California

1-10709

95-4300881

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(I.R.S. Employer Identification Number)

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

For Release:

Immediately

Date:

May 4, 2009

Contact:

Edward A. Stokx

Rental income:

Same Park ⁽¹⁾

$    69,747

$    70,111

(0.5%)

Cost of operations:

Same Park

22,755

22,490

1.2%

Net operating income ⁽²⁾:

Same Park

46,992

47,621

(1.3%)

Other income and expenses:

Facility management fees

177

195

(9.2%)

Interest and other income

179

328

(45.4%)

Interest expense

(930)

(993)

(6.3%)

Depreciation and amortization

(22,391)

(25,447)

(12.0%)

General and administrative

(1,976)

(2,046)

(3.4%)

Net income

$    22,051

$    19,658

12.2%

Same Park gross margin ⁽³⁾

67.4%

67.9%

(0.7%)

Same Park weighted average for the period:

Occupancy

91.4%

94.0%

(2.8%)

Annualized realized rent per square foot ⁽⁴⁾

$       15.61

$      15.26

2.3%

(1)

See above for a definition of Same Park.

(2)

Net operating income (“NOI”) is an important measurement in the commercial real estate industry for determining the value of the real estate generating the NOI. The Company’s calculation of NOI may not be comparable to those of other companies and should not be used as an alternative to measures of performance in accordance with generally accepted accounting principles (“GAAP”).

(3)

Same Park gross margin is computed by dividing NOI by rental income.

(4)

Same Park realized rent per square foot represents the annualized revenues earned per occupied square foot.

Ratio of FFO to fixed charges ^{(1) (2)}

48.7x

Ratio of FFO to fixed charges and preferred distributions ^{(1) (2)}

3.3x

Debt and preferred equity to total market capitalization (based on

common stock price of $36.85 at March 31, 2009)

42.3%

Available under line of credit at March 31, 2009

$100.0 million

(1)

Fixed charges include interest expense of $930,000.

(2)

Excludes $35.6 million of net gain on preferred equity repurchase.

Series

Dividend Rate

Dividend Declared

Series H

7.000%

$ 0.437500

Series I

6.875%

$ 0.429688

Series K

7.950%

$ 0.496875

Series L

7.600%

$ 0.475000

Series M

7.200%

$ 0.450000

Series O

7.375%

$ 0.460938

Series P

6.700%

$ 0.418750

March 31,

December 31,

2009

2008

(Unaudited)

ASSETS

Cash and cash equivalents

$          5,093

$        55,015

Real estate facilities, at cost:

Land

494,849

494,849

Buildings and equipment

1,521,785

1,517,484

2,016,634

2,012,333

Accumulated depreciation

(659,565)

(637,948)

1,357,069

1,374,385

Land held for development

7,869

7,869

1,364,938

1,382,254

Rent receivable

2,878

2,055

Deferred rent receivable

21,978

21,633

Other assets

4,994

8,366

Total assets

$   1,399,881

$   1,469,323

LIABILITIES AND EQUITY

Accrued and other liabilities

$        48,373

$        46,428

Mortgage notes payable

53,840

59,308

Total liabilities

102,213

105,736

Commitments and contingencies

Equity:

PS Business Parks, Inc.’s shareholders’ equity:

Preferred stock, $0.01 par value, 50,000,000 shares authorized,

25,042 and 28,250 shares issued and outstanding at March 31, 2009 and

December 31, 2008, respectively

626,046

706,250

Common stock, $0.01 par value, 100,000,000 shares authorized,

20,523,288 and 20,459,916 shares issued and outstanding at

March 31, 2009 and December 31, 2008, respectively

204

204

Paid-in capital

396,180

363,587

Cumulative net income

639,106

622,113

Cumulative distributions

(594,322)

(571,340)

Total PS Business Parks, Inc.’s shareholders’ equity

1,067,214

1,120,814

Noncontrolling interests:

Preferred units

73,418

94,750

Common units

157,036

148,023

Total noncontrolling interests

230,454

242,773

Total equity

1,297,668

1,363,587

Total liabilities and equity

$   1,399,881

$   1,469,323

For the Three Months

Ended March 31,

2009

2008

(Unaudited)

Revenues:

Rental income

$   69,747

$   70,111

Facility management fees

177

195

Total operating revenues

69,924

70,306

Expenses:

Cost of operations

22,755

22,490

Depreciation and amortization

22,391

25,447

General and administrative

1,976

2,046

Total operating expenses

47,122

49,983

Other income and expenses:

Interest and other income

179

328

Interest expense

(930)

(993)

Total other income and expenses

(751)

(665)

Net income

$   22,051

$   19,658

Net income allocation:

Common shareholders

$   32,961

$     3,749

Preferred shareholders

(16,026)

12,756

Noncontrolling interests — common units

11,772

1,348

Noncontrolling interests — preferred units

(6,714)

1,752

Restricted stock unit holders

58

53

$   22,051

$   19,658

Net income per common share:

Basic

$      1.61

$      0.18

Diluted

$      1.60

$      0.18

Weighted average common shares outstanding:

Basic

20,470

20,435

Diluted

20,541

20,629

For the Three Months

Ended March 31,

2009

2008

Computation of Diluted Funds From Operations  

per Common Share (“FFO”) ⁽¹⁾:

Net income allocable to common shareholders

$32,961

$   3,749

Adjustments:

Depreciation and amortization

22,391

25,447

Net income allocable to noncontrolling interests —

common units

11,772

1,348

FFO allocable to common shareholders/unit holders

$67,124

$ 30,544

Weighted average common shares outstanding

20,470

20,435

Weighted average common OP units outstanding

7,305

7,305

Weighted average common share equivalents outstanding

71

194

Weighted average common shares and OP units for purposes of computing fully-diluted FFO per common share

27,846

27,934

Diluted FFO per common share equivalent

$      2.41

$       1.09

Computation of Funds Available for Distribution (“FAD”) ⁽²⁾:

FFO allocable to common shareholders/unit holders

$67,124

$ 30,544

Adjustments:

Recurring capital improvements

(785)

(1,934)

Tenant improvements

(3,282)

(4,454)

Lease commissions

(871)

(2,268)

Straight-line rent

(345)

94

Stock compensation expense

1,088

1,012

In-place lease adjustment

(86)

(48)

Lease incentives net of tenant improvement reimbursements

(81)

(31)

Gain on repurchase of preferred equity, net of issuance costs

(35,639)

-

FAD

$27,123

$ 22,915

Distributions to common shareholders/unit holders

$12,217

$ 12,196

Distribution payout ratio

45.0%

53.2%

(1)

Funds From Operations (“FFO”) is computed in accordance with the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). The White Paper defines FFO as net income, computed in accordance with GAAP, before depreciation, amortization, net income allocable to noncontrolling interests, gains or losses on asset dispositions and nonrecurring items. FFO should be analyzed in conjunction with net income. However, FFO should not be viewed as a substitute for net income as a measure of operating performance or liquidity as it does not reflect depreciation and amortization costs or the level of capital expenditure and leasing costs necessary to maintain the operating performance of the Company’s properties, which are significant economic costs and could materially impact the Company’s results from operations. Other REITs may use different methods for calculating FFO and, accordingly, the Company’s FFO may not be comparable to other real estate companies.

(2)

Funds available for distribution (“FAD”) is computed by adjusting consolidated FFO for recurring capital improvements, which the Company defines as those costs incurred to maintain the assets’ value, tenant improvements, lease commissions, straight-line rent, stock compensation expense, impairment charges, amortization of lease incentives and tenant improvement reimbursements, in-place lease adjustment and the impact of EITF Topic D-42. Like FFO, the Company considers FAD to be a useful measure for investors to evaluate the operations and cash flows of a REIT. FAD does not represent net income or cash flow from operations as defined by GAAP.