The accounting impairment for the properties, amounting to an average of $82 per sf, will result in lower funds from operations of $0.50 per share. The change will be reflected in the company's third-quarter earnings report, Equity Office Properties Trust officials say.

Most of the assets are in the San Jose market, battered by the tech industry's downturn. The REIT has 41 properties totaling 1.7 million sf there that will see an accounting impairment. "We are committed to San Jose's high-end office market because we believe this area will continue to be a leading center of intellectual capital," says president and chief executive officer Richard Kincaid. "Our focus is on primarily class A multi-tenant office buildings, and we don't expect many of the R&D buildings, which were in high demand as office space in the late '90s, to be attractive to office space users in the foreseeable future. As a result, we are evaluating sales and adaptive reuse scenarios for these assets."

Meanwhile, the REIT is taking impairment charges on two suburban Dallas properties, a 369,134-sf building at 545 John Carpenter Freeway and a 360,815-sf building at 909 Lake Carolyn Pkwy., both in Las Colinas. Additionally, two suburban San Francisco buildings, the 99,150-sf Sierra Point property and 78,022-sf Redwood Shores property, also are seeing a write-down. A 129,583-sf building in the Columbus, OH market, One Crosswoods in Worthington, also is on the REIT's list of impairments.

"The decision to reduce how long we intend to own these assets reflects our plan to more narrowly focus on our core assets and markets," Kincaid says. "We expect to redeploy the capital from these properties into submarkets where we are or can become a market leader."