Good morning, and welcome to Boston Properties third quarter earnings call. This call is being recorded. All audience lines are currently in a listen-only mode. Our speakers will address your question at the end of the presentation during the question-and-answer session. At this time, I would like to turn the conference over to Ms. Arista Joyner, Investor Relations Manager for Boston Properties. Please go ahead.

Good morning, and welcome to Boston Properties’ third quarter earnings conference call. The press release and supplemental package were distributed last night as well as furnished on Form 8-K. In the supplemental package, the Company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg. G requirements. If you did not receive a copy, these documents are available in the Investor Relations section of our website at www.bostonproperties.com. An audio webcast of this call will be available for 12 months in the Investor Relations section of our website. At this time we would like to inform you that certain statements made during this conference call, which are not historical, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Boston Properties believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors and risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements were detailed in Tuesday's press release, and from time to time in the Company's filings with the SEC. The company does not undertake a duty to update any forward-looking statements. Having said that, I'd like to welcome Mort Zuckerman, Chairman of the Board; Ed Linde, Chief Executive Officer; Doug Linde, President and Mike LaBelle, Chief Financial Officer. Also during the question-and-answer portion of our call, our regional management team will be available to answer questions as well. I would now like to turn the call over to Doug Linde for his formal remarks.

Good morning, everybody and thanks for joining us for the third quarter conference call. It's been pretty eventful year and we still have two months to go and we will see bunch of you folks out in Phoenix in about ten days at NAREIT On the capital front, we have come a long, long way considering the fear that during the first quarter the financial system might actually be at the precipice of a collapse. And from an operating perspective, we are now living through the repercussions of the rapid increase in unemployment driven by significant job cuts by both public and private employers. The impact of the current employment situation and prospects for job growth have on vacancy, rental rate concessions varies in degree by each market that we are in and, quite frankly, by assets in each market, as will the pace of recovery. In a couple of minutes, I'm going to discuss the current state of the markets, achievable rental rates and the magnitude of concessions, probably giving you more information than you'd care to have, but first I thought I'd spend a couple of minutes talking about the reasons why we think maybe it's going to take a little bit longer than anyone is expecting to see us complete attractive acquisition opportunities. There continues to be tremendous trepidation about the balance sheet of the commercial real estate sector. There is universal acknowledgement that the availability of financing in recent years has led to a situation where individual properties carry debt at levels that couldn't be refinanced today and in many cases greatly exceed the property value. We see the wave of CMBS loans that are going to mature over the next few years, and we know that many financial institutions have loans that are greater than…

Thanks, Doug. Good morning everybody. I want to start with a quick discussion of our balance sheet and the financing activities that we have. This year, we enhanced our liquidity by raising $860 million of equity in June and just three weeks ago raised an additional $700 million in the bond market. Our debt offering was for a ten-year term at all-in pricing under 6%. We experienced tremendous demand, enabling us to upsize the deal by 40% and demonstrating the strong support we have from institutional fixed income investors. We now have $1.5 billion of cash on our balance sheet and are in a great position to take advantage of investment opportunities in our markets. As I will touch on later, our cash position will be dilutive in the short term and have a negative impact on our 2010 guidance, but looking forward, should enable us to make highly attractive investments. In addition to our superb liquidity position, our balance sheet is conservatively leveraged with a net debt to EBITDA ratio of 6.1 based upon our current quarter annualized GAAP EBITDA with net debt meaning total combined debt less our cash balances. On a cash EBITDA basis, this ratio is 6.9 but it excludes much of our recent leasing where cash rent has not commenced. Our 2010 financing activity includes the expected payoff of our loans related to 738 8th Avenue, 8 Cambridge Center and our remaining debt on Carnegie Center. We plan to exercise one-year extensions on our expiring construction loans for South of Market, Democracy Tower and Annapolis Junction, and we expect to refinance our expiring joint venture mortgages at a fixed rate of between 6% and 7.5%, including a pay down of roughly $80 million. The expiring joint venture mortgages include $263 million for 125 West 55th…

Well, good morning, everybody. I think you've heard a comprehensive discussion of the various real estate markets. I will just spend a couple of minutes on the overall economic environment, which I think, still remains problematic, at least as far as my own assessment is concerned. We do, I think, live in a very strange time because of huge budget deficits; we have interest rates that are continuing to go down, by and large; and we have unemployment that continues to go up. I don't think we are out of the credit crunch. I think the unemployment numbers are going to be very, very serious through the next year. I think they're going to dominate the politics of the Congressional election. I think the Obama Administration is going to lose not only political prestige, but I think, they will lose a large number of seats in the House and a number of seats in the Senate. One in every three homes has either a family member or a close friend who has lost a job. We have not seen unemployment numbers, if you add them all up, really in 70 years in this country, the ostensible unemployment number rate is about 9.8%, although I think it is inching up. Quite high of an unemployment rate would take that total up to 17%, the other 2.5 million people who basically are around the economy but not looking for a job – they’ve given up or decided to become full-time parents. But add it all up together, and we are close to a real unemployment rate or part-time unemployment rate of close to 20% with the average work week down to 33 hours, the lowest it has been in 60 years. And I think companies are not going to be hiring if…

Okay, operator.

(Operator instructions). Your first question comes from Chris Kessen [ph] from Morgan Stanley. Chris Kessen – Morgan Stanley: Good morning. Thanks for commentary on the leasing environment and on the economy. I’d like to ask you to drill in, if you could, on the competitive environment and specifically sub-leasing activity. Looking through brokers' reports, it looks like subleasing hasn't really meaningfully – submarket leasing vacancies hasn't really meaningfully improved into the third quarter. I'm wondering how competitive you see that. Looking across Boston, do you see those levels are still elevated and how do you see that unfolding into 2010?

I guess, unfortunately, this is going to be sort of a self-fulfilling answer to your question. But much of the subleasing activity that or space that is available in the markets we are in is probably not as competitive with our product and our tenants as you would sort of think of from a big-picture perspective. The type of tenant who's looking to do a lease in a building like ours in Midtown Manhattan is probably looking to do a minimum of a 10-year lease. Hopefully, they do a 15 and maybe a 20-year lease. The capital associated with doing those type of transactions is pretty significant and they are probably not able to get a landlord to provide a stub on top of a sublet. Now, there may be a particular instance where there is a seven or an eight-year sublet from a financial institution or a law firm where they can go in and they can sort of live in that space for a period of time and then say they will make another decision. But for the most part, the tenants that we are leasing to are tenants who have much longer-term perspectives than that. That's not to say that the sublet market isn’t – it doesn't have an impact on the market; it clearly does. Sublet rents are generally 15% to 20% lower than direct landlord competitive rents. I would say, as a gross generalization, the smallest of tenant the more options there are in the sublet as well as the tenants that are less interested in having their real estate be a key component to retain and recruit their employees are more interested in sublet space because they're looking for a deal and they are prepared to potentially be more migrant users of space as opposed to people who want to have that space on a long-term basis. So there is no question that it's going to impact the market. I'm not sure that, on a space-by-space basis, when we are dealing with an existing tenant on our own properties that we are going to be competing with sublet space. I think, depending upon the particular tenant that's in the marketplace, we are not going to be able to price competitively with sublet space. To the extent that those tenants have a different outlook on what they want to use their space for, they will probably go to sublet space and not our space. Chris Kessen – Morgan Stanley: Thanks.

Your next question comes from Mark Biffert of Oppenheimer & Co. Mark Biffert – Oppenheimer & Co.: Good morning. Doug, I was wondering if you could maybe talk about as the rent levels that you've seen. Obviously, we saw the sharp declines, which I think most of us expected, but I'm just wondering if you think that we've kind of seen a stabilization of rents across most of your markets?

I would say the answer is yes. It doesn't mean that we might not have some more downward pressure on rents, depending upon what I call the discipline or the desperation of a particular landlord to do something depending upon what their financial situation is and how that potentially drives the overall market. But I think we are seeing enough transactional activity in all of our markets to feel like the tenant rep brokers and the landlords are both feeling pretty good about sort of where the overall level of transactions are. I think the big difference, in terms of where the rents are, is what's really going on with that particular user. Is that user looking for an as-is deal? And they are looking for rent relief? Or are they looking for, is that user coming into a space saying I want a big tenant improvement package because I want to do a lot of things with my work – with my space from a work perspective and therefore I'm going to be looking at a different rent level? So from – on a net effective basis, you may get the same place or you may even have a higher number with a lower rent. But I would say, overall, we have seen a coming together from a transactional perspective and are seeing a lot more transactional volume because of that. Mark Biffert – Oppenheimer & Co.: Okay, and then just jumping over to acquisition opportunities. I am just wondering what you view as the potential catalyst for you to start putting money to work. Is it further deterioration in the fundamentals of a specific asset that you are looking at, or is it banks starting to pull back assets? If you can provide some more color on that?

I guess, I would caveat the question by we are not sure where it's going to come from necessarily. I think the fundamental belief that we have is that there are many assets who have deficient capital structures; there are many assets where the leasing fundamentals have gone down significantly. Therefore, there should be a recognition that the value of the property is not what it was. The question will be what the friction point will be for those particular assets and the constituents in the capital structure in terms of resolving that issue. As I said, we are seeing assets in the market today where they are slowly but surely going through the various owners on the capital stack and people are taking as much time as they possibly can to try and work a deal, in many cases unsuccessfully, recognizing that they are no longer in an equity position and there may be term left on a particular securitization tranche or the structure of a particular debt asset so that, over time, it’s going to get to the appropriate parties. When it gets there, that party is going to say 'I'm not sure I want to be in the ownership position; I'm not sure I want to be the person who's going to have to take care of stabilizing this asset from a leasing or a capital repositioning perspective, and I'm going to want to get rid of it.' Our expectation is that, that's where much of the stuff will come. Mark Biffert – Oppenheimer & Co.: So in terms of pricing, given the amount of capital that’s been sitting on the sideline or everybody is talking about sitting on the sideline, what is your anticipation for some of these higher-quality assets that you are targeting in terms of cap rates and where you think those might go in your individual markets?

Mort, do you want to take care of that?

I don't think there is any easy way to predict that at this stage of the game. So much depends on the specifics of a property, but if you wanted to take a relatively ideal acquisition where somebody has a big lease that's coming up and doesn't want to take the risk or to pay the money that takes to renew it or find another tenant, or somebody has a financing that's coming due and can't handle the obligations there, I would say that you're going to be talking certainly a sub 7% cap rate for the best properties or the best potential properties. And that's where I think, if when I say that, that is sort of going in. We don't look at it just in terms of the current cap rate. We just look at it as much in terms of what do we look like on, say, on a five to ten-year IRR. And this is what our sort of basic philosophy is to take the longer-term. That may give us a particular edge, since we are in a position to nurture these properties and manage these properties and lease these properties and we hope maximize the value in these properties. And we generally have been able to do that. So but if you ask me what the, whether its kind of properties we're looking at, I suspect it is going to be a sub 7% cap rate.

Can I just add something to that answer? I urge you all not to just get fixated on cap rates. If you think back to the properties that were let's call them over-financed, there were two things that were at work. One was cap rate compression. The other with bad underwriting. And underwriting is just as important as cap rates. What are rent levels going to be two and three years out, or four and five years out, or six and seven years out? So let's not I think you fool yourselves if you think cap rate sort of gives you the answer to the question. It doesn't and you have to look, you have to drill down into the asset itself. Mark Biffert – Oppenheimer & Co.: Okay, thanks. And then lastly, Mike, I was just wondering if you could give an update. As you are looking to pay down some of the mortgages next year, what are underwriters coming back to you with in terms of loan to values and the rates that you are seeing, if those stayed pretty low in terms of the spreads?

I think that debt coupons have come down a little bit, and I think that is because the whole loan lenders, which are the lenders that are really out there, which are banks, foreign banks, life insurance companies and pension funds, are not really putting out much money. And we have talked to several insurance, major insurance companies that are saying to us that they've put out 20% to 40% of what they would like to put out this year and that they are interested in trying to put out a significant amount just in the last few months of the year. And if they can't, that's going to kind of roll into next year because they realized that they can’t continue to invest all of this liquidity they have in short-term type of cash instruments. They want to put it into longer-term investments and a portion of that is to, it’s a real estate. So we have seen the coupon requests, again, on high quality assets, go from what was the mid-sevens to low-eights to more the mid-six to the low-sevens for five to ten-year terms. With respect to leverage, 50% to 60% on an LTV basis, but on an LTV basis, they are looking at things very conservatively. They are using pretty high vacancy rates. Where there are rents in the buildings that are above market, they are going to be marking those rents down. And they are being pretty severe about the kind of roll over estimates in terms of the costs that it's going to take. They are making assumptions that all of the tenants that are rolling are going to be leaving, and you're going to need full TI and commission to replace those tenants. And when you throw that into a DCF, it really does impact the value. So although they may be saying 60%, in reality it’s probably more conservative than that. Mark Biffert – Oppenheimer & Co.: Okay. So then when they use up that capital, that excess that they haven't invested yet, is it your anticipation that rates will widen back out again and that capital will be less available, say, towards the second half of next year?

My sense is, on the life company side, they have money coming in every month and they’ve got to employ that money. And the issues that they have right now is they are unwilling to bend on their underwriting standards. They are only looking at a certain quality of real estate investment. And I don't see their chief investment officers changing that for them any time in the near future, given that it was not too long ago that they made some mistakes. So my expectation is that they will continue to have trouble putting out their capital. Mark Biffert – Oppenheimer & Co.: Okay thanks.

Everybody tends to fight the last war; that's the problem you have to cope with.

Your next question comes from Jordan Sadler of KeyBanc Capital Markets. Jordan Sadler – KeyBanc Capital Markets: Thank you. I just wanted to come back to Ed's follow-up on Mort's answer on the cap rate question. The, what are you guys underwriting? And I know it’s different by asset and by market, but maybe you can give us some generalizations. Given sort of, Mort, your overlay, what are you underwriting in terms of expectations, either on the job front and how that translates into market rents over the let's say, a five-year period?

Well, again, it is so difficult to give you a specific answer. Obviously, you have a tremendous diminution and new supply coming on. There's virtually no new supply coming on in many of the markets, unless these buildings where we're well underway. So you have to imagine what that means in terms of the, what you're trying to project as demand. And my belief for example, I’ve said this before. I think New York as a market it is going to recover faster than other people seem to expect. And I will tell you why, because when the world of global finance really begins to re-energize itself, it is going to still, in my judgment center in New York City because one of its major competitors, London, has suffered much more than New York has and the intellectual firepower in New York, in my judgment, still is preeminent and there are a lot of firms that have done extremely well and will continue to do well and can organize a lot of capital. So I think we are going to come back and we already have come back to a degree that I think surprises a lot of people. And particularly the kind of real estate that we have has come back in ways that have surprised a lot of people and frankly to some extent, including ourselves, although this is always being our philosophy, when you see it work as well as it worked, still a bit of a surprise. So, my own view is that where we are now may, which is frankly a high unemployment rate that I believe that it is going to be same double digits in the simple terms for a couple of years. But my own view is that parts of the city…

I think now we believe and what I mentioned in my comments is that our occupancy is going to be flat by year end, and the impact is from the leasing that happened this quarter in New York City and then the leasing – some of the leasing that we mentioned that we have done that hasn't hit the occupancy numbers yet, such as the deal in San Francisco and a couple of deals in New York City. Jordan Sadler – KeyBanc Capital Markets: But the Lehman space, most of that will be occupied by when?

Some of it is already occupied, and the rest is going to hit sometime around January 1st. Jordan Sadler – KeyBanc Capital Markets: Thank you.

Your next question comes from Ross Nussbaum of UBS. Ross Nussbaum – UBS: Good morning. I'm curious. Right now, the cost of your long-term debt in the unsecured market, whether that is just straight unsecured or converts, is so low relative to where you maybe able to potentially buy assets. Why not go out and raise as much debt in the public markets as you humanly can today, build a massive war chest and go from there? I mean, do you believe that debt costs are going to be as low or lower than they are today in one or two or three years?

I think that's a very good question, actually. We sort of go back and forth on that. We've done two fairly significant financings, one an equity financing and one a debt financing. We are not closed to looking at this again, and not in too long a period of time. I think we also want to get a feel for – we will see where rates are and what we can do, but I also think we want to get a feel for what our potential is to put that money to work. We don't want to excessively overburden the short-term. But in a sense what we have done is exactly consistent with what you're talking about. We have raised a fair amount of money and I think we are open to raising more money, particularly if we begin to see some opportunities for investing this money, and we are, believe me, going to be working hard on that. Ross Nussbaum – UBS: Do you see – as a follow-up to that, given that the cost of your long-term unsecured debt is significantly cheaper than where you can go get secured financing today. Do you see shifting the balance sheet completely over to an unsecured strategy if this persists?

Well, not necessarily but I mean we are not adverse to it. Obviously, what has happened is there is going to be in my judgment, because of the availability of financing to a number of REITs as compared to securitized financing on individual buildings. There's going to be a shift and this is a part of the reason why we are going to be in a position, I believe, to make some interesting acquisitions, both for investment properties and development properties. I think those REITs that are strong enough to have raised the kind of money that we have and strong enough to continue to be raising that kind of money are really going to have a comparative advantage and will do disproportionately well. So I think we are in a very, very strong position to take advantage of whatever opportunities are available in the market. As I say, we are not doing it on the basis of a short-term perspective. We really are taking a longer-term perspective and I think were going to be able to do this, but the proof will be in the pudding. We've been able to do a lot of acquisitions in the past, as well as a lot of developments. Those are still the two prongs of our basic growth strategy. We are going to stay in the markets that we think we are very comfortable with, or at least have the characteristics that we are comfortable with. On some level, it is an opportunistic business and it is an entrepreneurial business. That's what we've got to sort of – we've had some good experience in that regard. We have a lot of credibility, I hope, and we are certainly going to be out there beating the bushes.

Please remember that we have been advantaged by the fact that we can, because of who we are and the confidence that lenders have in us, to be able, at the appropriate time, to go secured and at the appropriate time to go unsecured. Nothing is static in these markets. So the key to our success is to be nimble and also to be able to go to the lenders, whether they be secured or unsecured, with the kind of track record that we have been able to demonstrate.

Not only to lenders but to property owners.

Well, that's in terms of acquisition, obviously.

Yes. Ross Nussbaum – UBS: Thank you.

Your next question comes from the line of Jay Habermann of Goldman Sachs. Jay Habermann – Goldman Sachs:

You said a couple of things. I think, Mort, made it clear that we are probably not interested in going far a field in terms of the markets that we are in, nor the property types that we are in, which would suggest that we are looking for more iconic, high quality trophy, whatever you want to call them assets and our marketplaces, but that doesn't –

I don't like the term 'trophy' because that sort of implies that you buy something because it looks good. We buy things, we will buy things that are consistent with our existing portfolio that will operate good, to use poor English. Sorry. So, I mean that's where we are going to focus our time and our energy. We will continue to, obviously, to the extent that it makes sense, look at some of the other markets that we've thought about in the past, but I think the fundamentals of those markets are probably going to point us in a direction of sort of sticking to our knitting. With regards to the size of the assets, yes, the advantages we have are on the capital side with size. I'm not sure those necessarily are going to be where the immediate opportunities are, so we maybe doing some smaller things in the short-term to – if that's where the opportunities avail themselves. With regards to partners, I'm not sure where that came from. We may do things with other people; we may do things on ourselves, by ourselves. We have, we believe, access to capital. So, the issue isn't the capital; the issue is the opportunity, and to the extent we find really terrific opportunities, I think the markets would be hospitable to us discussing what those opportunities are and potentially giving us more capital to go out and do them again. Jay Habermann – Goldman Sachs: Can you talk about the mezz investments? I know historically you have looked more at acquiring assets, but can you give us a sense of investing in debt and what opportunities might present themselves there? Is that a smaller portion of the total pie?

Sure. We don't know where it's going to come from, but I think the thing you said there that I wanted to sort of highlight is we are not looking to invest in mezzanine financing. What we're looking to do is figure out whether or not the mezzanine position is really the equity position in a particular deal, and how or when that position might allow us to become the owner of the property. So I don't think we would be a party that would go out and make mezzanine loans and help other people recapitalize their assets. But to the extent there are mezzanine positions that are available and they are a means to an end in terms of being able to utilize our operating expertise to fix a property, that's really I think where our focus would be. Jay Habermann – Goldman Sachs: Great. Thank you.

Your next question comes from Jamie Feldman of Bank of America-Merrill Lynch. Jamie Feldman – Bank of America-Merrill Lynch: Thank you. Good morning. So the BofA and Merrill economists just came out with a report saying that corporations in this country cut too many jobs this cycle. When you look at the GDP decline, do you expect a GDP decline versus job cuts in other countries versus their GDP declines? Are you sensing that from your tenants? I know you mentioned a pickup in velocity. We are just trying to get a sense of how sustainable that pickup is, and what your view is of what your tenants are thinking in terms of, if things pick up, how much more they do need to hire?

Well, Jamie, I think, unfortunately, it varies by market. I think in the city that you sit in, there are more financial firms who are going back to the colleges and universities to hire people in calendar year 2010 than anybody expected there would have been. I believe that the service industries associated with the transactional experts, meaning the legal profession and the accounting profession are probably still struggling with the level of financing activity that has fallen off and the number of bodies that were employed in structured finance and other non-transactional related activities that haven't come back yet. With regards to asset management and money management, again I think we are starting to see as capital looks for more – is more comfortable taking a higher-return investments, that some of the alternative asset class fund managers are starting to gain traction again and are looking for people and are raising capital. I don't think it is a significant change from what it might have been two or three years ago, but it's certainly much better than it was six months ago. In other cities where we are not as tuned into the financial economy as New York City is, I think it is going to be slower going, because most of the users of office space in those other cities are sort of one step removed from the transactional work that gets done in Midtown Manhattan and/or on a global basis.

Just to add something to that, I do spend a fair amount of time talking to non-real estate corporate CEOs, and not necessarily in the financial industry. I would say that the tone of those conversations has gotten far more optimistic about where they're going. Now, I agree with Mort. That doesn't immediately translate itself into job growth, which is what we need. They may not be direct tenants of us. But I think the tone of the marketplace in general has improved tremendously. Ultimately, that works its way through and does impact real estate and does impact people's prospects about job hiring. Now, I do point out that I am the optimist in the crowd. So, there may be descending dissenting views within Boston Properties. But that seems to be my observation of what's going on. Jamie Feldman – Bank of America-Merrill Lynch: So, those non-financial CEOs mentioned that they cut too far, are they just saying business won't grew, so they’ll need more body [ph].

I have not heard somebody admit that they have cut too far. And probably they've learned how to make money and lots of money with their current workforce. I'm sure they are going to be very cautious about adding people, but it has to happen, and I think it will happen. I'm not saying it's going to happen in 2010 or even 2011, but it's going to happen. Jamie Feldman – Bank of America-Merrill Lynch: Okay. And then, we are hearing a lot of more pressure on small businesses in this country. What do you see – I know that's not the focus of your portfolio, but what are you seeing from your smaller tenants in terms of their health and their ability to take more space?

It's the big tenants that defaulted on us.

I think that we have not had much in the way of small tenant defaults, other than small tenant retailers. We've had sort of what I would call the mom-and-shop retailers, the deli providers in many of our buildings who sort of have really started to struggle. I think, in the buildings that we have lots of small tenants there in some of our weaker markets. So, for example, Burlington, Massachusetts. And there I think, they are struggling but they also are seeing that there is an opportunity to really dramatically reduce their occupancy expense. The question is do they have viable business models? So we are not seeing much in the way of growth from those tenants, but we are not seeing wholesale closing of the business and walking away from leases. Jamie Feldman – Bank of America-Merrill Lynch: Okay. Then finally, we are hearing about discussions on Capitol Hill about potential changes in regulations for how banks are accounting for their commercial real estate loans. What are you guys hearing along those lines and what is your view going forward?

We haven't heard anything that's changed. We have heard lots of rumblings from the owners of those loans that they would prefer not to have to mark those to market, and they would like to figure out ways to keep them on their balance sheets as long as possible, so that to the extent that they recover, they don't look like they looked like when the FDIC took over all of the savings and loans back in the late '80s/early '90s. The one disconnect that I keep hearing is, I hear people saying 'We are prepared to operate these properties.' It's hard for me to believe that a financial institution is set up to make decisions and to invest additional capital, particularly in the office sector, where the pulse of the market and the underwriting of the tenant and the understanding of how that building may or maybe not be viewed from the market perspective are so critical to those decisions. I am just not sure that they have necessarily the prerequisite skills and aptitude to do that in a very meaningful way. So I question whether or not they will be successful if they are in fact able to retain these assets for a longer basis. Jamie Feldman – Bank of America-Merrill Lynch: Okay, thank you very much.

Your next question comes from Alexander Goldfarb of Sandler O'Neill. Alexander Goldfarb – Sandler O'Neill: Yes, hi, good morning. Mort, I just want to go back to your New York comments. You sounded pretty optimistic on the city and living here is certainly – we want to see the city do well. But caps in executive compensation certainly hit New York hard and the Journal this morning highlighted the high tax cost of living in a city is driving people out. So, how do you balance those two where the State and the city are being hit on the budget side? It is an expensive place to live and yet the optimistic side that says the city will rebound would be a good place going forward?

Well, let me just say this. The best part of New York City I might say is its human capital. It attracts talented people from all around the country and from all around the world in virtually every phase of it. Now, you look at the hotel occupancies in New York and they are astonishingly high. They have barely fallen off, so the tourism coming into the city and the people-visitors coming into the city are still extraordinary. The retail sales, which were down are now beginning to pick up again. I just do think that there are – you look at the theater district, et cetera, the activity is really quite remarkable. I have gone over it with the city financial people quite recently, and I don't remember all of the individual categories, but I must say I was astonished at how well the city is doing, hotel rates and hotel occupancy being one of the things, but particularly occupancy I was really astonished at how well they are doing. So, I do think that this city has extraordinary assets as an attractive city on so many levels, there are so many people. And in particular, for a lot of the financial firms who want to hire people who are really talented people and really able people, those people, the younger people, want to come and live in New York or in cities like New York. And nothing compares to New York. so I do think. Washington is another city that works that way. I do think that these are cities that are going to continue to do very well, but I particularly think New York is going to do very well. It will take a while because we have to work through some issues, without question. But if…

I think that you can raise – do a $400 million mortgage on a well-leased, relatively modest valued property from our LTV debt concept [ph] perspective, that you can put together one or two insurance companies who would be more than happy to provide you with a couple of hundred million dollars a piece.

I think the other thing that I would add that changed a little bit from maybe our prior comments, or that again these insurance companies aren’t putting out any money. So, wherein the first and second quarter they were saying, “Well, maybe we could do a $100 million or $150 million deal”, they have found that if they increase their size a little bit, they may be able to capture a little bit more. So, some of them are saying “The loan is a little bit big, but it’s still a very high-quality asset. It’s got good cash flow, it’s got a good rent roll.” We should be doing that deal in order to be able to put out the type of capital that we need to. Alexander Goldfarb – Sandler O'Neill: Okay. Thank you.

Your next question comes from Michael Bilerman of Citi. Michael Bilerman – Citi: Good morning. Josh Attie is on the phone with me as well. Doug, in your opening comments, you’ve talked about chatter on foreign capital sources looking to buy US assets, and clearly, with the dollar where it is, I am sure those interests have peaked up. Are you working with any foreign capital sources in terms of trying to enter US, or are you thinking more so about – you’ll find an opportunity and then, if you need more capital than you already have today, you will go out and do it?

I guess I characterized our philosophy and our thought process as follows, Michael. There are a number of foreign capital parties who call us on a periodic basis, and we engage those conversations actually with an active dialogue. What we generally find is that, unless there is a deal, a real deal, those conversations are interesting and they are informative, but they are not actionable. But when you have a transaction, they are much more actionable, and that’s sort of when the rubber meets the road and you determine whether or not the capital is really serious or not about transaction. The typical entrée today for a foreign capital source is, “We are interested in buying an interest in or out – one of your properties. Do you have anything for sale?” And they are from – I am not exaggerating – from Mexico, from Spain, from Germany, from South Korea, from China, from Singapore. And we have these conversations, and we have interesting dialogues with them, and we understand what their investment objectives are. And to the extent that there is something that we think makes sense to do with partners, I think that we would continue to engage those conversations. But until you have a real concrete deal that you’re talking about, I think it’s hard to sort of be actionable with those parties. Michael Bilerman – Citi: And then you talked about this whole opportunistic acquisition or some development deals being as important or as a biggest priority relative to keeping the portfolio leased. How internally are things being done? You have a task force set up. How are things logistically working internally in terms of scouring for opportunities? Have you bought other people on board? Using existing? Have roles changed at all?

Well I think, Michael, that we have had a – you may recall we have purchased properties in the past, and so we have a reasonable operating strategy where we have regional managers [ph] who are very strong and who have talented people in their offices. Some of them are leasing people, some of them are development people. And those people are talking to people in the marketplace on a day-to-day basis and their job is to churn up stuff. Then we have relationship-driven people who are talking to lenders and foreign institutions and investment managers and such, and their – one of their prime objectives is to churn stuff up. And to the extent that there is something that makes sense, we figure a way to marshal the resources to actually work on it. But I think it’s going to become a more and more focused pursuit by the whole organization, and I think that it has transformed from where we were nine months ago. Six months ago or nine months ago, every time a deal came through from one of these guys, we said, thanks but no thanks. We are just not interested in looking at it. We are worried about, quite frankly, whether or not our credit markets are going to come back and the equity markets are going to come back, and we have to worry more about protecting our flank than we do about looking to the outside. And that's really I think where the change has come.

And frankly, we do think we have the talent, and if we didn’t have the talent then we have the wrong people working for us right now to do this without having to go out and hire specialists from the outside. I think, if our regional managers and the people that work for them are not fully current about what’s going on in each of the major buildings or buildings that we would be interested in, in their regions, then I would be very both disappointed and really quite surprised. I think we do have the talent in-house to do this. Josh Attie – Citi: Thanks. This is Josh, just one more question. You guys mentioned earlier that you are seeing some companies actually expand. Can you give us some color on what type of companies or industries you are seeing this from, and also if you are seeing any companies or industries that are still contracting?

Well, the expansion that we are seeing is really primarily been in New York City, as I said, and I used the word “financial services-oriented” but C.V. Starr lease space, and they’ve leased more space than they currently have under their footprint. Avenue Financial leased more space than they had; Studley leased more space than they had. We have two companies that are in the effectively in – the consulting businesses of helping analytic litigation, one in Boston and one in 599; they have both expanded. We have another hedge fund that is merging with a public company, and they are expanding. They are sort of those types of situations. From a contraction perspective, we really haven’t seen, in our portfolio, much in the way of contractions other than, as I said, in the legal industry. You know, law firms for the most part who made leasing decision in calendar year 2005, ‘06 and ‘07 probably took more space than they thought – than they currently think they will need, and they are looking to reduce that square footage either through a re-stacking, if it is at all possible, or as their leases expire through some sort of a change in the amount of space that they occupy. In our portfolio, I would say that’s where most of the, if you want to call it “underutilized spaces.”

This is Mort. I want to just add one other thing to a question that was asked to me before that sort of ties into what we were just talking about. It is true that there are sort of pay CAPs [ph] as we say, and indeed even some financial firms that are clearly contracting. As I try to – the talent is still there; the talent is still in New York. And a lot of the people are spinning out of these firms and starting smaller firms, and some of them are really growing very rapidly. And I think that’s going to be a hallmark of what’s going to happen over the next several years. You’re going to have a lot of startup firms or a lot of smaller firms that are attracting a lot of people out of the major financial institutions. They don’t want the hassle of having the government looking over their shoulder. These are still people with a lot of talent. That’s why I thought, the whole system of pay caps is asinine, because it really means that you are going to have the least talented people be stuck back in the firms in which the government is going to have, I don’t know, $750 billion is either invested or guaranteed. And the talented people are going to leave and start other firms or join other firms and accelerate their growth. But I think a lot of that is happening in any event. I think we have probably exhausted all of you. So why don’t, at this stage, we call this…

We’ve got a couple more – we have a few more, unfortunately there are a few more people in the queue.

No, I am sorry, I am sorry, it’s not unfortunate.

It's fortunate! Operator, keep going.

Okay. Your next question comes from Shane Buckner [ph] of Royal Capital Management. Shane Buckner – Royal Capital Management: Yes, my question is more an accounting question. As market rents declined below the allocation to below market rents from past acquisitions, and those below-market rents aren’t quite as below-market as they used to be, is there any need to reduce the value allocated to that from an accounting standpoint, or reduce the income that’s amortized to fair value lease revenue?

Are you talking about FASB 141? Shane Buckner – Royal Capital Management: Yes.

The one thing I did mention with respect to FASB 141 is that we are expecting a decline from our contribution of joint ventures next year. And that's because FASB 141 to a certain extent is rolling off. And the reason it’s creating a decline is because rents are going down, and rents are off from where they were when we acquired the assets and set up with the FASB 141 was for each of these leases. So, as I mentioned, I think it was $10 million to $15 million in our joint ventures is rolling off, and that’s a non-cash P&L impact. With respect to our joint ventures again, only, we also do impairment testing in every quarter. And to the extent that there was significant further decline in rents, we would do additional impairment testing every quarter and there could be impairment charges. Now we have not – we have seen more of a plateauing in lease rates, and we did not – we did our impairment testing this quarter, and we did not come up with any impairment on any of our joint ventures. Again, that really – that accounting impact only affects our joint ventures. We do an analysis of our consolidated assets as well every quarter, but it’s a different analysis based on an un-discounted valuation, assuming that our intent is to hold those assets for the long term, which it is today on all of those assets. I hope that answers the question? Shane Buckner – Royal Capital Management: It does. If I could follow-up with the impairment testing, if I understand correctly, the value allocated to below-market rents is a liability on the balance sheet?

If they are below market, they are, and the analysis is done once upon acquisition and then it’s not readjusted. So, as Mike said, as the leases expire, it will burn off. Shane Buckner – Royal Capital Management: Right, but do you test the liability for impairment?

No, we do not need to.

The impairment testing is based on our equity investment in the asset, so just our pure equity. Shane Buckner – Royal Capital Management: Okay, if…

If you want to have an off-line conversation, we are happy to do that. Shane Buckner – Royal Capital Management: Okay, sure. Thanks.

Your next question comes from Anthony Paolone of JP Morgan. Anthony Paolone – JP Morgan: Thank you. I just had two small ones left on the development pipeline. The first is, with respect to the 200,000 square feet that you're looking to add to Atlantic Wharf, what is the status of that? Is there at some point along the construction plan where you just can't add anymore?

200,000 square feet is really a reclassification of the space from residential to office. It is going to be office space. It’s being marketed as office space; it is being designed as office space. Anthony Paolone – JP Morgan: Okay.

It's already there. It's not an expansion of the building. Anthony Paolone – JP Morgan: Okay. Then I guess you noted 170,000 square feet of development rights that you went to contract for in Cambridge. One, am I looking at that right? Can you give us a price, and can we glean a land comp out of that?

Probably not. Basically, there was a transaction. When we did our transaction with Biogen a year ago, they had the rights to one last development site in Cambridge Center. They agreed to relinquish that site to us. So it all sort of got – it got tied into their decision to move to Reston, and then we basically reclaimed that right, and the right we had to buy the property was clearly a right that was based upon a contract that was done 20 years ago. So, I don't think it is a fair allocation of what the value of that land might be. Anthony Paolone – JP Morgan: Okay, thanks.

Your next question comes from Michael Knott of Green Street Advisors. Michael Knott – Green Street Advisors: Hi, Mort, I have a question for you. What’s your view as to how the bulging national debt will ultimately impact the dollar interest rates and thus real estate values?

Well, that's one of the really great questions. I have to say that, for the next several years, I just think the economy is going to be weak enough of – that interest rates will remain low. I don't think that this is going to be a serious problem. If there is a problem, it is that I think will be much less anxious to buy dollar denominated debt securities, if they think inflation is going to basically undermine the value. They would naturally think and probably rightly think that governments would rather have inflation to really reduce the cost of overseas debt holdings or to the governments than any other approach, if they don't want to fault and they wouldn't like to pay that money back. But I just don't see that we are going to have any kind of inflationary pressures for a while. I mean, I have to say I think the – my own view is that this whole healthcare issue is a fiscal disaster for the country. I mean if you look through and see what governments have stated, what the estimated costs would be, they are off by multiples of what the real costs are. I think we are in an era where there will be a whole range of medical discoveries which, genetics, the whole stem cell research, bionic – people being created, all kinds of – search on the brain, etc., which are not really incorporated into our estimated future healthcare costs any more than longevity was back when we did Medicare and Medicaid. Longevity, one-third of all medical costs are now in the last year of life, and more than that go to nursing homes than for Medicaid. So, I think that is going to be, at some point, a fiscal…

We have recaptured the naming rights, and the ability to capitalize on it is under the heading of TK – to come. There will be somebody, some company, that's going to want to have that building named, there is. If I venture to say along perhaps with – it's certainly the most famous new building built in the last 50 years in the world. I mean, when we bought the General Motors building, I cannot tell you the number of stories that were sent into us from countries all around the world. So somebody is going to want to have that acknowledgement. We really – this has all just has become, shall we say, available more recently. We will just have to see who it is, who would like to have that naming and what they will pay for it. Michael Knott – Green Street Advisors: Just to be clear, is it an explicit payment that you would get or would it be just baked into maybe a rent for a tenant or –?

We would just as soon have it be baked into a rent with a tenant. We would rather have it be tenant that occupies the building, even if we, shall we say, take a little bit less. I just think that's – it's just there is a better feel for it when that's the circumstance. But it may not be possible because we are going to have virtually no space in that building at this point, given what's going on in that building. Michael Knott – Green Street Advisors: Okay, thank you. That's all for me.

The last question, operator.

Your last question comes from Nick Pirsos of Macquarie Securities. Nick Pirsos – Macquarie Securities: Good morning. Two quick questions, first, has the trend of tenants inquiring for rent relief abated from earlier this year?

I would say the answer is a definitive yes. Nick Pirsos – Macquarie Securities: Great. And then secondly, in today's acquisition comments had been accompanied with a focus on long-term value creation. But just to be clear, does that preclude day one accretive deals from possibly occurring, despite current market conditions?

No, absolutely not.

Not at all. Bear in mind, as I think Mike made a reference before, I mean, given where we are able to invest a lot of the capital that we've just raised, if we are able to do, I think Mike used a 6% rate, Mike?

Yes.

I mean, we would add, what, 50 what –?

Yes, 56 [ph] –

$0.56 [ph], give or take, to our earnings. So, it would have to be an extraordinary long-term value that we saw if we were going in on a 6% cap rate or a 6% yield. So, we will just have to see how it works out. But the important thing for us is, in a sense, I think whether or not we can buy or build buildings that really are consistent with where we think the best place to be, both in good times and in bad times. We've really seen why the quality of buildings that we have really works out so well in more difficult times. It's been our experience in the past whenever there would be downturns in the real estate market. We're going to stay in that space because that's what we do, and that's what we do well, and that's where we have a lot of shall we say market context, credibility, name it what you would like. I think that's still going to be our principal focus. I mean, we are basically opportunistic. You have to be that way. You don't sort of – we generally don't tend to buy companies; we buy individual buildings. You never know when they're going to come up or what the opportunities are going to be. Sometimes, alas, our opportunities are somebody else's problems. Sometimes you don't know what somebody else's problems are until they break out. So we will just have to see where it comes out. But we now feel we have the capital to be able to commit and to move very quickly and not to be dependent upon financing commitments which we think we can get later on, so it will give us an ability to move quickly and to move decisively and to move with credibility. I think that's going to be a comparative advantage in terms of going out and trying to do acquisitions. Nick Pirsos – Macquarie Securities: Great, thank you.

Okay. Thank you, operator. We will see many of you, I guess, in Phoenix in a couple of weeks. If you have follow-up questions, we’re more than happy to try and answer them to the extent we can under Reg FD. We will talk to you next quarter. Thank you.

This concludes today's Boston Properties conference call. Thank you again for attending and have a good day.