1283709--3/16/2006--THOMAS_PROPERTIES_GROUP

related topics

{investment, property, distribution}

{acquisition, growth, future}

{loan, real, estate}

{debt, indebtedness, cash}

{loss, insurance, financial}

{stock, price, operating}

{personnel, key, retain}

{provision, law, control}

{cost, regulation, environmental}

{regulation, change, law}

{stock, price, share}

{operation, natural, condition}

{customer, product, revenue}

{capital, credit, financial}

We generate a significant portion of our revenues as a result of our relationships with CalSTRS. If we were to lose these relationships, our financial results and growth prospects would be significantly negatively affected. Our joint venture investments may be adversely affected by our lack of control or input on decisions or shared decision-making authority or disputes with our co-venturers. CalSTRS has rights under our joint venture agreement that could adversely affect us. We are required to present certain investment opportunities to CalSTRS which may limit our opportunities to make investments for our own account or with other third parties. We must expand our business to establish additional strategic alliances to decrease our dependence on our relationship with CalSTRS or our prospects for growth may be limited. We depend on significant tenants, and their failure to pay rent could seriously harm our operating results and financial condition. Our operating results depend upon the regional economies in which our properties are located and the demand for office and other mixed-use space and an economic downturn in these regions could harm our operating results. Our debt level reduces cash available to fund business growth and may expose us to the risk of default under our debt obligations. We have a substantial amount of debt which bears interest at variable rates. Our failure to hedge effectively against interest rate changes may adversely affect our results of operations. We may be unable to complete acquisitions necessary to grow our business, and even if consummated, we may fail to successfully operate these acquired properties. Our real estate acquisitions may result in disruptions to our business as a result of the burden in negotiating these acquisitions and in integrating operations placed on our management. As a result of the limited time during which we have to perform due diligence of many of our acquired properties, we may become subject to significant unexpected liabilities and our properties may not meet projections. We have a near-term expectation of significant growth, and we may not be able to adapt our management and operational systems to respond to this growth, including the acquisition and integration of additional properties without unanticipated disruption or expense. We may be unable to successfully complete and operate properties under development, which would impair our financial condition and operating results. Our efforts to expand our geographic presence and diversify into other regional real estate markets may not be successful, thereby constraining our growth to markets in which we currently operate. We face significant competition, which may decrease or prevent increases of the occupancy and rental rates of our properties. We may be unable to renew leases, lease vacant space or re-lease space as leases expire resulting in increased vacancy rates, lower revenue and an adverse effect on our operating results. Our growth depends on external sources of capital, some of which are outside of our control. If we are unable to access capital from external sources, we may not be able to implement our business strategy. We could incur significant costs related to government regulation and private litigation over environmental matters, including with respect to clean-up of contaminated properties and litigation from any harm caused by environmental hazards on our properties. We are subject to high taxes relating to our California and Philadelphia properties that could negatively affect our operating results and may also be adversely affected by new legislation. The risk of future terrorist attacks in the United States could harm the demand for and the value of our properties which are located in major metropolitan areas. Tax indemnification obligations that may arise in the event we or our Operating Partnership sell an interest in either of two of our properties could limit our operating flexibility. Illiquidity of real estate investments and the susceptibility of the real estate industry to economic conditions could significantly impede our ability to respond to adverse changes in the performance of our properties. Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unintended expenditures that adversely impact our financial condition. Potential losses may not be covered by insurance and may result in our inability to repair damaged properties and we could lose invested capital. Our senior management has existing conflicts of interest with us and our public stockholders that could result in decisions adverse to our company. We have a holding company structure and rely upon funds received from our Operating Partnership to pay liabilities. Mr. Thomas has a significant vote in certain matters as a result of his ownership of 100% of our limited voting stock. Our success depends on key personnel, the loss of whom could impair our ability to operate our business successfully. Some provisions of our certificate of incorporation and bylaws may deter takeover attempts, which may limit the opportunity of our stockholders to sell their shares at a favorable price. We could authorize and issue stock without stockholder approval, which could cause our stock price to decline and dilute the holdings of our existing stockholders.

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1283709--3/16/2006--THOMAS_PROPERTIES_GROUP_INC