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<SEC-DOCUMENT>0000950123-10-078089.txt : 20101123
<SEC-HEADER>0000950123-10-078089.hdr.sgml : 20101123
<ACCEPTANCE-DATETIME>20100816165644
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-10-078089
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100816

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FIRST INDUSTRIAL REALTY TRUST INC
		CENTRAL INDEX KEY:			0000921825
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				363935116
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		311 S WACKER DRIVE
		STREET 2:		SUITE 3900
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60606
		BUSINESS PHONE:		3123444300

	MAIL ADDRESS:	
		STREET 1:		311 S WACKER DRIVE
		STREET 2:		SUITE 3900
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60606
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>corresp</TITLE>
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<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">August&nbsp;16, 2010
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>VIA FACSIMILE AND EDGAR</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Division of Corporation Finance<BR>
100 F Street, N.E.<BR>
Washington, D.C. 20549<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
Telecopier Number: (703)&nbsp;813-6984

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<TR></TR>
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<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Re:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><B>First Industrial Realty Trust, Inc.</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><B>Form&nbsp;10-K for the year ended December&nbsp;31, 2009</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><B>Form&nbsp;10-Q for the quarterly period ended March&nbsp;31, 2010</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><B>Definitive Proxy Statement on Schedule&nbsp;14A filed April&nbsp;2, 2010</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><B>File No.&nbsp;1-13102</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Messrs.&nbsp;Dang and Efron:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are writing to respond to the comments of the Staff contained in a letter, dated July&nbsp;14,
2010, relating to the above-referenced filings of First Industrial Realty Trust, Inc. (the
&#147;Company&#148;). Set forth below are the comments (in italics) as set forth in the Staff&#146;s letter and
immediately below each comment is the response of the Company. Unless otherwise noted, the page
numbers in our responses refer to the page numbers in the above-referenced filings.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2009</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Item&nbsp;7 Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Critical Accounting Policies, page 30</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><I>1.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that you have recorded impairment charges on your real estate properties of $6.9
million and $9.2&nbsp;million for the fiscal year ended December&nbsp;31, 2009 and the first quarter
ended March&nbsp;31, 2010, respectively. Please disclose how the severe recession has impacted your
impairment analysis and the related assumptions used in determining future cash flows from
your properties. In your response, please address the notion that more than 50% of your gross
leasable area is scheduled to come-off lease during the next three fiscal years in a period
when the current economic environment makes it more challenging to lease to potential tenants
and the trend in occupancy rates has been to the downside. Additionally, help us to understand
why you recorded the impairment charge of $9.2&nbsp;million during the first quarter of 2010 on the
Grand Rapids Property and why impairment charges were not taken in an earlier period. Within
your response, please provide to us any proposed disclosures to be included in future filings.</I></TD>
</TR>




</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 2

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">As disclosed in the critical accounting policies within the MD&#038;A and in footnote 4
to the Company&#146;s consolidated financial statements included within the Form 10-K,
the Company conducts a review of its real estate assets in accordance with ASC 360
Property, Plant, and Equipment, which indicates that real estate values should be
analyzed whenever events or changes in circumstances indicate that the carrying
value of a property may not be fully recoverable. The Company conducts this review
on a quarterly basis. For properties experiencing events or changes in
circumstances that indicate the carrying value of a property may not be fully
recoverable, we compare the estimated undiscounted cash flows against the carrying
value. For properties held and used in which the estimated undiscounted cash
flows are less than the carrying value, an impairment charge is recognized based on
the difference between fair value and carrying value. For properties held for sale,
the fair value of the property less costs to sell is compared to the property&#146;s
carrying value to determine if an impairment charge is required.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Assumptions included in the undiscounted cash flows include re-leasing and renewal
probabilities of future lease expirations, vacancy factors, rental growth rates,
capital expenditures, holding periods and ultimate residual value. For properties we
analyze for impairment that have leases rolling in the next three years, the renewal
and leasing rate assumptions are based on specific feedback from the regional
offices responsible for leasing the properties. Since the severe recession, we have
been using longer lease up times, lower rental rates and higher capitalization rates
to value the property in our cash flow projections compared to those used prior to
the recession.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">The impairment charge taken on the Grand Rapids property was a result of a purchase
option to be included in a renewing tenant&#146;s lease the Company approved during the
quarter ended March&nbsp;31, 2010. Since the purchase option is exercisable within five
years of the commencement of the lease, the holding period used for our undiscounted
cash flows was less than what would normally be used for a property that is held and
used. Using the shorter holding period, the total estimated undiscounted cash flows
was less than our carrying value at March&nbsp;31, 2010. As such, the Company calculated
the fair market value of the property and recorded an impairment charge equal to the
excess of the carrying value over fair market value, which was $9.2&nbsp;million.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">





</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 3

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Liquidity and Capital Resources, page 40</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><I>2.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that your credit ratings have been downgraded since 2008. Please tell us why
management did not consider this a material trend or uncertainty that should be discussed in
the MD&#038;A section. In addition, please tell us what consideration you gave to discussing the
downgrade in your risk factors section.</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">As noted by the Staff, our credit ratings have been downgraded since 2008. However,
management does not consider the downgrades, themselves, to constitute a material
trend or uncertainty to be discussed in the MD&#038;A section. Rather, a credit rating
represents a third party&#146;s analysis of a company&#146;s ability to repay existing or
newly-issued indebtedness, and incorporates the rating agency&#146;s evaluation of
certain financial factors, including the status of a company&#146;s liquidity and capital
resources. As such, although credit ratings are likely impacted by the material
trends and uncertainties disclosed by the Company in its MD&#038;A section, management
does not believe that third party distillations and analyses of these trends and
uncertainties, or any modifications to such analyses, themselves represent
independent trends or uncertainties. The Company believes that it has provided
adequate disclosure of material trends and uncertainties, including those that may
underlie the rating agency determinations, in its Annual Report on Form 10-K and its
Quarterly Reports on Form 10-Q.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">The Company acknowledges that its cost of borrowing may increase, and its access to
the financial markets may be limited, by credit rating downgrades, and has provided
disclosure to this effect in its MD&#038;A, both in its discussion of liquidity and
capital resources (page 41) and in the introductory portion (page 28). The Company
also provides its current credit ratings (page 41). Further emphasis on the credit
ratings could improperly deemphasize other factors that may affect the Company&#146;s
future costs of capital, which are also discussed in the MD&#038;A, as well as capital
resource alternatives available to, and utilized in the past 12&nbsp;months by, the
Company such as mortgage financing and sales of equity securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">The Company identifies its credit agency ratings as a factor that could have a
material adverse effect on the Company&#146;s operations and future prospects in its
cautionary note regarding forward-looking statements (page 3). The Company also
considered including a risk factor regarding its credit ratings, but management did
not believe that such a risk factor was necessary in the absence of the sale of a
rating-sensitive security.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">However, in response to the Staff&#146;s comment, and in light of recent downgrades by
Fitch Ratings and Standard &amp; Poor&#146;s of certain of the Company&#146;s credit ratings, and recent risk factor
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 4

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">disclosure provided by certain of the Company&#146;s peers, management has determined
that it is now appropriate to include a reference to credit ratings in its risk
factors. As such, the Company included in Item&nbsp;1A to its Quarterly Report on Form
10-Q for the quarter ended June&nbsp;30, 2010 the following risk factor:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&#147;<B><I>Adverse changes in our credit ratings could negatively affect our liquidity and
business operations.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">The credit ratings of the Operating Partnership&#146;s senior unsecured debt and the
Company&#146;s preferred stock are based on the Company&#146;s operating performance,
liquidity and leverage ratios, overall financial position and other factors employed
by the credit rating agencies in their rating analyses. Our credit ratings can
affect the availability, terms and pricing of any indebtedness that we may incur
going forward. There can be no assurance that we will be able to maintain any credit
rating, and in the event any credit rating is downgraded, we could incur higher
borrowing costs or be unable to access certain financial markets at all.&#148;
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><I>3.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that you are subject to &#147;certain&#148; financial covenants and that you are in compliance
with such covenants. Please tell us if you are operating close to the limitations imposed by
any covenants. If so, identify such covenants and tell us of any material actions taken to
achieve compliance, including, but not limited to, sales of properties.</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Financial covenants, actions taken by us to achieve compliance and material options
available to us to achieve future compliance are reflected in our discussion of
current business risks and uncertainties in the MD&#038;A (pages 28-30). In this
section, we identify as financial covenants that we are monitoring fixed charge
coverage ratios and total indebtedness, total unsecured indebtedness and total
secured indebtedness limitations. Identified actions taken or that may be taken in
light of those covenants include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>common stock dividend suspension;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>preferred stock dividend suspension;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>mortgage financing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>stock sales;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>property sales; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>debt pay downs.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">We have updated and elaborated on this disclosure in the current business risks and
uncertainties discussion in the MD&#038;A in our Quarterly Reports on Form 10-Q for the
quarters ended March&nbsp;31, 2010 and June&nbsp;30, 2010. There we note: &#147;we
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 5

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">expect to exceed the minimum amounts permitted under the unsecured leverage and
fixed charge coverage covenants set forth in our Unsecured Line of Credit by only a
thin margin.&#148; We intend to continue to include comparable disclosure in future
filings, to the extent appropriate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Finally, in recognition of the thin margin by which the Company has been in
compliance with its unsecured leverage and fixed charge coverage covenants, the
Company included in its Quarterly Report on Form 10-Q for the quarter ended June&nbsp;30,
2010, the risk factor set forth below, supplementing the comparable risk factor
included in the Annual Report on Form 10-K with additional (underscored)&nbsp;disclosure.
The Company intends to include this additional language in its risk factors in
future filings, to the extent appropriate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&#147;<B><I>Failure to comply with covenants in our debt agreements could adversely affect our
financial condition</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">The terms of our agreements governing our Unsecured Line of Credit and other
indebtedness require that we comply with a number of financial and other covenants,
such as maintaining debt service coverage and leverage ratios and maintaining
insurance coverage. Complying with such covenants may limit our operational
flexibility. Moreover, our failure to comply with these covenants could cause a
default under the applicable debt agreement even if we have satisfied our payment
obligations. <U>Consistent with our prior practice, we will, in the future,
continue to interpret and certify our performance under these covenants in a good
faith manner that we deem reasonable and appropriate. However, these financial
covenants are complex and there can be no assurance that these provisions would not
be interpreted by the lenders under our Unsecured Line of Credit or the trustee with
respect to the senior debt securities in a manner that could impose and cause us to
incur material costs</U>. <U>We anticipate that we will be able to operate in
compliance with our financial covenants, including our unsecured leverage and fixed
charge covenants, for the remainder of 2010. However, we expect to exceed the
minimum amounts permitted under the unsecured leverage and fixed charge coverage
covenants set forth in our Unsecured Line of Credit by only a thin margin. Our
ability to meet our financial covenants may be adversely affected if economic and
credit market conditions limit our ability to reduce our debt levels consistent
with, or result in net operating income below, our current expectations</U>.
<U>Under our Unsecured Line of Credit, an event of default can also occur if the
lenders, in their good faith judgment, determine that any material adverse change
has occurred which could prevent timely repayment or materially impair our ability
to perform our obligations under the loan agreement.</U>
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 6

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Upon the occurrence of an event of default, <U>we would be subject to higher
finance costs and fees, and</U> the lenders under our Unsecured Line of Credit will
not be required to lend any additional amounts to us. In addition, our outstanding
senior debt securities as well as all outstanding borrowings under the Unsecured
Line of Credit, together with accrued and unpaid interest and fees, could be
accelerated and declared to be immediately due and payable. Furthermore, our
Unsecured Line of Credit and senior debt securities contain certain cross-default
provisions, which are triggered in the event that our other material indebtedness is
in default. These cross-default provisions may require us to repay or restructure
the Unsecured Line of Credit and the senior debt securities or other debt that is in
default, which could adversely affect our financial condition, results of
operations, cash flow and ability to pay dividends on, and the market price of, our
stock. If repayment of any of our borrowings is accelerated, we cannot provide
assurance that we will have sufficient assets to repay such indebtedness or that we
would be able to borrow sufficient funds to refinance such indebtedness. Even if we
are able to obtain new financing, it may not be on commercially reasonable terms, or
terms that are acceptable to us.&#148;
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Form&nbsp;10-Q for the period ended March&nbsp;31, 2010</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Notes to Consolidated Financial Statements</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>3. Summary of Significant Accounting Policies</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Recent Accounting Pronouncements, page 9</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><I>4.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please provide to us your analysis under ASC 810 that supports management&#146;s conclusion that
adoption of the new guidance did not impact your financial statements. Within your response
please ensure that you address the effect the various fees you receive from the Joint Ventures
have on the analysis.</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">The Company performed an analysis of all of its arrangements that the Company i)
holds an economic interest, voting right or similar rights in the entity, or
obligations to that entity; ii) has issued a guarantee with respect to that entity;
iii) transferred assets to the entity; iv) manages the assets of the entity; and/or
v) leases assets from the entity or provides it with financing to determine whether
the arrangements would qualify as variable-interest entities (&#147;VIEs&#148;) and the
appropriate accounting for such arrangements (i.e. consolidation, equity method of
accounting). The Company identified four joint venture entities which were VIEs.
Three of the four joint ventures, collectively referred to as the &#147;Three Joint
Ventures,&#148; have partnership and management agreements with the same joint
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 7

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">venture partner and purposes that are nearly identical. The Three Joint Ventures
were formed as limited liability companies with the sole purpose to invest in, own,
develop, redevelop and hold for long term capital appreciation in industrial real
estate. Since the main objective for each of the Three Joint Ventures is to buy and
develop real estate assets, each would require significant contributions from its partners
to sustain itself for the initial years of the venture. Accordingly, it was
determined that the equity investment at risk was not sufficient to finance their
respective activities without additional financial support. The fourth joint
venture (the &#147;Fourth Joint Venture&#148;) was formed to invest in, own, operate and hold
for long term capital appreciation interests in certain single tenant, net leased
properties, with a majority of the business activities to be financed by third-party
debt. At inception of this venture it was determined that the entity was not a VIE;
however, subsequently it was determined that the entity was a VIE
because during 2009 certain
third party mortgage lenders were granted the ability to make
substantive decisions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">For the joint venture entities considered VIEs, the Company performed an assessment
of which partner would be considered the primary beneficiary. This assessment is
based upon which partner (a)&nbsp;had the power to direct matters that most significantly
impact the activities of the VIEs, and (b)&nbsp;had the obligation to absorb losses or
the right to receive benefits of the VIEs that could potentially be significant to
the VIE based upon the terms of their respective partnership and management
agreements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%"><U>Primary Beneficiary Review &#151; the Three Joint Ventures</U><br>
The Company reviewed the governing agreements for the Three Joint Ventures to
determine the powers given to the respective parties to the agreements. The
following documents were reviewed in detail for each joint venture:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operating Agreement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Development Agreement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Management Agreement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Leasing Agreement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Credit Agreements</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Based on the review it was determined that the following power/decision rights over
activities which significantly impact the economic performance of the Three Joint
Ventures are equally shared by the Company and our partner:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Acquiring projects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Selling, assigning or transferring projects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Initiating member capital calls;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving operating budgets, development plans and leasing plans;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 8

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving material variances from approved budgets or plans, including
changes in development scope and lease negotiations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Executing new financing and modifications to existing financing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Engaging alternate service providers, including project contractors
associated with development plans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Revising any existing asset or property development, management or
leasing agreement or any service agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving or rejecting proposed tax elections or settlements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Withdrawing the Company from its role as manager;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Transferring of Member interest in the entity;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Final dissolution of the entity.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">However, it was determined that our partner in the Three Joint Ventures has the
power/decision right associated with securing all of the entity&#146;s third party debt.
At our partner&#146;s sole discretion, its portion of capital contributions serves as
collateral for the financing. Failure by our partner to so collateralize would
preclude the Three Joint Ventures from obtaining financing because even in a
normalized market, the Three Joint Ventures would not be able to secure conventional
financing without this collateral, making this a key power over which only our
partner presides.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%"><U>Primary Beneficiary Review &#151; the Fourth Joint Venture</U><br>
The Company carried out a similar review related to the Fourth Joint Venture. The
following documents were reviewed in detail:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amended and Restated Master Agreement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amended and Restated Operating Agreement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Management Agreement</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mortgage Agreements</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Based on the review it was determined that the following power/decision rights over
activities which significantly impact the economic performance of the Fourth Joint
Venture are equally shared by the Company and our partner:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Acquiring projects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Executing new financing and modifications to existing financing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Selling, assigning or transferring projects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amending or revising the existing agreements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving or rejecting proposed tax elections or settlements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Withdrawing the Company from its role as manager;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Initiating member capital calls;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving operating budgets for the majority of the buildings;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 9

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving leasing plans for the majority of the buildings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving development plans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Transferring of Member interest in the entity.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">However, based on the review it was determined that the following key power/decision
rights are held solely by our partner in the Fourth Joint Venture:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Majority of members of Board;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving material variances from approved budgets or plans on a
majority of the properties;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving material changes in lease provisions; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approval of any agreement or investment which would cause the venture
to earn interest income.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Additionally, based on our review of the Fourth Joint Venture&#146;s mortgage agreements
the following key power/decision rights are granted to the mortgage lenders for some
of the properties:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approving leases or amendments to existing leases;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approval of operating budgets; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approval of expenditures not already included in an approved budget.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Based on the detailed analysis the Company performed, the Company concluded that it
did not hold the power to direct the activities that most significantly impact
economic performance for any of the Three Joint Ventures or the Fourth Joint
Venture. ASC 810 dictates that the primary beneficiary must have both of the
characteristics (a)&nbsp;and (b)&nbsp;above. As the Company concluded that it did not meet
characteristic (a)&nbsp;for either the Three Joint Ventures or the Fourth Joint Venture,
the Company was and is not the primary beneficiary of any of its joint ventures.
Accordingly, the Company continued to account for the joint ventures under the
equity method of accounting. Additionally, since the Company was able to conclude
that it did not meet characteristic (a), it did not analyze the fees it earns
related to the joint ventures, which would have been analyzed under characteristic
(b).
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 10

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>DEFINITIVE PROXY STATEMENT</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Annual Incentive Bonuses, page 15</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><I>5.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that the named executive officers are awarded incentive compensation based on the
achievement of FFO targets set by either existing employment agreements or company policy.
Please tell us the different levels of FFO used to determine achievements meriting incentive
compensation. Additionally, compare the actual FFO achieved with the target levels, As
applicable, please provide similar disclosure in future filings so that investors can fully
understand your incentive compensation arrangements.</I></TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">As indicated in the discussion of the annual incentive bonuses in the Company&#146;s
Compensation Discussion and Analysis (the &#147;CD&#038;A&#148;), achievement by the Company above
a minimum FFO threshold for 2009 qualified each executive officer covered by the
2009 Executive Officer Bonus Plan to receive up to 125% of his stated target maximum
cash and equity bonus opportunity, depending on the level of FFO achieved (the &#147;FFO
Percentage&#148;). In response to the Staff&#146;s comment, set forth below are the various
potential FFO Percentages, and the level of FFO required to be achieved to qualify
for each FFO Percentage.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="13"><u>FFO Percentage</u></TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="13">&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>0%</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>25%</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>50%</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>75%</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>100%</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>125%</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>FFO/share</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1.28
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1.37
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1.46
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1.55
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1.65
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">$1.74</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">The Company achieved FFO of $2.08 for the year ended December&nbsp;31, 2009, thereby
justifying an FFO Percentage of 125%. However, as disclosed in the Company&#146;s CD&#038;A,
in order to conserve cash and to give consideration to the Company&#146;s overall
performance in 2009 and the current economic environment, the Company&#146;s Chief
Executive Officer recommended to the Compensation Committee that it apply a revised
FFO Percentage in awarding bonuses. Based upon the Chief Executive Officer&#146;s
recommendation, the Compensation Committee exercised its discretion and established
a bonus pool to be distributed among the members of Senior Management representing
the aggregate cash and equity bonuses that would have been justified under the 2009
Executive Officer Bonus Plan had an FFO Percentage of 60.5% been applied.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">The exercise of the Compensation Committee&#146;s discretion decoupled the cash and
equity bonuses actually received by the members of Senior Management from the level
of FFO achieved by the Company. As a result, management did not believe that the
levels of FFO required to be achieved in order to justify the various FFO
Percentages was material to investors and determined that disclosure of such target
levels was neither required nor appropriate. Management intends to
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
Attention:&nbsp;&nbsp;Duc Dang, Staff Attorney<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Howard Efron, Staff Accountant<BR>
August&nbsp;16, 2010<BR>
Page 11

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">disclose in future filings, to the extent material, the levels of FFO (or comparable
performance metrics) required to be achieved in order to justify specified bonus
opportunities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with responding to the above comments, the Company hereby acknowledges that it
is responsible for the adequacy and accuracy of the disclosures in the filings; staff comments or
changes to disclosure in response to staff comments do not foreclose the Commission from taking any
action with respect to the filings; and the Company may not assert staff comments as a defense in
any proceeding initiated by the Commission or any person under the federal securities laws of the
United States. If you have any questions about any of the Company&#146;s responses to your comments or
require further explanation, please do not hesitate to telephone me at (312)&nbsp;344-4380.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Scott Musil
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Scott Musil&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Enclosures
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">cc:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Bruce W. Duncan</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">John H. Clayton</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">William E. Turner II</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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