exv99w4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
of AMB Property Corporation:

We have completed integrated audits of AMB Property Corporation’s consolidated financial statements and of its internal control over financial reporting as of December 31, 2006 in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

Consolidated financial statements and financial statement schedule

In our opinion, the consolidated financial statements listed in the index appearing in Exhibit 99.4 present fairly, in all material respects, the financial position of AMB Property Corporation and its subsidiaries at December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing in Exhibit 99.4 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 12 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, on January 1, 2006.

Internal control over financial reporting

Also, in our opinion, management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, in the 2006 Annual Report on Form 10-K, that the Company maintained effective internal control over financial reporting as of December 31, 2006 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

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

F-1

AMB PROPERTY CORPORATION

CONSOLIDATED BALANCE SHEETS
As of December 31, 2006 and 2005


	December 31,			December 31,
	2006			2005
	(Dollars in thousands, except share and per share
	amounts)
ASSETS
Investments in real estate:
Land	$	1,351,123		$	1,527,072
Buildings and improvements		4,038,474			4,273,716
Construction in progress		1,186,136			997,506

Total investments in properties		6,575,733			6,798,294
Accumulated depreciation and amortization		(789,693	)		(697,388	)

Net investments in properties		5,786,040			6,100,906
Investments in unconsolidated joint ventures		274,381			118,653
Properties held for contribution, net		154,036			32,755
Properties held for divestiture, net		20,916			17,936

Net investments in real estate		6,235,373			6,270,250
Cash and cash equivalents		174,763			232,881
Restricted cash		21,115			34,352
Mortgage and loan receivables		18,747			21,621
Accounts receivable, net of allowance for doubtful accounts of $6,361 and $6,302, respectively		133,998			178,682
Deferred financing costs, net		20,394			25,026
Other assets		109,122			39,927

Total assets	$	6,713,512		$	6,802,739


LIABILITIES AND STOCKHOLDERS’ EQUITY
Debt:
Secured debt	$	1,395,354		$	1,912,526
Unsecured senior debt securities		1,101,874			975,000
Unsecured credit facilities		852,033			490,072
Other debt		88,154			23,963

Total debt		3,437,415			3,401,561
Security deposits		36,106			47,055
Dividends payable		48,967			46,382
Accounts payable and other liabilities		186,807			170,307

Total liabilities		3,709,295			3,665,305
Commitments and contingencies (Note 14)
Minority interests:
Joint venture partners		555,201			853,643
Preferred unitholders		180,298			278,378
Limited partnership unitholders		102,061			89,114

Total minority interests		837,560			1,221,135
Stockholders’ equity:
Series L preferred stock, cumulative, redeemable, $.01 par value, 2,300,000 shares authorized and 2,000,000 issued and outstanding $50,000 liquidation preference		48,017			48,017
Series M preferred stock, cumulative, redeemable, $.01 par value, 2,300,000 shares authorized and 2,300,000 issued and outstanding $57,500 liquidation preference		55,187			55,187
Series O preferred stock, cumulative, redeemable, $.01 par value, 3,000,000 shares authorized and 3,000,000 issued and outstanding $75,000 liquidation preference		72,127			72,344
Series P preferred stock, cumulative, redeemable, $.01 par value, 2,000,000 shares authorized and 2,000,000 issued and outstanding $50,000 liquidation preference		48,086			—
Common stock $.01 par value, 500,000,000 shares authorized, 89,662,435 and 85,814,905 issued and outstanding, respectively		895			857
Additional paid-in capital		1,796,849			1,641,186
Retained earnings		147,274			101,124
Accumulated other comprehensive loss		(1,778	)		(2,416	)

Total stockholders’ equity		2,166,657			1,916,299

Total liabilities and stockholders’ equity	$	6,713,512		$	6,802,739

The accompanying notes are an integral part of these consolidated financial statements.

F-3

AMB PROPERTY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years ended December 31, 2006, 2005 and 2004


	2006			2005			2004
	(Dollars in thousands, except per share amounts)
REVENUES
Rental revenues	$	672,621		$	606,888		$	553,792
Private capital income		46,102			43,942			12,895

Total revenues		718,723			650,830			566,687

COSTS AND EXPENSES
Property operating expenses		(100,167	)		(77,877	)		(80,226	)
Real estate taxes		(74,399	)		(79,965	)		(62,598	)
Depreciation and amortization		(176,468	)		(160,276	)		(135,412	)
Impairment losses		(6,312	)		—			—
General and administrative		(104,262	)		(71,564	)		(57,181	)
Other expenses		(2,620	)		(5,038	)		(2,554	)
Fund costs		(2,091	)		(1,482	)		(1,741	)

Total costs and expenses		(466,319	)		(396,202	)		(339,712	)

OTHER INCOME AND EXPENSES
Equity in earnings of unconsolidated joint ventures, net		23,240			10,770			3,781
Other income		9,423			5,593			4,700
Gains from dispositions of real estate interests		—			19,099			5,219
Development profits, net of taxes		106,389			54,811			8,528
Interest expense, including amortization		(166,222	)		(147,653	)		(141,955	)

Total other income and expenses, net		(27,170	)		(57,380	)		(119,727	)

Income before minority interests, discontinued operations and cumulative effect of change in accounting principle		225,234			197,248			107,248

Minority interests’ share of income:
Joint venture partners’ share of income before minority interests and discontinued operations		(37,975	)		(36,401	)		(29,360	)
Joint venture partners’ share of development profits		(5,613	)		(13,492	)		(958	)
Preferred unitholders		(16,462	)		(21,473	)		(20,161	)
Limited partnership unitholders		(2,358	)		(3,004	)		(1,987	)

Total minority interests’ share of income		(62,408	)		(74,370	)		(52,466	)

Income from continuing operations before cumulative effect of change in accounting principle		162,826			122,878			54,782

Discontinued operations:
Income attributable to discontinued operations, net of minority interests		18,418			21,376			28,684
Gains from dispositions of real estate, net of minority interests		42,635			113,553			42,005

Total discontinued operations		61,053			134,929			70,689

Net income before cumulative effect of change in accounting principle		223,879			257,807			125,471
Cumulative effect of change in accounting principle		193			—			—

Net income		224,072			257,807			125,471
Preferred stock dividends		(13,582	)		(7,388	)		(7,131	)
Preferred stock and unit redemption issuance costs		(1,070	)		—			—

Net income available to common stockholders	$	209,420		$	250,419		$	118,340


Basic income per common share
Income from continuing operations (after preferred stock dividends and preferred stock and unit redemption issuance costs) before cumulative effect of change in accounting principle	$	1.69		$	1.37		$	0.58
Discontinued operations		0.70			1.61			0.86
Cumulative effect of change in accounting principle		—			—			—

Net income available to common stockholders	$	2.39		$	2.98		$	1.44


Diluted income per common share
Income from continuing operations (after preferred stock dividends and preferred stock and unit redemption issuance costs) before cumulative effect of change in accounting principle	$	1.63		$	1.31		$	0.56
Discontinued operations		0.67			1.54			0.83
Cumulative effect of change in accounting principle		—			—			—

Net income available to common stockholders	$	2.30		$	2.85		$	1.39


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic		87,710,500			84,048,936			82,133,627

Diluted		91,106,893			87,873,399			85,368,626

The accompanying notes are an integral part of these consolidated financial statements.

F-4

AMB PROPERTY CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Years ended December 31, 2006, 2005 and 2004
(dollars in thousands)


														Accumulated
				Common Stock				Additional						Other
	Preferred			Number				Paid-in			Retained			Comprehensive
	Stock			of Shares		Amount		Capital			Earnings			Income (Loss)			Total
Balance as of December 31, 2003	$	103,373			81,792,913	$	818	$	1,551,441		$	—		$	1,505		$	1,657,137
Net income		7,131			—		—		—			118,340			—
Unrealized loss on securities and derivatives		—			—		—		—			—			(2,058	)
Currency translation adjustment		—			—		—		—			—			(438	)
Total comprehensive income																		122,975
Stock-based compensation amortization and issuance of restricted stock, net		—			204,556		2		10,442			—			—			10,444
Exercise of stock options		—			1,233,485		12		27,709			—			—			27,721
Conversion of partnership units		—			17,686		—		618			—			—			618
Forfeiture of restricted stock		—			—		—		(646	)		—			—			(646	)
Reallocation of partnership interest		—			—		—		1,038			—			—			1,038
Offering costs		(169	)		—		—		—			—			—			(169	)
Dividends		(7,131	)		—		—		(22,507	)		(118,340	)		—			(147,978	)

Balance as of December 31, 2004		103,204			83,248,640		832		1,568,095			—			(991	)		1,671,140
Net income		7,388			—		—		—			250,419			—
Unrealized gain on securities and derivatives		—			—		—		—			—			421
Currency translation adjustment		—			—		—		—			—			(1,846	)
Total comprehensive income																		256,382
Issuance of preferred stock, net		72,344			—		—		—			—			—			72,344
Stock-based compensation amortization and issuance of restricted stock, net		—			183,216		2		12,294			—			—			12,296
Exercise of stock options		—			2,033,470		20		48,452			—			—			48,472
Conversion of partnership units		—			349,579		3		15,105			—			—			15,108
Forfeiture of restricted stock		—			—		—		(1,869	)		—			—			(1,869	)
Reallocation of partnership interest		—			—		—		(891	)		—			—			(891	)
Dividends		(7,388	)		—		—		—			(149,295	)		—			(156,683	)

Balance as of December 31, 2005		175,548			85,814,905		857		1,641,186			101,124			(2,416	)		1,916,299
Net income		13,582			—		—		—			209,420			—
Unrealized gain on securities and derivatives		—			—		—		—			—			825
Currency translation adjustment		—			—		—		—			—			(187	)
Total comprehensive income																		223,640
Issuance of preferred stock, net		48,086			—		—		—			—			—			48,086
Stock-based compensation amortization and issuance of restricted stock, net		—			331,911		3		20,733			—			—			20,736
Exercise of stock options		—			2,697,315		27		55,494			—			—			55,521
Conversion of partnership units		—			818,304		8		45,143			—			—			45,151
Forfeiture of restricted stock		—			—		—		(3,454	)		—			—			(3,454	)
Cumulative effect of change in accounting principle		—			—		—		(193	)		—			—			(193	)
Reallocation of partnership interest		—			—		—		37,940			—			—			37,940
Offering costs		(217	)		—		—		—			—			—			(217	)
Dividends		(13,582	)		—		—		—			(163,270	)		—			(176,852	)

Balance as of December 31, 2006	$	223,417			89,662,435	$	895	$	1,796,849		$	147,274		$	(1,778	)	$	2,166,657

The accompanying notes are an integral part of these consolidated financial statements.

F-5

AMB PROPERTY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years ended December 31, 2006, 2005 and 2004


	2006			2005			2004
	(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	224,072		$	257,807		$	125,471
Adjustments to net income:
Straight-line rents and amortization of lease intangibles		(19,134	)		(19,523	)		(16,281	)
Depreciation and amortization		176,468			160,276			135,412
Impairment losses		6,312			—			—
Stock-based compensation amortization		20,736			12,296			10,444
Equity in earnings of unconsolidated joint ventures		(23,240	)		(10,770	)		(3,781	)
Operating distributions received from unconsolidated joint ventures		4,875			2,752			2,971
Gains from dispositions of real estate interest		—			(19,099	)		(5,219	)
Development profits, net of taxes		(106,389	)		(54,811	)		(8,528	)
Debt premiums, discounts and finance cost amortization, net		8,343			4,172			310
Total minority interests’ share of net income		62,408			74,370			52,466
Discontinued operations:
Depreciation and amortization		3,509			20,028			31,938
Joint venture partners’ share of net income		(426	)		8,006			12,707
Limited partnership unitholders’ share of net income		904			1,170			1,654
Gains from dispositions of real estate, net of minority interests		(42,635	)		(113,553	)		(42,005	)
Cumulative effect of change in accounting principle		(193	)		—			—
Changes in assets and liabilities:
Accounts receivable and other assets		3,276			(42,379	)		(1,154	)
Accounts payable and other liabilities		16,969			15,073			944

Net cash provided by operating activities		335,855			295,815			297,349
CASH FLOWS FROM INVESTING ACTIVITIES
Change in restricted cash and other assets		(24,910	)		1,973			(9,749	)
Cash paid for property acquisitions		(451,940	)		(424,087	)		(415,034	)
Additions to land, buildings, development costs, building improvements and lease costs		(1,033,941	)		(662,561	)		(581,168	)
Net proceeds from divestiture of real estate		616,343			1,088,737			213,296
Additions to interests in unconsolidated joint ventures		(18,969	)		(74,069	)		(16,003	)
Capital distributions received from unconsolidated joint ventures		34,277			17,483			47,849
Repayment/(issuance) of mortgage receivable		2,874			(7,883	)		29,407
Cash transferred to unconsolidated joint venture		(4,294	)		—			—

Net cash used in investing activities		(880,560	)		(60,407	)		(731,402	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock, proceeds from stock option exercises		55,521			48,472			27,721
Borrowings on secured debt		610,598			386,592			420,565
Payments on secured debt		(483,138	)		(327,038	)		(98,178	)
Borrowings on other debt		65,098			—			—
Payments on other debt		(16,281	)		(649	)		(600	)
Borrowings on unsecured credit facilities		1,291,209			873,627			795,128
Payments on unsecured credit facilities		(944,626	)		(697,464	)		(747,432	)
Net proceeds from issuances of senior debt securities		272,079			—			99,067
Payments on senior debt securities		(150,000	)		(28,940	)		(21,060	)
Payment of financing fees		(11,746	)		(10,185	)		(13,230	)
Net proceeds from issuances of preferred stock or units		48,086			72,344			—
Issuance costs on preferred stock or units		(217	)		—			(169	)
Repurchase of preferred units		(98,080	)		—			—
Cash transferred to unconsolidated joint venture		—			—			(2,897	)
Contributions from co-investment partners		189,110			160,544			192,956
Dividends paid to common and preferred stockholders		(174,266	)		(154,070	)		(145,951	)
Distributions to minority interests, including preferred units		(169,726	)		(425,089	)		(96,215	)

Net cash provided by (used in)/financing activities		483,621			(101,856	)		409,705
Net effect of exchange rate changes on cash		2,966			(10,063	)		6,062
Net (decrease) increase in cash and cash equivalents		(58,118	)		123,489			(18,286	)
Cash and cash equivalents at beginning of period		232,881			109,392			127,678

Cash and cash equivalents at end of period	$	174,763		$	232,881		$	109,392

Supplemental Disclosures of Cash Flow Information
Cash paid for interest, net of capitalized interest	$	159,389		$	174,246		$	171,298
Non-cash transactions:
Acquisition of properties	$	689,832		$	519,106		$	695,169
Assumption of secured debt		(134,651	)		(74,173	)		(210,233	)
Assumption of other assets and liabilities		(17,931	)		(5,994	)		(59,970	)
Acquisition capital		(20,061	)		(13,979	)		(8,097	)
Minority interests’ contributions, including units issued		(65,249	)		(873	)		(1,835	)

Net cash paid for acquisitions	$	451,940		$	424,087		$	415,034

Preferred unit redemption issuance costs	$	1,070		$	—		$	—
Contribution of properties to unconsolidated joint ventures, net	$	161,967		$	27,282		$	9,467
Deconsolidation of AMB Institutional Alliance Fund III, L.P.	$	93,876		$	—		$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-6

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006 and 2005

1. Organization and Formation of the Company

AMB Property Corporation, a Maryland corporation (the “Company”), commenced operations as a fully integrated real estate company effective with the completion of its initial public offering on November 26, 1997. The Company elected to be taxed as a real estate investment trust (REIT) under Sections 856 through 860 of the Internal Revenue Code of 1986 as amended (the “Code”), commencing with its taxable year ended December 31, 1997, and believes its current organization and method of operation will enable it to maintain its status as a REIT. The Company, through its controlling interest in its subsidiary, AMB Property, L.P., a Delaware limited partnership (the “Operating Partnership”), is engaged in the acquisition, development and operation of industrial properties in key distribution markets throughout North America, Europe and Asia. The Company uses the terms “industrial properties” or “industrial buildings” to describe various types of industrial properties in its portfolio and uses these terms interchangeably with the following: logistics facilities, centers or warehouses; distribution facilities, centers or warehouses; High Throughput Distribution^® (HTD^®) facilities; or any combination of these terms. The Company uses the term “owned and managed” to describe assets in which it has at least a 10% ownership interest, for which it is the property or asset manager, and which it intends to hold for the long-term. Unless the context otherwise requires, the “Company” means AMB Property Corporation, the Operating Partnership and their other controlled subsidiaries.

As of December 31, 2006, the Company owned an approximate 95.0% general partnership interest in the Operating Partnership, excluding preferred units. The remaining approximate 5.0% common limited partnership interests are owned by non-affiliated investors and certain current and former directors and officers of the Company. As the sole general partner of the Operating Partnership, the Company has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership. Net operating results of the Operating Partnership are allocated after preferred unit distributions based on the respective partners’ ownership interests. Certain properties are owned by the Company through limited partnerships, limited liability companies and other entities. The ownership of such properties through such entities does not materially affect the Company’s overall ownership interests in the properties.

Through the Operating Partnership, the Company enters into co-investment joint ventures with institutional investors. These co-investment joint ventures provide the Company with an additional source of capital and income. As of December 31, 2006, the Company had investments in five consolidated and four unconsolidated co-investment joint ventures. Effective October 1, 2006, the Company deconsolidated AMB Institutional Alliance Fund III, L.P., an open-ended co-investment partnership formed in 2004 with institutional investors, on a prospective basis, due to the re-evaluation of the Company’s accounting for its investment in the fund in light of changes to the partnership agreement regarding the general partner’s rights effective October 1, 2006.

Any references to the number of buildings, square footage, customers and occupancy in the financial statement footnotes are unaudited.

AMB Capital Partners, LLC, a Delaware limited liability company (“AMB Capital Partners”), provides real estate investment services to clients on a fee basis. Headlands Realty Corporation, a Maryland corporation, conducts a variety of businesses that include development projects available for sale or contribution to third parties and incremental income programs. IMD Holding Corporation, a Delaware corporation, conducts a variety of businesses that also includes development projects available for sale or contribution to third parties. AMB Capital Partners, Headlands Realty Corporation and IMD Holding Corporation are wholly-owned direct or indirect subsidiaries of the Operating Partnership.

As of December 31, 2006, the Company owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 124.7 million rentable square feet (11.6 million square meters) and 1,108 buildings in 39 markets within twelve countries. Additionally, as of December 31, 2006, the Company managed, but did not have a significant ownership interest in, industrial and other properties, totaling approximately 1.5 million rentable square feet. The Company’s investment strategy generally targets customers whose business is tied to global trade, which according to the World Trade Organization, has grown more than three times the world domestic product growth rate during the last 20 years. To serve the facility needs of these customers, the Company seeks to invest in major distribution markets, transportation hubs and gateways, that generally are tied to global trade, both in the U.S. and internationally.

F-7

Of the approximately 124.7 million rentable square feet as of December 31, 2006:

	•		on an owned and managed basis, which include investments held on a consolidated basis or through unconsolidated joint ventures, the Company owned or partially owned 964 industrial buildings, principally warehouse distribution buildings, encompassing approximately 100.7 million rentable square feet that were 96.1% leased;

	•		on an owned and managed basis, which include investments held on an unconsolidated basis or through unconsolidated joint ventures, the Company had investments in 45 industrial development projects which are expected to total approximately 13.7 million rentable square feet upon completion;

	•		on a consolidated basis, the Company owned nine development projects, totaling approximately 2.7 million rentable square feet that are available for sale or contribution; and

	•		through other non-managed unconsolidated joint ventures, the Company had investments in 46 industrial operating properties, totaling approximately 7.4 million rentable square feet, and one industrial operating property, totaling approximately 0.2 million square feet which is available for sale or contribution.

2. Summary of Significant Accounting Policies

Basis of Presentation. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the financial position, results of operations and cash flows of the Company, its wholly-owned qualified REIT and taxable REIT subsidiaries, the Operating Partnership and joint ventures, in which the Company has a controlling interest. Third-party equity interests in the Operating Partnership and joint ventures are reflected as minority interests in the consolidated financial statements. The Company also has non-controlling partnership interests in unconsolidated real estate joint ventures, which are accounted for under the equity method. All significant intercompany amounts have been eliminated.

Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications. Certain items in the consolidated financial statements for prior periods have been reclassified to conform to current classifications.

Investments in Real Estate. Investments in real estate and leasehold interests are stated at cost unless circumstances indicate that cost cannot be recovered, in which case, the carrying value of the property is reduced to estimated fair value. The Company also regularly reviews the impact of above or below-market leases, in-place leases and lease origination costs for all new acquisitions, and records an intangible asset or liability accordingly. Carrying values for financial reporting purposes are reviewed for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. Impairment is recognized when estimated expected future cash flows (undiscounted and without interest charges) are less than the carrying value of the property. The estimation of expected future net cash flows is inherently uncertain and relies on assumptions regarding current and future economics and market conditions and the availability of capital. If impairment analysis assumptions change, then an adjustment to the carrying value of the Company’s long-lived assets could occur in the future period in which the assumptions change. To the extent that a property is impaired, the excess of the carrying amount of the property over its estimated fair value is charged to earnings. As a result of leasing activity and the economic environment, the Company re-evaluated the carrying value of its investments and recorded impairment charges of $6.3 million during the year ended December 31, 2006 on certain of its investments.

Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the real estate investments. Investments that are located on-tarmac, which is land owned by federal, state or local airport authorities, and subject to ground leases are depreciated over the lesser of 40 years or the contractual term of the underlying ground lease. The estimated lives and components of depreciation and amortization expense for the years ended December 31 are as follows (dollars in thousands):

F-8


Depreciation and Amortization Expense	Estimated Lives	2006			2005			2004
Building costs	5-40 years	$	81,565		$	85,192		$	68,329
Building costs on ground leases	5-40 years		19,173			16,631			31,268
Buildings and improvements:
Roof/HVAC/parking lots	5-40 years		10,016			6,928			6,072
Plumbing/signage	7-25 years		2,469			2,111			1,704
Painting and other	5-40 years		11,479			15,035			13,516
Tenant improvements	Over initial lease term		19,901			21,635			20,246
Lease commissions	Over initial lease term		19,990			21,095			19,655

Total real estate depreciation and amortization			164,593			168,627			160,790
Other depreciation and amortization	Various		15,384			11,677			6,560
Discontinued operations’ depreciation	Various		(3,509	)		(20,028	)		(31,938	)

Total depreciation and amortization from continuing operations		$	176,468		$	160,276		$	135,412

The cost of buildings and improvements includes the purchase price of the property or interest in property, including legal fees and acquisition costs. Project costs directly associated with the development and construction of a real estate project, which include interest and property taxes, are capitalized as construction in progress. Capitalized interest related to construction projects for the years ended December 31, 2006, 2005 and 2004 was $42.9 million, $29.5 million and $18.7 million, respectively.

Expenditures for maintenance and repairs are charged to operations as incurred. Maintenance expenditures include painting and repair costs. The Company expenses costs as incurred and does not accrue in advance of planned major maintenance activities. Significant renovations or betterments that extend the economic useful life of assets are capitalized and include parking lot, HVAC and roof replacement costs.

Investments in Consolidated and Unconsolidated Joint Ventures. Minority interests represent the limited partnership interests in the Operating Partnership and interests held by certain third parties in several real estate joint ventures, which own properties aggregating approximately 36.1 million square feet, which are consolidated for financial reporting purposes. Such investments are consolidated because the Company exercises significant control over major operating decisions such as approval of budgets, selection of property managers, asset management, investment activity and changes in financing.

The Company holds interests in both consolidated and unconsolidated joint ventures. The Company determines consolidation based on standards set forth in EITF 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights or FASB Interpretation No. 46R, Consolidation of Variable Interest Entities “FIN 46”. Based on the guidance set forth in EITF 04-5, the Company consolidates certain joint venture investments because it exercises significant control over major operating decisions, such as approval of budgets, selection of property managers, asset management, investment activity and changes in financing. For joint ventures that are variable interest entities as defined under FIN 46 where the Company is not the primary beneficiary, it does not consolidate the joint venture for financial reporting purposes. For joint ventures under EITF 04-5, where the Company does not exercise significant control over major operating and management decisions, but where it exercises significant influence, the Company uses the equity method of accounting and does not consolidate the joint venture for financial reporting purposes.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity (“SFAS 150”). This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS 150 was effective beginning in the third quarter of 2003; however, the FASB deferred the implementation of SFAS 150 as it applied to certain minority interests in finite-lived entities indefinitely. The disclosure requirements for certain minority interests in finite-lived entities still apply. The Company adopted the requirements of SFAS 150 in the third quarter of 2003, and, considering the aforementioned deferral, there was no impact on the Company’s financial position, results of operations or cash flows. However, the minority interests associated with certain of the Company’s consolidated joint ventures, that have finite lives under the terms of the partnership agreements represent mandatorily redeemable interests as defined in SFAS 150. As of December 31, 2006 and 2005, the aggregate book value of these minority interests in the accompanying consolidated balance sheet was $555.2 million and $853.6 million, respectively, and the Company believes that the aggregate settlement value of these interests was approximately $1.0 billion and $1.2 billion, respectively. This amount is based on the estimated liquidation values of the assets and liabilities and the resulting proceeds that the Company would distribute to its joint venture partners

F-9

upon dissolution, as required under the terms of the respective partnership agreements. Subsequent changes to the estimated fair values of the assets and liabilities of the consolidated joint ventures will affect the Company’s estimate of the aggregate settlement value. The partnership agreements do not limit the amount that the minority partners would be entitled to in the event of liquidation of the assets and liabilities and dissolution of the respective partnerships.

Cash and Cash Equivalents. Cash and cash equivalents include cash held in financial institutions and other highly liquid short-term investments with original maturities of three months or less.

Restricted Cash. Restricted cash includes cash held in escrow in connection with property purchases, Section 1031 exchange accounts and debt or real estate tax payments.

Mortgages and Loans Receivable. Through a wholly-owned subsidiary, the Company holds a mortgage loan receivable of $12.7 million on AMB Pier One, LLC, an unconsolidated joint venture. The Company also holds a loan receivable of $6.1 million on G. Accion, an unconsolidated investment. The book value of the mortgages approximates fair value.

Accounts Receivable. Accounts receivable includes all current accounts receivable, net of allowances, other accruals and deferred rent receivable of $64.6 million and $66.7 million as of December 31, 2006 and 2005, respectively. The Company regularly reviews the credit worthiness of its customers and adjusts its allowance for doubtful accounts, straight-line rent receivable balance and tenant improvement and leasing costs amortization accordingly.

Concentration of Credit Risk. Other real estate companies compete with the Company in its real estate markets. This results in competition for customers to occupy space. The existence of competing properties could have a material impact on the Company’s ability to lease space and on the amount of rent received. As of December 31, 2006, the Company does not have any material concentration of credit risk due to the diversification of its customers.

Deferred Financing Costs. Costs incurred in connection with financings are capitalized and amortized to interest expense using the straight-line method over the term of the related loan. As of December 31, 2006 and 2005, deferred financing costs were $20.4 million and $25.0 million, respectively, net of accumulated amortization.

Goodwill and Intangible Assets. The Company has classified as goodwill the cost in excess of fair value of the net assets of companies acquired in purchase transactions. As prescribed in Statement of Financial Accounting Standards No. 142, “Goodwill and Intangible Assets”, (SFAS 142) goodwill and certain indefinite lived intangible assets, including excess reorganization value and certain trademarks, are no longer amortized, but are subject to at least annual impairment testing. The Company tests annually (or more often, if necessary) for impairment under SFAS No. 142. The Company determined that there was no impairment to goodwill and intangible assets during the year ended December 31, 2006.

Financial Instruments. SFAS No. 133, Accounting for Derivative Instruments and for Hedging Activities, provides comprehensive guidelines for the recognition and measurement of derivatives and hedging activities and, specifically, requires all derivatives to be recorded on the balance sheet at fair value as an asset or liability, with an offset to accumulated other comprehensive income or loss. For revenues or expenses denominated in nonfunctional currencies, the Company may use derivative financial instruments to manage foreign currency exchange rate risk. The Company’s derivative financial instruments in effect at December 31, 2006 were three interest rate swaps hedging cash flows of our variable rate borrowings based on U.S. Libor (USD) and Euribor (Europe). Adjustments to the fair value of these instruments for the year ended December 31, 2006 resulted in a gain of $0.6 million. This gain is included in other assets in the consolidated balance sheet and accumulated other comprehensive loss in the consolidated statements of stockholders’ equity.

Debt. The Company’s debt includes both fixed and variable rate secured debt, unsecured fixed rate debt, unsecured variable rate debt and credit facilities. Based on borrowing rates available to the Company at December 31, 2006, the book value and the estimated fair value of the total debt (both secured and unsecured) was $3.4 billion and $3.5 billion, respectively. The carrying value of the variable rate debt approximates fair value.

Debt Premiums. Debt premiums represent the excess of the fair value of debt over the principal value of debt assumed in connection with the Company’s initial public offering and subsequent property acquisitions. The debt premiums are being amortized as an offset to interest expense over the term of the related debt instrument using the straight-line method. As of December 31, 2006

F-10

and 2005, the net unamortized debt premium was $6.3 million and $12.0 million, respectively, and are included as a component of secured debt on the accompanying consolidated balance sheets.

Rental Revenues and Allowance for Doubtful Accounts. The Company, as a lessor, retains substantially all of the benefits and risks of ownership of the properties and accounts for its leases as operating leases. Rental income is recognized on a straight-line basis over the term of the leases. Reimbursements from customers for real estate taxes and other recoverable operating expenses are recognized as revenue in the period the applicable expenses are incurred. The Company also records lease termination fees when a customer terminates its lease by executing a definitive termination agreement with the Company, vacates the premises and the payment of the termination fee is not subject to any conditions that must be met before the fee is due to the Company. In addition, the Company nets its allowance for doubtful accounts against rental income for financial reporting purposes. Such amounts totaled $2.9 million, $3.2 million and $1.8 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Private Capital Income. Private capital income consists primarily of acquisition and development fees, asset management fees and priority distributions earned by AMB Capital Partners from joint ventures and clients. Private capital income also includes promoted interests and incentive distributions from the Operating Partnership’s co-investment joint ventures. The Company received incentive distributions of $22.5 million, of which $19.8 million was from AMB Partners II, L.P., and $26.4 million for the sale of AMB Institutional Alliance Fund I, L.P., respectively, during the years ended December 31, 2006 and 2005.

Other Income. Other income consists primarily of interest income from mortgages receivable and on cash and cash equivalents.

Development Profits, Net of Taxes. When the Company disposes of its real estate entities’ interests, gains reported from the sale of these interests represent either: (i) the sale of partial interests in consolidated co-investment joint ventures to third-party investors for cash or (ii) the sale of partial interests in properties to unconsolidated co-investment joint ventures with third-party investors for cash.

Gains from Dispositions of Real Estate. Gains and losses are recognized using the full accrual method. Gains related to transactions which do not meet the requirements of the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met.

Discontinued Operations. The Company reported real estate dispositions as discontinued operations separately as prescribed under the provisions of SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). The Company separately reports as discontinued operations the historical operating results attributable to operating properties sold and held for disposition and the applicable gain or loss on the disposition of the properties, which is included in gains from dispositions of real estate, net of minority interests, in the statement of operations. The consolidated statements of operations for prior periods are also adjusted to conform with this classification. There is no impact on the Company’s previously reported consolidated financial position, net income or cash flows.

International Operations. The U.S. dollar is the functional currency for the Company’s subsidiaries operating in the United States and Mexico. The functional currency for the Company’s subsidiaries operating outside the United States is generally the local currency of the country in which the entity is located, mitigating the effect of currency exchange gains and losses. The Company’s subsidiaries whose functional currency is not the U.S. dollar translate their financial statements into U.S. dollars. Assets and liabilities are translated at the exchange rate in effect as of the financial statement date. The Company translates income statement accounts using the average exchange rate for the period and significant nonrecurring transactions using the rate on the transaction date. For the years ended December 31, 2006, 2005 and 2004, losses resulting from the translation were $0.2 million, $1.8 million and $0.4 million, respectively. These losses are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity.

The Company’s international subsidiaries may have transactions denominated in currencies other than their functional currency. In these instances, non-monetary assets and liabilities are reflected at the historical exchange rate, monetary assets and liabilities are remeasured at the exchange rate in effect at the end of the period and income statement accounts are remeasured at the average exchange rate for the period. Gains from remeasurement were $0.8 million, $0.6 million and $0.5 million for the years ended 2006, 2005 and 2004, respectively. These gains are included in the consolidated statements of operations.

The Company also records gains or losses in the income statement when a transaction with a third party, denominated in a currency other than the entity’s functional currency, is settled and the functional currency cash flows realized are more or less than

F-11

expected based upon the exchange rate in effect when the transaction was initiated. These gains and losses have been immaterial over the past three years.

New Accounting Pronouncements. In June 2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109.”, which clarifies the accounting and disclosure for uncertainty in tax positions, as defined. FIN 48 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. This interpretation is effective for fiscal years beginning after December 15, 2006. Based on the Company’s evaluation, which is ongoing, the Company does not believe that FIN 48 will have a material impact on its financial position, results of operations and cash flows.

In September 2006, the SEC staff issued Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements,” in order to address the SEC Staff’s concerns over registrant’s exclusive reliance on either the “iron curtain” or balance sheet approach or the “rollover” or income statement approach in quantifying financial statement misstatements. SAB No. 108 states that registrants should use both a balance sheet and an income statement approach when quantifying and evaluating the materiality of a misstatement and contains guidance on correcting errors under the dual approach. SAB No. 108 is effective for financial statements issued for fiscal years ending after November 15, 2006. The adoption of SAB No. 108 did not have a material impact on the Company’s financial position or results of operations.

3. Real Estate Acquisition and Development Activity

Acquisition Activity. During the year ended December 31, 2006, on an owned and managed basis, the Company acquired 106 industrial buildings, aggregating approximately 9.8 million square feet for a total expected investment of $834.2 million (includes acquisition costs of $814.1 million and estimated acquisition capital of $20.1 million, unaudited), of which the Company acquired 70 buildings through one of its unconsolidated co-investment joint ventures. During 2005, the Company acquired 39 industrial buildings, aggregating approximately 6.4 million square feet for a total expected investment of $522.3 million (includes acquisition costs of $508.6 million and estimated acquisition capital of $13.7 million, unaudited).

Development Starts. During the year ended December 31, 2006, the Company initiated 30 new industrial development projects in North America, Europe and Asia with a total expected investment of $914.3 million (unaudited), aggregating approximately 10.4 million square feet. During 2005, the Company initiated 30 new industrial development projects in North America, Europe and Asia with a total expected investment of $522.4 million (unaudited), aggregating approximately 7.0 million square feet.

Development Completions. During the year ended December 31, 2006, the Company completed 33 industrial projects with a total investment of $777.8 million (unaudited), aggregating 8.7 million square feet. Seven of these completed projects with a total investment of $90.5 million (unaudited) and aggregating approximately 0.9 million square feet were placed in operations, nine projects with a total investment of $430.3 million (unaudited) and aggregating approximately 3.5 million square feet were contributed to unconsolidated joint ventures, seven projects with a total investment of $57.8 million (unaudited) and aggregating approximately 1.3 million square feet were sold to third parties, and ten projects with a total investment of $199.2 million (unaudited), aggregating approximately 3.0 million square feet were available for sale or contribution as of December 31, 2006. One of these ten projects totaling $13.0 million (unaudited) and approximately 0.2 million square feet is held in an unconsolidated joint venture. During the year ended December 31, 2005, the Company completed 15 industrial projects with a total investment of $250.7 million (unaudited), aggregating 4.3 million square feet. Eleven of these completed projects with a total investment of $137.9 million (unaudited) and aggregating approximately 2.5 million square feet were placed in operations, one approximately 0.4 million square foot project with a total investment of $20.1 million (unaudited) was contributed to an unconsolidated joint venture, two projects with a total investment of $60.9 million (unaudited) aggregating approximately 0.8 million square feet were sold to third parties, and one approximately 0.6 million square foot project with an investment of $31.8 million (unaudited) was available for sale or contribution as of December 31, 2005.

Development Pipeline. As of December 31, 2006, the Company had 45 industrial projects in its development pipeline, which will total approximately 13.7 million square feet, and will have an aggregate estimated investment of $1.3 billion (unaudited) upon completion. The Company has an additional ten development projects available for sale or contribution totaling approximately 3.0 million square feet, with an aggregate estimated investment of $199.2 million (unaudited). One of these ten projects totaling $13.0 million (unaudited) and approximately 0.2 million square feet is held in an unconsolidated joint venture. As of December 31, 2006, the Company and its joint venture partners had funded an aggregate of $814.5 million and needed to fund an estimated additional $481.0 million (unaudited) in order to complete its development pipeline. The Company’s development pipeline currently includes projects

F-12

expected to be completed through the fourth quarter of 2008. In addition, during the year ended December 31, 2006, the Company acquired 835 acres of land for industrial warehouse development in North America and Asia for approximately $293.2 million.

4. Gains from Dispositions of Real Estate Interests, Development Sales and Discontinued Operations

Gains from Dispositions of Real Estate Interests. On June 30, 2005, the Company formed AMB Japan Fund I, L.P. a joint venture with 13 institutional investors, in which the Company retained an approximate 20% interest. The 13 institutional investors have committed 49.5 billion Yen ($415.7 million U.S. dollars, using the exchange rate at December 31, 2006) for an approximate 80% equity interest. The Company contributed $106.9 million (using exchange rate in effect at contribution) in operating properties, consisting of six industrial buildings, aggregating approximately 0.9 million square feet, to this fund. During 2005, the Company recognized a gain of $17.8 million on the contribution, representing the portion of its interest in the contributed properties acquired by the third-party investors for cash.

On December 31, 2004, the Company formed AMB-SGP Mexico, LLC, a joint venture 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, in which the Company retained a 20% interest. During 2005, the Company recognized a gain of $1.3 million from disposition of real estate interests, representing the additional value received from the contribution of properties to AMB-SGP Mexico, LLC.

Development Sales. During 2006, the Company sold five land parcels and six development projects totaling approximately 1.3 million square feet for an aggregate sale price of $86.6 million, resulting in an after-tax gain of $13.3 million. In addition, during 2006, the Company received approximately $0.4 million in connection with the condemnation of a parcel of land resulting in a loss of $1.0 million, $0.8 million of which was the joint venture partner’s share.

During 2005, the Company sold five land parcels and five development projects, aggregating approximately 0.9 million square feet for an aggregate price of $155.2 million, resulting in an after-tax gain of $45.1 million. In addition, during 2005, the Company received final proceeds of $7.8 million from a land sale that occurred in 2004.

During 2004, the Company sold seven land parcels and six development projects as part of our development-for-sale program, aggregating approximately 0.3 million square feet, for an aggregate price of $40.4 million, resulting in an after-tax gain of $6.5 million.

Discontinued Operations. The Company reports its property divestitures as discontinued operations separately as prescribed under the provisions of SFAS No. 144. Beginning in 2002, SFAS No. 144 requires the Company to separately report as discontinued operations the historical operating results attributable to operating properties sold and held for disposition and the applicable gain or loss on the disposition of the properties, which is included in gains from dispositions of real estate, net of minority interests, in the statement of operations. Although the application of SFAS No. 144 may affect the presentation of the Company’s results of operations for the periods that it has already reported in filings with the SEC, there will be no effect on its previously reported financial position, net income or cash flows.

During 2006, the Company divested itself of 39 industrial buildings, aggregating approximately 3.5 million square feet, for an aggregate price of $175.3 million, with a resulting net gain of $42.6 million.

During 2005, the Company divested itself of 142 industrial buildings and one retail center, aggregating approximately 9.3 million square feet, for an aggregate price of $926.6 million, with a resulting net gain of $113.6 million. Included in these divestitures is the sale of the assets of AMB Alliance Fund I for $618.5 million. The multi-investor fund owned 100 buildings totaling approximately 5.8 million square feet. The Company received cash and a distribution of an on-tarmac property, AMB DFW Air Cargo Center I, in exchange for its 21% interest in the fund. The Company also received a net incentive distribution of approximately $26.4 million in cash which is classified under private capital income on the consolidated statement of operations.

During 2004, the Company divested itself of 21 industrial buildings, two retail centers and one office building, aggregating approximately 3.1 million square feet, for an aggregate price of $200.3 million, with a resulting net gain of $42.0 million.

Development Contributions. During 2006, the Company contributed a total of nine completed development projects into unconsolidated co-investment joint ventures. Four projects totaling approximately 2.6 million square feet were contributed into AMB Japan Fund I, L.P, two projects totaling approximately 0.8 million square feet were contributed into AMB-SGP Mexico, LLC, and

F-13

three projects totaling approximately 0.6 million square feet were contributed into AMB Institutional Alliance Fund III, L.P. In addition, one land parcel was contributed into AMB DFS Fund I, LLC. As a result of these contributions, the Company recognized an aggregate after-tax gain of $94.1 million, representing the portion of the Company’s interest in the contributed property acquired by the third-party investors for cash. These gains are included in development profits, net of taxes, in the statement of operations.

During 2005, the Company contributed one approximately 0.4 million square foot completed development project into AMB-SGP Mexico, LLC, and recognized an after-tax gain of $1.9 million.

During 2004, the Company contributed one approximately 0.2 million square foot completed development project into AMB-SGP Mexico, LLC, and recognized an after-tax gain of $2.0 million.

Properties Held for Contribution. As of December 31, 2006, the Company held for contribution to co-investment joint ventures nine industrial projects with an aggregate net book value of $154.0 million, which, when contributed to a joint venture, will reduce the Company’s current ownership interest from approximately 100% to an expected range of 15-50%.

Properties Held for Divestiture. As of December 31, 2006, the Company held for divestiture four industrial projects with an aggregate net book value of $20.9 million. These properties either are not in the Company’s core markets or do not meet its current strategic objectives, or are included as part of its development-for-sale program. The divestitures of the properties are subject to negotiation of acceptable terms and other customary conditions. Properties held for divestiture are stated at the lower of cost or estimated fair value less costs to sell.

The following summarizes the condensed results of operations of the properties held for divestiture and sold under SFAS No. 144 for the years ended December 31 (dollars in thousands):


	2006			2005			2004
Rental revenues	$	25,593		$	89,121		$	124,355
Straight-line rents and amortization of lease intangibles		520			2,334			2,601
Property operating expenses		(3,885	)		(13,689	)		(18,845	)
Real estate taxes		(2,361	)		(10,219	)		(15,103	)
Depreciation and amortization		(3,509	)		(20,028	)		(31,938	)
General and administrative		(13	)		(85	)		(113	)
Other income and expenses, net		19			165			200
Interest, including amortization		2,532			(17,047	)		(18,112	)
Joint venture partners’ share of loss (income)		426			(8,006	)		(12,707	)
Limited partnership unitholders’ share of income		(904	)		(1,170	)		(1,654	)

Income attributable to discontinued operations	$	18,418		$	21,376		$	28,684

As of December 31, 2006 and 2005, assets and liabilities attributable to properties held for divestiture under the provisions of SFAS No. 144 consisted of the following (dollars in thousands):


	2006		2005
Other assets	$	1	$	1
Accounts payable and other liabilities	$	286	$	1,884

F-14

5. Mortgage and Loan Receivables

Through a wholly-owned subsidiary, the Company holds a mortgage loan receivable on AMB Pier One, LLC, an unconsolidated joint venture. The Company also holds a loan receivable on G.Accion, S.A. de C.V. (G.Accion), an unconsolidated equity investment. The Company’s mortgage and loan receivables at December 31, 2006 and 2005 consisted of the following (dollars in thousands):



Mortgage and Loan Receivables	Market	Maturity	2006		2005		Rate
1. Pier 1	SF Bay Area	May 2026	$	12,686	$	12,821		13.0	%
2. G.Accion	Mexico, Various	March 2010		6,061		8,800		10.0	%

Total Mortgage and Loan Receivables			$	18,747	$	21,621

6. Debt

As of December 31, 2006 and 2005, debt consisted of the following (dollars in thousands):


	2006			2005
Wholly-owned secured debt, varying interest rates from 4.3% to 10.4%, due February, 1 2007 to April 2020 (weighted average interest rate of 5.6% and 4.1% at December 31, 2006 and 2005, respectively)	$	368,332		$	522,459
Consolidated joint venture secured debt, varying interest rates from 2.9% to 9.4%, due March 2007 to January 2025 (weighted average interest rates of 6.5% and 6.3% at December 31, 2006 and 2005, respectively)		1,020,678			1,378,083
Unsecured senior debt securities, varying interest rates from 3.5% to 8.0%, due January 2007 to June 2018 (weighted average interest rates of 6.2% and 6.2% at December 31, 2006 and December 31, 2005, respectively, and net of unamortized discounts of $10.6 million and $12.5 million, respectively)		1,112,491			975,000
Other debt, varying interest rates from 5.1% to 7.5%, due June 2007 to November 2015 (weighted average interest rates of 6.6% and 8.2% at December 31, 2006 and December 31, 2005, respectively)		88,154			23,963
Unsecured credit facilities, variable interest rate, due February 2010 and June 2010 (weighted average interest rates of 3.1% and 2.2% at December 31, 2006 and 2005, respectively)		852,033			490,072

Total debt before unamortized net premiums (discounts)		3,441,688			3,389,577
Unamortized net premiums (discounts)		(4,273	)		11,984

Total consolidated debt	$	3,437,415		$	3,401,561

Secured debt generally requires monthly principal and interest payments. Some of the loans are cross-collateralized by multiple properties. The secured debt is secured by deeds of trust or mortgages on certain properties and is generally non-recourse. As of December 31, 2006 and 2005, the total gross investment book value of those properties securing the debt was $2.6 billion and $3.6 billion, respectively, including $1.9 billion and $2.5 billion, respectively, in consolidated joint ventures. As of December 31, 2006, $1.0 billion of the secured debt obligations bore interest at fixed rates with a weighted average interest rate of 6.1% while the remaining $386.1 million bore interest at variable rates (with a weighted average interest rate of 4.7%).

As of December 31, 2006, the Operating Partnership had outstanding an aggregate of $1.1 billion in unsecured senior debt securities, which bore a weighted average interest rate of 6.2% and had an average term of 4.8 years. These unsecured senior debt securities include $300.0 million in notes issued in June 1998, $225.0 million of medium-term notes, which were issued under the Operating Partnership’s 2000 medium-term note program, $275.0 million of medium-term notes, which were issued under the Operating Partnership’s 2002 medium-term note program, $175.0 million of medium-term notes, which were issued under the Operating Partnership’s 2006 medium-term note program and approximately $112.5 million of 5.094% Notes Due 2015, which were issued to Teachers Insurance and Annuity Association of America on July 11, 2005 in a private placement, in exchange for the cancelled $100.0 million of notes that were issued in June 1998 resulting in a discount of approximately $12.5 million. The unsecured senior debt securities are subject to various covenants. Also included is a $25.0 million promissory note which matures in January 2007. Management believes that the Company and the Operating Partnership were in compliance with their financial covenants as of December 31, 2006.

F-15

As of December 31, 2006, the Company had $88.2 million outstanding in other debt which bore a weighted average interest rate of 6.6% and had an average term of 6.1 years. Other debt includes a $65.0 million non-recourse credit facility obtained by AMB Partners II, L.P., a subsidiary of the Operating Partnership, which had a $65.0 million balance outstanding as of December 31, 2006. The Company also had $23.2 million outstanding in other non-recourse debt.

On June 1, 2006, the Operating Partnership entered into a third amended and restated $550.0 million (includes Euros, Yen or U.S. Dollar denominated borrowings) unsecured revolving credit agreement that replaced its then-existing $500.0 million credit facility, which was to mature on June 1, 2007. The Company is a guarantor of the Operating Partnership’s obligations under the credit facility. The line, which matures on June 1, 2010, carries a one-year extension option and can be increased to up to $700.0 million upon certain conditions. The rate on the borrowings is generally LIBOR plus a margin, based on the Operating Partnership’s long-term debt rating, which was 42.5 basis points as of December 31, 2006, with an annual facility fee of 15 basis points. The four year credit facility includes a multi-currency component, under which up to $550.0 million can be drawn in U.S. Dollars, Euros, Yen or British Pounds Sterling. The Operating Partnership uses the credit facility principally for acquisitions, funding development activity and general working capital requirements. As of December 31, 2006, the outstanding balance on the credit facility was $303.7 million and the remaining amount available was $234.6 million, net of outstanding letters of credit of $11.7 million. The outstanding balance included borrowings denominated in Euros, which, using the exchange rate in effect on December 31, 2006, equaled approximately $303.7 million in U.S. dollars. The credit agreement contains affirmative covenants, including compliance with financial reporting requirements and maintenance of specified financial ratios, and negative covenants, including limitations on the incurrence of liens and limitations on mergers or consolidations. Management believes that the Company and the Operating Partnership were in compliance with their financial covenants under this credit agreement at December 31, 2006.

On June 23, 2006, AMB Japan Finance Y.K., a subsidiary of the Operating Partnership and as the initial borrower, entered into an amended and restated revolving credit agreement for a 45.0 billion Yen unsecured revolving credit facility, which, using the exchange rate in effect on December 31, 2006, equaled approximately $377.9 million U.S. dollars. This replaced the 35.0 billion Yen unsecured revolving credit facility executed on June 29, 2004, as previously amended, which using the exchange rate in effect on December 31, 2006, equaled approximately $293.9 million U.S. dollars. The Company, along with the Operating Partnership, guarantees the obligations of AMB Japan Finance Y.K. under the credit facility, as well as the obligations of any other entity in which the Operating Partnership directly or indirectly owns an ownership interest and which is selected from time to time to be a borrower under and pursuant to the credit agreement. The borrowers intend to use the proceeds from the facility to fund the acquisition and development of properties and for other real estate purposes in Japan, China and South Korea. Generally,borrowers under the credit facility have the option to secure all or a portion of the borrowings under the credit facility with certain real estate assets or equity in entities holding such real estate assets. The credit facility matures in June 2010 and has a one-year extension option. The credit facility can be increased to up to 55.0 billion Yen, which, using the exchange rate in effect on December 31, 2006, equaled approximately $461.9 million U.S. dollars. The extension option is subject to the satisfaction of certain conditions and the payment of an extension fee equal to 0.15% of the outstanding commitments under the facility at that time. The rate on the borrowings is generally TIBOR plus a margin, which is based on the credit rating of the Operating Partnership’s long-term debt and was 42.5 basis points as of December 31, 2006. In addition, there is an annual facility fee, payable in quarterly amounts, which is based on the credit rating of the Operating Partnership’s long-term debt, and was 15 basis points of the outstanding commitments under the facility as of December 31, 2006. As of December 31, 2006, the outstanding balance on this credit facility, using the exchange rate in effect on December 31, 2006, was $320.9 million in U.S. dollars. The credit agreement contains affirmative covenants, including financial reporting requirements and maintenance of specified financial ratios, and negative covenants, including limitations on the incurrence of liens and limitations on mergers or consolidations. Management believes that the Company, the Operating Partnership and AMB Japan Finance Y.K. were in compliance with their financial covenants under this credit agreement at December 31, 2006.

On June 13, 2006, the Operating Partnership and certain of its consolidated subsidiaries entered into a fourth amended and restated credit agreement for a $250.0 million unsecured revolving credit facility, which replaced the third amended and restated credit agreement for a $250.0 million unsecured credit facility. On February 16, 2006, the third amended and restated credit agreement replaced the then-existing $100.0 million unsecured revolving credit facility that was to mature in June 2008. The Company, along with the Operating Partnership, guarantees the obligations for such subsidiaries and other entities controlled by the Company or the Operating Partnership that are selected by the Operating Partnership from time to time to be borrowers under and pursuant to the credit facility. The four-year credit facility includes a multi-currency component under which up to $250.0 million can be drawn in U.S. dollars, Hong Kong dollars, Singapore dollars, Canadian dollars and Euros. The line, which matures in February 2010 and carries a one-year extension option, can be increased to up to $350.0 million upon certain conditions and the payment of an extension fee equal to 0.15% of the outstanding commitments. The rate on the borrowings is generally LIBOR plus a margin, based on the credit rating of the Operating Partnership’s senior unsecured long-term debt, which was 60 basis points as of December 31, 2006, with an annual facility fee based on the credit rating of the Operating Partnership’s senior unsecured long-term debt. The borrowers intend to

F-16

use the proceeds from the facility to fund the acquisition and development of properties and general working capital requirements. As of December 31, 2006, the outstanding balance on this credit facility was approximately $227.4 million. The credit agreement contains affirmative covenants, including financial reporting requirements and maintenance of specified financial ratios by the Operating Partnership, and negative covenants, including limitations on the incurrence of liens and limitations on mergers or consolidations. Management believes that the Company and the Operating Partnership were in compliance with their financial covenants under this credit agreement at December 31, 2006.

As of December 31, 2006, the scheduled maturities of the Company’s total debt, excluding unamortized secured debt premiums and discounts, were as follows (dollars in thousands):


	Wholly-		Consolidated		Unsecured
	owned		Joint Venture		Senior
	Secured		Secured		Debt		Other		Credit
	Debt		Debt		Securities		Debt		Facilities		Total
2007	$	12,929	$	84,815	$	100,000	$	16,125	$	—	$	213,869
2008		41,906		173,029		175,000		810		—		390,745
2009		3,536		96,833		100,000		971		—		201,340
2010		69,327		112,918		250,000		941		852,033		1,285,219
2011		3,094		228,708		75,000		1,014		—		307,816
2012		5,085		169,717		—		1,093		—		175,895
2013		38,668		55,168		175,000		65,920		—		334,756
2014		186,864		4,261		—		616		—		191,741
2015		2,174		19,001		112,491		664		—		134,330
2016		4,749		50,648		—		—		—		55,397
Thereafter		—		25,580		125,000		—		—		150,580

Total	$	368,332	$	1,020,678	$	1,112,491	$	88,154	$	852,033	$	3,441,688

7. Leasing Activity

Future minimum base rental income due under non-cancelable leases with customers in effect as of December 31, 2006 was as follows (dollars in thousands):


2007	$	488,738
2008		409,728
2009		335,638
2010		264,633
2011		196,729
Thereafter		352,884

Total	$	2,048,350

The schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property operating expense reimbursements. In addition to minimum rental payments, certain customers pay reimbursements for their pro rata share of specified operating expenses, which amounted to $143.0 million, $144.0 million and $134.1 million for the years ended December 31, 2006, 2005 and 2004, respectively. These amounts are included as rental revenue and operating expenses in the accompanying consolidated statements of operations. Some leases contain options to renew.

F-17

8. Income Taxes

The Company elected to be taxed as a REIT under the Code, commencing with its taxable year ended December 31, 1997. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its taxable income to its stockholders. It is management’s current intention to adhere to these requirements and maintain the Company’s REIT status. As a REIT, the Company generally will not be subject to corporate level federal income tax on net income it distributes currently to its stockholders. As such, no provision for federal income taxes has been included in the accompanying consolidated financial statements. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may be ineligible to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state, local taxes on its income and excise taxes on its undistributed taxable income. The Company is required to pay federal and state income tax on its net taxable income, if any, from the activities conducted by the Company’s taxable REIT subsidiaries. Foreign income taxes are accrued for foreign countries in which the Company operates, as necessary.

The following is a reconciliation of net income available to common stockholders to taxable income available to common stockholders for the years ended December 31 (dollars in thousands):


	2006			2005			2004
Net income available to common stockholders	$	209,420		$	250,419		$	118,340
Book depreciation and amortization		176,468			160,276			135,412
Book depreciation discontinued operations		3,509			20,028			31,938
Impairment losses		6,312			—			—
Tax depreciation and amortization		(155,467	)		(152,084	)		(141,368	)
Book/tax difference on gain on divestitures and contributions of real estate		(108,777	)		(23,104	)		(7,409	)
Book/tax difference in stock option expense		(50,030	)		(35,513	)		(15,069	)
Other book/tax differences, net⁽¹⁾		(3,436	)		(35,348	)		(14,786	)

Taxable income available to common stockholders	$	77,999		$	184,674		$	107,058


(1)		Primarily due to straight-line rent, prepaid rent, joint venture accounting and debt premium amortization timing differences.

For income tax purposes, distributions paid to common stockholders consist of ordinary income, capital gains, non-taxable return of capital or a combination thereof. For the years ended December 31, 2006, 2005 and 2004, the Company elected to distribute all of its taxable capital gain. The taxability of the Company’s distributions to common stockholders is summarized below:


	2006				2005				2004
Ordinary income	$	0.53	38.4	%	$	0.50	23.0	%	$	0.78	46.1	%
Capital gains		0.16	11.6	%		1.34	61.1	%		0.37	21.9	%
Unrecaptured Section 1250 gain		0.20	14.4	%		0.35	15.9	%		0.15	8.9	%

Dividends paid or payable		0.89	64.4	%		2.19	100.0	%		1.30	76.9	%

Return of capital		0.49	35.6	%		—	0.0	%		0.39	23.1	%

Total distributions	$	1.38	100.0	%	$	2.19	100.0	%	$	1.69	100.0	%

9. Minority Interests in Consolidated Joint Ventures and Preferred Units

Minority interests in the Company represent the limited partnership interests in the Operating Partnership, limited partnership interests in AMB Property II, L.P., a Delaware limited partnership, and interests held by certain third parties in several real estate joint ventures, aggregating approximately 36.1 million square feet, which are consolidated for financial reporting purposes. Such investments are consolidated because the Company exercises significant rights over major operating decisions such as approval of budgets, selection of property managers, asset management, investment activity and changes in financing. These joint venture

F-18

investments do not meet the variable interest entity criteria under FASB Interpretation No. 46R, Consolidation of Variable Interest Entities.

Through the Operating Partnership, the Company enters into co-investment joint ventures with institutional investors. The Company’s co-investment joint ventures are engaged in the acquisition, ownership, operation, management and, in some cases, the renovation, expansion and development of industrial buildings in target markets in North America.

The Company’s consolidated co-investment joint ventures’ total investment and property debt in properties at December 31, 2006 and 2005 (dollars in thousands) were:


		Company’s			Total Investment
		Ownership			in Real Estate⁽¹⁾				Property Debt⁽²⁾				Other Debt
Co-investment Joint Venture	Joint Venture Partner	Percentage			2006		2005		2006		2005		2006		2005
AMB/Erie, L.P.	Erie Insurance Company and affiliates		50	%	$	52,942	$	99,722	$	20,605	$	40,710	$	—	$—
AMB Partners II, L.P.	City and County of San Francisco Employee’s Retirement System		20	%		679,138		592,115		323,532		291,684		65,000	—
AMB-SGP, L.P.	Industrial JV Pte Ltd⁽³⁾		50	%		444,990		436,713		235,480		239,944		—	—
AMB Institutional Alliance Fund II, L.P.	AMB Institutional Alliance REIT II, Inc.⁽⁴⁾		20	%		519,534		507,493		243,263		245,056		—	—
AMB-AMS, L.P. ⁽⁵⁾	PMT, SPW and TNO⁽⁶⁾		39	%		153,563		146,007		78,904		63,143		—	—
AMB Institutional Alliance Fund III, L.P. ⁽⁷⁾	AMB Institutional Alliance REIT III, Inc.		23	%		—		749,634		—		421,290		—	—

Total					$	1,850,167	$	2,531,684	$	901,784	$	1,301,827	$	65,000	$—


(1)		The Company also had other consolidated joint ventures with total investments in real estate of $579.3 million as of December 31, 2006.

(2)		The Company also had other consolidated joint ventures with property debt of $123.6 million as of December 31, 2006.

(3)		A subsidiary of GIC Real Estate Pte. Ltd., the real estate investment subsidiary of the Government of Singapore Investment Corporation.

(4)		Comprised of 14 institutional investors as stockholders and one third-party limited partner as of December 31, 2006.

(5)		AMB-AMS, L.P. is a co-investment partnership with three Dutch pension funds.

(6)		PMT is Stichting Pensioenfonds Metaal en Techniek, SPW is Stichting Pensioenfonds voor de Woningcorporaties and TNO is Stichting Pensioenfonds TNO.

(7)		AMB Institutional Alliance Fund III, L.P., is an open-ended co-investment partnership formed in 2004 with institutional investors, which effective October 1, 2006, was deconsolidated on a prospective basis.

The following table details the minority interests as of December 31, 2006 and 2005 (dollars in thousands):

F-19


	2006		2005
Joint venture partners	$	555,201	$	853,643
Limited Partners in the Operating Partnership		74,780		86,164
Series J preferred units (liquidation preference of $40,000)		38,883		38,883
Series K preferred units (liquidation preference of $40,000)		38,932		38,932
Held through AMB Property II, L.P.:
Class B Limited Partners		27,281		2,950
Series D preferred units (liquidation preference of $79,767)		77,684		77,684
Series E preferred units (repurchased in June 2006)		—		10,788
Series F preferred units (repurchased in September 2006)		—		9,900
Series H preferred units (repurchased in March 2006)		—		40,912
Series I preferred units (liquidation preference of $25,500)		24,799		24,800
Series N preferred units (repurchased in January 2006)		—		36,479

Total minority interests	$	837,560	$	1,221,135

The following table distinguishes the minority interests’ share of income, including minority interests’ share of development profits, but excluding minority interests’ share of discontinued operations for the years ending December 31, 2006, 2005 and 2004 (dollars in thousands):


	2006		2005		2004
Joint venture partners	$	37,975	$	36,401	$	29,360
Joint venture partners’ share of development profits		5,613		13,492		958
Common limited partners in the Operating Partnership		1,543		2,889		1,885
Series J preferred units (liquidation preference of $40,000)		3,180		3,180		3,180
Series K preferred units (liquidation preference of $40,000)		3,180		3,180		3,180
Held through AMB Property II, L.P.:
Class B common limited partnership units		815		115		102
Series D preferred units (liquidation preference of $79,767)		6,182		6,182		6,182
Series E preferred units (repurchased in June 2006)		392		854		854
Series F preferred units (repurchased in September 2006)		546		800		800
Series H preferred units (repurchased in March 2006)		815		3,413		3,413
Series I preferred units (liquidation preference of $25,500)		2,040		2,040		2,040
Series N preferred units (repurchased in January 2006)		127		1,824		512

Total minority interests’ share of net income	$	62,408	$	74,370	$	52,466

10. Investments in Unconsolidated Joint Ventures

The Company’s investment in unconsolidated joint ventures at December 31, 2006 and 2005 totaled $274.4 million and $118.7 million, respectively. The Company’s exposure to losses associated with its unconsolidated joint ventures is limited to its carrying value in these investments and guarantees of $170.5 million on loans on three of its unconsolidated joint ventures.

The Company’s unconsolidated joint ventures’ net equity investments at December 31, 2006 and 2005 (dollars in thousands) were:

F-20


							Company’s
	Square						Ownership
Unconsolidated Joint Ventures	Feet		2006		2005		Percentage
Co-Investment Joint Ventures
AMB-SGP Mexico, LLC ⁽¹⁾		2,737,515	$	7,601	$	16,218		20	%
AMB Japan Fund I, L.P. ⁽²⁾		3,814,773		31,811		10,112		20	%
AMB Institutional Alliance Fund III, L.P. ⁽³⁾		13,963,806		136,971		—		23	%
AMB DFS Fund I, LLC ⁽⁴⁾		N/A		11,700		—		15	%

Other Industrial Operating Joint Ventures		7,684,931		47,955		41,520		53	%
Other Industrial Development Joint Ventures		N/A		—		6,176

Other Investment — G.Accion ⁽⁵⁾		N/A		38,343		44,627		39	%


Total Unconsolidated Joint Ventures		28,201,025	$	274,381	$	118,653


(1)		AMB-SGP Mexico, LLC, is a co-investment partnership 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 the Company and the co-investment partnership.

(2)		AMB Japan Fund I, L.P. is a co-investment partnership formed in 2005 with institutional investors.

(3)		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 REIT. Prior to October 1, 2006, the Company accounted for AMB Institutional Alliance Fund III, L.P. as a consolidated joint venture.

(4)		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.

(5)		The Company has a 39% unconsolidated equity interest in G.Accion, a Mexican real estate company. G.Accion provides management and development services for industrial, retail, residential and office properties in Mexico.

The table below presents summarized financial information of the Company’s unconsolidated joint ventures as of and for the years ended December 31, 2006, 2005 and 2004:

F-21


																		Income (loss)
	Net														Property			from			Net
	Investment		Total		Total		Total		Minority						Operating			Continuing			Income
2006	in Properties		assets		debt		liabilities		Interests		Equity		Revenues		Expenses			Operations			(loss)
Co-Investment Joint Ventures:
AMB-SGP Mexico, LLC ⁽¹⁾	$	158,959	$	172,533	$	106,700	$	162,963	$	1,082	$	8,488	$	14,514	$	(7,915	)	$	(6,796	)	$	(6,796	)
AMB Japan Fund I, L.P. ⁽²⁾		595,859		673,811		450,270		483,835		48,570		141,406		19,217		(11,289	)		1,716			1,716
AMB Institutional Alliance Fund III, L.P. ⁽³⁾		1,279,564		1,318,709		675,500		714,072		3,090		601,547		80,160		(42,601	)		12,691			33,842
AMB DFS Fund I, LLC ⁽⁴⁾		78,450		78,475		—		—		—		78,475		—		—			—			—

Other Industrial Operating Joint Ventures		223,679		241,085		184,423		193,394		—		47,691		37,238		(9,234	)		11,529			26,139

Other Investments:
G. Accion ⁽⁵⁾		9,536		158,733		14,881		45,380		1,610		111,743		18,294		(38,490	)		(51,399	)		21,532

Total Unconsolidated Joint Ventures	$	2,346,047	$	2,643,346	$	1,431,774	$	1,599,644	$	54,352	$	989,350	$	169,423	$	(109,529	)	$	(32,259	)	$	76,433


																			Income (loss)
	Net															Property			from			Net
	Investment		Total		Total		Total		Minority							Operating			Continuing			Income
2005	in Properties		assets		debt		liabilities		Interests		Equity			Revenues		Expenses			Operations			(loss)
Co-Investment Joint Ventures:
AMB-SGP Mexico, LLC ⁽¹⁾	$	105,123	$	127,509	$	65,351	$	86,522	$	81,663	$	(40,676	)	$	9,288	$	(5,182	)	$	(4,892	)	$	(4,892	)
AMB Japan Fund I, L.P. ⁽²⁾		121,161		161,469		73,893		106,008		10,043		45,418			6,736		(4,581	)		871			871

Other Industrial Operating Joint Ventures		279,526		297,874		232,503		239,335		—		58,539			42,031		(13,766	)		9,659			9,713

Other Industrial Development Joint Ventures		33,190		34,542		21,596		22,856		5,471		6,216			732		(565	)		(305	)		(305	)

Other Investments:
G. Accion ⁽⁵⁾		116,549		249,193		91,730		126,456		832		121,905			49,605		(60,856	)		(33,977	)		1,750

Total Unconsolidated Joint Ventures	$	655,549	$	870,587	$	485,073	$	581,177	$	98,009	$	191,402		$	108,392	$	(84,950	)	$	(28,644	)	$	7,137


																		Income (loss)
	Net														Property			from			Net
	Investment		Total		Total		Total		Minority						Operating			Continuing			Income
2004	in Properties		assets		debt		liabilities		Interests		Equity		Revenues		Expenses			Operations			(loss)
Co-Investment Joint Ventures:
AMB-SGP Mexico, LLC ⁽¹⁾	$	73,300	$	103,223	$	16,405	$	46,870	$	48,631	$	7,722	$	—	$	—		$	—		$	—

Other Industrial Operating Joint Ventures		275,269		290,734		223,215		230,224		—		60,510		38,112		(14,144	)		6,765			7,471

Other Industrial Development Joint Ventures		31,640		35,287		27,664		29,360		3,108		2,818		—		(7	)		(3	)		(3	)

Total Unconsolidated Joint Ventures	$	380,209	$	429,244	$	267,284	$	306,454	$	51,739	$	71,050	$	38,112	$	(14,151	)	$	6,762		$	7,468


(1)		AMB-SGP Mexico, LLC, is a co-investment partnership 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 the Company and the co-investment partnership.

(2)		AMB Japan Fund I is a co-investment partnership formed in 2005 with institutional investors.

(3)		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 REIT. Prior to October 1, 2006, the Company accounted for AMB Institutional Alliance Fund III, L.P. as a consolidated joint venture.

(4)		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.

(5)		The Company has a 39% unconsolidated equity interest in G.Accion, a Mexican real estate company. G.Accion provides management and development services for industrial, retail, residential and office properties in Mexico.

On December 30, 2004, the Company formed AMB-SGP Mexico, LLC, a joint venture 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, in which the Company retained a 20% interest. During 2006, the Company recognized development profits of $5.1 million from the contribution of two completed development projects for $56.4 million aggregating approximately 0.8 million square feet. During 2005, the Company recognized a gain of $1.3 million from disposition of real estate interests, representing the additional value received from the contribution of properties to AMB-SGP Mexico, LLC during 2004. During 2005, the Company recognized

F-22

development profits of $1.9 million from the contribution of one industrial building for $23.6 million aggregating approximately 0.4 million square feet.

On June 30, 2005, the Company formed AMB Japan Fund I, L.P., a joint venture with 13 institutional investors, in which joint venture the Company retained an approximate 20% interest. The 13 institutional investors have committed 49.5 billion Yen (approximately $415.7 million in U.S. dollars, using the exchange rate at December 31, 2006) for an approximate 80% equity interest. During 2006, the Company recognized development profits of $77.9 million, representing the portion of the Company’s interest in the contributed properties acquired by the third-party investors for cash from the contribution to the joint venture of four completed development projects for $486.2 million (using the exchange rates in effect at contribution) aggregating approximately 2.6 million square feet. During 2005, the Company contributed to the joint venture $106.9 million (using the exchange rate in effect at contribution) in operating properties, consisting of six industrial buildings, aggregating approximately 0.9 million square feet and recognized a gain of $17.6 million on the contribution, representing the portion of the Company’s interest in the contributed property acquired by the third-party investors for cash.

Effective October 1, 2006, the Company deconsolidated AMB Institutional Alliance Fund III, L.P., an open-ended co-investment partnership formed in 2004 with institutional investors, on a prospective basis, due to the re-evaluation of the Company’s accounting for its investment in the fund in light of changes to the partnership agreement regarding the general partner’s rights effective October 1, 2006. During 2006, the Company recognized development profits of $10.3 million, representing the portion of the Company’s interest in the contributed properties acquired by the third-party investors for cash from the contribution to the joint venture of three completed development projects for approximately $64.8 million aggregating approximately 0.6 million square feet.

On October 17, 2006, the Company formed AMB DFS Fund I, LLC, a merchant development joint venture with GE Real Estate (“GE”), in which joint venture the Company retained an approximate 15% interest. The joint venture will have total investment capacity of approximately $500.0 million to pursue development-for-sale opportunities primarily in U.S. markets other than those the Company identifies as its target markets. GE and the Company have committed $425.0 million and $75.0 million of equity, respectively. During 2006, the Company contributed a land parcel with a contribution value of approximately $77.5 million to this fund and recognized development profits of approximately $0.8 million on the contribution, representing the portion of its interest in the contributed land parcel acquired by the third-party investor for cash.

Under the agreements governing the joint ventures, the Company and the other parties to the joint ventures may be required to make additional capital contributions and, subject to certain limitations, the joint ventures may incur additional debt.

The Company also has a 0.1% unconsolidated equity interest (with an approximate 33% economic interest) in AMB Pier One, LLC, a joint venture related to the 2000 redevelopment of the pier which houses the Company’s office space in the San Francisco Bay Area. The investment is not consolidated because the Company does not exercise control over major operating decisions such as approval of budgets, selection of property managers, investment activity and changes in financing. The Company has an option to purchase the remaining equity interest beginning January 1, 2007 and expiring December 31, 2009, based on the fair market value as stipulated in the joint venture agreement. As of December 31, 2006, the Company also had an approximate 39% unconsolidated equity interest in G.Accion, a Mexican real estate company. G.Accion provides management and development services for industrial, retail, residential and office properties in Mexico. In addition, as of December 31, 2006, a subsidiary of the Company also had an approximate 5% interest in IAT Air Cargo Facilities Income Fund (IAT), a Canadian income trust specializing in aviation-related real estate at Canada’s leading international airports. This equity investment of approximately $2.7 million and $2.6 million, respectively, is included in other assets on the consolidated balance sheets as of December 31, 2006 and 2005.

11. Stockholders’ Equity

Holders of common limited partnership units of the Operating Partnership and class B common limited partnership units of AMB Property II, L.P. have the right, commencing generally on or after the first anniversary of the holder becoming a limited partner of the Operating Partnership or AMB Property II, L.P., as applicable (or such other date agreed to by the Operating Partnership or AMB Property II, L.P. and the applicable unit holders), to require the Operating Partnership or AMB Property II, L.P., as applicable, to redeem part or all of their common units or class B common limited partnership units, as applicable, for cash (based upon the fair market value, as defined in the applicable partnership agreement, of an equivalent number of shares of common stock of the Company at the time of redemption) or the Operating Partnership or AMB Property II, L.P. may, in its respective sole and absolute discretion (subject to the limits on ownership and transfer of common stock set forth in the Company’s charter), elect to have the Company exchange those common units or class B common limited partnership units, as applicable, for shares of the Company’s common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of certain rights, certain

F-23

extraordinary distributions and similar events. With each redemption or exchange of the Operating Partnership’s common units, the Company’s percentage ownership in the Operating Partnership will increase. Common limited partners and class B common limited partners may exercise this redemption right from time to time, in whole or in part, subject to certain limitations. In November 2006, AMB Property II L.P., issued 1,130,835 of its class B common limited partnership units in connection with a property acquisition which resulted in a reallocation of partnership interest. During 2006, the Operating Partnership redeemed 818,304 of its common limited partnership units for an equivalent number of shares of the Company’s common stock.

On September 21, 2006, AMB Property II, L.P., repurchased all 201,139 of its outstanding 7.95% Series F Cumulative Redeemable Preferred Limited Partnership Units from a single institutional investor for an aggregate price of $10.0 million, including accrued and unpaid distributions. In connection with this repurchase, the Company reclassified all of its 267,439 shares of 7.95% Series F Cumulative Redeemable Preferred Stock as preferred stock.

On June 30, 2006, AMB Property II, L.P., repurchased all 220,440 of its outstanding 7.75% Series E Cumulative Redeemable Preferred Limited Partnership Units from a single institutional investor for an aggregate price of $10.9 million, including accrued and unpaid distributions. In connection with this repurchase, the Company reclassified all of its 220,440 shares of 7.795% Series E Cumulative Redeemable Preferred Stock as preferred stock.

On March 21, 2006, AMB Property II, L.P., repurchased all 840,000 of its outstanding 8.125% Series H Cumulative Redeemable Preferred Limited Partnership Units from a single institutional investor for an aggregate price of $42.8 million, including accrued and unpaid distributions. In connection with this repurchase, we reclassified all of our outstanding 840,000 shares of 8.125% Series H Cumulative Redeemable Preferred Stock as preferred stock.

As of December 31, 2006, $145.3 million in preferred units with a weighted average rate of 7.85%, issued by the Operating Partnership, were callable under the terms of the partnership agreement and $40.0 million in preferred units with a weighted average rate of 7.95% become callable in 2007.

On August 25, 2006, the Company issued and sold 2,000,000 shares of 6.85% Series P Cumulative Redeemable Preferred Stock at $25.00 per share. Dividends are cumulative from the date of issuance and payable quarterly in arrears at a rate per share equal to $1.7125 per annum. The series P preferred stock is redeemable by the Company on or after August 25, 2011, subject to certain conditions, for cash at a redemption price equal to $25.00 per share, plus accumulated and unpaid dividends thereon, if any, to the redemption date. The Company contributed the net proceeds of approximately $48.1 million to the Operating Partnership, and in exchange, the Operating Partnership issued to the Company 2,000,000 6.85% Series P Cumulative Redeemable Preferred Units.

On December 13, 2005, the Company issued and sold 3,000,000 shares of 7.00% Series O Cumulative Redeemable Preferred Stock at $25.00 per share. Dividends are cumulative from the date of issuance and payable quarterly in arrears at a rate per share equal to $1.75 per annum. The series O preferred stock is redeemable by the Company on or after December 13, 2010, subject to certain conditions, for cash at a redemption price equal to $25.00 per share, plus accumulated and unpaid dividends thereon, if any, to the redemption date. The Company contributed the net proceeds of approximately $72.3 million to the Operating Partnership, and in exchange, the Operating Partnership issued to the Company 3,000,000 7.00% Series O Cumulative Redeemable Preferred Units.

On September 24, 2004, AMB Property II, L.P., a partnership in which Texas AMB I, LLC, a Delaware limited liability company and the Company’s indirect subsidiary, owns an approximate 8.0% general partnership interest and the Operating Partnership owns an approximate 92% common limited partnership interest, issued 729,582 5.0% Series N Cumulative Redeemable Preferred Limited Partnership Units at a price of $50.00 per unit. The series N preferred units were issued to Robert Pattillo Properties, Inc. in exchange for the contribution to AMB Property II, L.P of certain parcels of land that are located in multiple markets. Effective January 27, 2006, Robert Pattillo Properties, Inc. exercised its rights under its Put Agreement, dated September 24, 2004, with the Operating Partnership, and sold all of its series N preferred units to the Operating Partnership for an aggregate price of $36.6 million, including accrued and unpaid distributions. Also on January 27, 2006, AMB Property II, L.P. repurchased all of the series N preferred units from the Operating Partnership at an aggregate price of $36.6 million and cancelled all of the outstanding series N preferred units as of such date.

On November 25, 2003, the Company issued and sold 2,300,000 shares of 6.75% Series M Cumulative Redeemable Preferred Stock at $25.00 per share. Dividends are cumulative from the date of issuance and payable quarterly in arrears at a rate per share equal to $1.6875 per annum. The series M preferred stock is redeemable by the Company on or after November 25, 2008, subject to certain conditions, for cash at a redemption price equal to $25.00 per share, plus accumulated and unpaid dividends thereon, if any, to the

F-24

redemption date. The Company contributed the net proceeds of approximately $55.4 million to the Operating Partnership, and in exchange, the Operating Partnership issued to the Company 2,300,000 6.75% Series M Cumulative Redeemable Preferred Units.

On June 23, 2003, the Company issued and sold 2,000,000 shares of 6.5% Series L Cumulative Redeemable Preferred Stock at a price of $25.00 per share. Dividends are cumulative from the date of issuance and payable quarterly in arrears at a rate per share equal to $1.625 per annum. The series L preferred stock is redeemable by the Company on or after June 23, 2008, subject to certain conditions, for cash at a redemption price equal to $25.00 per share, plus accumulated and unpaid dividends thereon, if any, to the redemption date. The Company contributed the net proceeds of approximately $48.0 million to the Operating Partnership, and in exchange, the Operating Partnership issued to the Company 2,000,000 6.5% Series L Cumulative Redeemable Preferred Units. The Operating Partnership used the proceeds, in addition to proceeds previously contributed to the Operating Partnership from other equity issuances, to redeem all 3,995,800 of its 8.5% Series A Cumulative Redeemable Preferred Units from the Company on July 28, 2003. The Company, in turn, used those proceeds to redeem all 3,995,800 of our 8.5% Series A Cumulative Redeemable Preferred Stock for $100.2 million, including all accumulated and unpaid dividends thereon, to the redemption date.

In December 2005, the Company’s board of directors approved a new two-year common stock repurchase program for the repurchase of up to $200.0 million of its common stock. The Company did not repurchase or retire any shares of its common stock during the year ended December 31, 2006.

The Company has authorized 100,000,000 shares of preferred stock for issuance, of which the following series were designated as of December 31, 2006: 1,595,337 shares of series D cumulative redeemable preferred; 510,000 shares of series I cumulative redeemable preferred; 800,000 shares of series J cumulative redeemable preferred; 800,000 shares of series K cumulative redeemable preferred; 2,300,000 shares of series L cumulative redeemable preferred, of which 2,000,000 are outstanding; 2,300,000 shares of series M cumulative redeemable preferred, all of which are outstanding; 3,000,000 shares of series O cumulative redeemable preferred, all of which are outstanding, and 2,000,000 shares of series P cumulative redeemable preferred, all of which are outstanding.

The following table sets forth the dividends and distributions paid per share or unit:


Paying Entity	Security	2006		2005		2004
AMB Property Corporation	Common stock	$	1.84	$	1.76	$	1.70
AMB Property Corporation	Series L preferred stock	$	1.63	$	1.63	$	1.63
AMB Property Corporation	Series M preferred stock	$	1.69	$	1.69	$	1.69
AMB Property Corporation	Series O preferred stock	$	1.75	$	0.09		n/a
AMB Property Corporation	Series P preferred stock	$	0.60		n/a		n/a

Operating Partnership	Common limited partnership units	$	1.84	$	1.76	$	1.70
Operating Partnership	Series J preferred units	$	3.98	$	3.98	$	3.98
Operating Partnership	Series K preferred units	$	3.98	$	3.98	$	3.98

AMB Property II, L.P.	Class B common limited partnership units	$	1.84	$	1.76	$	1.70
AMB Property II, L.P.	Series D preferred units	$	3.88	$	3.88	$	3.88
AMB Property II, L.P.	Series E preferred units ⁽¹⁾	$	1.78	$	3.88	$	3.88
AMB Property II, L.P.	Series F preferred units ⁽²⁾	$	2.72	$	3.98	$	3.98
AMB Property II, L.P.	Series H preferred units ⁽³⁾	$	0.97	$	4.06	$	4.06
AMB Property II, L.P.	Series I preferred units	$	4.00	$	4.00	$	4.00
AMB Property II, L.P.	Series N preferred units ⁽⁴⁾	$	0.22	$	2.50	$	0.70


(1)		In June 2006, AMB Property II, L.P. repurchased all of its outstanding Series E preferred units.

(2)		In September 2006, AMB Property II, L.P. repurchased all of its outstanding Series F preferred units.

(3)		In March 2006, AMB Property II, L.P. repurchased all of its outstanding Series H preferred units.

F-25


(4)		The holder of the series N preferred units exercised its put option in January 2006 and sold all of its series N preferred units to the Operating Partnership and AMB Property II, L.P. repurchased all of such units from the Operating Partnership.

12. Stock Incentive Plan, 401(k) Plan and Deferred Compensation Plan

Stock Incentive Plans. The Company has stock option and incentive plans (“Stock Incentive Plans”) for the purpose of attracting and retaining eligible officers, directors and employees. The Company has reserved for issuance 18,950,000 shares of common stock under its Stock Incentive Plans. As of December 31, 2006, the Company had 6,843,025 non-qualified options outstanding granted to certain directors, officers and employees. Each option is exchangeable for one share of the Company’s common stock. Each option’s exercise price is equal to the Company’s market price on the date of grant. The options have an original ten-year term and generally vest pro rata in annual installments over a three to five-year period from the date of grant.

The Company adopted SFAS No. 123R, Share Based Payment, on January 1, 2006. The Company opted to utilize the modified prospective method of transition in adopting SFAS No. 123R. The effect of this change from applying the original expense recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, had an immaterial effect on income before minority interests and discontinued operations, income from continuing operations, net income and earnings per share. The effect of this change from applying the original provisions of SFAS No. 123 had no effect on cash flow from operating and financing activities. The Company recorded a cumulative effect of change in accounting principle in the amount of $0.2 million as of January 1, 2006 to reflect the change in accounting for forfeitures. The Company values stock options using the Black-Scholes option-pricing model and recognizes this value as an expense over the vesting periods. Under this standard, recognition of expense for stock options is applied to all options granted after the beginning of the year of adoption. In accordance with SFAS No. 123R, the Company will recognize the associated expense over the three to five-year vesting periods. For the years ended December 31, 2006, 2005 and 2004, under SFAS No. 123R or SFAS No. 123, related stock option expense was $6.8 million, $4.8 million and $4.0 million, respectively. Additionally, the Company awards restricted stock and recognizes this value as an expense over the vesting periods. During the years ended December 31, 2006, 2005 and 2004, related restricted stock compensation expense was $13.9 million, $7.5 million and $6.4 million, respectively. The expense is included in general and administrative expenses in the accompanying consolidated statements of operations. As of December 31, 2006, the Company had $5.1 million of total unrecognized compensation cost related to unvested options granted under the Stock Incentive Plans which is expected to be recognized over a weighted average period of 1 year. Results for prior periods have not been restated.

As a result of adopting SFAS No. 123R on January 1, 2006, the Company’s income before income taxes and net income for the year ended December 31, 2006 is $0.5 million higher than if the Company had continued to account for share-based compensation under the original provisions of SFAS No. 123. Basic and diluted earnings per share for the year ended December 31, 2006 would have decreased to $2.38 and $2.29, respectively, if the Company had not adopted SFAS No. 123R.

SFAS No. 123R requires the cash flows resulting from tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) to be classified as financing cash flows. The Company does not have any such excess tax benefits.

The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing model. The Company uses historical data to estimate option exercise and employee termination within the valuation model. Expected volatilities are based on historical volatility of the Company’s stock. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The following assumptions are used for grants during the years ended December 31, 2006, 2005 and 2004, respectively: dividend yields of 3.5%, 4.5% and 4.8%; expected volatility of 17.9%, 17.5% and 18.6%; risk-free interest rates of 4.6%, 3.8% and 3.6%; and expected lives of six, seven and seven years, respectively.

Following is a summary of the option activity for the year ended December 31, 2006 (options in thousands):

F-26


	Shares			Weighted		Options
	Under			Average		Exercisable
	Option			Exercise Price		at Year End
Outstanding as of December 31, 2003		10,286		$	23.92		7,210

Granted		1,253			34.88
Exercised		(1,233	)		22.45
Forfeited		(85	)		29.43

Outstanding as of December 31, 2004		10,221			25.40		7,841

Granted		1,086			38.94
Exercised		(2,033	)		24.24
Forfeited		(126	)		35.32

Outstanding as of December 31, 2005		9,148			27.14		7,237

Granted		874			51.89
Exercised		(3,081	)		24.16
Forfeited		(98	)		42.18

Outstanding as of December 31, 2006		6,843		$	31.42		5,404

Remaining average contractual life	6.0 years

Fair value of options granted during the year	$	8.54

The following table summarizes additional information concerning outstanding and exercisable stock options at December 31, 2006 (options in thousands):


					Weighted
					Average		Currently Exercisable
			Weighted		Remaining				Weighted
Range of	Number		Average		Contractual		Number		Average
Exercise Price	of Options		Exercise Price		Life in Years		of Options		Exercise Price
$20.19 - $24.69		1,937	$	22.52		3.4		1,936	$	22.52
$25.06 - $30.81		2,293		27.10		5.8		2,291		27.10
$30.81 - $44.65		1,774		37.06		7.6		1,004		36.61
$44.65 - $61.35		839		51.89		9.2		173		51.92

		6,843						5,404

The following table summarizes additional information concerning unvested stock options at December 31, 2006 (options in thousands):


				Weighted
	Number			Average
Unvested Options	of Options			Exercise Price
Unvested at December 31, 2005		1,912		$	27.14
Granted		874			51.89
Vested		(1,250	)		36.23
Forfeited		(97	)		42.15

Unvested at December 31, 2006		1,439		$	43.54

Cash received from options exercised during the years ended December 31, 2006, 2005 and 2004 was $55.5 million, $48.5 million and $27.7 million, respectively. There were no excess tax benefits realized for the tax deductions from option exercises during the years ended December 31, 2006, 2005 and 2004. The total intrinsic value of options exercised during the years ended December 31, 2006, 2005 and 2004 was $88.1 million, $38.1 million and $17.5 million, respectively. The total intrinsic value of options outstanding and exercisable as of December 31, 2006 was $146.4 million.

F-27

The Company issued 450,352, 262,394 and 227,609 shares of restricted stock, respectively, to certain officers of the Company as part of the pay-for-performance pay program and in connection with employment with the Company during the years ended December 31, 2006, 2005 and 2004, respectively. The total fair value of restricted shares was $23.3 million, $10.2 million and $8.0 million for the years ended December 31, 2006, 2005 and 2004, respectively. As of December 31, 2006, 99,587 shares of restricted stock had been forfeited. The 611,549 outstanding restricted shares are subject to repurchase rights, which generally lapse over a period from three to five years.

The following table summarizes additional information concerning unvested restricted shares at December 31, 2006 (shares in thousands):


				Weighted Average
				Grant Date
Unvested Shares	Shares			Fair Value
Unvested at December 31, 2005		548		$	34.41
Granted		450			51.92
Vested		(330	)		35.97
Forfeited		(56	)		45.68

Unvested at December 31, 2006		612		$	45.43

As of December 31, 2006, there was $24.1 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the stock incentive plans. That cost is expected to be recognized over a weighted average period of 1.96 years. The total fair value of shares vested, based on the market price on the vesting date, for the years ended December 31, 2006 and 2005 was $17.4 million and $9.8 million, respectively.

401(k) Plan. In November 1997, the Company established a Section 401(k) Savings and Retirement Plan (the “401(k) Plan”), which is a continuation of the 401(k) Plan of the predecessor, to cover eligible employees of the Company and any designated affiliates. During 2006 and 2005, the 401(k) Plan permitted eligible employees of the Company to defer up to 20% of their annual compensation (as adjusted under the terms of the 401(k) Plan), subject to certain limitations imposed by the Code. The employees’ elective deferrals are immediately vested and non-forfeitable upon contribution to the 401(k) Plan. During 2006 and 2005, the Company matched employee contributions under the 401(k) Plan in an amount equal to 50% of the first 6.0% of annual compensation deferred by each employee, up to a maximum match by the Company of $6,600 and $6,300 per year, respectively, for each participating employee.

Matching contributions made by the Company vest fully one year after the commencement of an employee’s employment with the Company. The Company may also make discretionary contributions to the 401(k) Plan. In 2006, 2005 and 2004, the Company paid $0.8 million, $0.7 million and $0.5 million, respectively, for its 401(k) match. No discretionary contributions were made by the Company to the 401(k) Plan in 2006, 2005 and 2004.

Deferred Compensation Plans. The Company has established two non-qualified deferred compensation plans for eligible officers and directors of the Company and certain of its affiliates, which enable eligible participants to defer income from their U.S. payroll up to 100% of annual base pay, up to 100% of annual bonuses, up to 100% of their meeting fees and/or committee chairmanship fees, and up to 100% of certain equity-based compensation, as applicable, subject to restrictions, on a pre-tax basis. This deferred compensation is our unsecured obligation. The Company may make discretionary matching contributions to participant accounts at any time. The Company made no such discretionary matching contributions in 2006, 2005 or 2004. The participant’s elective deferrals and any matching contributions are immediately 100% vested. As of December 31, 2006 and 2005, the total fair value of compensation deferred was $70.2 million and $20.9 million, respectively.

13. Income Per Share

The Company’s only dilutive securities outstanding for the years ended December 31, 2006, 2005 and 2004 were stock options and shares of restricted stock granted under its stock incentive plans. The effect on income per share was to increase weighted average shares outstanding. Such dilution was computed using the treasury stock method. The computation of basic and diluted earnings per share (“EPS”) is presented below (dollars in thousands, except share and per share amounts):

F-28


	2006			2005			2004
Numerator
Income from continuing operations before cumulative effect of change in accounting principle	$	162,826		$	122,878		$	54,782
Preferred stock dividends		(13,582	)		(7,388	)		(7,131	)
Preferred unit issuance costs		(1,070	)		—			—


Income from continuing operations before cumulative effect of change in accounting principle (after preferred stock dividends)		148,174			115,490			47,651
Total discontinued operations		61,053			134,929			70,689
Cumulative effect of change in accounting principle		193			—			—

Net income available to common stockholders	$	209,420		$	250,419		$	118,340


Denominator
Basic		87,710,500			84,048,936			82,133,627
Stock options and restricted stock dilution ⁽¹⁾		3,396,393			3,824,463			3,234,999

Diluted weighted average common shares		91,106,893			87,873,399			85,368,626


Basic income per common share
Income from continuing operations (after preferred stock dividends) before cumulative effect of change in accounting principle	$	1.69		$	1.37		$	0.58
Discontinued operations		0.70			1.61			0.86
Cumulative effect of change in accounting principle		—			—			—

Net income available to common stockholders	$	2.39		$	2.98		$	1.44


Diluted income per common share
Income from continuing operations (after preferred stock dividends) before cumulative effect of change in accounting principle	$	1.63		$	1.31		$	0.56
Discontinued operations		0.67			1.54			0.83
Cumulative effect of change in accounting principle		—			—			—

Net income available to common stockholders	$	2.30		$	2.85		$	1.39


(1)		Excludes anti—dilutive stock options of 48,196, 56,463 and 62,380, respectively, for the years ended December 31, 2006, 2005, and 2004.

14. Commitments and Contingencies

Commitments

Lease Commitments. The Company holds operating ground leases on land parcels at its on—tarmac facilities, leases on office spaces for corporate use, and a leasehold interest that it holds for investment purposes. The remaining lease terms are from one to 55 years. Buildings and improvements are being amortized ratably over the lesser of the terms of the related leases or 40 years. Future minimum rental payments required under non—cancelable operating leases in effect as of December 31, 2006 were as follows (dollars in thousands):

F-29


2007	$	21,636
2008		22,186
2009		21,506
2010		20,667
2011		20,668
Thereafter		272,483

Total	$	379,146

Standby Letters of Credit. As of December 31, 2006, the Company had provided approximately $22.1 million in letters of credit, of which $11.7 million were provided under the Operating Partnership’s $550.0 million unsecured credit facility. The letters of credit were required to be issued under certain ground lease provisions, bank guarantees and other commitments.

Guarantees. Other than parent guarantees associated with the unsecured debt, as of December 31, 2006, the Company had outstanding guarantees in the aggregate amount of $48.2 million in connection with certain acquisitions. As of December 31, 2006, the Company guaranteed $26.8 million and $83.2 million on outstanding loans on two of its consolidated joint ventures and two of its unconsolidated joint ventures, respectively. In addition, as of December 31, 2006, the Company guaranteed $87.3 million on outstanding property debt related to one of its unconsolidated joint ventures.

Performance and Surety Bonds. As of December 31, 2006, the Company had outstanding performance and surety bonds in an aggregate amount of $11.4 million. These bonds were issued in connection with certain of its development projects and were posted to guarantee certain tax obligations and the construction of certain real property improvements and infrastructure, such as grading, sewers and streets. Performance and surety bonds are commonly required by public agencies from real estate developers. Performance and surety bonds are renewable and expire upon the payment of the taxes due or the completion of the improvements and infrastructure.

Promoted Interests and Other Contractual Obligations. Upon the achievement of certain return thresholds and the occurrence of certain events, the Company may be obligated to make payments to certain of joint venture partners pursuant to the terms and provisions of their contractual agreements with the Operating Partnership. From time to time in the normal course of the Company’s business, the Company enters into various contracts with third parties that may obligate it to make payments, pay promotes or perform other obligations upon the occurrence of certain events.

Contingencies

Litigation. In the normal course of business, from time to time, the Company may be involved in legal actions relating to the ownership and operations of its properties. Management does not expect that the liabilities, if any, that may ultimately result from such legal actions will have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

Environmental Matters. The Company monitors its properties for the presence of hazardous or toxic substances. The Company is not aware of any environmental liability with respect to the properties that would have a material adverse effect on the Company’s business, assets or results of operations. However, there can be no assurance that such a material environmental liability does not exist. The existence of any such material environmental liability would have an adverse effect on the Company’s results of operations and cash flow. The Company carries environmental insurance and believes that the policy terms, conditions, limits and deductibles are adequate and appropriate under the circumstances, given the relative risk of loss, the cost of such coverage and current industry practice.

General Uninsured Losses. The Company carries property and rental loss, liability, flood and terrorism insurance. The Company believes that the policy terms, conditions, limits and deductibles are adequate and appropriate under the circumstances, given the relative risk of loss, the cost of such coverage and current industry practice. In addition, certain of the Company’s properties are located in areas that are subject to earthquake activity; therefore, the Company has obtained limited earthquake insurance on those properties. There are, however, certain types of extraordinary losses, such as those due to acts of war, that may be either uninsurable or not economically insurable. Although the Company has obtained coverage for certain acts of terrorism, with policy specifications and insured limits that it believes are commercially reasonable, there can be no assurance that the Company will be able to collect under such policies. Should an uninsured loss occur, the Company could lose its investment in, and anticipated profits and cash flows from, a property.

F-30

Various properties that the Company owns or leases in New Orleans, Louisiana and South Florida suffered damage in 2005 as a result of Hurricanes Katrina and Wilma. Although the Company expects that its insurance will cover losses arising from this damage in excess of the industry standard deductibles paid by the Company, there can be no assurance the Company will be reimbursed for all losses incurred. Management is not aware of circumstances associated with these losses that would have a material adverse effect on the Company’s business, assets or results from operations.

Captive Insurance Company. In December 2001, the Company formed a wholly—owned captive insurance company, Arcata National Insurance Ltd., (Arcata), which provides insurance coverage for all or a portion of losses below the deductible under the Company’s third—party policies. The captive insurance company is one element of the Company’s overall risk management program. The Company capitalized Arcata in accordance with the applicable regulatory requirements. Arcata established annual premiums based on projections derived from the past loss experience at the Company’s properties. Annually, the Company engages an independent third party to perform an actuarial estimate of future projected claims, related deductibles and projected expenses necessary to fund associated risk management programs. Premiums paid to Arcata may be adjusted based on this estimate. Like premiums paid to third—party insurance companies, premiums paid to Arcata may be reimbursed by customers pursuant to specific lease terms. Through this structure, the Company believes that it has more comprehensive insurance coverage at an overall lower cost than would otherwise be available in the market.

15. Quarterly Financial Data (Unaudited)

Selected quarterly financial results for 2006 and 2005 were as follows (dollars in thousands, except share and per share amounts):

2006


	Quarter (unaudited)⁽¹⁾
	March 31			June 30			September 30			December 31			Year
Total revenues	$	175,168		$	174,590		$	181,529		$	187,436		$	718,723
Income before minority interests, discontinued operations and cumulative effect of change in accounting principle		30,334			67,367			46,692			80,841			225,234
Total minority interests’ share of income		(14,445	)		(15,274	)		(17,051	)		(15,638	)		(62,408	)
Income from continuing operations before cumulative effect of change in accounting principle		15,889			52,093			29,641			65,203			162,826
Total discontinued operations		11,495			23,260			3,746			22,552			61,053
Cumulative effect of change in accounting principle		193			—			—			—			193

Net income		27,577			75,353			33,387			87,755			224,072
Preferred stock dividends		(3,096	)		(3,095	)		(3,440	)		(3,951	)		(13,582	)
Preferred unit redemption (issuance costs)/discount		(1,097	)		77			16			(66	)		(1,070	)

Net income available to common stockholders	$	23,384		$	72,335		$	29,963		$	83,738		$	209,420


Basic income per common share⁽²⁾
Income from continuing operations	$	0.14		$	0.56		$	0.30		$	0.69		$	1.69
Discontinued operations		0.13			0.27			0.04			0.25			0.70
Cumulative effect of change in accounting principle		—			—			—			—			—

Net income available to common stockholders	$	0.27		$	0.83		$	0.34		$	0.94		$	2.39


Diluted income per common share⁽²⁾
Income from continuing operations	$	0.13		$	0.54		$	0.29		$	0.67		$	1.63
Discontinued operations		0.13			0.26			0.04			0.24			0.67
Cumulative effect of change in accounting principle		—			—			—			—			—

Net income available to common stockholders	$	0.26		$	0.80		$	0.33		$	0.91		$	2.30

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic		86,432,895			87,317,494			88,029,033			88,835,283			87,710,500

Diluted		90,179,329			90,135,659			91,058,029			92,251,667			91,106,893


(1)		Certain reclassifications have been made to the quarterly data to conform with the annual presentation with no net effect to net income or net income available to common stockholders.

(2)		The sum of quarterly financial data may vary from the annual data due to rounding.

F-31

2005


	Quarter (unaudited)⁽¹⁾
	March 31			June 30			September 30			December 31			Year
Total revenues	$	150,365		$	152,109		$	154,284		$	194,072		$	650,830
Income before minority interests and discontinued operations		38,446			45,198			24,261			89,343			197,248
Total minority interests’ share of income		(24,646	)		(15,041	)		(14,602	)		(20,081	)		(74,370	)
Income from continuing operations		13,800			30,157			9,659			69,262			122,878
Total discontinued operations		32,967			10,632			19,409			71,921			134,929

Net income		46,767			40,789			29,068			141,183			257,807
Preferred stock dividends		(1,783	)		(1,783	)		(1,783	)		(2,039	)		(7,388	)

Net income available to common stockholders	$	44,984		$	39,006		$	27,285		$	139,144		$	250,419


Basic income per common share⁽²⁾
Income from continuing operations	$	0.14		$	0.34		$	0.09		$	0.79		$	1.37
Discontinued operations		0.40			0.13			0.23			0.85			1.61

Net income available to common stockholders	$	0.54		$	0.47		$	0.32		$	1.64		$	2.98


Diluted income per common share⁽²⁾
Income from continuing operations	$	0.14		$	0.33		$	0.09		$	0.75		$	1.31
Discontinued operations		0.38			0.12			0.22			0.81			1.54

Net income available to common stockholders	$	0.52		$	0.45		$	0.31		$	1.56		$	2.85

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic		83,133,730			83,521,538			84,437,568			85,010,258			84,048,936

Diluted		86,516,695			87,076,011			88,373,479			88,981,657			87,873,399


(1)		Certain reclassifications have been made to the quarterly data to conform with the annual presentation with no net effect to net income or per share amounts.

(2)		The sum of quarterly financial data may vary from the annual data due to rounding.

16. Segment Information

The Company has two lines of business, real estate operations and private capital. Real estate operations is comprised of various segments while private capital consists of a single segment, on which the Company evaluates its performance:

•

Real Estate Operations. The Company operates industrial properties and manages its business by geographic markets. Such industrial properties typically comprise multiple distribution warehouse facilities suitable for single or multiple customers who are engaged in various types of businesses. The geographic markets where the Company owns industrial properties are managed separately because it believes each market has its own economic characteristics and requires its own operating, pricing and leasing strategies. Each market is considered to be an individual operating segment. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based upon property net operating income of the combined properties in each segment, which are listed below. In addition, the Company’s development business is included under real estate operations. It primarily consists of the Company’s development of real estate properties that are subsequently contributed to a joint venture fund in which the Company has an ownership interest and for which the Company acts as manager, or that are sold to third parties. The Company evaluates performance of the development business by reported operating segment based upon gains generated from the disposition and/or contribution of real estate. The assets of the development business generally include properties under development and land held for development. During the period between the completion of development of a property and the date the property is contributed to an unconsolidated joint venture or sold to a third party, the property and its associated rental income and property operating costs are included in the real estate operations segment because the primary activity associated with the property during that period is leasing. Upon contribution or sale, the resulting gain or loss is included as gains from dispositions of real estate interests or development profits, as appropriate.

•

Private Capital. The Company, through its private capital group, AMB Capital Partners, LLC, provides real estate investment, portfolio management and reporting services to co—investment joint ventures and clients. The private capital income earned consists of acquisition and development fees, asset management fees and priority distributions, and promoted interests and incentive distributions from the Company’s co—investment joint ventures and AMB Capital Partners’ clients. With respect to the Company’s U.S. and Mexico funds and joint ventures, the Company typically earns a 90 basis points acquisition fee on the acquisition cost of third party acquisitions, asset management priority distributions of 7.5% of net

F-32

operating income on stabilized properties, 70 basis points of total projected costs as asset management fees on renovation or development properties, and incentive distributions of 15% of the return over a 9% internal rate of return and 20% of the return over a 12% internal rate of return to investors on a periodic basis or at the end of a fund’s life. In Japan, the Company earns a 90 basis points acquisition fee on the acquisition cost of third party acquisitions, asset management priority distributions of 1.5% of 80% of the committed equity during the investment period and then 1.5% of unreturned equity, and incentive distributions of 20% of the return over a 10% internal rate of return and 25% of the return over a 13% internal rate of return to investors at the end of a fund’s life. In Europe, the Company earns a 90 basis points acquisition fee on the acquisition cost of third party acquisitions, asset management fees of 75 basis points on the gross asset value of the fund, and incentive distributions of 20% of the return over a 9% internal rate of return and 25% of the return over a 12% internal rate of return to investors on a periodic basis. The accounting policies of the segment are the same as those described in the summary of significant accounting policies under Note 2, Interim Financial Statements. The Company evaluates performance based upon private capital income.

The segment information in the following tables for the three years ended December 31, 2006, 2005 and 2004, have been reclassified to conform to current presentation. See Note 17.

Summary information for the reportable segments is as follows (dollars in thousands):


	Revenues									Property NOI⁽²⁾									Development Gains
Segments⁽¹⁾	2006			2005			2004			2006			2005			2005			2006			2005		2004
U.S. Markets
Southern California	$	111,191		$	108,625		$	106,306		$	87,708		$	86,300		$	83,288		$	6,854		$	14,701	$	—
No. New Jersey / New York		79,940			85,331			64,662			56,283			61,278			45,022			1,422			15,335		—
San Francisco Bay Area		86,477			86,631			98,885			68,412			69,005			79,486			—			658		2,749
Chicago		55,255			55,085			45,015			38,606			38,105			31,389			5,972			2,622		—
On-Tarmac		55,131			56,912			54,425			31,584			33,198			30,596			—			—		—
South Florida		40,311			35,953			36,833			27,678			24,188			24,136			5,287			11,117		2,398
Seattle		38,968			44,368			41,675			30,668			34,394			32,539			(901	)		—		—
Non — U.S. Markets
Europe		34,439			17,886			8,255			27,723			14,462			6,696			—			—		—
Asia		21,501			8,773			7,009			13,645			6,004			5,289			77,939			—		—
Other Markets		156,387			179,256			201,402			116,481			130,136			149,254			9,816			10,378		3,381

Total markets		679,600			678,820			664,467			498,788			497,070			487,695			106,389			54,811		8,528
Straight-line rents and amortization of lease intangibles		19,134			19,523			16,281			19,134			19,523			16,281			—			—		—
Discontinued operations		(26,113	)		(91,455	)		(126,956	)		(19,867	)		(67,547	)		(93,008	)		—			—		—

Private captial
Private capital income		46,102			43,942			12,895			—			—			—			—			—		—

Total	$	718,723		$	650,830		$	566,687		$	498,055		$	449,046		$	410,968		$	106,389		$	54,811	$	8,528


(1)		The markets included are a subset of the Company’s regions defined as East, Southwest and West Central in North America, Europe and Asia.

(2)		Property net operating income (“NOI”) is defined as rental revenue, including reimbursements, less property operating expenses, which excludes depreciation, amortization, general and administrative expenses and interest expense. For a reconciliation of NOI to net income, see the table below.

The Company considers NOI to be an appropriate and useful supplemental performance measure because NOI reflects the operating performance of the Company’s real estate portfolio on a segment basis, and the Company uses NOI to make decisions about resource allocations and to assess regional property level performance. However, NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact the Company’s results from operations. Further, the Company’s NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI.

F-33

The following table is a reconciliation from NOI to reported net income, a financial measure under GAAP (dollars in thousands):


	2006			2005			2004
Property NOI	$	498,055		$	449,046		$	410,968
Private capital income		46,102			43,942			12,895
Depreciation and amortization		(176,468	)		(160,276	)		(135,412	)
Impairment losses		(6,312	)		—			—
General and administrative		(104,262	)		(71,564	)		(57,181	)
Other income		(2,620	)		(5,038	)		(2,554	)
Fund costs		(2,091	)		(1,482	)		(1,741	)
Equity in earnings of unconsolidated joint ventures		23,240			10,770			3,781
Other income		9,423			5,593			4,700
Gains from dispositions of real estate		—			19,099			5,219
Development profits, net of taxes		106,389			54,811			8,528
Interest, including amortization		(166,222	)		(147,653	)		(141,955	)
Total minority interests’ share of income		(62,408	)		(74,370	)		(52,466	)
Total discontinued operations		61,053			134,929			70,689
Cumulative effect of change in accounting principle		193			—			—

Net income	$	224,072		$	257,807		$	125,471

The Company’s total assets by reportable segments were (dollars in thousands):


	Total Assets as of
	December 31, 2006		December 31, 2005
U.S. Markets
Southern California	$	895,610	$	930,917
No. New Jersey / New York		607,727		756,719
San Francisco Bay Area		703,660		789,129
Chicago		446,662		504,581
On-Tarmac		210,798		245,046
South Florida		371,603		372,728
Seattle		380,459		371,029
Non-U.S. Markets
Europe		723,326		312,730
Asia		434,706		525,441
Other Markets		1,430,308		1,452,170

Total markets		6,204,859		6,260,490
Investments in unconsolidated joint ventures		274,381		118,653
Non-segment assets		234,272		423,596

Total assets	$	6,713,512	$	6,802,739

17. Subsequent Events

On February 14, 2007, seven subsidiaries of AMB-SGP, L.P., a Delaware limited partnership, which is a subsidiary of the Company, entered into a loan agreement for a $305 million secured financing. The loan is secured by more than sixty buildings owned by such subsidiaries of AMB-SGP, L.P. $160 million of the loan will be securitized and sold on the open market, and the remaining portion will be held in the lenders’ general accounts. AMB-SGP, L.P. remains a guarantor of certain standard recourse carve-outs under the loan agreement.

On the same day, pursuant to the loan agreement the same seven subsidiaries delivered four promissory notes to the two lenders, each of which matures on March 5, 2012. One note, has a principal of $160 million and an interest rate that is fixed at 5.29%. One is a $40 million note with an interest rate of 81 basis points above the one-month LIBOR rate, a second has a principal of $84 million and

F-34

a fixed interest rate of 5.90%, and the final note has a principal of $21 million and bears interest at a rate of 135 basis points above the one-month LIBOR rate.

Subsequent to the filing of the Company’s annual report on Form 10-K on February 23, 2007, as amended, the Company plans to file a registration statement on Form S-3 with the Securities and Exchange Commission (SEC) on or about November 14, 2007 registering the issuance and resale of 1,130,835 shares of common stock issuable to J.A. Green Development Corp. and JAGI, Inc. In connection with the filing of this registration statement and for the sole purpose of meeting post-annual report SEC reporting requirements with respect to such registration statement, the Company amended its audited consolidated financial statements for the year ended December 31, 2006, due to certain provisions of Statement of Financial Accounting Standards (SFAS) No 144. “Accounting for the Impairment or Disposal of Long–Lived Assets” that require the Company to report the results of operations of a property if it has either been disposed of or classified as held for sale in discontinued operations and meets certain other criteria. The effect of the reclassification represents a $9.1 million, $7.4 million and $6.8 million decrease in our previously reported income from continuing operations for the three years ended December 31, 2006, 2005 and 2004, respectively. As a result of the foregoing, Notes 2, 4, 8, 9, 13, 15, 16 and 17 to the consolidated financial statements for the three years ended December 31, 2006, 2005 and 2004 have been updated. There is no effect on our previously reported net income, financial condition or cash flows.

We are also amending our segment information presented in Note 16 to the consolidated financial statements for the three years ended December 31, 2006, 2005 and 2004 to conform to the current presentation presented in Note 10 of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2007.

F-35

AMB PROPERTY CORPORATION
SCHEDULE III
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2006
(in thousands, except number of buildings)


						Initial Cost to Company						Gross Amount Carried at 12/31/06
										Costs
										Capitalized										Year of
	No of							Building &		Subsequent to				Building &		Total Costs		Accumulated		Construction/		Depreciable
Property	Bldgs	Location	Type	Encumbrances (3)		Land		Improvements		Acquisition		Land		Improvements		(1) (2)		Depreciation (4)		Acquisition		Life (Years)
Atlanta
Airport Plaza	3	GA	IND	$	4,275	$	1,811	$	5,093	$	974	$	1,811	$	6,067	$	7,878	$	785		2003		5-40
Airport South Business Park	8	GA	IND		16,086		9,200		16,436		14,476		9,200		30,912		40,112		5,341		2001		5-40
Atlanta South Business Park	9	GA	IND		—		8,047		24,180		4,348		8,047		28,528		36,575		7,728		1997		5-40
AMB Garden City Industrial	1	GA	IND		—		441		2,604		147		462		2,730		3,192		213		2004		5-40
South Ridge at Hartsfield	1	GA	IND		3,828		2,096		4,008		1,130		2,096		5,138		7,234		872		2001		5-40
Southfield/KRDC Industrial SG	13	GA	IND		32,177		13,578		35,730		8,591		13,578		44,321		57,899		7,672		1997		5-40
Southside Distribution Center	1	GA	IND		1,064		766		2,480		105		766		2,585		3,351		385		2001		5-40
Sylvan Industrial	1	GA	IND		—		1,946		5,905		724		1,946		6,629		8,575		1,407		1999		5-40
Chicago
Addison Business Center	1	IL	IND		—		1,060		3,228		389		1,060		3,617		4,677		742		2000		5-40
Alsip Industrial	1	IL	IND		—		1,200		3,744		737		1,200		4,481		5,681		1,013		1998		5-40
Belden Avenue SGP	3	IL	IND		9,486		5,393		13,655		1,176		5,487		14,737		20,224		3,345		2001		5-40
Bensenville Ind Park	13	IL	IND		—		20,799		62,438		23,187		20,799		85,625		106,424		25,407		1993		5-40
Bridgeview Industrial	1	IL	IND		—		1,332		3,996		561		1,332		4,557		5,889		1,136		1995		5-40
Chancellory Park	8	IL	IND		35,838		24,491		31,848		1,725		24,491		33,573		58,064		1,106		2002		5-40
Chicago Industrial Portfolio	1	IL	IND		—		762		2,285		749		762		3,034		3,796		787		1992		5-40
Chicago Ridge Freight Terminal	1	IL	IND		—		3,705		3,576		206		3,705		3,782		7,487		567		2001		5.40
AMB District Industrial	1	IL	IND		—		703		1,338		173		703		1,511		2,214		191		2004		5-40
Elk Grove Village SG	10	IL	IND		15,948		7,059		21,739		5,095		7,059		26,834		33,893		5,928		2001		5-40
Executive Drive	1	IL	IND		—		1,399		4,236		1,599		1,399		5,835		7,234		1,727		1997		5-40
AMB Golf Distribution	1	IL	IND		13,922		7,740		16,749		823		7,740		17,572		25,312		1,207		2005		5-40
Hamilton Parkway	1	IL	IND		—		1,554		4,408		563		1,554		4,971		6,525		1,254		1995		5-40
Hintz Building	1	IL	IND		—		420		1,259		402		420		1,661		2,081		428		1998		5-40
Itasca Industrial Portfolio	5	IL	IND		—		3,830		11,537		2,958		3,830		14,495		18,325		4,703		1994		5-40
AMB Kehoe Industrial	1	IL	IND		—		2,000		3,006		—		2,000		3,006		5,006		39		2006		5-40
Melrose Park Distribution Ctr.	1	IL	IND		—		2,936		9,190		2,398		2,936		11,588		14,524		3,892		1995		5-40
NDP — Chicago	3	IL	IND		—		1,496		4,487		1,271		1,496		5,758		7,254		1,744		1998		5-40
AMB Nicholas Logistics Center	1	IL	IND		—		4,681		5,811		1,883		4,681		7,694		12,375		798		2001		5-40
AMB O’Hare	14	IL	IND		8,987		2,924		8,995		3,002		2,924		11,997		14,921		2,511		2001		5-40
O’Hare Industrial Portfolio	12	IL	IND		—		5,497		20,238		1,806		5,497		22,044		27,541		5,963		1996		5-40
Poplar Gateway Truck Terminal	1	IL	IND		—		4,551		3,152		806		4,551		3,958		8,509		371		2002		5-40
AMB Port O’Hare	2	IL	IND		5,739		4,913		5,761		1,300		4,913		7,061		11,974		1,567		2001		5-40
AMB Sivert Distribution	1	IL	IND		—		857		1,377		744		857		2,121		2,978		260		2004		5-40
Stone Distribution Center	1	IL	IND		2,781		2,242		3,266		801		2,242		4,067		6,309		463		2003		5-40
AMB Territorial Industrial	1	IL	IND		—		954		3,451		5		954		3,456		4,410		53		2006		5-40
Thorndale Distribution	1	IL	IND		5,252		4,130		4,216		531		4,130		4,747		8,877		731		2002		5-40
Touhy Cargo Terminal	1	IL	IND		5,056		2,800		110		4,615		2,800		4,725		7,525		450		2002		5-40
West O’Hare CC	2	IL	IND		5,892		8,523		14,848		1,761		8,523		16,609		25,132		1,732		2001		5-40
Windsor Court	1	IL	IND		—		766		2,338		165		766		2,503		3,269		612		1997		5-40
Wood Dale Industrial SG	5	IL	IND		8,227		2,868		9,166		1,482		2,868		10,648		13,516		1,993		2001		5-40
Yohan Industrial	3	IL	IND		4,364		5,904		7,323		1,656		5,904		8,979		14,883		1,349		2003		5-40
Dallas/Ft. Worth
Addison Technology Center	1	TX	IND		—		899		2,696		1,312		899		4,008		4,907		1,228		1998		5-40
Dallas Industrial	12	TX	IND		—		5,938		17,836		5,980		5,938		23,816		29,754		7,856		1994		5-40
Greater Dallas Industrial Port	4	TX	IND		—		4,295		14,285		3,971		4,295		18,256		22,551		5,676		1997		5-40

S-1

AMB PROPERTY CORPORATION
SCHEDULE III
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2006
(in thousands, except number of buildings)


						Initial Cost to Company						Gross Amount Carried at 12/31/06
										Costs
										Capitalized										Year of
	No of							Building &		Subsequent to				Building &		Total Costs		Accumulated		Construction/		Depreciable
Property	Bldgs	Location	Type	Encumbrances (3)		Land		Improvements		Acquisition		Land		Improvements		(1) (2)		Depreciation (4)		Acquisition		Life (Years)
Lincoln Industrial Center	1	TX	IND		—		671		2,052		1,426		671		3,478		4,149		760		1994		5-40
Lonestar Portfolio	6	TX	IND		15,414		6,451		19,360		4,978		6,451		24,338		30,789		4,115		1994		5-40
Northfield Dist. Center	7	TX	IND		21,453		9,313		27,388		3,676		9,313		31,064		40,377		3,519		2002		5-40
Richardson Tech Center SGP	2	TX	IND		4,810		1,522		5,887		2,425		1,522		8,312		9,834		1,116		2001		5-40
Valwood Industrial	2	TX	IND		—		1,983		5,989		2,476		1,983		8,465		10,448		2,745		1994		5-40
West North Carrier Parkway	1	TX	IND		—		1,375		4,165		1,275		1,375		5,440		6,815		1,676		1993		5-40
Los Angeles
Activity Distribution Center	4	CA	IND		—		3,736		11,248		3,293		3,736		14,541		18,277		3,914		1994		5-40
Anaheim Industrial Property	1	CA	IND		—		1,457		4,341		940		1,457		5,281		6,738		1,420		1994		5-40
Artesia Industrial	23	CA	IND		—		21,764		65,270		15,301		21,764		80,571		102,335		21,873		1996		5-40
Bell Ranch Distribution	5	CA	IND		—		6,904		12,915		1,415		6,904		14,330		21,234		2,286		2001		5-40
Cabrillo Distribution Center	1	CA	IND		11,794		7,563		11,177		41		7,563		11,218		18,781		1,134		2002		5-40
Carson Industrial	12	CA	IND		—		4,231		10,418		6,664		4,231		17,082		21,313		3,713		1999		5-40
Carson Town Center	2	CA	IND		—		6,565		3,210		15,604		6,565		18,814		25,379		3,365		2000		5-40
Chartwell Distribution Center	1	CA	IND		—		2,711		8,191		1,111		2,711		9,302		12,013		1,645		2000		5-40
Del Amo Industrial Center	1	CA	IND		—		2,529		7,651		231		2,529		7,882		10,411		1,206		2000		5-40
Eaves Distribution Center	3	CA	IND		14,341		11,893		12,708		3,317		11,893		16,025		27,918		3,239		2001		5-40
Fordyce Distribution Center	1	CA	IND		7,054		5,835		10,985		917		5,835		11,902		17,737		1,346		2001		5-40
Ford Distribution Cntr	7	CA	IND		—		24,557		22,046		5,261		24,557		27,307		51,864		4,750		2001		5-40
Harris Bus Ctr Alliance II	9	CA	IND		31,095		20,772		31,050		4,370		20,863		35,329		56,192		6,706		2000		5-40
Hawthorne LAX Cargo AMBPTNII	1	CA	IND		7,952		2,775		8,377		519		2,775		8,896		11,671		1,436		2000		5-40
LA Co Industrial Port SGP	6	CA	IND		21,596		9,430		29,242		6,600		9,432		35,840		45,272		5,700		2001		5-40
LAX Gateway	1	CA	IND		15,960		—		26,814		425		—		27,239		27,239		3,093		2004		5-40
Los Nietos Business Center SG	4	CA	IND		7,504		2,488		7,751		1,103		2,488		8,854		11,342		1,635		2001		5-40
International Multifoods	1	CA	IND		—		1,613		4,879		1,751		1,613		6,630		8,243		1,910		1993		5-40
NDP — Los Angeles	6	CA	IND		—		5,948		17,844		4,879		5,948		22,723		28,671		5,520		1998		5-40
Normandie Industrial	1	CA	IND		—		2,398		7,491		3,095		2,398		10,586		12,984		2,370		2000		5-40
Northpointe Commerce	2	CA	IND		—		1,773		5,358		788		1,773		6,146		7,919		1,646		1993		5-40
Pioneer-Alburtis	5	CA	IND		7,821		2,422		7,166		1,302		2,422		8,468		10,890		1,645		2001		5-40
Park One at LAX, LLC	0	CA	IND		—		75,000		431		67		75,000		498		75,498		64		2002		5-40
Slauson Dist. Ctr. AMBPTNII	8	CA	IND		24,706		7,806		23,552		6,163		7,806		29,715		37,521		5,307		2000		5-40
Spinnaker Logistics	1	CA	IND		12,934		12,198		17,276		1,737		12,198		19,013		31,211		417		2004		5-40
AMB Starboard Distribution Ctr	1	CA	IND		—		19,683		17,387		2,069		19,683		19,456		39,139		1,160		2005		5-40
Sunset Dist. Center	3	CA	IND		13,725		13,360		2,765		10,022		13,360		12,787		26,147		1,311		2002		5-40
Systematics	1	CA	IND		—		911		2,773		711		911		3,484		4,395		1,161		1993		5-40
Torrance Commerce Center	6	CA	IND		—		2,045		6,136		1,604		2,045		7,740		9,785		2,281		1998		5-40
AMB Triton Distribution Center	1	CA	IND		9,700		6,856		7,135		1,243		6,856		8,378		15,234		351		2005		5-40
Van Nuys Airport Industrial	4	CA	IND		—		9,393		8,641		15,714		9,393		24,355		33,748		5,463		2000		5-40
Walnut Drive	1	CA	IND		—		964		2,918		814		964		3,732		4,696		1,065		1997		5-40
Watson Industrial Center AFdII	1	CA	IND		4,270		1,713		5,321		1,378		1,713		6,699		8,412		1,252		2001		5-40
Wilmington Avenue Warehouse	2	CA	IND		—		3,849		11,605		4,525		3,849		16,130		19,979		4,284		1999		5-40
Miami
Beacon Centre	18	FL	IND		65,798		31,704		96,681		26,393		31,704		123,074		154,778		24,905		2000		5-40
Beacon Centre — Headlands	1	FL	IND		—		2,523		7,669		1,288		2,523		8,957		11,480		1,637		2000		5-40
Beacon Industrial Park	8	FL	IND		—		10,105		31,437		9,388		10,105		40,825		50,930		9,881		1996		5-40
Beacon Lakes	1	FL	IND		7,544		1,689		8,133		878		1,689		9,011		10,700		822		2002		5-40
Blue Lagoon Business Park	2	FL	IND		—		4,945		14,875		2,439		4,945		17,314		22,259		4,486		1996		5-40
Cobia Distribution Center	2	FL	IND		7,800		1,792		5,950		2,292		1,792		8,242		10,034		534		2004		5-40

S-2

AMB PROPERTY CORPORATION
SCHEDULE III
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2006
(in thousands, except number of buildings)


						Initial Cost to Company						Gross Amount Carried at 12/31/06
										Costs
										Capitalized										Year of
	No of							Building &		Subsequent to				Building &		Total Costs		Accumulated		Construction/		Depreciable
Property	Bldgs	Location	Type	Encumbrances (3)		Land		Improvements		Acquisition		Land		Improvements		(1) (2)		Depreciation (4)		Acquisition		Life (Years)
Dolphin Distribution Center	1	FL	IND		2,819		1,581		3,602		1,652		1,581		5,254		6,835		295		2003		5-40
Gratigny Distribution Center	1	FL	IND		3,766		1,551		2,380		1,306		1,551		3,686		5,237		513		2003		5-40
Marlin Distribution Center	1	FL	IND		—		1,076		2,169		931		1,076		3,100		4,176		408		2003		5-40
Miami Airport Business Center	6	FL	IND		—		6,400		19,634		5,068		6,400		24,702		31,102		4,956		1999		5-40
Panther Distribution Center	1	FL	IND		3,865		1,840		3,252		1,391		1,840		4,643		6,483		482		2003		5-40
Sunrise Industrial	3	FL	IND		7,415		4,573		17,088		2,155		4,573		19,243		23,816		3,104		1998		5-40
Tarpon Distribution Center	1	FL	IND		3,008		884		3,914		531		884		4,445		5,329		450		2004		5-40
No. New Jersey/New York City
AMB Meadowlands Park	8	NJ	IND		—		5,449		14,458		4,975		5,449		19,433		24,882		4,253		2000		5-40
Dellamor	8	NJ	IND		13,662		12,061		11,577		2,674		12,061		14,251		26,312		2,084		2002		5-40
Docks Corner SG (Phase II)	1	NJ	IND		34,068		13,672		22,516		20,624		13,672		43,140		56,812		7,672		2001		5-40
Fairfalls Portfolio	28	NJ	IND		32,984		20,381		45,038		6,351		20,381		51,389		71,770		5,121		2004		5-40
Fairmeadows Portfolio	20	NJ	IND		30,058		22,932		35,522		7,935		22,932		43,457		66,389		4,437		2003		5-40
Jamesburg Road Corporate Park	3	NJ	IND		20,605		11,700		35,101		6,141		11,700		41,242		52,942		11,070		1998		5-40
JFK Air Cargo	15	NY	IND		—		16,944		45,694		8,664		16,944		54,358		71,302		11,696		2000		5-40
JFK Airport Park	1	NY	IND		—		2,350		7,251		1,240		2,350		8,491		10,841		1,798		2000		5-40
AMB JFK Airgate Center	4	NY	IND		12,770		5,980		26,393		2,570		5,980		28,963		34,943		2,070		2005		5-40
Linden Industrial	1	NJ	IND		—		900		2,753		1,617		900		4,370		5,270		1,057		1999		5-40
Mahwah Corporate Center	4	NJ	IND		—		7,068		22,086		5,886		7,068		27,972		35,040		5,604		1998		5-40
Mooncreek Distribution Center	1	NJ	IND		—		2,958		7,924		166		2,958		8,090		11,048		662		2004		5-40
Meadowlands ALFII	3	NJ	IND		11,510		5,210		10,272		2,457		5,210		12,729		17,939		2,624		2001		5-40
Meadowlands Cross Dock	1	NJ	IND		—		1,110		3,485		1,102		1,110		4,587		5,697		1,187		2000		5-40
Meadow Lane	1	NJ	IND		—		838		2,594		773		838		3,367		4,205		702		1999		5-40
Moonachie Industrial	2	NJ	IND		5,154		2,731		5,228		711		2,731		5,939		8,670		1,036		2001		5-40
Murray Hill Parkway	2	NJ	IND		—		1,670		2,568		5,605		1,670		8,173		9,843		3,117		1999		5-40
Newark Airport I & II	2	NJ	IND		3,347		1,755		5,400		656		1,755		6,056		7,811		1,385		2000		5-40
Orchard Hill	1	NJ	IND		1,504		1,212		1,411		642		1,212		2,053		3,265		242		2002		5-40
AMB Pointview Dist. Ctr.	1	NJ	IND		12,217		4,693		12,355		539		4,693		12,894		17,587		563		2005		5-40
Porete Avenue Warehouse	1	NJ	IND		—		4,067		12,202		5,081		4,067		17,283		21,350		4,391		1998		5-40
Skyland Crossdock	1	NJ	IND		—		—		7,250		714		—		7,964		7,964		970		2002		5-40
Teterboro Meadowlands 15	1	NJ	IND		9,189		4,961		9,618		6,838		4,961		16,456		21,417		2,953		2001		5-40
AMB Tri-Port Distribution Ctr	1	NJ	IND		—		25,672		19,852		729		25,672		20,581		46,253		1,564		2004		5-40
Two South Middlesex	1	NJ	IND		—		2,247		6,781		2,354		2,247		9,135		11,382		2,627		1995		5-40
On-Tarmac
AMB BWI Cargo Center E	1	MD	IND		—		—		6,367		200		—		6,567		6,567		2,157		2000		5-19
AMB DFW Cargo Center East	3	TX	IND		5,678		—		20,632		1,291		—		21,923		21,923		5,176		2000		5-26
AMB DAY Cargo Center	5	OH	IND		6,265		—		7,163		554		—		7,717		7,717		2,264		2000		5-23
AMB DFW Cargo Center 1	1	TX	IND		—		—		34,199		724		—		34,923		34,923		1,334		2005		5-32
AMB DFW Cargo Center 2	1	TX	IND		—		—		4,286		14,703		—		18,989		18,989		3,721		1999		5-39
AMB IAD Cargo Center 5	1	VA	IND		—		—		38,840		804		—		39,644		39,644		11,723		2002		5-15
AMB JAX Cargo Center	1	FL	IND		—		—		3,029		226		—		3,255		3,255		859		2000		5-22
AMB JFK Cargo Center 75_77	2	NJ	IND		—		—		30,965		6,503		—		37,468		37,468		12,917		2002		5-13
AMB LAS Cargo Center 1_5	4	NV	IND		—		—		19,721		1,560		—		21,281		21,281		3,026		2003		5-33
AMB LAX Cargo Center	3	CA	IND		6,454		—		13,445		782		—		14,227		14,227		3,940		2000		5-22
AMB MCI Cargo Center 1	1	MO	IND		4,215		—		5,793		437		—		6,230		6,230		2,115		2000		5-18
AMB MCI Cargo Center 2	1	MO	IND		8,485		—		8,134		180		—		8,314		8,314		1,836		2000		5-27
AMB PHL Cargo Center C2	1	PA	IND		—		—		9,716		2,438		—		12,154		12,154		4,068		2000		5-27
AMB PDX Cargo Center Airtrans	2	OR	IND		—		—		9,207		2,018		—		11,225		11,225		2,187		1999		5-28
AMB RNO Cargo Center 10_11	2	NV	IND		—		—		6,014		302		—		6,316		6,316		1,129		2003		5-23
AMB SEA Cargo Center North	2	WA	IND		3,771		—		15,594		570		—		16,164		16,164		3,764		2000		5-27
AMB SEA Cargo Center South	1	WA	IND		—		—		3,056		363		—		3,419		3,419		1,519		2000		5-14

S-3

AMB PROPERTY CORPORATION
SCHEDULE III
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2006
(in thousands, except number of buildings)


											Costs
							Initial Cost to Company				Capitalized		Gross Amount Carried at 12/31/06								Year of
	No of								Building &		Subsequent to				Building &		Total Costs		Accumulated		Construction/		Depreciable
Property	Bldgs		Location	Type	Encumbrances (3)		Land		Improvements		Acquisition		Land		Improvements		(1) (2)		Depreciation (4)		Acquisition		Life (Years)
San Francisco Bay Area
Acer Distribution Center		1	CA	IND		—		3,146		9,479		3,162		3,146		12,641		15,787		3,941		1998		5-40
Albrae Business Center		1	CA	IND		7,331		6,299		6,227		1,189		6,299		7,416		13,715		1,222		2001		5-40
Alvarado Business Center SG		5	CA	IND		22,560		6,328		26,671		10,620		6,328		37,291		43,619		6,551		2001		5-40
Brennan Distribution		1	CA	IND		3,448		3,683		3,022		2,193		3,683		5,215		8,898		1,599		2001		5-40
Central Bay		2	CA	IND		6,571		3,896		7,400		1,903		3,896		9,303		13,199		2,068		2001		5-40
Component Drive Ind Port		3	CA	IND		—		12,688		6,974		2,028		12,688		9,002		21,690		1,766		2001		5-40
Dado Distribution		1	CA	IND		—		7,221		3,739		2,520		7,221		6,259		13,480		1,217		2001		5-40
Doolittle Distribution Center		1	CA	IND		—		2,644		8,014		1,522		2,644		9,536		12,180		2,030		2000		5-40
Dowe Industrial Center		2	CA	IND		—		2,665		8,034		2,537		2,665		10,571		13,236		3,023		1991		5-40
East Bay Whipple		1	CA	IND		6,497		5,333		8,126		1,697		5,333		9,823		15,156		1,735		2001		5-40
East Bay Doolittle		1	CA	IND		—		7,128		11,023		3,051		7,128		14,074		21,202		2,783		2001		5-40
Edgewater Industrial Center		1	CA	IND		—		4,038		15,113		5,574		4,038		20,687		24,725		4,995		2000		5-40
East Grand Airfreight		2	CA	IND		3,789		5,093		4,190		816		5,093		5,006		10,099		639		2003		5-40
Fairway Drive Ind SGP		4	CA	IND		11,546		4,204		13,949		3,496		4,204		17,445		21,649		3,009		2001		5-40
Junction Industrial Park		4	CA	IND		—		7,875		23,975		4,377		7,875		28,352		36,227		6,651		1999		5-40
Laurelwood Drive		2	CA	IND		—		2,750		8,538		958		2,750		9,496		12,246		2,238		1997		5-40
Lawrence SSF		1	CA	IND		—		2,870		5,521		1,269		2,870		6,790		9,660		1,491		2001		5-40
Marina Business Park		2	CA	IND		—		3,280		4,316		447		3,280		4,763		8,043		608		2002		5-40
Martin/Scott Ind Port		2	CA	IND		—		9,052		5,309		952		9,052		6,261		15,313		979		2001		5-40
MBC Industrial		4	CA	IND		—		5,892		17,716		3,881		5,892		21,597		27,489		6,065		1996		5-40
Milmont Page SGP		3	CA	IND		10,780		3,420		10,600		3,356		3,420		13,956		17,376		2,391		2001		5-40
Moffett Distribution		7	CA	IND		15,856		26,916		11,277		2,875		26,916		14,152		41,068		2,725		2001		5-40
Moffett Park / Bordeaux R&D		4	CA	IND		—		—		—		3,801		—		3,801		3,801		2,557		1996		5-40
Moffett Park R&D Portfolio		10	CA	IND		—		14,805		44,462		12,458		14,805		56,920		71,725		17,744		1996		5-40
Pacific Business Center		2	CA	IND		—		5,417		16,291		4,519		5,417		20,810		26,227		6,174		1993		5-40
Pardee Drive SG		1	CA	IND		1,443		619		1,880		284		619		2,164		2,783		354		2001		5-40
South Bay Brokaw		3	CA	IND		—		4,372		13,154		3,218		4,372		16,372		20,744		4,769		1995		5-40
South Bay Junction		2	CA	IND		—		3,464		10,424		1,099		3,464		11,523		14,987		3,089		1995		5-40
South Bay Lundy		2	CA	IND		—		5,497		16,542		2,787		5,497		19,329		24,826		5,417		1995		5-40
South Bay Osgood		1	CA	IND		—		1,659		4,992		1,537		1,659		6,529		8,188		1,787		1995		5-40
Silicon Valley R&D		5	CA	IND		—		6,700		20,186		11,877		6,700		32,063		38,763		10,434		1997		5-40
Utah Airfreight		1	CA	IND		16,234		18,753		8,381		1,759		18,753		10,140		28,893		1,565		2003		5-40
Wiegman Road		1	CA	IND		—		1,563		4,688		1,670		1,563		6,358		7,921		2,044		1997		5-40
Willow Park Industrial		21	CA	IND		—		25,590		76,771		20,408		25,590		97,179		122,769		26,189		1998		5-40
Williams & Burroughs AMB PrtII		4	CA	IND		7,468		2,262		6,981		3,406		2,262		10,387		12,649		2,949		2001		5-40
Yosemite Drive		1	CA	IND		—		2,350		7,051		1,546		2,350		8,597		10,947		2,115		1997		5-40
Zanker/Charcot Industrial		5	CA	IND		—		5,282		15,887		4,806		5,282		20,693		25,975		5,633		1992		5-40
Seattle
Black River		1	WA	IND		3,197		1,845		3,559		534		1,845		4,093		5,938		778		2001		5-40
Earlington Business Park		1	WA	IND		3,962		2,766		3,234		1,052		2,766		4,286		7,052		753		2002		5-40
East Valley Warehouse		1	WA	IND		—		6,813		20,511		6,656		6,813		27,167		33,980		7,620		1999		5-40
Harvest Business Park		3	WA	IND		—		2,371		7,153		2,161		2,371		9,314		11,685		2,735		1995		5-40

S-4

AMB PROPERTY CORPORATION
SCHEDULE III
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2006
(in thousands, except number of buildings)


											Costs
							Initial Cost to Company				Capitalized		Gross Amount Carried at 12/31/06								Year of
	No of								Building &		Subsequent to				Building &		Total Costs		Accumulated		Construction/		Depreciable
Property	Bldgs		Location	Type	Encumbrances (3)		Land		Improvements		Acquisition		Land		Improvements		(1) (2)		Depreciation(4)		Acquisition		Life (Years)
Kent Centre Corporate Park		4	WA	IND		—		3,042		9,165		3,060		3,042		12,225		15,267		3,282		1995		5-40
Kingsport Industrial Park		7	WA	IND		—		7,919		23,812		7,195		7,919		31,007		38,926		8,849		1992		5-40
NDP — Seattle		4	WA	IND		11,206		3,992		11,773		1,404		3,992		13,177		17,169		1,783		2002		5-40
Northwest Distribution Center		3	WA	IND		—		3,533		10,751		2,010		3,533		12,761		16,294		3,494		1992		5-40
AMB Portside Distribution Cent		1	WA	IND		—		9,964		14,421		4,707		9,964		19,128		29,092		990		2005		5-40
Puget Sound Airfreight		1	WA	IND		—		1,329		1,830		426		1,329		2,256		3,585		424		2002		5-40
Renton Northwest Corp. Park		6	WA	IND		22,990		25,959		14,792		1,922		25,959		16,714		42,673		2,132		2002		5-40
SEA Logistics Center 2		3	WA	IND		14,031		11,481		24,496		485		11,481		24,981		36,462		2,293		2003		5-40
AMB Sumner Landing		1	WA	IND		—		6,937		17,577		3,056		6,937		20,633		27,570		1,425		2005		5-40
Trans-Pacific Industrial Park		11	WA	IND		48,600		31,675		42,210		9,516		31,675		51,726		83,401		5,459		2003		5-40
Non U.S. Target Markets
AMB Capronilaan		1	The Netherlands	IND		22,260		8,769		14,675		2,403		9,497		16,350		25,847		1,418		2004		5-40
AMB CDG Cargo Center SAS		1	France	IND		20,403		—		38,870		2,353		—		41,223		41,223		2,806		2004		8-38
AMB Schiphol Dist Center		1	The Netherlands	IND		9,655		6,258		9,490		84		6,258		9,574		15,832		701		2004		5-40
Koolhovenlaan 1&2		2	The Netherlands	IND		10,256		4,371		7,412		506		4,551		7,738		12,289		459		2005		4-40
AMB Isle d’Abeau Logistics Park Bldg B		1	Lyon	IND		18,479		3,774		14,367		1,809		4,133		15,817		19,950		893		2005		5-40
Frankfurt Logistic Center		1	Germany	IND		23,316		—		19,875		5,250		—		25,125		25,125		1,620		2003		37-40
Paris Nord Distribution I		1	France	IND		—		2,864		4,723		2,606		3,743		6,450		10,193		693		2002		5-40
Paris Nord Distribution II		1	France	IND		—		1,697		5,127		4,034		2,191		8,667		10,858		1,217		2002		5-40
Bourget Industrial		1	France	IND		33,077		10,058		23,843		2,769		10,864		25,806		36,670		2,004		2003		5-38
Port of Rotterdam		1	The Netherlands	IND		3,689		—		5,660		428		—		6,088		6,088		263		2005		4-40
Port of Hamburg 2, 3, 5		3	Germany	IND		18,987		—		34,218		4,360		—		38,578		38,578		1,564		2005		2-28
AMB LG Roissy Mesnil SAS		1	France	IND		310		124		537		54		124		591		715		3		2006		2-40
AMB LG Roissy Santal SAS		1	France	IND		2,851		1,396		3,227		143		1,396		3,370		4,766		91		2006		2-40
AMB LG Roissy Saturne SAS		1	France	IND		2,957		1,666		3,894		151		1,666		4,045		5,711		79		2006		4-40
AMB LG Roissy Scandy SAS		1	France	IND		3,867		1,870		4,325		157		1,870		4,482		6,352		115		2006		2-40
AMB LG Roissy Scipion SAS		1	France	IND		2,006		844		3,597		141		844		3,738		4,582		81		2006		2-40
AMB LG Roissy Segur SAS		1	France	IND		9,655		4,583		11,444		237		4,583		11,681		16,264		224		2006		5-40
AMB LG Roissy Sepia SAS		1	France	IND		4,052		2,162		4,594		651		2,162		5,245		7,407		97		2006		6-40
AMB LG Roissy Seringa SAS		1	France	IND		2,653		1,126		3,483		250		1,126		3,733		4,859		79		2006		3-40
AMB LG Roissy Signac SAS		1	France	IND		4,785		2,106		5,228		166		2,106		5,394		7,500		117		2006		3-40
AMB LG Roissy Sisley SAS		1	France	IND		6,349		2,883		6,942		425		2,883		7,367		10,250		136		2006		5-40
AMB LG Roissy Soliflore SAS		1	France	IND		2,178		752		3,248		138		752		3,386		4,138		77		2006		2-40
AMB LG Roissy Sonate SAS		1	France	IND		7,477		4,121		9,745		291		4,121		10,036		14,157		241		2006		2-40
AMB LG Roissy Sorbiers SAS		1	France	IND		3,524		1,124		4,853		155		1,124		5,008		6,132		150		2006		2-40
AMB LG Roissy Storland SAS		1	France	IND		1,346		479		2,109		226		479		2,335		2,814		42		2006		2-40
AMB LG Roissy Symphonie SAS		1	France	IND		3,933		1,930		4,463		158		1,930		4,621		6,551		125		2006		2-40
AMB Eemhaven Distribution Center B.V.		1	The Netherlands	IND		—		—		23,588		1,399		—		24,987		24,987		9		2006		5-33
AMB Hordijk Distribution Center B.V.		1	The Netherlands	IND		—		—		12,349		4		—		12,353		12,353		54		2006		5-40
SCI AMB France Givaudan DC		1	France	IND		—		1,037		4,323		—		1,037		4,323		5,360		51		2006		5-40
AMB Port of Hamburg 4, 6-8 BV		4	Germany	IND		39,284		—		51,359		81		—		51,440		51,440		2,116		2006		2-28
AMB Jiuting DC		1	Shanghai	IND		—		—		6,302		—		—		6,302		6,302		501		2005		2-40
Corregidora Distribution Center		1	Mexico	IND		—		798		3,662		9		798		3,671		4,469		50		2006		10-40

S-5

AMB PROPERTY CORPORATION
SCHEDULE III
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2006
(in thousands, except number of buildings)


												Costs
							Initial Cost to Company					Capitalized		Gross Amount Carried at 12/31/06								Year of
	No of								Building &			Subsequent to				Building &		Total Costs		Accumulated		Construction/		Depreciable
Property	Bldgs		Location	Type	Encumbrances (3)		Land		Improvements			Acquisition		Land		Improvements		(1) (2)		Depreciation (4)		Acquisition		Life (Years)
U.S. Other Target Markets
MET PHASE 1 95, LTD		4	TX	IND		—		10,968		14,554			2,677		10,968		17,231		28,199		1,346		1995		5-40
MET 4/12, LTD		1	TX	IND		—		—		18,390			2,678		—		21,068		21,068		8,067		1997		5-40
TechRidge Bldg 4.3B (Phase IV)		1	TX	IND		8,000		4,020		9,185			114		4,020		9,299		13,319		62		2006		5-40
TechRidge Phase II		1	TX	IND		10,588		7,261		13,484			234		7,261		13,718		20,979		1,976		2001		5-40
TechRidge Phase IIIA Bldg. 4.1		1	TX	IND		9,200		3,143		12,087			13		3,143		12,100		15,243		1,353		2004		5-40
Beltway Distribution		1	MD	IND		—		4,800		15,159			6,298		4,800		21,457		26,257		5,508		1999		5-40
B.W.I.P.		2	MD	IND		—		2,258		5,149			1,219		2,258		6,368		8,626		921		2002		5-40
Columbia Business Center		9	MD	IND		—		3,856		11,736			5,001		3,856		16,737		20,593		4,582		1999		5-40
Corridor Industrial		1	MD	IND		2,260		996		3,019			382		996		3,401		4,397		774		1999		5-40
Crysen Industrial		1	MD	IND		—		1,425		4,275			1,267		1,425		5,542		6,967		1,640		1998		5-40
Dulles Commerce Center		3	MD	IND		—		3,694		12,547			1,341		3,694		13,888		17,582		497		2003		5-40
Gateway Commerce Center		5	MD	IND		—		4,083		12,336			2,568		4,083		14,904		18,987		3,593		1999		5-40
AMB Granite Hill Dist. Center		2	MD	IND		—		4,653		6,407			319		4,653		6,726		11,379		193		2006		5-40
Greenwood Industrial		3	MD	IND		—		4,729		14,188			4,053		4,729		18,241		22,970		4,712		1998		5-40
Meadowridge Industrial		3	MD	IND		—		3,716		11,147			958		3,716		12,105		15,821		2,786		1998		5-40
Oakland Ridge Ind Ctr I		1	MD	IND		1,769		797		2,466			1,160		797		3,626		4,423		1,153		1999		5-40
Oakland Ridge Ind Ctr II		1	MD	IND		2,269		839		2,557			1,411		839		3,968		4,807		1,436		1999		5-40
Oakland Ridge Ind Ctr V		4	MD	IND		—		—		6,740			3,032		—		9,772		9,772		3,455		1999		5-40
Patuxent Range Road		2	MD	IND		—		1,696		5,127			1,265		1,696		6,392		8,088		1,806		1997		5-40
Preston Court		1	MD	IND		—		2,313		7,192			1,073		2,313		8,265		10,578		2,056		1997		5-40
Boston Industrial		17	MA	IND		6,475		16,329		50,856			20,516		16,329		71,372		87,701		21,612		1998		5-40
Cabot Business Park		12	MA	IND		—		15,398		42,288			10,484		15,398		52,772		68,170		14,458		1997		5-40
Cabot BP Land (KYDJ)		1	MA	IND		—		863		6,918			3,035		863		9,953		10,816		3,585		1998		5-40
Cabot Business Park SGP		3	MA	IND		15,525		6,253		18,747			1,872		6,253		20,619		26,872		2,634		2002		5-40
Patriot Dist. Center		1	MA	IND		11,844		4,164		22,603			1,249		4,164		23,852		28,016		1,534		2003		5-40
Somerville Distribution Center		1	MA	IND		—		5,221		13,208			1,714		5,221		14,922		20,143		1,107		2004		5-40
AMB Blue Water		1	MN	IND		—		1,905		6,312			—		1,905		6,312		8,217		63		2006		5-40
Braemar Business Center		2	MN	IND		—		1,566		4,613			1,551		1,566		6,164		7,730		1,878		1998		5-40
Burnsville Business Center		1	MN	IND		—		932		2,796			1,566		932		4,362		5,294		1,617		1998		5-40
Corporate Square Industrial		6	MN	IND		—		4,024		12,113			4,335		4,024		16,448		20,472		5,249		1996		5-40
AMB Industrial Park Bus. Ctr		1	MN	IND		3,212		1,648		4,187			8		1,648		4,195		5,843		309		2004		5-40
Minneapolis Distribution Port		3	MN	IND		—		4,052		13,375			4,611		4,052		17,986		22,038		4,840		1994		5-40
Mendota Heights Gateway Common		1	MN	IND		—		1,367		4,565			2,833		1,367		7,398		8,765		2,987		1997		5-40
Minneapolis Industrial Port IV		4	MN	IND		—		4,938		14,854			3,628		4,938		18,482		23,420		5,517		1994		5-40
AMB Northpoint Indust. Center		3	MN	IND		6,245		2,769		8,087			115		2,769		8,202		10,971		751		2004		5-40
Penn James Warehouse		2	MN	IND		—		1,991		6,013			1,888		1,991		7,901		9,892		2,346		1996		5-40
Round Lake Business Center		1	MN	IND		—		875		2,625			863		875		3,488		4,363		1,076		1998		5-40
AMB Shady Oak Indust. Center		1	MN	IND		1,745		897		1,795			248		897		2,043		2,940		237		2004		5-40
Twin Cities		2	MN	IND		—		4,873		14,638			7,989		4,873		22,627		27,500		7,436		1995		5-40
Chancellor		1	FL	IND		—		1,587		3,759			3,622		1,587		7,381		8,968		1,249		1996		5-40
Chancellor Square		3	FL	IND		13,929		2,009		6,106			5,576		2,009		11,682		13,691		3,558		1998		5-40
Presidents Drive		6	FL	IND		—		5,770		17,655			4,785		5,770		22,440		28,210		6,111		1997		5-40
Sand Lake Service Center		6	FL	IND		—		3,483		10,585			5,152		3,483		15,737		19,220		4,876		1998		5-40
Other U.S. Non-Target Markets
Janitrol		1	OH	IND		—		1,797		4,605	(1)		369		1,797		4,974		6,771		1,442		1997		5-40
Elmwood Distribution		5	LA	IND		—		4,163		12,488			5,391		4,152		17,890		22,042		2,742		1998		5-40

Total		820			$	1,302,921	$	1,347,480	$	3,266,466		$	775,651	$	1,351,123	$	4,038,474	$	5,389,597	$	789,693


(1)		The Company recognized an impairment loss of approximately $1.0 million during the year ended December 31, 2006, as a result of leasing activities and changes in the economic environment.

S-6


		2006			2005			2004
(1)	Reconciliation of total cost to consolidated balance sheet caption as of December 31, 2006:
	Total per Schedule III⁽⁵⁾	$	5,389,597		$	5,800,788		$	5,814,767
	Construction in process		1,186,136			997,506			711,377

	Total investments in properties	$	6,575,733		$	6,798,294		$	6,526,144


(2)	Aggregate cost for federal income tax purposes of investments in real estate	$	6,297,448		$	6,468,360		$	6,263,171


(3)	Reconciliation of total debt to consolidated balance sheet caption as of December 31, 2006:
	Total per Schedule III	$	1,302,921		$	1,598,919		$	1,828,864
	Debt on properties held for divestiture		22,919			—			27,481
	Debt on development properties		63,170			301,623			25,413
	Unamortized premiums		6,344			11,984			10,766

	Total debt	$	1,395,354		$	1,912,526		$	1,892,524


(4)	Reconciliation of accumulated depreciation to consolidated balance sheet caption as of December 31, 2006:
	Total per Schedule III	$	789,693		$	693,324		$	614,084
	Accumulated depreciation on properties under renovation		—			4,064			1,562

	Total accumulated depreciation	$	789,693		$	697,388		$	615,646


(5)	A summary of activity for real estate and accumulated depreciation for the year ended December 31, 2006 is as follows:
	Investments in Properties:
	Balance at beginning of year	$	6,798,294		$	6,526,144		$	5,491,707
	Acquisition of properties		669,771			505,127			687,072
	Improvements, including development properties		442,922			496,623			618,188
	Deconsolidation of AMB Institutional Alliance Fund III, L.P.		(743,323	)		—			—
	Asset impairment		(6,312	)		—			—
	Divestiture of properties		(478,545	)		(770,869	)		(185,564	)
	Adjustment for properties held for divestiture		(107,074	)		41,269			(85,259	)

	Balance at end of year	$	6,575,733		$	6,798,294		$	6,526,144


	Accumulated Depreciation:
	Balance at beginning of year	$	697,388		$	615,646		$	485,559
	Depreciation expense, including discontinued operations		127,199			168,869			163,316
	Properties divested		(37,391	)		(95,371	)		(23,559	)
	Adjustment for properties held for divestiture		2,497			8,244			(9,670	)

	Balance at end of year	$	789,693		$	697,388		$	615,646

S-7


		Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets as of December 31, 2006 and 2005		F-3
Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004		F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2006, 2005 and 2004		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004		F-6
Notes to Consolidated Financial Statements		F-7
Schedule III — Consolidated Real Estate and Accumulated Depreciation		S-1