CABOT INDUSTRIAL VALUE FUND II, L.P. 2011 First · PDF file · 2016-07-08Cabot Industrial Value Fund II, L.P. Q1 2011 Quarterly Letter have seen in our over 25 years of history in

CABOT INDUSTRIAL VALUE FUND II, L.P.

2011 First Quarter

Benchmark Drive, Farmers Branch, Dallas, TX

Table of Contents

Tab I Tab II Tab III

Letter to Investors Inception to Date Investment Activity Unaudited Financial Statements and Supplemental Financial Information

Cabot Industrial Value Fund II, L.P. Q1 2011 Quarterly Letter

have seen in our over 25 years of history in this business. Rent levels remain well below peak levels. Rents on leases executed prior to 2008 continue to roll down to levels that are 15-20% lower. High velocity markets such as Dallas, Atlanta and New Jersey are experiencing strong absorption; owners willing to cut rents are benefiting from increased activity. Large space users are moving to take advantage of low rates by upgrading facilities and trying to secure long-term commitments. Smaller businesses remain more tentative. Given that almost all job growth is accounted for by these smaller businesses, we need to see greater confidence among these types of businesses and more momentum with the recovery before we begin to experience rent growth. In past recoveries, we have seen annual absorptions averaging 150 million square feet or more. We remain well below these levels. Portfolio Performance Given that most industrial leases are three to five years in duration and the Fund is now approaching its sixth anniversary we have had the opportunity to work with almost every one of our 484 tenants. One of the most important premises of our underwriting process is to value the property from the tenant’s perspective given that all industrial properties will likely face the prospect of vacancy. We have tested this premise during the past very difficult two years. During this time, we have leased over eight million square feet of space.

-0.17%

-0.04%

0.06%

0.27%

0.23%

-0.20%

-0.15%

-0.10%

-0.05%

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

2010.1 2010.2 2010.3 2010.4 2011.1

Net Absorption as Percent of Total Industrial Stock

Source: CBRE-EA Industrial Outlook


Despite this significant activity, we have seen occupancy decline from 80.9% (as of 3/31/09) to 75.5% today. The sources of our vacancy our shown below.

We do believe, however, that the worst is behind us. The long anticipated impact of General Motors vacating the three large buildings they occupied hit us during the first half of this year. During the first part of the second quarter, we can report that this space has largely been absorbed. Further, we are seeing improving activity on our largest development projects. Our vacancy is largely concentrated in Atlanta and Dallas and both these markets are improving. For the past three quarters, we have moved to meet market pricing in these two markets and we are seeing better activity as a result. During the first quarter, we leased 915,000 square feet in 48 transactions (greater than 12 months in term), which consisted of 17 new leases on 378,000 square feet and 31 renewals on 537,000 square feet. The largest four of these deals include: • In West Chicago, at Downs Drive, we executed an agreement with Sleep Innovations

to expand their existing premises by 67,000 square feet for a term of 127 months, at an average net rent of $3.28 PSF, exclusive of free rent, resulting in an average lease yield of 8.2%. As part of this transaction, we also extended the term of the tenant’s existing lease on 101,000 square feet by three years (commencing 2019) at an average rate of $4.04 PSF; a resulting return on cost of 10.9%.

• In Memphis at Crowfarn Drive, we renewed ABX Air Cargo Services for 45 months

in 106,000 square feet at an average net rent of $2.20 PSF, resulting in an average lease yield of 7.9%.

• In Tampa at N. 53rd Street, we converted Global Investment Recovery, a tenant

leasing 55,000 square feet month to month, to a one-year lease for 75,000 square feet at an average net rent of $3.04 PSF, rendering an average lease yield of 8.7%.

• In Atlanta at West Oak Parkway, we executed a new 84-month lease with Amendia

for 49,000 square feet at an average net rent of $4.34 PSF, resulting in an average

Acquired vacancy Speculative developments

Defaults Lease expirations Total Vacancy as of March 31, 2011

2%

5%

6%

12% 25%

Components of Fund II Vacancy


lease yield of 6.0%. This tenant leased a space which had been vacant since April of 2009.

While the yields for two of the afore-highlighted transactions are lower than what we have hoped for, the average yield on cost, exclusive of free rent, for all 48 transactions executed during the first quarter was 8.0%. Portfolio Valuation As of March 31, 2011, the Fund owned 199 properties totaling 21 million square feet. Each quarter, every property is individually valued. The key components of these valuations include the assessment of market rent levels, the review of income projections and comparable sale transactions. Two key drivers of value are the cap rate applied to the income in the 10th year and the discount rate. For Fund II, the weighted average cap rate used for the terminal values was 8.6% and the weighted average discount rate was 9.0%. These rates declined slightly during the quarter. During the first quarter, as leasing conditions continued to stabilize, values increased slightly. The results of the valuation process are summarized below.

Fund II Recent Quarterly Valuations(Dollars in millions)

Mar-11 Dec-10 Sep-10 Jun-10 Mar-10

Cumulative Capital Called 420$ 420$ 420$ 420$ 420$

Dividends Paid (23) (23) (23) (23) (23)

Net Investment 397$ 397$ 397$ 397$ 397$

Retained Earnings from Operations 59 58 57 54 52

Unrealized Loss from Real Estate Valuation (150) (153) (161) (157) (162)

Unrealized (Loss)Gain from Debt Valuation (8) (8) (13) (5) 17

Net Asset Value 298$ 294$ 280$ 289$ 304$

Weighted Average

Discount Rate

Weighted Average Exit

Cap Rate

Current Yield* on Value

Stabilized Yield** on Value (95% occupancy)

Stabilized Market Rent Yield*** on

Value

9.0%8.6%

6.2%8.7% 8.6%

Portfolio Valuation Metrics

* Yield includes leases in place as of March 31, 2010. Yields are based on annualized NNN rent for leased space ($3.96/SF) less $1.35/SF of expense for vacant space and less $.05/SF for non-reimbursable expense for all spaces.

**Stabilized Yield is based on annualized NNN rent in place as of March 31, 2010 less $1.35/SF of expense for 5% of total square feet and less $0.05/SF for non-reimbursable expense for all spaces, plus ($3.92/SF) for 4.1 MM SF which would result in 95% occupancy.

***Stabilized Market Rent Yield is based on the weighted average NNN market rent used in our current valuations ($3.92/SF) for 95% of the total square feet less $1.35/SF of expense for the 5% vacant space and less $0.05/SF for non-reimbursable expense for all spaces.


Financial Profile The Fund’s capital structure remains solid. The Fund has $30 million of uncalled capital commitments available to pay for tenant improvements or capital expenditures not covered by cash flows from operations or the roughly $40 million of available borrowing capacity under the secured credit facility led by PNC bank. Further, the Fund has no debt maturities in 2011, with the earliest being in September 2012, associated with the secured credit facility (which has two one-year extension options at the borrower’s discretion).

As of quarter end, the Fund continued to be in compliance with the covenants under its secured credit facility. All pooled financings completed by Cabot have a debt service coverage equal to or greater than 1.0 times. While the debt service coverage is not a covenant for these pooled financings, we continue to watch them and converse with our lenders to ensure we can maximize the negotiated flexibility associated with substitutions and potential one-off sales. From a valuation perspective, the Fund did not see a significant change in the overall value of its debt. While treasuries may have increased slightly, overall spreads decreased to compensate. Over 50% of the $8.3 million in unrealized loss currently reflected in the Fund’s balance sheet is related to the unamortized deferred financing costs totaling $4.5 million.

Fund Debt Profile - Non-Recourse(as of March 31, 2011)Lender # of PropertiesConnecticut General Life Insurance Company 19 2,331,600 96.6% 63,771,368$ 77.0% 1.5 6.4% 8/1/2015Prudential Insurance Company of America 14 1,849,606 66.1% 63,908,721 79.0% 1.0 6.3% 10/5/2015TIAA Portfolio 14 1,670,103 89.2% 53,000,000 76.6% 1.9 5.4% 4/1/2016Jackson National Life Insurance Company (Two Fundings) 36 3,026,485 83.0% 86,247,142 69.5% 1.8 5.6% 5/1/2016JP Morgan Chase Bank 27 2,157,272 62.8% 61,365,000 78.5% 1.3 5.5% 1/1/2017JP Morgan Chase Bank 15 1,918,201 66.5% 60,000,000 83.8% 1.0 5.8% 4/1/2017New York Life Insurance Company 35 2,090,554 71.4% 72,000,000 83.0% 1.2 6.1% 10/10/2017New York Life Insurance Company (Two Fundings) 15 3,173,320 80.1% 104,156,629 79.2% 1.2 6.2% 12/10/2017Assumed Mortgages 5 555,748 78.5% 16,534,624 54.6% 1.0 6.3% various

Total/Weighted Averages 180 18,772,889 77.7% 580,983,484$ 76.9% 1.3 5.9% 5.5 years

Fund Debt Profile - Recourse(as of March 31, 2011)LenderPNC Secured Credit Facility 11 1,553,251 81.4% 17,100,000$ 20.3% 3.8 4.5% 9/30/2012

Debt Coverage Summary(as of March 31, 2011) Debt BalanceDebt (before fees) 191 20,326,140 77.9% 598,083,484$ 71.3% 1.4 5.9%All properties (before fees) 199 21,035,515 75.5% 598,083,484$ 65.4% 1.4 5.9%All properties (post fees) 1.2

PNC Secured Credit Facility - Fund Level ** 1.30

# of Properties

# of Properties

Size (SF)

** Debt service coverage ratio is based on current quarter income (adjusted to exclude expenses from three development projects not stabilized and to include leases signed but not commenced) annualized, less a $0.20 reserve

Loan to ValueSize (SF) Occupancy

DSC Ratio*

Interest Rate

* Debt service coverage ratios are based on annualized NNN rent for leases in place as of March 31, 2011 less $1.35 for vacant space and less $0.05/SF for non-reimbursable expenses for all spaces.

Occupancy Debt BalanceLoan to Value

DSC Ratio*

Interest Rate

Maturity Date

DSC Ratio**

Interest Rate

Maturity DateSize (SF) Occupancy Debt Balance

Loan to Value

Current YieldMarket $ $/SF % $ $/SF % Size (SF) Occupancy On Value*

Dallas 127.6$ 40.73$ 12.5% 118.2$ 37.74$ 13.5% 3,133,227 76.9% 5.8%Atlanta 90.5 43.51 8.8% 79.3 38.11 9.0% 2,079,467 67.2% 5.5%Chicago 112.2 55.09 11.0% 91.1 44.74 10.4% 2,035,740 85.8% 7.9%Houston 97.1 49.79 9.5% 92.3 47.31 10.5% 1,950,481 83.9% 6.8%Cincinnati 87.7 39.06 8.6% 78.4 34.96 9.0% 2,244,478 77.6% 7.1%Boston 65.2 66.61 6.4% 51.3 52.49 5.8% 978,290 47.5% 3.2%Columbus 61.6 34.82 6.0% 53.4 30.18 6.1% 1,768,887 59.4% 4.2%Indianapolis 60.8 44.13 5.9% 53.0 38.47 6.0% 1,377,132 98.9% 8.1%Jacksonville 57.6 61.76 5.6% 39.9 42.82 4.5% 932,785 49.7% 3.3%South Florida 43.0 115.48 4.2% 33.4 89.87 3.8% 372,409 80.5% 5.8%Phoenix 41.8 77.80 4.1% 31.9 59.39 3.6% 537,441 46.8% 3.9%Memphis 34.7 29.44 3.4% 29.1 24.71 3.3% 1,178,091 72.2% 7.1%Eastern PA 25.7 71.64 2.5% 26.4 73.47 3.0% 358,750 100.0% 8.3%Nashville 22.1 38.22 2.2% 19.8 34.22 2.3% 578,918 100.0% 8.9%San Francisco 22.0 114.28 2.1% 16.8 87.02 2.0% 192,661 77.4% 6.5%Toronto 15.9 78.30 1.6% 12.6 61.93 1.4% 203,397 56.0% 3.9%Seattle 12.6 74.08 1.2% 10.9 63.83 1.2% 170,486 100.0% 8.0%Tampa 11.4 46.22 1.1% 10.8 43.76 1.2% 247,376 77.8% 7.1%Orlando 8.6 57.51 0.8% 6.7 45.02 0.8% 148,822 87.5% 8.9%New Jersey 8.3 56.46 0.8% 7.9 53.41 0.9% 147,181 100.0% 8.8%Charlotte 8.1 34.08 0.8% 7.0 29.34 0.8% 237,442 85.8% 8.2%Harrisburg 6.1 54.37 0.6% 5.6 50.13 0.6% 112,254 100.0% 9.0%Philadelphia 3.2 63.54 0.3% 3.0 59.68 0.3% 49,800 88.4% 7.8%

Totals 1,023.8$ 48.67$ 100.0% 878.8$ 41.78$ 100.0% 21,035,515 75.5% 6.2%

Current Cost Current FMV

INVESTMENT SUMMARY

(Dollars in millions, except per square foot information)As of March 31, 2011

(Land for development not included)

*Yields are based on annualized NNN rent for leased space less $1.35/SF of expense for vacant space and less $.05/SF for non-reimbursable expense for all spaces.

Current Current Date Current YieldName Market Cost FMV Size (SF) Acquired Occupancy On Value*

Bakers Ferry Road Atlanta 6.5$ 5.8$ 200,827 10/28/05 100.0% 10.2%Rivergreen Court Atlanta 10.2 8.9 157,458 12/09/05 65.9% 5.1%Cobb Center Drive Atlanta 3.5 3.6 82,500 12/16/05 100.0% 8.7%Citizens and Southlake Parkway Atlanta 12.0 10.0 445,204 05/11/06 5.8% -4.5%Avalon Ridge Parkway Atlanta 6.1 5.3 93,133 09/05/06 100.0% 7.2%Atlanta Industrial Properties Atlanta 8.7 7.5 126,640 11/09/06 61.2% 5.7%West Oak Parkway Atlanta 5.9 4.5 87,248 01/31/07 100.0% 9.2%Panola Industrial Boulevard Atlanta 3.3 3.2 47,000 05/31/07 100.0% 9.3%Southmeadow Pkwy & Welcome All Rd Atlanta 15.8 13.9 442,337 07/24/07 65.4% 3.6%Research Center Drive Atlanta 8.7 7.5 170,000 10/15/07 100.0% 8.1%Presidential and Villanova Drive Atlanta 5.3 4.8 135,658 04/30/08 95.5% 9.5%Evergreen Drive Atlanta 4.3 4.4 91,462 07/17/08 100.0% 8.2%

Atlanta Totals 90.5$ 79.3$ 2,079,467 67.2% 5.5%

Commerce Way Boston 25.2$ 19.9$ 401,360 12/21/07 0.0% -2.8%I-290 Industrial Park Boston 40.0 31.4 576,930 07/31/08 80.5% 7.0%

Boston Totals 65.2$ 51.3$ 978,290 47.5% 3.2%

Interstate Street Charlotte 2.6$ 2.2$ 60,038 08/16/05 43.7% 2.6%Westinghouse Boulevard Charlotte 3.0 2.8 97,284 04/26/06 100.0% 9.0%West 32nd Street Charlotte 2.5 1.9 80,120 09/01/06 100.0% 13.3%

Charlotte Totals 8.1$ 7.0$ 237,442 85.8% 8.2%

Chicago Industrial Properties Chicago 41.2$ 38.5$ 739,549 08/04/05 91.5% 7.9%West Howard Street Chicago 23.0 16.9 356,103 02/28/06 79.5% 9.1%E. Devon Avenue Chicago 4.3 3.5 68,742 04/24/06 79.8% 7.2%Republic Drive Chicago 5.3 3.6 103,000 05/23/06 74.2% 5.4%Brewster Creek Boulevard Chicago 15.9 9.5 259,200 08/04/06 60.1% 4.4%West 40th Street Chicago 3.9 2.7 84,713 05/09/07 100.0% 9.7%Abbott Drive Chicago 2.1 1.7 43,930 06/18/07 100.0% 4.5%Huehl Road Chicago 2.0 1.7 31,400 09/13/07 100.0% 9.6%Central Avenue Chicago 9.7 8.0 263,840 06/02/08 96.4% 9.8%Oakwood Drive Chicago 4.9 5.0 85,263 10/17/08 100.0% 8.3%

Chicago Totals 112.2$ 91.1$ 2,035,740 85.8% 7.9%

Deerfield Road Cincinnati 3.7$ 3.1$ 77,500 11/22/05 77.4% 8.0%Aviation Boulevard Cincinnati 18.1 16.5 361,263 05/25/06 91.7% 6.7%Earhart Court Cincinnati 9.5 9.1 150,891 01/26/07 100.0% 9.1%Old Dixie Highway Cincinnati 6.6 6.6 137,088 06/01/07 100.0% 9.0%Cincinnati Industrial Properties Cincinnati 31.0 24.6 1,051,040 06/27/07 56.6% 4.2%Jacquemin Drive Cincinnati 15.4 15.2 402,214 12/21/07 100.0% 9.7%Circleport Drive Cincinnati 3.4 3.2 64,482 05/30/08 100.0% 8.8%

Cincinnati Totals 87.7$ 78.4$ 2,244,478 77.6% 7.1%

(Land for development noted separately)

As of March 31, 2011INVESTMENT DETAILS

(Dollars in millions)






Hilton Corporate Drive Columbus 4.2$ 4.5$ 97,800 08/05/05 100.0% 10.1%West Columbus Properties Columbus 19.1 16.1 656,918 09/21/05 87.2% 8.9%East Wilson Bridge Road Columbus 6.0 4.8 99,810 04/13/06 76.7% 9.6%Dearborn Park Lane Columbus 5.1 4.3 107,450 01/08/07 100.0% 10.6%Venture Court Columbus 3.6 4.7 168,850 01/31/07 48.3% -2.6%West Belt Business Park Columbus 4.4 3.9 136,206 06/27/07 84.4% 6.9%Green Pointe Drive South Columbus 19.1 14.9 501,853 12/21/07 0.0% -4.7%

Columbus Totals 61.6$ 53.4$ 1,768,887 59.4% 4.2%

Benchmark Drive Dallas 5.8$ 4.3$ 119,083 09/12/05 100.0% 6.0%Texas Multi-Tenant Properties Dallas 38.9 33.1 927,842 03/17/06 83.9% 6.8%S. Northpoint Drive Dallas 12.9 11.6 308,000 12/15/06 15.8% -1.6%S. Royal Lane Dallas 8.9 6.9 208,800 12/18/06 0.0% -4.2%Lakeway Drive Dallas 4.1 3.9 87,624 11/21/07 100.0% 8.9%Lakeway and TriStar Drive Dallas 9.4 8.0 192,788 04/14/08 80.5% 6.6%Reynolds/Rosenberg Properties Dallas 17.7 19.8 575,080 04/30/08 97.9% 8.9%Amberpoint - Phase I Dallas 30.0 30.6 714,010 Dev 59.3% 7.3%

Dallas Totals 127.6$ 118.2$ 3,133,227 76.9% 5.8%

Newlins Mill Road Eastern PA 25.7$ 26.4$ 358,750 Dev 100.0% 8.3%

Eastern PA Totals 25.7$ 26.4$ 358,750 100.0% 8.3%

North Union Street Harrisburg 6.1$ 5.6$ 112,254 11/21/07 100.0% 9.0%

Harrisburg Totals 6.1$ 5.6$ 112,254 100.0% 9.0%

Texas Multi-Tenant Properties Houston 10.2$ 10.6$ 307,039 03/17/06 92.1% 8.8%West Little York Road Houston 9.1 9.2 110,715 11/13/06 86.1% 7.3%Houston Industrial Properties Houston 13.2 12.3 191,122 06/22/07 82.6% 8.1%South Sheldon Road Houston 7.1 7.6 180,000 07/31/07 100.0% 8.2%Britmoore Road & Kempwood Drive Houston 21.5 16.8 336,013 10/03/07 87.3% 8.0%Willowbend Boulevard Houston 23.8 23.2 654,352 03/06/08 95.9% 8.4%Dairy Ashford Rd & Cardinal Meadow Dr Houston 12.1 12.6 171,240 Dev 0.0% -1.9%

Houston Totals 97.1$ 92.3$ 1,950,481 83.9% 6.8%

Post Place Indianapolis 6.6$ 5.5$ 141,229 10/31/06 100.0% 3.3%North Shadeland Avenue Indianapolis 4.7 4.0 90,135 09/07/07 83.1% 7.5%Perry Road Indianapolis 41.6 35.5 925,800 10/26/07 100.0% 9.0%West New Road Indianapolis 8.0 8.0 219,968 02/29/08 100.0% 7.8%

Indianapolis Totals 60.8$ 53.0$ 1,377,132 98.9% 8.1%






Gran Bay Parkway West Jacksonville 19.4$ 12.1$ 363,041 12/21/07 100.0% 12.6%Cabot Commerce Drive/Circle Jacksonville 38.2 27.8 569,744 Dev 17.6% -0.7%

Jacksonville Totals 57.6$ 39.9$ 932,785 49.7% 3.3%

Senator Street and Raines Road Memphis 16.4$ 13.4$ 532,994 03/09/06 66.7% 6.1%Old Lamar Avenue Memphis 3.2 2.4 124,812 06/30/06 9.9% -4.9%South Mendenhall Road Memphis 3.5 2.9 102,500 09/18/06 100.0% 10.3%Delp Street Memphis 3.1 2.5 102,000 10/31/06 63.8% 11.8%Crowfarn Drive Memphis 2.9 2.2 105,785 12/14/06 100.0% 10.1%Knight Arnold Road Memphis 5.7 5.7 210,000 05/23/08 100.0% 9.6%

Memphis Totals 34.7$ 29.1$ 1,178,091 72.2% 7.1%

Great Circle Road Nashville 22.1$ 19.8$ 578,918 01/05/07 100.0% 8.9%

Nashville Totals 22.1$ 19.8$ 578,918 100.0% 8.9%

Clyde Road & Howard Avenue New Jersey 8.3$ 7.9$ 147,181 07/17/07 100.0% 8.8%

New Jersey Totals 8.3$ 7.9$ 147,181 100.0% 8.8%

North Orange Blossom Trail Orlando 8.6$ 6.7$ 148,822 07/12/06 87.5% 8.9%

Orlando Totals 8.6$ 6.7$ 148,822 87.5% 8.9%

Holstein Avenue Philadelphia 3.2$ 3.0$ 49,800 09/21/07 88.4% 7.8%

Philadelphia Totals 3.2$ 3.0$ 49,800 88.4% 7.8%

West 10th Street Phoenix 6.6$ 5.2$ 64,270 01/27/06 100.0% 8.7%West Papago Phoenix 3.9 2.1 88,488 01/10/07 0.0% -5.5%West Camelback Phoenix 11.5 12.8 157,523 03/13/07 100.0% 7.9%Empire Business Park Phoenix 19.8 11.8 227,160 Dev 13.1% -0.8%

Phoenix Totals 41.8$ 31.9$ 537,441 46.8% 3.9%

Encyclopedia Circle San Francisco 7.1$ 7.1$ 81,485 09/23/05 100.0% 8.3%Ardenwood Boulevard San Francisco 5.4$ 2.9$ 49,145 08/09/07 11.4% -0.4%Huntwood Avenue San Francisco 9.5$ 6.8$ 62,031 06/19/08 100.0% 7.6%

San Francisco Totals 22.0$ 16.8$ 192,661 77.4% 6.5%

206th Street Seattle 5.3$ 3.5$ 63,576 08/17/05 100.0% 8.7%South 216th Street Seattle 7.3$ 7.4$ 106,910 09/01/05 100.0% 7.7%

Seattle Totals 12.6$ 10.9$ 170,486 100.0% 8.0%

SW 45th Street South Florida 13.8$ 11.8$ 137,500 11/18/05 76.1% 4.9%Park of Commerce South Florida 13.5 11.5 113,191 06/29/07 100.0% 7.5%Northwest 74th Avenue South Florida 6.7 5.1 58,621 02/21/08 100.0% 6.9%Riveria Beach South Florida 9.0$ 5.0$ 63,097 Dev 37.2% 3.1%

South Florida Totals 43.0$ 33.4$ 372,409 80.5% 5.8%






North 53rd Street Tampa 7.7$ 7.2$ 205,126 11/15/05 73.2% 6.3%Ulmerton Road Tampa 3.8$ 3.7$ 42,250 07/11/08 100.0% 8.6%

Tampa Totals 11.4$ 10.8$ 247,376 77.8% 7.1%

Royal Windsor Drive Toronto 15.9$ 12.6$ 203,397 11/30/07 56.0% 3.9%

Toronto Totals 15.9$ 12.6$ 203,397 56.0% 3.9%

Grand Totals 1,023.8$ 878.8$ 21,035,515 75.5% 6.2%

Land

Land - New Ridge Road Baltimore 8.2$ 7.8$ DevLand - AirEast II Columbus 6.8 6.6 DevLand - Amberpoint - Phase II Dallas 4.8 4.5 DevLand - Interwood Business Park Houston 4.7 4.4 DevLand - Sugar Land - Phase 2 Houston 2.5 2.3 DevLand - Port of Jacksonville - Phase 2 Jacksonville 7.1 5.0 DevWaterman Land Tampa 6.2 5.2 Dev

Total 40.2$ 35.8$


CABOT INDUSTRIAL VALUE FUND II, L.P. Consolidated Financial Statements and Supplemental Schedules As of March 31, 2011 (Unaudited)


Consolidated Statements of Net Assets As of March 31, 2011 and December 31, 2010

(Unaudited)

The accompanying notes are an integral part of these financial statements.

March 31, 2011 December 31, 2010

Assets:

Investments in real estate 914,620,429$ 905,785,249$

Cash and cash equivalents 475,021 2,064,128

Restricted cash 960,542 951,980

Rents and other receivables 2,326,822 1,453,900

Prepaid expenses 24,032 293,200

Other assets 148,652 165,100

Total assets 918,555,498$ 910,713,557$

Liabilities:

Line of credit borrowings 17,100,000$ 10,200,000$

Mortgage loans 584,807,852 584,379,059

Derivative instruments 553,661 327,790

Accounts payable and other accrued liabilities 4,672,555 5,579,054

Accrued real estate taxes 7,827,058 10,481,318

Tenant security deposits and prepaid rents 5,242,244 6,230,149

Total liabilities 620,203,370$ 617,197,370$

Net assets representing equity of:

Noncontrolling interest 7,121,421$ 6,989,494$

General partner 330,416 325,076

Limited partners 290,900,291 286,201,617

Total net assets 298,352,128$ 293,516,187$


Consolidated Statement of Operations For the Three Months Ended March 31, 2011

(Unaudited)


Three MonthsEnded

March 31, 2011Revenues:

Rental income 16,105,377$ Tenant reimbursements 4,614,096Other income 19,119 Total revenues 20,738,592$

Expenses:Property operating 4,045,918$ Property taxes 4,290,084General and administrative 190,023Asset management fees 1,541,751Interest 9,124,532 Total expenses 19,192,308$

Net investment income 1,546,284$

Net change in unrealized loss on investments 3,908,389$

Net unrealized loss on borrowings (614,826)

Net unrealized gain 3,293,563$

Net increase in net assets resulting from operations 4,839,847$

Allocation of net increase in net assets resulting from operations

Amounts attributable to noncontrolling interest:Net investment income 66,302$ Net unrealized gain 69,531

Net increase in net assets resulting from operations 135,833$

Amounts attributable to general partner:Net investment income 1,680$ Net unrealized gain 3,660

Net increase in net assets resulting from operations 5,340$

Amounts attributable to limited partners:Net investment income 1,478,302$ Net unrealized gain 3,220,372

Net increase in net assets resulting from operations 4,698,674$


Consolidated Statement of Changes in Net Assets For the Three Months Ended March 31, 2011

(Unaudited)


Noncontrolling General Limited

Interest Partner Partners Total

Net assets as of December 31, 2010 6,989,494$ 325,076$ 286,201,617$ 293,516,187$

Distributions (3,906) - - (3,906)

Net investment income 66,302 1,680 1,478,302 1,546,284

Net unrealized gain 69,531 3,660 3,220,372 3,293,563

Net assets as of March 31, 2011 7,121,421$ 330,416$ 290,900,291$ 298,352,128$


Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2011

(Unaudited)


Three MonthsEnded

March 31, 2011Cash flows from operating activities:

Net investment income 1,546,284$ Adjustments to reconcile net investment income to net cash used in operating activities:

Amortization of deferred financing costs 336,138

Increase in rents and other receivables (872,922)

Decrease in other assets and prepaid expenses 285,616

Decrease in accounts payable and other accrued liabilities (237,945)

Decrease in accrued real estate taxes (2,654,260)

Decrease in tenant security deposits and prepaid rents (987,905)

Net cash used in operating activities (2,584,994)$ Cash flows from investing activities:

Improvement and development of investments in real estate (1,253,384)$

Tenant improvements and leasing costs (4,119,996)

Restricted cash deposits, net (8,562)

Net cash used in investing activities (5,381,942)$ Cash flows from financing activities:

Line of credit borrowings, net 6,900,000$

Repayment of mortgage loans, net (465,705)

Payment of deferred financing costs (56,466)

Net cash provided by financing activities 6,377,829$

Net decrease in cash and cash equivalents (1,589,107)$

Cash and cash equivalents, beginning of period 2,064,128

Cash and cash equivalents, end of period 475,021$

Supplemental cash flow informationCash paid for interest 8,805,204$

Non-cash investing and financing activitiesDevelopment and investment costs in other accrued liabilities 68,973$ Tenant improvements and lease commissions in other accrued liabilities (741,433)$

Dividends due the preferred shareholders in other accrued liabilities 3,906$


Notes to Consolidated Financial Statements (Dollars in thousands)

(1) ORGANIZATION AND DESCRIPTION OF BUSINESS

Cabot Industrial Value Fund II, L.P., a Delaware limited partnership (the “Partnership” or the “Fund”), was formed on July 27, 2005 for the purpose of acquiring, developing, managing and otherwise dealing in and with industrial real estate investments in the United States of America. The Fund is the sole common stockholder of Cabot Industrial Value Fund II, Inc. (the “REIT”), a Maryland real estate investment trust, which was formed on July 26, 2005. The REIT is the general partner of a limited partnership, Cabot Industrial Value Fund II Operating Partnership, L.P. (the “Cabot O.P.”), and conducts substantially all of its business through Cabot O.P. As the general partner of Cabot O.P., the REIT has the exclusive power under the agreement of limited partnership to conduct the business of Cabot O.P. and, therefore, the Fund consolidates the financial results of Cabot O.P. and the REIT for financial reporting purposes.

The term of the Partnership is eight years from September 1, 2005, the “Final Closing”, but may be extended at the discretion of the general partner for up to two consecutive one-year periods; provided further, however, that the term of the Partnership may be further extended by the general partner with the approval of limited partners representing a Voting Interest of the Limited Partners in excess of fifty percent (50%). All terms not defined herein shall have the meaning ascribed to them in the Limited Partnership Agreement, dated July 27, 2005.

The general partner of the Partnership is Cabot Industrial Value Fund II Manager, LP, a Massachusetts limited partnership, (the “General Partner”). The General Partner has full and exclusive management authority over investments, dispositions and other affairs of the Partnership. However, the General Partner may consult with the Board of Advisors in connection with potential conflicts of interest and other Partnership-related matters. The investment manager of the Partnership is Cabot Properties, L.P., a Delaware limited partnership (the “Manager”), an affiliate of the General Partner. The Manager provides personnel, as well as administrative and management services, to the Partnership in connection with Investments to be made by the Partnership for a Management Fee (Note 9).

The Partnership completed its Initial Closing on July 27, 2005. As of the Final Closing, the aggregate committed capital for the Partnership is $440,500. The limited partners committed $440,000 and the general partner committed $500. The terms of the partnership agreement do not generally provide for new subscription or redemption of partners’ interests. The Partnership may call capital from its Partners to fund Investments, Partnership Expenses, Organizational Costs and Management Fees. However, capital calls for Investments must generally be made within four years from the Final Closing (the “Investment Period”). During the Investment Period, any return of capital from an Investment disposed may either be retained by the Partnership and reinvested or distributed in accordance with the distribution procedures in Note 4. As of March 31, 2011, $411,134, or 93% of committed capital had been contributed to the Partnership. On May 15, 2009, one partner, LandAmerica Financial Group, Inc., did not make its required capital contribution of $444.5. On August 17, 2010, the defaulting partner transferred its interest to Landmark Real Estate Partners VI PV II, L.P., after payment of the defaulted capital contribution and related costs to the Partnership.

Noncontrolling Interest includes the General Partner’s $9,500 limited partner commitment to the Cabot O.P. and the Canadian investment, of which $8,867 had been contributed as of March 31, 2011. Noncontrolling Interest also includes the REIT’s preferred shareholders’ committed capital of $125, which was contributed on October 18, 2005. The REIT’s preferred stock is 12.5% cumulative non-voting stock with dividends payable June 30 and December 31 of each year. Cumulative dividends of $81 have been paid through March 31, 2011. The General Partner’s noncontrolling interest share of net investment income (loss) and net unrealized gain of Cabot O.P. and the Canadian investment for the three months ended March 31, 2011 was $134, and $2, respectively. As of March 31, 2011, the General Partner’s noncontrolling interest in Cabot O.P. was $7,122, the General Partner’s noncontrolling interest in the Canadian investment was ($41) and the preferred shareholders’ noncontrolling interest was $40.



(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Use of Estimates

The accompanying financial statements of the Partnership have been presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The real estate and capital markets are cyclical and sometimes volatile in nature. Property and investment values are affected by, among other things, the availability of capital, occupancy rates, rental rates and interest and inflation rates. Furthermore, as of March 31, 2011, there was and continues to be significant disruptions in the global capital, credit and real estate markets. These disruptions have led to, among other things, a significant decline in the volume of transaction activity in real estate related investments and a significant contraction in short-term and long-term debt and equity funding sources. These market developments have had a significant adverse impact on the Fund’s results of operations and financial condition. The decline in relative prices of real estate and real estate related investments, as well as the availability of observable transaction data and inputs, may have made it more difficult to determine the fair value of such investments. As a result, amounts ultimately realized by the Fund from investments sold may vary significantly from the fair values presented.

Consolidation Policy

The consolidated financial statements of the Partnership include the accounts of its controlled investees. All intercompany transactions have been eliminated in the consolidation.

Noncontrolling interest represents the General Partner’s and the REIT’s preferred shareholders share of the equity in the Partnership’s consolidated investees.

Investments in Real Estate

Investments in real estate are carried at fair value. Real estate owned is initially recorded at the purchase price costs. Development costs and major renovations are capitalized as a component of costs, and routine maintenance and repairs are charged to expense as incurred. The difference between the cost basis and the fair value of the investments represents unrealized appreciation or depreciation. Changes in unrealized appreciation or depreciation occurring during the period are reflected in the accompanying statements of operations.

Investment Valuation

The fair value of real estate investments are estimated based on the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date and does not reflect transaction sales costs that may be incurred upon disposition of real estate investments. Real estate values are based largely on estimates using real estate appraisal techniques and other valuation methods. On a quarterly basis, fair values are reviewed by the General Partner and adjusted if there has been a significant change in circumstances related to the investment since the last valuation. The General Partner will use valuation methods considered appropriate for the type of investment. Such valuation techniques include the income capitalization, the sales comparison, and the cost approach, as more fully described below.

Income Capitalization Approach: This approach is based on the principle that value is created by the expectation of future income. This approach is particularly applicable in the case of income producing properties, and is the primary approach utilized by the Fund. One technique to convert income to value is direct capitalization, which



(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investment Valuation (continued)

involves dividing the net operating income by a market capitalization rate. A second technique is the discounted cash flow analysis, in which projected cash flows (net operating income less periodic capital expenditures and reversion value at the conclusion of the holding period) are converted to present value by applying an annual discount rate. As applicable, net operating income and cash flow are estimated based on an analysis of market rent and occupancy levels and forecast property expenses and, accordingly, key inputs and assumptions include rental income and expense amounts and related growth rates, as well as discount and income capitalization rates.

Sales Comparison Approach: This approach is a method of estimating fair value based on analyzing transactions of similar properties in the market area. A major premise of this approach is that the fair value of the property is directly related to the prices of comparable, competitive properties. The reliability of this approach is dependent upon the availability of comparable data, the verification of sales data, the degree of comparability and the absence of atypical conditions affecting the sales price. Once sales data is gathered, adjustments, involving the judgement of the General Partner, are made to the comparable properties to determine a value range for the property being valued. Generally, a point of value within the adjusted range is concluded.

Cost Approach: The application of the cost approach is based on the principle of substitution and the concept that a market participant would not pay more for a property than the cost to develop a substitute property of equivalent desirability and utility. This approach involves the valuation of the land as if vacant, estimation of the replacement cost of the existing or proposed structure and site improvements, estimation of accrued deprecation found in the improvements and estimation of an appropriate entrepreneurial profit as applicable. The cost approach is typically utilized to determine value for new or proposed properties, special use properties or where the cost of reproducing the improvements is easily and accurately quantified and there is no economic obsolescence.

Because of the inherent uncertainties associated with real estate valuation, the estimated fair values reflected in the accompanying financial statements may differ significantly from values that could be realized in an arm’s-length transaction.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of cash and short-term investments with original maturity dates of less than ninety days from the date of purchase.

Restricted Cash

Restricted cash is subject to usage restrictions, such as reserves required by related loan agreements for tenant improvement replacement reserves.

Concentration of Credit Risk

The Partnership invests its cash primarily in deposits and money market funds with commercial banks. At times, cash balances may exceed federally insured amounts. The General Partner believes it mitigates credit risk by depositing cash or investing through major financial institutions.

Issuance Costs and Organization Costs

The Partnership has incurred various legal and other professional expenses associated with the sale of interests in the Fund totaling $530 through March 31, 2011. Such costs have been recorded as a charge to net assets of the Partnership. Costs incurred in connection with the organization of the Partnership have been expensed as a component of general and administrative expense.




Borrowings

Borrowings, including line of credit borrowings and mortgage loans, are stated at fair value. The fair value of borrowings is estimated based on the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The difference between the cost basis (including deferred financing costs) and the fair value of the borrowings represents unrealized appreciation or depreciation. Changes in unrealized appreciation or depreciation occurring during the period are reflected in the accompanying statement of operations. The fair value of the borrowings have been determined by giving consideration to one or more of the following criteria as appropriate: (i) interest rates and/or interest rate spreads for loans of comparable quality and maturity, (ii) the value of the underlying collateral, (iii) the credit risk of the borrower based on key elements of the real estate's investment valuation, (iv) market based loan-to-value and debt-service-coverage ratios relative to each mortgage loan payable valuation, and (v) key terms such as assumability, recourse provisions and guaranties. Because of the inherent uncertainties associated with debt valuation, the estimated fair values reflected in the accompanying financial statements may differ significantly from values that could be realized in an arm’s-length transaction.

Deferred financing costs incurred to obtain financing are not reflected on the Statement of Net Assets but are included in the cost basis of borrowings and are being amortized over the terms of the respective loans on a basis that approximates the effective interest method as a component of interest expense. The related asset has been ascribed no value in conjunction with the valuation of the related borrowings in accordance with the accounting standard for fair value measurements.

Revenue and Expense Recognition

The Partnership recognizes base rental income based on the contractual rents due under the terms of the related leases. Additional rents, which are provided for in individual tenant leases, primarily relate to the reimbursement of certain operating expenses of the Rental Property. The Partnership recognizes such reimbursement of expenses by tenants as revenue when earned and when the amounts can be reasonably estimated. The Partnership recognizes operating expenses as incurred.

Income Taxes

No provision has been made in the accompanying financial statements for federal, state or local income taxes, as each Partner is individually responsible for reporting its allocable share of the Partnership’s income, gains, reductions, losses and credits on its individual income tax returns.

The Fund consolidates the financial statements of the REIT, which is being operated to qualify as a real estate investment trust for Federal income tax purposes. Accordingly, the REIT will not be subject to federal income tax, provided that it complies with the federal income tax requirements applicable to real estate investment trusts, which include certain minimum distribution requirements.

New Accounting Pronouncements

In January 2010, FASB issued an Accounting Standards Update, Improving Disclosures about Fair Value Measurements. The update requires disclosure of significant transfers in and out of Level 1 and 2 fair value measurements and description of the reason for transfers. The update also requires enhanced disclosure about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements within Level 2 or Level 3. Effective January 1, 2011, the update also requires presentation of purchases, sales, and settlement on a gross basis within the roll forward of activity in Level 3 fair value measurements with the exception of derivatives, which can be presented on a net or gross basis. The adoption of this guidance affected financial statement disclosures only and did not have an impact on the Fund's financial position or results of operations on the effective date.




New Accounting Pronouncements (continued)

In May 2011, FASB issued an Accounting Standards Update, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. The update changes some fair value measurement principles and disclosure requirements, but is not expected to have a significant impact on the Fund's financial position or results of operations on the effective date in 2012.

Foreign Currency The accounting records of the Fund are maintained in U.S. dollars. Investments owned and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the prevailing exchange rate at the date of valuation. Purchases and sales of investments denominated in foreign currencies are translated into U.S. dollar amounts at the prevailing exchange rate on the respective dates of such transactions. Income and expense items denominated in foreign currencies are translated into U.S. dollar amounts at the average exchange rate during the period. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from gains and losses arising from changes in the market pricing of investments held and sold. Such amounts are included within net realized and unrealized gain or loss from investments.

Investments in foreign currency denominated assets may involve more risk than domestic transactions. As a result of having foreign investments, the Fund is exposed to foreign currency rate fluctuation, political, economic and regulatory risk. The Fund utilizes derivative financial instruments to add stability to its earnings and manage its exposure to foreign currency rate fluctuation. The Fund does not use derivatives for trading or speculative purposes and currently does not have any that are designated as hedges.

Derivative financial instruments consist of forward currency option contracts designed to minimize the effect of fluctuating foreign currencies on the cash flows attributable to the Fund's foreign investments. A foreign currency option is an agreement by which the purchaser of the option has the right to exchange with the seller of the option, currencies at a specified exchange rate at an agreed upon future date. Foreign currency collar option contracts involve the purchase and sale of put/call options to exchange CAD and USD at specified exchange rates at an agreed upon future date.

Derivative financial instruments are carried at fair value and changes in the fair value of the contracts are recorded as unrealized gains (losses) on the instruments held by the Fund at the end of each reporting period. These derivatives are traded in the over-the-counter (“OTC”) market and are classified within level 2 in the fair value hierarchy (Note 10). OTC derivatives classified within level 2 are valued using models generally accepted in the financial services industry that use actively quoted or observable market input values from external market data providers, non-binding broker-dealer quotations, third-party pricing vendors and/or recent trading activity. The fair value of the derivative financial instruments is determined using discounted cash flow models. The models’ key assumptions include the contractual terms of the contract, along with significant observable inputs, including foreign currency exchange rates and nonperformance risk of our counterparties.

(3) DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments were held primarily for the purpose of managing the Fund's exposure to foreign currency rate movements in connection with the following investment as of March 31, 2011 (dollars not in thousands):



(3) DERIVATIVE FINANCIAL INSTRUMENTS (continued) March 31, 2011 Investment Derivative Notional Amount Maturity Date Fair Value

Royal Windsor Currency Collar CAD $547,662 December 5, 2011 ($ 43,859) Royal Windsor Currency Collar CAD $7,462,581 December 3, 2012 ($509,802)

Total CAD $8,010,243 ($553,661)

Foreign currency collar option contracts involve the purchase and sale of put/call options to exchange CAD and USD at specified exchange rates. An unrealized loss in the amount of $225,871 was recorded in the accompanying statements of operations for the three months ended March 31, 2011, related to the above derivative instruments.

(4) PARTNERSHIP AGREEMENT

Capital Commitments

Each partner has committed to contribute capital to the Fund in accordance with the terms of the partnership agreement. Capital contributions by a partner to the Fund for the purpose of acquiring an investment or payment of certain partnership expenses will reduce such partner’s remaining capital commitment in the Fund. The partners’ obligations to make capital contributions based on their remaining capital commitments to the Fund will expire on August 31, 2009, or earlier as defined in the partnership agreement, except that capital contributions may be required to the extent of any unpaid capital commitments at any time after the expiration period in certain instances, including funding additional investments in strategic investment assets of the Fund, to the extent it does not exceed 10% of the aggregate capital commitments.

Distributions

Net cash proceeds from operations and the sale of Investments or any portion of an Investment will be distributed pro rata to the Partners in the following priority:

i. First, 100% to the Partners in proportion to their Equity Interest Percentages; and

ii. Second, 100% to each Partner in proportion to their Equity Interest Percentages until the cumulative distributions represent a 9% per annum compounded return on the amount of each Partners capital contribution;

iii. Third, 20% to the General Partner and 80% to each Limited Partner, in proportion to their Equity Interest Percentages until the cumulative distributions represent a 12% per annum compounded return on the amount of each Partners capital contribution;

iv. Fourth, 50% to the General Partner and 50% to each Limited Partner, until the General Partner has received on a cumulative basis as a Carried Interest 20% of the sum of (a) the aggregate amount of all distributions made by the Partnership to such Limited Partner in excess of such Limited Partner’s capital contributions plus (b) the amount of Carried Interest distributed to the General Partner with respect to such Limited Partner; and

v. Thereafter, 80% to such Limited Partner and 20% to the General Partner.



(4) PARTNERSHIP AGREEMENT (continued)

Allocations of Profits and Losses

For financial reporting purposes, profits and losses will be allocated to the Partners in a manner similar to Distributions and consistent with the allocation which would result under a hypothetical liquidation of the Partnership’s assets and liabilities at their carrying values at the date of presentation of the statements of net assets.

(5) REAL ESTATE INVESTMENTS

A summary of real estate investments, which consists of industrial properties except as indicated, as of March 31, 2011 is as follows:

Month of SF No. of Cost Fair ValueName Location Acquisition (unaudited) Properties 03/31/11 03/31/11

Industrial Properties:

Chicago Industrial Properties Chicago, IL August-05 739,549 8 41,227$ 38,453$

Hilton Corporate Drive Columbus, OH August-05 97,800 1 4,154 4,527

Interstate Street Charlotte, NC August-05 60,038 1 2,589 2,207

206th Street Kent, WA August-05 63,576 1 5,293 3,505

South 216th Street Kent, WA September-05 106,910 1 7,337 7,377

Benchmark Drive Farmers Branch, TX September-05 119,083 1 5,793 4,343

West Columbus Properties Columbus, OH September-05 656,918 4 19,143 16,127

Encyclopedia Circle Fremont, CA September-05 81,485 1 7,107 7,082

Bakers Ferry Road Atlanta, GA October-05 200,827 1 6,544 5,773

North 53rd Street Tampa, FL November-05 205,126 1 7,652 7,156

SW 45th Street Dania Beach, FL November-05 137,500 1 13,810 11,823

Deerfield Road Blue Ash, OH November-05 77,500 2 3,675 3,091

Rivergreen Court Duluth, GA December-05 157,458 1 10,239 8,939

Cobb Center Drive Kennesaw, GA December-05 82,500 1 3,526 3,610

Amberpoint Phase I Coppell, TX September-05 714,010 3 29,997 30,619

Amberpoint Phase II * Coppell, TX September-05 41.80 acres - 4,825 4,518

West 10th Street Tempe, AZ January-06 64,270 1 6,621 5,199

West Howard Street Niles, IL February-06 356,103 2 22,951 16,922

Senator Street and Raines Road Memphis, TN March-06 532,994 6 16,356 13,434

Texas Multi-Tenant Properties Dallas, TX March-06 927,842 13 38,894 33,068

Texas Multi-Tenant Properties Houston, TX March-06 307,039 8 10,184 10,639

East Wilson Bridge Road Worthington, OH April-06 99,810 4 6,042 4,844

E. Devon Avenue Elk Grove Village, IL April-06 68,742 1 4,310 3,537

Westinghouse Boulevard Charlotte, NC April-06 97,284 1 2,983 2,826

Citizens and Southlake Parkway Morrow, GA May-06 445,204 4 12,027 9,973

Republic Drive Chicago, IL May-06 103,000 1 5,297 3,590

Aviation Boulevard Hebron, KY May-06 361,263 3 18,071 16,529

Old Lamar Avenue Memphis, TN June-06 124,812 2 3,242 2,407

North Orange Blossom Trail Orlando, FL July-06 148,822 3 8,558 6,700

Brewster Creek Boulevard Bartlett, IL August-06 259,200 1 15,872 9,515

West 32nd Street Charlotte, NC September-06 80,120 1 2,520 1,933

Avalon Ridge Parkway Norcross, GA September-06 93,133 1 6,136 5,305



(5) REAL ESTATE INVESTMENTS (continued) Month of SF No. of Cost Fair Value

Name Location Acquisition (unaudited) Properties 03/31/11 03/31/11


South Mendenhall Road Memphis, TN September-06 102,500 1 3,450 2,891

Delp Street Memphis, TN October-06 102,000 1 3,091 2,472

Post Place Indianapolis, IN October-06 141,229 3 6,586 5,507

Atlanta Industrial Properties Atlanta, GA November-06 126,640 3 8,695 7,513

West Little York Road Houston, TX November-06 110,715 1 9,099 9,171

Empire Business Park Peoria, AZ November-06 227,160 3 19,849 11,834

Crowfarn Drive Memphis, TN December-06 105,785 1 2,858 2,243

S. Northpoint Drive Coppell, TX December-06 308,000 1 12,934 11,599

S. Royal Lane Coppell, TX December-06 208,800 1 8,867 6,885

Great Circle Road Nashville, TN January-07 578,918 1 22,126 19,810

Dearborn Park Lane Worthington, OH January-07 107,450 1 5,052 4,334

West Papago Phoenix, AZ January-07 88,488 1 3,870 2,065

Earhart Court Hebron, KY January-07 150,891 2 9,541 9,139

Venture Court Columbus, OH January-07 168,850 1 3,643 4,712

West Oak Parkway Marietta, GA January-07 87,248 1 5,916 4,460

New Ridge Road * Hanover, MD February-07 17.19 acres - 8,152 7,831

West Camelback Phoenix, AZ March-07 157,523 1 11,471 12,820

AirEast II * Columbus, OH April-07 98.23 acres - 6,812 6,610

Riviera Beach Riviera Beach, FL April-07 63,097 2 8,974 5,001

West 40th Street Chicago, IL May-07 84,713 1 3,876 2,729

Panola Industrial Boulevard Decatur, GA May-07 47,000 1 3,335 3,178

Old Dixie Highway Florence, KY June-07 137,088 1 6,612 6,646

Abbott Drive Wheeling, IL June-07 43,930 1 2,051 1,716

Houston Industrial Properties Houston/Stafford, TX June-07 191,122 7 13,247 12,327

West Belt Business Park Columbus, OH June-07 136,206 2 4,429 3,906

Cincinnati Industrial Properties Cincinnati, OH June-07 1,051,040 17 31,008 24,630

Park of Commerce Boca Raton, FL June-07 113,191 1 13,529 11,510

Clyde Road & Howard Avenue Somerset, NJ July-07 147,181 2 8,310 7,861

Cabot Commerce Drive/Circle Jacksonville, FL July-07 569,744 4 38,233 27,843

Port of Jacksonville Phase 2 * Jacksonville, FL July-07 22.48 acres - 7,085 4,990

Southmeadow Pkwy & Welcome All Rd Atlanta, GA July-07 442,337 2 15,770 13,875

South Sheldon Road Channelview, TX July-07 180,000 1 7,140 7,575

Ardenwood Boulevard Fremont, CA August-07 49,145 1 5,383 2,902

North Shadeland Avenue Indianapolis, IN September-07 90,135 1 4,663 4,045

Huehl Road Northbrook, IL September-07 31,400 1 1,985 1,653

Dairy Ashford Rd & Cardinal Meadow Dr Sugar Land, TX September-07 171,240 2 12,141 12,574

Sugar Land Phase 2 * Sugar Land, TX September-07 10.21 acres - 2,516 2,291

Holstein Avenue Philadelphia, PA September-07 49,800 1 3,164 2,972

Britmoore Road & Kempwood Drive Houston, TX October-07 336,013 4 21,469 16,809

Research Center Drive Atlanta, GA October-07 170,000 3 8,672 7,478

Perry Road Plainfield, IN October-07 925,800 1 41,561 35,452

Lakeway Drive Lewisville, TX November-07 87,624 1 4,086 3,908

North Union Street Morristown, PA November-07 112,254 1 6,103 5,627

Royal Windsor Drive Mississauga, ON November-07 203,397 2 15,927 12,596



(5) REAL ESTATE INVESTMENTS (continued) Month of SF No. of Cost Fair Value

Name Location Acquisition (unaudited) Properties 03/31/11 03/31/11


Gran Bay Parkway West Jacksonville, FL December-07 363,041 1 19,377 12,101

Commerce Way Norton, MA December-07 401,360 1 25,153 19,908

Green Pointe Drive South Groveport, OH December-07 501,853 1 19,124 14,942

Jacquemin Drive West Chester, OH December-07 402,214 1 15,359 15,225

Northwest 74th Avenue Medley, FL February-08 58,621 1 6,694 5,133

West New Road Greenfield, IN February-08 219,968 1 7,967 7,976

Willowbend Boulevard Houston, TX March-08 654,352 8 23,844 23,180

Lakeway and TriStar Drive Dallas, TX April-08 192,788 2 9,350 8,023

Presidential and Villanova Drive Atlanta, GA April-08 135,658 2 5,283 4,791

Reynolds/Rosenberg Properties Dallas, TX April-08 575,080 4 17,710 19,814

Interwood Business Park Land * Houston, TX May-08 23 acres - 4,663 4,358

Newlins Mill Road Allentown, PA May-08 358,750 1 25,701 26,356

Knight Arnold Road Memphis, TN May-08 210,000 1 5,690 5,664

Circleport Drive Erlanger, KY May-08 64,482 1 3,404 3,207

Central Avenue Alsip, IL June-08 263,840 1 9,689 7,985

Huntwood Avenue Haywood, CA June-08 62,031 1 9,527 6,781

Ulmerton Road Tampa, FL July-08 42,250 1 3,781 3,669

Evergreen Drive Duluth, GA July-08 91,462 1 4,343 4,361

Waterman Land* Lakeland, FL July-08 60.33 acres - 6,197 5,162

I-290 Industrial Park Northborough, MA July-08 576,930 6 40,015 31,443

Oakwood Drive Lake Zurich, IL October-08 85,263 1 4,896 4,980

Total Real Estate Investments 21,035,515 199 1,064,023$ 914,620$

* Investment consists of land at March 31, 2011.

(6) LINE OF CREDIT

On September 30, 2009, the Fund entered into a $60,000 revolving credit agreement (the “Secured Facility”). The agreement was expandable to $90,000 at the request of the Fund for a 45-day period after closing, however, the Fund did not choose to expand the Secured Facility. The Secured Facility is collateralized by eleven real estate assets which have an aggregate fair value of $84,107 as of March 31, 2011, and is guaranteed by the REIT. Based on the collateral pool as of March 31, 2011, the Fund’s borrowing capacity under the Secured Facility is approximately $40,000. The term of the credit facility is three years from closing with two twelve-month extensions. Under the terms of the agreement, interest rates are determined at the time of each borrowing based on London Inter-bank Offered Rates (LIBOR) with a minimum LIBOR rate of 1.0% plus 3.5% or other alternative rates. As of March 31, 2011, the interest rate on this facility was approximately 4.5%. In addition, the Fund pays a quarterly commitment fee of 0.35% per annum on the average daily-unused amount, decreasing to 0.30% when the total outstanding amount is equal to or greater than 50%. As of March 31, 2011, the Fund had $17,100 outstanding on this facility, which approximates fair value. The fair value of line of credit borrowings was determined using the discounted cash flow method, which applies certain key assumptions including the contractual terms of the contract, market interest rates, interest spreads, credit risk, liquidity and other factors. The Secured Facility requires that the Fund maintain certain customary financial and other covenants on an ongoing basis, such as debt service coverage ratios, leverage ratios and a minimum net worth. At March 31, 2011, the Fund was in compliance with each of these financial and other covenant requirements.



(7) MORTGAGE LOANS

Mortgage loans are non-recourse and are collateralized by the respective properties, which have an aggregate fair value of $755,234 as of March 31, 2011. Monthly interest payments are required on the loans through their maturity. Certain of the mortgage loans contain transfer rights, collateral substitution rights, and prepayment penalties. Prepayment penalties are generally based on the yield spread between the loan’s contractual interest rate and an adjusted comparable treasury rate. The Fund has recorded its mortgage loans at fair market value.

Mortgage loans on real estate investments at March 31, 2011 consist of the following:

03/31/11 03/31/11Fixed Principal Fair Value

Name Location Interest Rate Amortization Maturity Balance Balance

Chicago Industrial Properties Chicago, IL 5.43% Yrs 9 & 10 - 30yr amort April 1, 2016 20,854$ 20,677$

Hilton Corporate Drive Columbus, OH 5.43% Yrs 9 & 10 - 30yr amort April 1, 2016 3,130 3,103

Interstate Street Charlotte, NC 5.43% Yrs 9 & 10 - 30yr amort April 1, 2016 1,423 1,411

South 216th Street Kent, WA 5.43% Yrs 9 & 10 - 30yr amort April 1, 2016 4,980 4,938

Benchmark Drive Farmers Branch, TX 5.43% Yrs 9 & 10 - 30yr amort April 1, 2016 3,699 3,668

West Columbus Properties Columbus, OH 5.43% Yrs 9 & 10 - 30yr amort April 1, 2016 13,278 13,165

Encyclopedia Circle Fremont, CA 5.43% Yrs 9 & 10 - 30yr amort April 1, 2016 5,636 5,588

206th Street Kent, WA 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 2,630 2,630

Bakers Ferry Road Atlanta, GA 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 4,443 4,443

Deerfield Road Blue Ash, OH 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 2,274 2,274

Rivergreen Court Duluth, GA 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 6,965 6,965

Cobb Center Drive Kennesaw, GA 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 2,379 2,379 West 10th Street Tempe, AZ 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 3,868 3,868

West Howard Street Niles, IL 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 12,506 12,506

Aviation Boulevard Hebron, KY 6.68% Yrs 1-5 - 26yr & Yrs 6-12 -14yr October 7, 2014 4,961 5,211

North 53rd Street Tampa, FL 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 4,916 5,054

SW 45th Street Dania Beach, FL 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 6,380 6,559

Senator Street and Raines Road Memphis, TN 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 6,538 6,722

Texas Multi-Tenant Properties Dallas/Houston, TX 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 28,948 29,762

Westinghouse Boulevard Charlotte, NC 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 1,758 1,807

Chicago Industrial Properties Chicago, IL 5.58% Yrs 9 & 10 - 30yr amort May 1, 2016 2,642 2,716

North Orange Blossom Trail Orlando, FL 5.45% Interest Only January 1, 2017 5,825 5,740

Citizens and Southlake Parkway Morrow,GA 5.45% Interest Only January 1, 2017 7,699 7,586

Avalon Ridge Parkway Norcross, GA 5.45% Interest Only January 1, 2017 3,415 3,365

Brewster Creek Boulevard Bartlett, IL 5.45% Interest Only January 1, 2017 10,096 9,948

Chicago Industrial Properties Chicago, IL 5.45% Interest Only January 1, 2017 4,285 4,222

Republic Drive Chicago, IL 5.45% Interest Only January 1, 2017 3,702 3,648

E. Devon Avenue Elk Grove Village, IL 5.45% Interest Only January 1, 2017 3,207 3,160

Aviation Boulevard Hebron, KY 5.45% Interest Only January 1, 2017 4,352 4,288

West 32nd Street Charlotte, NC 5.45% Interest Only January 1, 2017 1,339 1,319

East Wilson Bridge Road Worthington, OH 5.45% Interest Only January 1, 2017 3,532 3,480

Old Lamar Avenue Memphis, TN 5.45% Interest Only January 1, 2017 2,410 2,375

Senator Street and Raines Road Memphis, TN 5.45% Interest Only January 1, 2017 3,615 3,562

South Mendenhall Road Memphis, TN 5.45% Interest Only January 1, 2017 2,126 2,095

Texas Multi-Tenant Properties Dallas/Houston, TX 5.45% Interest Only January 1, 2017 1,845 1,818

West Little York Road Houston, TX 5.45% Interest Only January 1, 2017 3,917 3,860

West Papago Phoenix, AZ 5.71% Interest Only April 1, 2017 3,018 2,973

Atlanta Industrial Properties Atlanta, GA 5.71% Interest Only April 1, 2017 6,272 6,178

Post Place Indianapolis, IN 5.71% Interest Only April 1, 2017 4,537 4,469

Earhart Court Hebron, KY 5.71% Interest Only April 1, 2017 6,826 6,724

Dearborn Park Lane Worthington, OH 5.71% Interest Only April 1, 2017 3,449 3,397

Delp Street Memphis, TN 5.71% Interest Only April 1, 2017 1,918 1,889 Crowfarn Drive Memphis, TN 5.71% Interest Only April 1, 2017 1,992 1,962



(7) MORTGAGE LOANS (continued)

03/31/11 03/31/11Fixed Principal Fair Value

Name Location Interest Rate Amortization Maturity Balance Balance

Great Circle Road Nashville, TN 5.71% Interest Only April 1, 2017 16,234 15,990 S. Royal Lane Coppell, TX 5.71% Interest Only April 1, 2017 6,530 6,432 S. Northpoint Drive Coppell, TX 5.71% Interest Only April 1, 2017 9,224 9,086 Old Dixie Highway Florence, KY 7.45% Yrs 1-10 - 25yr amortization January 1, 2013 3,627 3,727 West Camelback Phoenix, AZ 6.14% Yrs 6-10 - 30yr amort October 10, 2017 7,950 7,960 Park of Commerce Boca Raton, FL 6.14% Yrs 6-10 - 30yr amort October 10, 2017 9,750 9,762 West Oak Parkway Marietta, GA 6.14% Yrs 6-10 - 30yr amort October 10, 2017 4,462 4,468 Panola Industrial Boulevard Decatur, GA 6.14% Yrs 6-10 - 30yr amort October 10, 2017 2,550 2,553 Huehl Road Northbrook, IL 6.14% Yrs 6-10 - 30yr amort October 10, 2017 1,463 1,465 West 40th Street Chicago, IL 6.14% Yrs 6-10 - 30yr amort October 10, 2017 2,831 2,835 Abbott Drive Wheeling, IL 6.14% Yrs 6-10 - 30yr amort October 10, 2017 1,613 1,615 Clyde Road & Howard Avenue Somerset, NJ 6.14% Yrs 6-10 - 30yr amort October 10, 2017 6,506 6,514 West Belt Business Park Columbus, OH 6.14% Yrs 6-10 - 30yr amort October 10, 2017 3,150 3,154 Cincinnati Industrial Properties Cincinnati, OH 6.14% Yrs 6-10 - 30yr amort October 10, 2017 22,200 22,228 Houston Industrial Properties Houston/Stafford, TX 6.14% Yrs 6-10 - 30yr amort October 10, 2017 9,525 9,537 Southmeadow Pkwy & Welcome All Rd Atlanta, GA 6.10% Yrs 6-10 - 30yr amort December 10, 2017 11,321 11,368 Research Center Drive Atlanta, GA 6.10% Yrs 6-10 - 30yr amort December 10, 2017 6,181 6,206 Perry Road Plainfield, IN 6.10% Yrs 6-10 - 30yr amort December 10, 2017 29,454 29,575 North Shadeland Avenue Indianapolis, IN 6.10% Yrs 6-10 - 30yr amort December 10, 2017 3,277 3,291 Holstein Avenue Philadelphia, PA 6.10% Yrs 6-10 - 30yr amort December 10, 2017 2,309 2,319 Lakeway Drive Lewisville, TX 6.10% Yrs 6-10 - 30yr amort December 10, 2017 3,053 3,066 North Union Street Morristown,PA 6.10% Yrs 6-10 - 30yr amort December 10, 2017 4,617 4,636 South Sheldon Road Channelview, TX 6.10% Yrs 6-10 - 30yr amort December 10, 2017 5,288 5,310 Royal Windsor Drive Mississauga, ON 5.55% Yrs 1-10 - 25yr amort February 1, 2015 7,946 8,100 Amberpoint Phase I Coppell, TX 6.25% Yrs 3-10 - 30yr amort December 10, 2017 21,340 21,787 Commerce Way Norton, MA 6.25% Yrs 3-10 - 30yr amort December 10, 2017 17,317 17,680 Venture Court Columbus, OH 6.36% Yrs 1-7 - 30yr amort August 1, 2015 3,368 3,457 Gran Bay Parkway West Jacksonville, FL 6.36% Yrs 1-7 - 30yr amort August 1, 2015 13,141 13,487 Northwest 74th Avenue Medley, FL 6.36% Yrs 1-7 - 30yr amort August 1, 2015 4,471 4,589 West New Road Greenfield, IN 6.36% Yrs 1-7 - 30yr amort August 1, 2015 4,664 4,787 Willowbend Boulevard Houston, TX 6.36% Yrs 1-7 - 30yr amort August 1, 2015 15,454 15,861 Lakeway & TriStar Drive Dallas, TX 6.36% Yrs 1-7 - 30yr amort August 1, 2015 5,787 5,939 Presidential & Villanova Drive Atlanta, GA 6.36% Yrs 1-7 - 30yr amort August 1, 2015 3,696 3,793 Knight Arnold Road Memphis, TN 6.36% Yrs 1-7 - 30yr amort August 1, 2015 4,142 4,251 Circleport Drive Erlanger, KY 6.36% Yrs 1-7 - 30yr amort August 1, 2015 2,419 2,483 Central Avenue Alsip, IL 6.36% Yrs 1-7 - 30yr amort August 1, 2015 6,629 6,804

I-290 Industrial Park Northborough, MA 6.26% Interest Only Yr 1 - Yrs 2-7 30yr amort October 5, 2015 27,623 28,176 Huntwood Avenue Haywood, CA 6.26% Interest Only Yr 1 - Yrs 2-7 30yr amort October 5, 2015 5,113 5,215 Ulmerton Road Tampa, FL 6.26% Interest Only Yr 1 - Yrs 2-7 30yr amort October 5, 2015 2,627 2,680 Evergreen Drive Duluth, GA 6.26% Interest Only Yr 1 - Yrs 2-7 30yr amort October 5, 2015 2,912 2,970 Green Pointe Drive South Groveport, OH 6.26% Interest Only Yr 1 - Yrs 2-7 30yr amort October 5, 2015 13,278 13,544 Reynolds/Rosenberg Properties Dallas, TX 6.26% Interest Only Yr 1 - Yrs 2-7 30yr amort October 5, 2015 12,356 12,604

Total 580,983$ 584,808$



(8) FUTURE MINIMUM RENTS

Future minimum rental receipts due to the Partnership on non-cancelable operating leases for the industrial properties owned as of March 31, 2011 for the five years ending March 31 and thereafter are as follows:

2012 ------------------------------------------------------- 60,211$ 2013 ------------------------------------------------------- 47,525 2014 ------------------------------------------------------- 34,513 2015 ------------------------------------------------------- 26,434 2016 ------------------------------------------------------- 18,226

-------------------------------------------------- 35,835 Thereafter

(9) MANAGEMENT FEES

Asset Management Fee

During the period beginning on the Initial Closing Date and ending on the earlier of (a) the date of expiration of the Investment Period and (b) the date on which all Partners have contributed their entire Capital Commitment to the Partnership (the “Management Fee Adjustment Date”), the General Partner shall be paid a monthly asset management fee (the “Management Fee”) by the Partnership equal to one-twelfth of one and one-half percent (1.5%) of the aggregate amount of all Capital Commitments of the limited partners. After the Management Fee Adjustment Date, the Management Fee for each calendar month shall be equal to one-twelfth of one and one-half percent (1.5%) of the daily weighted average of the Limited Partners’ Capital Contributions with respect to Investments that have not been disposed of. For three months ended March 31, 2011, the asset management fees earned totaled $1,542. At March 31, 2011, the asset management fees payable to Cabot Properties, LP totaled $0.

Development Fees

Development management services for the Fund’s Amberpoint TX, Empire AZ, Riviera Beach FL, Port of Jacksonville FL, Sugar Land TX, Lehigh Valley PA and Houston TX developments are provided by Cabot Properties, L.P. Under the terms of the development services agreement, Cabot Properties, L.P. earned $53 for the three months ended March 31, 2011, of which the total amount has been included within the cost basis of the properties.

Development fees earned by affiliates of the General Partner are not subject to the review and approval of the Fund’s Board of Advisors if the affiliates provide such services pursuant to the Development Services Agreement attached to Limited Partnership.

(10) FAIR VALUE MEASUREMENTS

The Fund adopted the accounting guidance of fair value measurements, effective January 1, 2008. The guidance provides a definition of fair value which focuses on an exit price rather than an entry price, establishes a framework for measuring fair value which emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and requires expanded disclosures about fair value measurements. Companies are also provided with the option to report eligible financial assets and liabilities at fair value on an instrument-by-instrument basis. This option is available when an entity first recognizes a financial asset or financial liability or upon signing a firm commitment. In addition, a one-time election for existing qualifying assets and liabilities was allowed. Upon adoption, the Fund elected to account for its debt liabilities at fair value in part to comply with industry reporting standards that require all debt liabilities to be reported at fair value.



(10) FAIR VALUE MEASUREMENTS (continued)

In order to increase consistency and comparability in fair value measurements and related disclosures, the Fund utilizes the fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: Level 1 – Quoted prices in active markets for identical securities. Level 2 – Prices determined using other significant observable inputs. Observable inputs that other market participants would use in pricing a security, including quoted prices for similar securities.

Level 3 – Prices determined using significant unobservable inputs. Unobservable inputs reflect the Fund’s own assumptions about the factors which market participants would use in pricing an investment, and would be based on the best information available in the circumstances.

A summary of the inputs used, as of March 31, 2011 involving the Fund’s assets and liabilities carried at fair value, is as follows:

Quoted prices in Significant Significant active markets for observable unobservable

identical assets inputs inputs Total(Level 1) (Level 2) (Level 3) March 31, 2011

Investments in Real Estate -$ -$ 914,620$ 914,620$

Line of Credit Borrowings -$ -$ 17,100$ 17,100$

Mortgage Loans -$ -$ 584,808$ 584,808$

Derivative Instruments -$ 554$ -$ 554$



(10) FAIR VALUE MEASUREMENTS (continued)

The following is a reconciliation of assets and liabilities for which significant unobservable inputs (Level 3) wereused in determining fair value:

Investments in Line of Credit Mortgage Real Estate Borrowings Loans

Balance December 31, 2010 905,785$ 10,200$ 584,379$

Total realized and unrealized 4,134 10 941 gain/loss included in the statement of operationsCapital expenditures 4,701 - - Net borrowings (repayments) - 6,890 (512)

Balance March 31, 2011 914,620$ 17,100$ 584,808$

Amount of total unrealized 4,134$ 98$ (713)$ gain (loss) reported in the statement of operations attributable to investmentsand borrowingsheld at March 31, 2011

The above total unrealized gain attributable to investments in real estate held at March 31, 2011 includes $237 related to unrealized gain attributable to the foreign currency impact of non-real estate assets and liabilities.

(11) SUBSEQUENT EVENTS

The Fund has evaluated subsequent events through the time of releasing these financial statements on May 25, 2011.

Investors' Total Capital

Commitment

Investors' Capital

Contributions, Inception-to-

date

Investors' Remaining

Capital Commitment

Investors' Shares/Units Issued and

Outstanding, Inception-to-

date Cabot Industrial Value Fund II Operating Partnership, LP

Cabot Industrial Value Fund II, LP $440,500,000 411,133,500$ $29,366,500 822,267 Cabot Industrial Value Fund II Manager, LP 9,500,000 8,866,500 633,500 17,733

Total $450,000,000 420,000,000$ $30,000,000 840,000

Cabot Industrial Value Fund II, LP

New York State Teachers' Retirement System 50,000,000 46,667,000 3,333,000 93,334 The Board of Trustees of The Leland Stanford Junior University 40,000,000 37,333,500 2,666,500 74,667 Revere Holdings Limited 35,000,000 32,666,500 2,333,500 65,333 The United Methodist Church Domestic Private Real Estate Trust 30,000,000 28,000,000 2,000,000 56,000 Allstate Insurance Company 11,000,000 10,266,500 733,500 20,533 Allstate Life Insurance Company 8,500,000 7,933,500 566,500 15,867 BNY Midwest Trust Co. as the Trustee for the Allstate Plans' Master Trust 5,500,000 5,133,500 366,500 10,267 The Church Pension Fund 25,000,000 23,333,500 1,666,500 46,667 The William and Flora Hewlett Foundation 25,000,000 23,333,500 1,666,500 46,667 Morgan Stanley Institutional Fund, Inc. U.S. Real Estate Portfolio 7,500,000 7,000,000 500,000 14,000 The Universal Institutional Funds, Inc. 6,300,000 5,880,000 420,000 11,760 Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund 2,700,000 2,520,000 180,000 5,040 Invesco Van Kampen Real Estate Securities Fund 3,500,000 3,266,500 233,500 6,533 Northwestern University 20,000,000 18,666,500 1,333,500 37,333 The Rockefeller Foundation 20,000,000 18,666,500 1,333,500 37,333 Metropolitan Real Estate Partners III-A, L.P. 7,500,000 7,000,000 500,000 14,000 Metropolitan Real Estate Partners III-B, L.P. 7,500,000 7,000,000 500,000 14,000 The Regents of the University of Michigan 15,000,000 14,000,000 1,000,000 28,000 Terrebonne Investments, L.P. 7,500,000 7,000,000 500,000 14,000 Windfall Investments, L.P. 2,500,000 2,333,500 166,500 4,667 The Trustees of the Cheyne Walk Trust 8,000,000 7,466,500 533,500 14,933 The Trustees of the Ronald Trust B 2,000,000 1,866,500 133,500 3,733 Mayo Clinic Master Retirement Trust 5,000,000 4,666,500 333,500 9,333 Mayo Clinic 5,000,000 4,666,500 333,500 9,333 Rockefeller Brothers Fund, Inc. 10,000,000 9,333,500 666,500 18,667 The Rockefeller University 10,000,000 9,333,500 666,500 18,667 Savile Row Industrial Value Participation Fund, LLC 10,000,000 9,333,500 666,500 18,667 GUS Enterprises XII, LLC 6,000,000 5,600,000 400,000 11,200 G. Zachary Gund Generation Skipping Trust 750,000 700,000 50,000 1,400 Grant Gund Generation Skipping Trust 750,000 700,000 50,000 1,400 Sherman Fairchild Foundation 7,500,000 7,000,000 500,000 14,000 University of Washington 7,500,000 7,000,000 500,000 14,000 Mellon Bank, NA, as Trustee for the Washington and Lee University Trust 7,500,000 7,000,000 500,000 14,000 Rasmuson Foundation 5,000,000 4,666,500 333,500 9,333 Green Mansions LLC 1,500,000 1,400,000 100,000 2,800 Landmark Real Estate Partners VI PV II, L.P. 5,000,000 4,666,500 333,500 9,333 The President & Trustees of Colby College 4,000,000 3,733,500 266,500 7,467 American National Red Cross 3,000,000 2,800,000 200,000 5,600 Mid-Oaks Investments LLC 2,500,000 2,333,500 166,500 4,667 Sterling Stamos Real Estate Fund, L.P. 1,700,000 1,586,500 113,500 3,173 CW Real Estate Fund I, LLC 1,500,000 1,400,000 100,000 2,800 Burns 3 LLC 700,000 653,500 46,500 1,307 Homestake Partners L.P. 350,000 326,500 23,500 653 ACP Family Partnership L.P. 350,000 326,500 23,500 653 Arthur C. Patterson 350,000 326,500 23,500 653 Ellmore C. Patterson Partners L.P. 350,000 326,500 23,500 653 Gerson Bakar 1984 Trust 1,000,000 933,500 66,500 1,867 HCP Real Assets Fund, L.P. 1,000,000 933,500 66,500 1,867 Skates, Ronald L. 750,000 700,000 50,000 1,400 1988 Scott Family Trust 500,000 466,500 33,500 933 Cabot Industrial Value Fund II Manager, LP 500,000 466,500 33,500 933 One and Co. 200,000 186,500 13,500 373 Abrahamson, Valerie L. 28,000 26,000 2,000 52 Kinney, Douglas R. 28,000 26,000 2,000 52 Stackler, Walter A. 28,000 26,000 2,000 52 Stark, Michael E. 28,000 26,000 2,000 52 Wright, Pamela M. 28,000 26,000 2,000 52 Lyman, R. J. 20,000 18,500 1,500 37 Ebbott, Alison and Hasan, William 10,000 9,500 500 19 Griffith, Stephen M., Jr. 10,000 9,500 500 19 Lawrence, David T. 10,000 9,500 500 19 Lawrence, Susan H. 10,000 9,500 500 19 Noyes, Timothy 10,000 9,500 500 19 Purse, Charles R. 10,000 9,500 500 19 Ramchandani, Manjul S. 10,000 9,500 500 19 Ryan, Dudley 10,000 9,500 500 19 TM, Powers & Associates, Inc 10,000 9,500 500 19

Total $440,500,000 411,133,500$ $29,366,500 822,267

SUPPLEMENTAL SCHEDULE OF CHANGES IN REMAINING CAPITAL COMMITMENTS March 31, 2011

Investors' Capital

January 1, 2011.

Investors' Share of Net Investment

Income (before fees)

Investors' Share of Asset Management

Fee

Investors' Share of

Realized and Unrealized Gain(Loss)

Investors' Capital

March 31, 2011

Cabot Industrial Value Fund II Operating Partnership, LP Cabot Industrial Value Fund II, LP $289,060,130 3,193,182 (1,516,522) 2,998,007 $293,734,797Cabot Industrial Value Fund II Manager, LP 6,988,898 68,865 - 64,656 7,122,419

Total $296,049,028 3,262,047 (1,516,522) 3,062,663 $300,857,216

Cabot Industrial Value Fund II NS LimitedCabot Industrial Value Fund II, LP ($2,272,654) (118,872) (25,229) 226,025 ($2,190,730)Cabot Industrial Value Fund II Manager, LP (43,110) (2,563) - 4,875 (40,798) Total ($2,315,764) (121,435) (25,229) 230,900 ($2,231,528)

Cabot Industrial Value Fund II, LPNew York State Teachers' Retirement System $32,523,226 342,987 (175,001) 365,949 33,057,161The Board of Trustees of The Leland Stanford Junior University $26,018,439 274,389 (140,000) 292,761 26,445,589Revere Holdings Limited $22,765,847 240,091 (122,500) 256,166 23,139,604The United Methodist Church Domestic Private Real Estate Trust $19,513,707 205,793 (105,000) 219,571 19,834,071Allstate Insurance Company $7,154,862 75,458 (38,500) 80,509 7,272,329Allstate Life Insurance Company $5,529,021 58,308 (29,750) 62,212 5,619,791BNY Midwest Trust Co. as the Trustee for the Allstate Plans' Master Trust $3,577,673 37,729 (19,250) 40,255 3,636,407The Church Pension Fund $16,261,630 171,495 (87,500) 182,976 16,528,601The William and Flora Hewlett Foundation $16,261,630 171,495 (87,500) 182,976 16,528,601Morgan Stanley Institutional Fund, Inc. U.S. Real Estate Portfolio $4,878,404 51,448 (26,250) 54,893 4,958,495The Universal Institutional Funds, Inc. $4,097,883 43,217 (22,050) 46,110 4,165,160Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund $1,756,236 18,521 (9,450) 19,761 1,785,068Invesco Van Kampen Real Estate Securities Fund $2,276,446 24,009 (12,250) 25,617 2,313,822Northwestern University $13,008,981 137,196 (70,000) 146,381 13,222,558The Rockefeller Foundation $13,008,981 137,196 (70,000) 146,381 13,222,558Metropolitan Real Estate Partners III-A, L.P. $4,878,420 51,448 (26,250) 54,893 4,958,511Metropolitan Real Estate Partners III-B, L.P. $4,878,420 51,448 (26,250) 54,893 4,958,511The Regents of the University of Michigan $9,756,866 102,897 (52,500) 109,785 9,917,048Terrebonne Investments, L.P. $4,878,420 51,448 (26,250) 54,893 4,958,511Windfall Investments, L.P. $1,626,305 17,149 (8,750) 18,298 1,653,002The Trustees of the Cheyne Walk Trust $5,203,502 54,878 (28,000) 58,552 5,288,932The Trustees of the Ronald Trust B $1,300,729 13,720 (7,000) 14,638 1,322,087Mayo Clinic Master Retirement Trust $3,252,135 34,299 (17,500) 36,595 3,305,529Mayo Clinic $3,252,127 34,299 (17,500) 36,595 3,305,521Rockefeller Brothers Fund, Inc. $6,504,733 68,598 (35,000) 73,190 6,611,521The Rockefeller University $6,504,733 68,598 (35,000) 73,190 6,611,521Savile Row Industrial Value Participation Fund, LLC $6,504,733 68,598 (35,000) 73,190 6,611,521GUS Enterprises XII, LLC $3,902,756 41,159 (21,000) 43,914 3,966,829G. Zachary Gund Generation Skipping Trust $487,832 5,145 (2,625) 5,489 495,841Grant Gund Generation Skipping Trust $487,832 5,145 (2,625) 5,489 495,841Sherman Fairchild Foundation $4,878,419 51,448 (26,250) 54,893 4,958,510University of Washington $4,878,419 51,448 (26,250) 54,893 4,958,510Mellon Bank, NA, as Trustee for the Washington and Lee University Trust $4,878,419 51,448 (26,250) 54,893 4,958,510Rasmuson Foundation $3,252,143 34,299 (17,500) 36,595 3,305,537Green Mansions LLC $975,712 10,290 (5,250) 10,979 991,731Landmark Real Estate Partners VI PV II, L.P. $3,252,135 34,299 (17,500) 36,595 3,305,529The President & Trustees of Colby College $2,601,982 27,439 (14,000) 29,276 2,644,697American National Red Cross $1,951,361 20,579 (10,500) 21,957 1,983,397Mid-Oaks Investments LLC $1,626,313 17,149 (8,750) 18,298 1,653,010Sterling Stamos Real Estate Fund, L.P. $1,105,623 11,662 (5,950) 12,442 1,123,777CW Real Estate Fund I, LLC $975,696 10,290 (5,250) 10,979 991,715Burns 3 LLC $455,489 4,802 (2,450) 5,123 462,964Homestake Partners L.P. $227,504 2,401 (1,225) 2,562 231,242ACP Family Partnership L.P. $227,504 2,401 (1,225) 2,562 231,242Arthur C. Patterson $227,504 2,401 (1,225) 2,562 231,242Ellmore C. Patterson Partners L.P. $227,504 2,401 (1,225) 2,562 231,242Gerson Bakar 1984 Trust $650,615 6,860 (3,500) 7,319 661,294HCP Real Assets Fund, L.P. $650,622 6,860 (3,500) 7,319 661,301Skates, Ronald L. $487,850 5,145 (2,625) 5,489 495,8591988 Scott Family Trust $325,076 3,430 (1,750) 3,660 330,416Cabot Industrial Value Fund II Manager, LP $325,076 3,430 (1,750) 3,660 330,416One and Co. $129,914 1,372 (700) 1,464 132,050Abrahamson, Valerie L. $18,103 192 (98) 205 18,402Kinney, Douglas R. $18,103 192 (98) 205 18,402Stackler, Walter A. $18,103 192 (98) 205 18,402Stark, Michael E. $18,103 192 (98) 205 18,402Wright, Pamela M. $18,103 192 (98) 205 18,402Lyman, R. J. $12,822 137 (70) 146 13,035Ebbott, Alison and Hasan, William $6,663 69 (35) 73 6,770Griffith, Stephen M., Jr. $6,663 69 (35) 73 6,770Lawrence, David T. $6,663 69 (35) 73 6,770Lawrence, Susan H. $6,663 69 (35) 73 6,770Noyes, Timothy $6,663 69 (35) 73 6,770Purse, Charles R. $6,663 69 (35) 73 6,770Ramchandani, Manjul S. $6,663 69 (35) 73 6,770Ryan, Dudley $6,663 69 (35) 73 6,770TM, Powers & Associates, Inc $6,663 69 (35) 73 6,770

Total $286,526,693 3,021,733 (1,541,751) 3,224,032 $291,230,707

*Totals for Cabot Industrial Value Fund II, LP will not tie to amounts allocated from Cabot Industrial Value Fund II OP, LP. The variance is attributed to additional costs and investments recorded at the REIT and LP levels, as well as differences in amounts distributed.

SUPPLEMENTAL SCHEDULE OF CHANGES IN INVESTORS' CAPITALFor the period from January 1, 2011 through March 31, 2011

Documents

CABOT INDUSTRIAL VALUE FUND II, L.P. 2011 First · PDF file · 2016-07-08Cabot Industrial Value Fund II, L.P. Q1 2011 Quarterly Letter have seen in our over 25 years of history in