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SAN MATEO, CA-Glenborough Realty Trust is reporting today a 15% drop in second quarter funds from operations. Glenborough’s FFO was $17.67 million, or 58 cents per diluted share, for the second quarter of 2001, compared to $20.82 million, or 63 cents per diluted share, in the second quarter of 2000.

Glenborough is a self-administered and self-managed REIT with a portfolio of 85 primarily office and industrial properties encompassing approximately 14 million sf in 19 metropolitan markets. The company’s share price stood at $19.02 in afternoon trading Wednesday, up 17 cents on the day and less than $1.00 off a 52-week high dating back to Aug. 1, 2000.

Glenborough’s acquisitions during the quarter included Rockwall I and II, a two-building, 343,000 square-foot complex in Rockville, Maryland acquired for $58.8 million, and Gateway 19, a newly-constructed 166,000 square foot industrial building at Gateway Park in Denver acquired for $6.8 million.

The Rockwall acquisition price comprised $37 million in assumed mortgage debt, and cash proceeds from tax-deferred property sales completed during the first half of the year. Gateway 19, one of eleven industrial buildings now owned by Glenborough at Gateway Park, was acquired with tax-deferred proceeds from disposition of the Indianapolis retail property discussed below.

Glenborough also continued with its capital redeployment program, which includes exiting the retail sector as well as selected geographic markets. The company sold a retail property and office property in Indianapolis, a retail property in Tampa, and an industrial property in Memphis, for an aggregate sale price of $17.2 million. Glenborough’s retail portfolio has now been reduced to one property, from six at the beginning of 2001.

In May, Glenborough renewed and extended its $180 million unsecured bank line of credit. The maturity date of the line was extended to June 2003, with no change in rate structure. The amount of the line was increased to $180 million from $142 million, with the additional proceeds applied to pay off an unsecured term loan. Glenborough also completed $59 million of new medium-term mortgage financing with an insurance company, at a fixed rate of 6.83%, replacing short-term floating rate financings.

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