CONTACT:

William T. Camp

Executive Vice President and

6110 Executive Blvd., Suite 800

Rockville, Maryland 20852

Tel 301-984-9400

Net income attributable to the controlling interests for the year ending December 31, 2009 was $40.7 million, or $0.71 per diluted share, compared to $27.1 million, or $0.55 per diluted share, in 2008. Included in 2009 net income per share is a $0.09 gain on extinguishment of debt. Included in 2008 net income per share is an $0.11 loss related to the extinguishment of debt. Also included in 2009 and 2008 full year net income per share are respective charges of $0.13 and $0.12 per diluted share from the adoption of an accounting pronouncement impacting the accounting of our 3.875% convertible notes⁽¹⁾.

Net income attributable to the controlling interests for the quarter ending December 31, 2009 was $7.3 million, or $0.12 per diluted share, compared to $5.3 million, or $0.10 per diluted share, in the same period one year ago. Included in the fourth quarter 2009 and fourth quarter 2008 net income are respective charges of $0.01 and $0.04 per diluted share from the adoption of an accounting pronouncement impacting the accounting of our 3.875% convertible notes⁽¹⁾.

Funds from Operations (FFO)⁽²⁾ for the year ending December 31, 2009 was $121.8 million, or $2.14 per diluted share, compared to $98.7 million, or $2.00 per diluted share, in 2008. FFO for the quarter ending December 31, 2009 was $29.7 million, or $0.50 per diluted share, compared to $28.9 million, or $0.55 per diluted share, in the same period one year ago.

Multifamily properties’ core NOI for the fourth quarter increased 0.8% compared to the same period one year ago. Rental rate growth was -1.8% while core economic occupancy increased 170 bps to 94.5%. Sequentially, core economic occupancy increased 20 bps from the third quarter of 2009. The multifamily segment contributed 13.4% of our overall NOI for the fourth quarter of 2009.

Office properties’ core NOI for the fourth quarter increased 6.6% compared to the same period one year ago. Rental rate growth was 5.5% while core economic occupancy decreased 130 bps to 92.0%. Sequentially, core economic occupancy increased 30 bps from the third quarter of 2009. The office segment contributed 44.0% of our overall NOI for the fourth quarter of 2009.

Medical office properties’ core NOI for the fourth quarter increased 2.1% compared to the same period one year ago. Rental rate growth was 2.4% while core economic occupancy increased 70 bps to 95.9%. Sequentially, core economic occupancy decreased 10 bps from the third quarter of 2009. The medical office segment contributed 14.3% of our overall NOI for the fourth quarter of 2009.

Retail properties’ core NOI for the fourth quarter increased 16.3% compared to the same period one year ago. Rental rate growth was -0.3% while core economic occupancy decreased 40 bps to 94.4%. Sequentially, core economic occupancy increased 40 bps from the third quarter of 2009. The retail segment contributed 15.7% of our overall NOI for the fourth quarter of 2009.

Industrial properties’ core NOI for the fourth quarter decreased 5.2% compared to the same period one year ago. Rental rate growth was -3.1% while core economic occupancy decreased 590 bps to 87.1%. Sequentially, core economic occupancy decreased 250 bps from the third quarter of 2009. The industrial segment contributed 12.6% of our overall NOI for the fourth quarter of 2009.

Rental rates for new and renewed office leases increased 0.1% to $29.90 per square foot, with $10.71 per square foot in tenant improvement costs and $12.83 per square foot in leasing costs.

Rental rates for new and renewed medical office leases increased 28.0% to $38.88 per square foot, with $21.48 per square foot in tenant improvement costs and $20.48 per square foot in leasing costs.

Rental rates for new and renewed retail leases decreased 0.2% to $13.67 per square foot, with $7.48 per square foot in tenant improvement costs and $4.38 per square foot in leasing costs.

Rental rates for new and renewed industrial/flex leases decreased 3.3% to $9.02 per square foot, with $1.45 per square foot in tenant improvement costs and $2.69 per square foot in leasing costs.

Effective occupancy, which accounts for vacancy, bad debt and abatements as a percentage of minimum rent, ended 2009 at 11.8% and is expected to range between 11.5% and 12.5% throughout 2010. Every 100 basis point change in effective occupancy equates to approximately $0.05 per fully diluted share in FFO on an annual basis.

Net operating income is expected to decline by a range of $0.00 - $0.05, including snow removal costs of $0.02 per fully diluted share after reimbursements.

Dilution from the full year impact of issuing additional equity last year to reduce overall leverage is expected to lower FFO per fully diluted share by an additional $0.10 in 2010.

Straight-line rent impact of the lease signed at 1776 G Street in mid-2009 is expected to add approximately $0.01 per fully diluted share to FFO as compared to 2009 results.

Interest expense for 2010 is estimated to range between $0.02 - $0.05 per fully diluted share lower than reported 2009 results due to the reduction in overall debt. This range includes a swap termination charge of $0.02 - $0.04 per fully diluted share depending on interest rates at the time of payment.

General and administrative expense is estimated to range between $0.00 - $0.02 per fully diluted share lower than 2009 results.

Acquisition volume of $50 - $150 million will negatively impact FFO by $0.00 - $0.03 per fully diluted share primarily due to the expensing of acquisition costs.

Disposition volume of $25 - $75 million will negatively impact FFO by $0.02 - $0.03 per fully diluted share.

Financial Accounting Standards Board Staff Position APB14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP 14-1”), requires the bifurcation of a component of our 3.875% convertible notes, classification of that component in shareholders’ equity, and accretion of the resulting discount on the convertible notes to interest expense. As a result of the adoption of FSP 14-1, equity increased by $21.0 million as of December 31, 2009 and 2008. The principal balance of our 3.875% convertible notes was reduced by $4.3 million and $12.0 million as of December 31, 2009 and 2008, respectively, and the unamortized balance of the related loan origination costs was reduced by $2.1 million and $2.7 million, respectively. The decline in principal reflects the unamortized discount balance related to the adoption of FSP 14-1. Interest expense increased $3.6 million and $5.1 million in 2009 and 2008, respectively, as a result of the adoption. The gain (loss) on extinguishment of debt decreased $3.6 million and $0.6 million in 2009 and 2008, respectively, as a result of the adoption. Interest expense increased $0.7 million in the fourth quarter of 2009 and $1.3 million in the fourth quarter of 2008 as a result of the adoption. The gain (loss) on extinguishment of debt decreased $0.2 million in the fourth quarter of 2009 and $0.6 million in the fourth quarter of 2008 as a result of the adoption.

Funds From Operations (“FFO”) – The National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) defines FFO (April, 2002 White Paper) as net income (computed in accordance with generally accepted accounting principles (“GAAP”)) excluding gains (or losses) from sales of property plus real estate depreciation and amortization. FFO is a non-GAAP measure and does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. We consider FFO to be a standard supplemental measure for equity real estate investment trusts (“REITs”) because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which historically assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, we believe that FFO more accurately provides investors an indication of our ability to incur and service debt, make capital expenditures and fund other needs.

Total market capitalization is calculated by multiplying the total outstanding common shares at period end by the closing share price on the last trading day of the period, and then adding the book value of the total outstanding debt at period end.

Net Operating income (“NOI”), defined as real estate rental revenue less real estate expenses, is a non-GAAP measure. We provide NOI as a supplement to net income calculated in accordance with GAAP. As such, it should not be considered an alternative to net income as an indication of our operating performance. It is the primary performance measure we use to assess the results of our operations at the property level. NOI is calculated as net income, less non-real estate revenue and the results of discontinued operations (including the gain on sale, if any), plus interest expense, depreciation and amortization and general and administrative expenses.

For purposes of evaluating comparative operating performance, we categorize our properties as “core” or “non-core”. A core property is one that was owned for the entirety of the periods being evaluated. A non-core property is one that was acquired or placed into service during either of the periods being evaluated.

Funds Available for Distribution (“FAD”) is a non-GAAP measure. It is calculated by subtracting from FFO (1) recurring expenditures, tenant improvements and leasing costs that are capitalized and amortized and are necessary to maintain our properties and revenue stream and (2) straight-line rents, then adding (3) non-real estate depreciation and amortization, (4) amortization of restricted share and unit compensation, and adding or subtracting amortization of lease intangibles, as appropriate. We consider FAD to be a measure of a REIT’s ability to incur and service debt and to distribute dividends to its shareholders. FAD is a non-standardized measure and may be calculated differently by other REITs.

Residential

Office

Medical Office

Retail

Industrial

Overall Portfolio

Core properties include all properties that were owned for the entirety of the current and prior year reporting periods. For Q4 2009 and Q4 2008, core properties exclude:

Residential occupancy for all properties reflects the completion of Bennett Park and Clayborne Apartments. At 12/31/09, 218 of 224 units were occupied at Bennett Park and 69 of 74 units were occupied at Clayborne Apartments.

OPERATING RESULTS

Revenue

Real estate rental revenue

Expenses

Real estate expenses

Depreciation and amortization

General and administrative

Real estate operating income

Other income (expense):

Interest expense⁽¹⁾

Investment income

Gain (loss) on extinguishment of debt⁽¹⁾

Gain from non-disposal activities

Income from continuing operations

Discontinued operations:

Income from operations of properties held for sale

Gain on sale of real estate

Net income

Less: Net income attributable to noncontrolling interests in subsidiaries

Net income attributable to the controlling interests

Income from continuing operations attributable to the controlling interests

Gain from non-disposal activities

Continuing operations real estate depreciation and amortization

Funds from continuing operations

Income from discontinued operations before gain on sale

Discontinued operations real estate depreciation and amortization

Funds from discontinued operations

Funds from operations⁽²⁾

Non-cash (gain) loss on extinguishment of debt

Tenant improvements

External and internal leasing commissions capitalized

Recurring capital improvements

Straight-line rents, net

Non-cash fair value interest expense

Non real estate depreciation & amortization of debt costs

Amortization of lease intangibles, net

Amortization and expensing of restricted share and unit compensation

Funds available for distribution⁽⁶⁾

Per share data attributable to the controlling interests:

Income from continuing operations

Net income

Funds from continuing operations

Funds from operations

Dividends paid

Weighted average shares outstanding

Fully diluted weighted average shares outstanding

Assets

Land

Income producing property

Accumulated depreciation and amortization

Net income producing property

Development in progress

Total real estate held for investment, net

Investment in real estate sold or held for sale

Cash and cash equivalents

Restricted cash

Rents and other receivables, net of allowance for doubtful accounts of $6,455 and $6,122, respectively

Prepaid expenses and other assets⁽¹⁾

Other assets related to property sold or held for sale

Total assets

Liabilities

Notes payable⁽¹⁾

Mortgage notes payable

Lines of credit

Accounts payable and other liabilities

Advance rents

Tenant security deposits

Other liabilities related to property sold or held for sale

Total liabilities

Shareholders’ equity

Shares of beneficial interest, $0.01 par value; 100,000 Shares authorized;
59,811 and 52,434 shares issued and outstanding, respectively

Additional paid-in capital⁽¹⁾

Distributions in excess of net income

Accumulated other comprehensive income

Total shareholders’ equity

Noncontrolling interests in subsidiaries

Total equity

Total liabilities and equity

Core net operating income⁽⁵⁾

Add: Net operating income from non-core properties⁽⁴⁾

Total net operating income⁽⁴⁾

Add/(deduct):

Other income

Gain from non-disposal activities

Interest expense

Gain (loss) on extinguishment of debt

Depreciation and amortization

General and administrative expenses

Income from operations of properties held for sale

Gain on sale of real estate

Net income

Less: Net income attributable to noncontrolling interests in subsidiaries

Net income attributable to the controlling interests

Core net operating income⁽⁵⁾

Add: Net operating income from non-core properties⁽⁴⁾

Total net operating income⁽⁴⁾

Add/(deduct):

Other income

Interest expense

Gain (loss) on extinguishment of debt

Depreciation and amortization

General and administrative expenses

Income from operations of properties held for sale

Net income

Less: Net income attributable to noncontrolling interests in subsidiaries

Net income attributable to the controlling interests

Core net operating income⁽⁵⁾

Add: Net operating income from non-core properties⁽⁴⁾

Total net operating income⁽⁴⁾

Add/(deduct):

Other income

Gain from non-disposal activities

Interest expense

Gain (loss) on extinguishment of debt

Depreciation and amortization

General and administrative expenses

Income from operations of properties held for sale

Gain on sale of real estate

Net income

Less: Net income attributable to noncontrolling interests in subsidiaries

Net income attributable to the controlling interests

Core net operating income⁽⁵⁾

Add: Net operating income from non-core properties⁽⁴⁾

Total net operating income⁽⁴⁾

Add/(deduct):

Other income

Gain from non-disposal activities

Interest expense

Gain (loss) on extinguishment of debt

Depreciation and amortization

General and administrative expenses

Income from operations of properties held for sale

Gain on sale of real estate

Net income

Less: Net income attributable to noncontrolling interests in subsidiaries

Net income attributable to the controlling interests