SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS

EXHIBIT 10.1

SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS

          This Separation Agreement and Release of All Claims is entered into between AMB Property Corporation, its affiliates and subsidiaries (collectively, “Company”) and David S. Fries (“Employee”). The purpose of this Agreement is to arrange a severance of Employee’s employment with Company on a basis that is satisfactory both to the Company and to the Employee. For purposes of this Agreement, the term “Termination Date” shall mean October 1, 2005.

          1.     Effective as of the Termination Date, Employee’s employment will end as a result of his resignation from Company. The resignation by Employee of his employment shall not affect any benefits or entitlements due Employee under this Agreement. Employee’s residence is in Massachusetts, and Employee presently works in Massachusetts.

          2.     Both Employee and Company are entering into this Agreement as a way of concluding the employment relationship between them and of settling voluntarily any dispute or potential dispute that Employee has or might have with Company as of the date this Agreement is signed.

          3.     In return for Employee agreeing to this Agreement, Company agrees to provide Employee the following, subject to Paragraph 13 of this Agreement.

                    a.      Salary . Company will continue Employee’s base salary through the Termination Date, and will pay Employee’s base salary from the Termination Date through December 31, 2005 to Employee in a lump sum, less all applicable deductions, on the Termination Date.

                    b.      Bonus . Provided that Employee is not in Default (as hereafter defined) of this Agreement as of January 1, 2006, Company will pay Employee a prorated target bonus, based on 8 months’ employment through August 31, 2005, in the amount of $218,041,

less all applicable deductions. Company will pay Employee this bonus at the same time Company pays other employees their bonuses with respect to 2005, or by March 31, 2006, whichever is earlier. As used herein, the term “Default” shall mean a material breach by Employee of its obligations under Paragraphs 8, 9, 10 and 15 below, which breach is not cured by Employee within a reasonable period of time following delivery by Company to Employee of written notice describing such breach. `

                    c.      Benefits . Company, at its sole cost and expense, will continue Employee’s full benefits, including those provided under the Change in Control Agreement (as described in Paragraph 4), and including direct and matching contributions to Employee’s 401(k) plan consistent with current practice, through December 31, 2005, provided, that (A) with respect to all health benefits presently afforded to Employee and his family (medical, dental and vision), Company, at its sole cost and expense, will continue Employee’s full benefits until the earlier of (1) December 31, 2006 and (2) the effective date that Employee (and his family) are afforded substantially similar health benefits by another employer, and (B) with respect to Employee’s 401(k) plan, any direct and matching contributions for the period from the Termination Date through December 31, 2005 shall be effectuated in an equivalent lump sum manner on the Termination Date. Employee shall promptly notify Company of the occurrence of the date described in clause (A)(2) above if such occurs prior to December 31, 2006.

                    d.      Unvested Restricted Stock/Stock Options . Immediately upon the occurrence of the Termination Date, Employee shall be entitled to the:

          4.     In the event that Company enters into a binding agreement, prior to December 31, 2005, involving the sale or any other “Change in Control” of the Company or its assets, and such transaction is ultimately consummated (whether before or after December 31, 2005), Employee shall be entitled to all benefits he would have been afforded under Employee’s Amended and Restated Change in Control and Non-Competition Agreement dated December 9, 2004 (the “Change in Control Agreement”), as if Employee had remained in the employ of Company through the closing date of such sale or other transaction constituting a change in control, including, without limitation, the full vesting of all unvested shares and options (including all such unvested shares and options not vested pursuant to Paragraph 3.d above) and the severance pay described in Section 3.3(b) thereof and the gross-up payment described in Section 3.4 thereof; provided, however, that any amount paid pursuant to this Paragraph 4 shall be reduced by any amounts paid to Employee pursuant to Paragraph 3.b. of this Agreement.

          5.     Effective as of August 31, 2005, Employee will resign his positions as an Officer of AMB Property Corporation and as an Officer and/or Director of any affiliates and subsidiaries thereof. The resignation by Employee of his officer title and responsibilities shall not affect any benefits or entitlements due Employee under this Agreement.

          6.     Following the mutual execution of this Agreement and continuing through the Termination Date, and to the extent requested by the Company, Employee agrees to make himself reasonably available to the Company to provide assistance with respect to effecting an

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orderly transition of his past and current responsibilities and for such other matters that may reasonably be requested by the Company, provided that Employee shall not be required to devote a material amount of time to such efforts and shall not be required to be physically present at a Company office. Employee’s obligation to provide any services to, or perform any work on behalf of, Company following the mutual execution of this Agreement shall be limited to Employee’s obligations under this Paragraph 6. During this transition period, Employee will act in the capacity as a senior advisor to the Chairman and CEO, Hamid R. Moghadam, and the President, W. Blake Baird.

          7.     Nothing contained in Paragraph 6 or elsewhere in this Agreement or otherwise shall in any manner preclude Employee from accepting, after August 31, 2005, consulting or other self-employment that is not in violation of Paragraph 8 below, and the taking of any such assignments (and receiving remuneration there from) shall not in any manner limit or impair any of Employee’s rights or benefits hereunder.

          8.     For one (1) year after the Termination Date, Employee shall not, without the prior consent of the Company, in any geographic area where Company does business or