Good day, ladies and gentlemen, and welcome to the Federal Realty Investment Trust Fourth Quarter 2015 Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Leah Andress. You may begin.

Good morning everyone. I'd like to thank everyone for joining us today for Federal Realty's fourth quarter 2015 earnings conference call. Joining me on the call are Don Wood, Jim Taylor, Dawn Becker, Jeff Berkes, Chris Weilminster, and Melissa Solis. They will be available to take your questions at the conclusion of our prepared remarks. Certain matters discussed on this call, maybe deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any annualized or projected information as well as statements referring to expected or anticipated events or results. Although Federal Realty believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, Federal Realty's future operations and its actual performance may differ materially from the information in our forward-looking statements. And we can give no assurance that these expectations can be attained. The earnings release and supplemental reporting package that we issued yesterday, our Annual Report filed on Form 10-K and our other financial disclosure documents provide a more in-depth discussion of Risk Factors that may affect our financial condition and results of operations. These documents are available on our website at federalrealty.com. And with that, I'd like to turn the call over to Don Wood to begin our discussion of our fourth quarter and year-end 2015 results. Don?

Well, thanks, Leah, and good morning, everyone. Thanks for joining us today. Again I certainly look forward to seeing all or most of you in a few weeks at the Citi Conference, Florida, where we can talk more about our company and our industry. I also want to thank so many of you for the recognition, good wishes that you conveyed with the announcement of our admission into the S&P 500 late last month. I think our whole team feels particularly proud and your nice words made it even sweeter. So thank you all. Now, let's talk about 2015 results and 2016 expectations. And start off by noting that FFO per share of $1.37 in the quarter and $5.32 for the year before early extinguishment at costs are both all time records for our company and represent 7% quarterly FFO per share growth and 7.7% annual FFO per share growth. Now, just to put that growth into context. We always try to walk the top when it comes to taking a long-term view on our business plan. And that includes sometimes doing things that diminished certain quarterly metrics by same-store growth and occupancy from mid and long-term value enhancements. That is why went out on a limb a few years back before Assembly Row opened to lay out plans double our income over the next decade. That was in 2013 when we subsequently finished the year with 7% earnings growth only to follow that with 7.2% growth in 2014, and now 7.7% growth in 2015. If you're aware of the Rule 72, you'll note that we're on or a bit ahead of schedule, so far, so good. And what the first phases of the big development projects coming into their own, and the second phase is now underway, along with…

Thank you, Don and Leah, and good morning everyone. As Don highlighted our team delivered yet another record for the Trust in terms of FFO per share, which is a $1.37, represented 7% growth over the prior year quarter or 7.7% for the full-year. For the many of you park at the top or just above our guidance that $1.37, was just below the top-end of our previously provided range. In a quarter where we continue to invest in the future by intentionally taking down additional box vacancy, adding to our team, selling non-core assets, and incurring transactional cost for favorable acquisition, we are particularly pleased with the bottom-line results driven by our operation, leasing, acquisition, and development team. Turing to the numbers. Overall property operating income grew at 5.9% over the prior year, even with the decline in occupancy reflecting higher anchor rollover, our core portfolio continue to be a significant driver of POI growth. That core grew at 2.6% or approximately 3.8% for the full-year on a same-store basis, including redevelopment. As in prior quarters, allow me to again emphasize, that our same-store pool represents approximately 94% of our total POI. In other words, it represents substantially all of our portfolio and then truly reflects underlying core performance. This quarter the downtime associated with the anchor rollover we discussed, as well as other one-time item produced about a 150 basis points of drag. We highlighted this trend last quarter. And as I will discuss further in guidance, we expect this rollover drag to begin to ameliorate in the later part of this year, resulting in 2016 same-store NOI growth, including redevelopment of approximately 3% to 3.5%. Allow me to pause for a moment. I can think of very few portfolios that show growth even while taking down occupancies.…

Thank you. [Operator Instructions]. Our first question comes from the line of Alexander Goldfarb with Sandler O'Neill. Your line is open, please go ahead.

Good morning and Leah don't be afraid to give Jim some grief back there. So a few questions here. First, on the West Coast perhaps for Jeff, can you just give us an update of what you are seeing as you are talking to Splunk for their space as well as I think you guys are contemplating building some office across the street and just given the headlines, curious if that is still the plan or may be there has been some change?

Yes, Alex, no change to long-term development plans for Santana Row or Santana West. Obviously before we make a capital decision; we're going to make sure we're confident that there is going to be a market there when it's time to lease buildings, so no change. As it relates to Splunk, we don't have any special information about what's going on at Splunk or any of the other tech companies for that matter. But what we do see on the ground, if you will, is them being very aggressive about doing what they need to do to get into the building as soon as possible. They need the space; they need it as quickly as possible, so everything that has gone over the last couple of weeks hasn't affected that at all.

Okay. And then, as far as the Clarion JV, Don, I think over the years you have been asked numerous times about buying that in and it always seemed like it was more of a steady Eddie portfolio rather than something that would be more interesting to wholly own. So can you just provide some perspective? Was this a case where a JV partner wanted to get out or perhaps given some of the recent retailer things that have come up, maybe there is some new opportunities that made it a little more exciting for you guys to buy in now?

Yes, Alex, that's a very fair question, the single biggest thing or first you need both parties to want to do a deal. And from our perspective one of the biggest things that change was it's all about prioritization. And so, as you know, what we did do last year was setting up the core and the way that we set up the core we are kind of freeing up that achievement building on that team to be able to create value in it while taking Don and freeing up Chris and Briggs over on the mixed-use side, there is more capacity. So from our perspective I'm feeling great about being able to actually get to something we would like to get there. Secondly, a lot of it is just timing too, we've already at Plaza Del Mercado, for example, been able to do a deal that was in the works last year and has been in the works the last couple of years. With respect to LA Fitness to redevelop that site, that's great news. So it's really about management of pension afforded by the new reconfiguration of our companies. In addition, Alex too, the timing for Clarion we are ready to develop that partnership for their own reasons and us ready to take it out.

Okay. So how much more -- what should we look for as far as upside potential as far as the yield where you bought and where you think it could go over the next -- from a modeling perspective?

Yes, see I'm not going to give you a particular answer on that, I can tell you that we are working real hard to that particularly Mooallem and that team, is looking particularly hard as that portfolio. And if Mooallem and Wendy Seher, who I don't know, if you know, she is a critical part of our company, Senior Vice President of Leasing just on the core which is so important when we're saying just on the core, it also ties into what we're doing with respect to aggressively going after space. Having that ability to focus and move on that core the timing is just right. So we will give you more and not sure whether Mooallem we're going to bring him down to city or not, but if we do or if we don't, there will be more exposure for you and folks like you to him to be able to get some of that specifics, those specifics as we get closer.

Okay. I will have to look for Christy to fill me in on what you guys say down at the Citi conference. Thank you.

Thank you. Our next question comes from the line of Craig Schmidt with Bank of America. Your line is open. Please go ahead.

Yes, thank you. I am just wondering, are your better redevelopment expansion opportunities going to be internal with a company like Pike & Rose or may they be external like your shops at Sunset Place and CocoWalk?

You know, Craig, I think that again as we laid out at our Investor Day by far the large preponderance of our investment opportunity exists in what we earn and control today and we went through that some detail. And we augment that tactically with perhaps an acquisition or two; I think this past year we found three strong ones in San Antonio Center, Sunset Place, and CocoWalk which really kind of build our pipeline. But preponderance of what we're focused on and executing on and what you see in the 8-K as we not only detail the projects that are underway but then begin providing for you on that second page what the future pipeline is, is in real estate that we own.

Yes, Craig, and just the only thing I would add to that is the type of acquisition we make, I think it's a differentiator for us. I don't think we look at deals. It's not just about buying stable shopping centers; in fact it's not about buying stable shopping centers. It's truly is about looking at it with a more broad real estate point of view to be able to take advantage of skills that we've grown in and developed over the past decade or so in not only in Massachusetts and redevelopment and apply them to the -- to the land by which we look at those acquisitions. I mean there aren't a lot of companies that are going to go take a shot on Sunset place. But when we look at it -- and we may succeed or we may fail, we'll see. But we handicap it in such a way, we're looking at it in such a way that it provides opportunity that is consistent with the skill sets that we've learned all the way up from Bethedsa Row till today. So that's the balance Jim was talking about.

Yes, I guess from my perspective, it's like do I rather see you take on projects that have greater upside and that would be outside your portfolio I think generally or the safer bet, taking what you have really strong properties and making them better but I guess --

Yes. I don't know how to tell you tell you which way it will be. I can tell you it will be a balance of both. And how that moves depends on where the opportunity is. One thing we do -- and I think it's important, is we truly -- if you were in our investment committee meetings for each of those type of opportunities it's still capital. And as it's toward a capital where we risk adjust those returns and what we think we're going to do is the critical part of that balance. You're going to see both as we go forward. I just can't tell you whether it's 60/40, 70/30, 50/50, because that depends on the specific opportunity that comes up.

Great. And then just quickly, it sounds like you have more appetite for some repurposing of anchor space. Is there a point though where the economy gets too rough that you may be not want to take those gambles from a timing perspective?

Of course, Craig. It's funny. I was thinking about one of these 10 shopping centers that -- that we are getting to. I mean these 10 shopping centers that Jim talked about in the core these are shopping centers that we haven't talked much about. We've got 90 shopping centers. And the idea of unencumbering through restrictive anchor leases, things like Willow Lawn, Brick, Troy, Montrose, Crossroads in Chicago is -- show to that we -- as we say we have that appetite. I can tell you at Crossroads in Chicago for example, there is party city. The party city, if this were 2008, we would have done everything we can to keep them there. We would have lowered the rent, we would have done whatever we needed to do to keep the occupancy and to keep the income coming in the drawer. In 2016, we view that differently. We are certainly willing to play hardball on the lease terms effectively and say yes, you got to go, you got to go, because we're much more confident with respect to where it is that that we can release and what it is that we can do in terms of unencumbering the shopping center. Is there a point that that changes? Of course. To the extent the economy, it turns around and goes the other way, it's -- and we're going to feel a whole lot different about that just like we did back then. But it's not going to be an overnight type of decision. You'll have plenty of time and quarters for us to talk through what it is that we're doing with respect to these centers and what it is that we're -- be monitoring with respect to future centers.

Thank you. Our next question comes from the line of Jeffrey Donnelly with Wells Fargo. Your line is open. Please go ahead.

May be if I can just build on that a little bit just because there is increased concern in the U.S. about a recession today or one approaching if we are not in it already. I know Jim is inclined to probably make guidance that much more conservative than usual. But what specifically has, Don, do you think you have changed in your approach to managing the business to address risks that might not be on the radar screen say six to 12 months ago? And may be have you perceived any change in the willingness of retailers to commit to space or even just certain aspects of lease terms?

Yes, Jeff it's a good conservation. Let's start this out by Weilminster, is on the phone I think. I'd love for him to give you a prospective of the leasing world today. And then, I'm going to build on that with respect to your question, okay.

Sure.

So Jeff, good morning. So my feedback on the leasing world today is that we're very -- we're cautiously optimistic with regards to the opportunities and that very much aligns with what we at Federal Realty have. And this is what we best-in-class assets, which we see located on markets that really align with the retailers desired core customer profile which is incredibly important to them. They know that it's our Realty's commitment to deliver best-in-class property level operation, execution, and maintenance, and are focused on delivering really on the best tenant mix available aligns with their ability to be successful. That puts us then in the best opportunity to take advantage of the growth that retailers are pursuing. And there clearly is growth demand from the retailers. They're just -- their outlook is just a lot more. They are a lot more focused on finding cites that do align with core customer. The deals that they are doing are taking much longer. The lease negotiations are certainly more difficult and they are a lot more selective. So we definitely see opportunity with regard to growth in retailers and we think that they are looking in the markets where we have our real estate. So I think from our perspective we are setup to take advantage of what demand exits out there, both on the box side, as well as on the smaller shop side. And as Don pointed out, I mean it's very important for us as we unlever some of the restrictions and these opportunities take advantage of putting a new relevant box retailers that also that rising tide, will allow us to really take advantage of the demand from the smaller shop tenants and selectively that will make our assets much better.

Yes. And let me add to that Jeff. So I mean your question is a great one. And to the extent this was -- turning it to 2008, you'd have a whole different perspective here in terms of what we think and what we're doing in the approach. There is not one side that we see with our discussions, with our retailers, at our properties, in our locations of anything like that. At worse, it's a take a deep -- it's just more of a deep breath. And as Chris said, it's more deliberate. It's a tougher negotiation all that, that's fine. The reality is if you were to see or to know -- if I took you for a ride over to Grand Park Plaza which is inside the Beltway in Fairfax, we have not been able to do anything with that property for a long time, because of the leases in place. This is a particular point in time where we have a shot. If we simply released it to -- you kept the same anchor in and extended those existing leases, we would be losing the shot to create significant value for a decade or more. So we -- when you overall take a look at it -- and this is with the decision, with everything we've done, we are still 93% occupied. This is hardly, oh my God, empty out the whole place, right, but it does. Take -- it take up very measured and careful approach towards 10 shopping centers in particular that that we wouldn't -- we've been trying forever to figure out a way, because demand is there to create value, but they've been encumbered by other demand, fee lease, or an old valley lease or whatever it is that a particular shopping center that was calling it to get it back. That seems like a smart approach to me. It's not all the way over on one side or all the way over on the other. Again, it's balanced.

Just may be thank you for that. May be to switch gears, just on the Clarion joint venture one or two questions. All else equal, I would have expected that purchase considering the cash funding to be slightly accretive to earnings but if there is no further dispositions in guidance, I guess what is restraining that possibility?

Jeff, as I mentioned in the call, we didn't have factor previously in the guidance sale of Courtyard Shops in Wellington, Florida. So when you factor in that asset sale plus transaction cost, generally neutral for 2016 and we do expect it to be $0.02 to $0.03 accretive in 2017.

Sorry, I missed the second part of that. I'm just curious, related to that portfolio occupancy in that JV has been a little bit lower than the rest of the Federal portfolio. Can you just remind us I guess how you guys think about the quality of those assets in comparison to your core and is there a future redevelopment potential there that may be isn't in your schedules today or do you see these assets as eventual sale candidates down the road?

Yes. The demographics are dam good compared to the rest of the portfolio. And I wish I had a better answer for you as to that. What can I show you today that way I will say, oh my God, why not the other 70% in that portfolio is a clear home run? I don't have that for you today. What I do have -- and again, a lot of it -- from management perspective in a company like this, it's to say all right I know have a very focused team on it. The initial conversations that we've been having with retailers and with custodies and jurisdictions that they're in suggest that there is some good stuff to do at a couple or three of these shopping centers and Plaza Del Mercado was the first one that I've said, I mentioned to you. I expect there will be others. Jim, Mooallem, and his team a little bit of time to run through this and in the next couple of quarters we'll have a far better roadmap for you if you will as to how it relates to the rest of the products that we have.

Okay, thanks and one last question. Curious why do Federal's renewal TIs run so much higher than peers? I guess I wouldn't the majority of your tenants -- it is a costless proposition to renew, there is a little incentive or disincentive for them to leave the property and yet your renewal TIs tend to be $8 to $9 a square foot versus sometimes less than $1 for a lot of your peers. I'm just curious what you think drives that?

I'm not sure I have an answer, I'm not sure. The one thing I would pass it here is these shopping centers are better shopping centers in areas that that were effectively the economics of the deal on a net basis make a whole lot of sense. And I suspect in return for some of that higher rent there is an expectation for certain small shops tenants to want more done to the space, can we get a redone bathroom, can we effectively refresh et cetera at the space? I suspect that but I don't know for sure. Chris, do you have anything to add to that.

Yes, I only would add, I think it just vary, I think this period as Don mentioned, I mean we did a transaction up in Melville where do we have an in-place tenant where there is going to be a downsizing of GLA in one area of the store to bring another one of their brands in. So that is the Dick's deal that was mentioned. And so a lot of it has to do with our making sure of maximizing the opportunity within the space, whether that's an expansion, a shrinking and/or really is an improvement to some of the infrastructure that we see going beyond just a tenant. And so we're very proactive in analyzing every single step available to make sure that we're getting the best out of each space. You think about the amount of our portfolio of 100 plus assets we got to squeeze every bit out of juice out of each one of them, and so we do analyze them and that is how I think you will see the variation that I think we get into defining why on each deal we made those decisions, Don mentioned in our investment committee, and we do analyze them thoroughly. I hope that helps, Don.

Thank you. Our next question comes from the line of Christy McElroy with Citi. Your line is open. Please go ahead.

Hi, good morning, guys and thanks for all the free advertising for our conference.

Sure, Christy, keep Alex, informed okay.

Absolutely first priority. Jim, just following up on some of your comments on delivery and stabilization of the active redevelopment projects, I think you mentioned $3 million of NOI in Q4 from Pike & Rose and Assembly. As I think about the rest of the pipeline, the $290 million of cost at 9%, that's $26 million of incremental NOI from those projects. How much of that flows through Q4 NOI and maybe you can break out the point specifically?

I'm going to need to get you that number specifically in your follow-up Christy; I don’t have that with me right now.

Okay, right. And just secondly in regards to I think you mentioned $6 million of downtime impact from box recapture. Just wondering as you think about the occupancy trajectory in 2016 and the re-tenanting of some of those anchor boxes and it sounds like you could potentially have more that you could do on that front, where would you expect physical occupancy to end the year? What's sort of embedded in your guidance?

I think you're going to see occupancy dip a little bit in the first part of the year and then begin to recover towards the end of the year. I'm not going to give specific percentages because that's a difficult thing to predict based on how particular space can move it at particular period.

In Sports Authority too, we're going to have to figure out what happened there.

Yes.

Would you have any sense at this point for how many of those five Sports Authority locations you would divest?

I don't at this point. You know we've got five Christy and an average rent of 17 box or something like 17 box and anywhere between 11 and 25, I suspect we would love to get back to the ones at 11, and probably won't and once at 25 we will want to get back and we will have to figure out what else we have there. I tell you when I look at it; I take anyone of them back, anyone of them even ones to 25 because where they are and what we could do with them.

And Christy those are Assembly, Brick, Montrose Crossing, Crow Canyon, and East Bay Bride. So that are some of our very best centers.

Okay. And then just sorry if you mentioned this already on the Assembly phase two condos, the increase in the number and the cost there, anything that we should read into that in terms of demand at that site for multifamily housing, the increases go for the project?

Certainly some of that but much more, this is a much more efficient building. The outside of the building that we were building is no different and accordingly being able to refine and tweak mix and efficiency of the building is what that's all about, it is some variance in terms of economics and we would not have done that blue if we not feel the market would absorb that and able to handle 17 more condos.

Thank you. Our next question comes from the line of Jason White with Green Street Advisors. Your line is open. Please go ahead.

Good morning. Just a quick question along the lines of, with some executive positions floating around out there that are open, how do you look at your talent on the bench in terms of keeping those bodies and may be succession planning if you do happen to get somebody stolen away?

Frankly I couldn't feel better; I mean there is we've spent a whole lot of time over the last two years working exactly what you're talking about, Jason, putting comp arrangements into place to make sure that we're doing the best we can to retain. The key with Federal as always been from our perspective you can get the best and the brightest, if you give them the autonomy and you give them the lease so they are able to run their businesses that's effectively what it is that's how we are set up. You can have a couple of cocktails with anyone of them to get their point of view that way but I feel real good about not only choices that will have for succession down the road but also the ability to execute this business plan that we've simply articulate about.

Okay. And then last question for me. If you could maybe just contrast tenant health from three or four years ago versus today. It is obviously a Darwinian business and you are always replacing weak tenants with stronger tenants. But just overall kind of state of the retailer space, do you feel better today than you did three or four years ago relative to your tenant? Or is it there a little softness that is developing with some of these bankruptcies?

Yes Jason, I do have a very specific point of view with respect to this. I mean three or four years ago not just coming out of the recession, you're nervous. You're nervous with respect to what those tenants business plans are going to be, how they are going to work in the new world, did the cuts that they made in their staffing got their organizations with respect to be able to do all that. And what has happened and it's predictable if you kind of take a look at it, is, if you could be in every Board room of all those major retailers and smaller retailers along the way you would, some of them with respect to what they changed and where they're moving into a new economy became extremely good at it and got stronger, a lot of them kind of found mediocre and success in certain areas and not in other areas but with an improving economy, they held on, they held on, they held on, they held on. There is only so long you can hold on if your business plan is not affecting revenue. And I do think that what we see and we felt that in '15 not normal for what we're talking about for '16 was that those tenants that simply did not have business plans that resonated with consumers going forward we're not going to be able to hold on interest. We started to see that in the second half of '15, we decided then to specifically aggressively target them, it's -- we don't turn that on and off and this is a continuation of that into '16. But the better tenants, there are better tenants and those better tenants are doing very well. There is more of a bifurcation is what I'm saying between good and not so good today than there was three or four years ago. That's the distinction and that's why I guess I'm talking my own book here but it’s what I believe, that's why the bifurcation between the desirable real estate and not desirable real estate is wider than it certainly was three or four years ago. Those things work in tandem and that's why we are probably bit more optimistic with respect to our leasing of this strategy in '16 and '17 and some others are.

So with your long lived leases, do you feel like there is a number of years of kind of pain to come from a retailer standpoint or are you working through the lion's share of that in the last couple of years?

Jason I do believe that but I believe that for only the better portfolio. I don’t believe that across the board, three years ago, four years ago across the board, didn't matter. Today it matters.

Thank you. Our next question comes from the line of Jeremy Metz with UBS. Your line is open. Please go ahead.

Maybe a question for Chris Weilminster here, but you mentioned the broad strength you've seen on the leasing front both from main present in line and you talked at length earlier about being still optimistic about the retail environment. So I'm just wondering if you could give us some more specifics or color on where demand is coming from on both the shop and the box side.

Sure. I will say that, the soft goods retailers, Nordstrom Rack has made announcement about their growth plans, so there is a lot of demand out from boxes in that category, Rack TJX you talk about what's going on HTC and growth expectations I think for Saks be it Saks OFF 5TH brand, I think they are rolling out or talking about some brands as it relates to Lord and Taylor. I think that clearly is a box component that is looking for opportunity. We see the grocery category looking to get more nimble and do more urban oriented stores, so smaller. I think there is a new concept out by Ahoid called BeFresh which is taking some of what they have learned over the European market about providing more deliverables on home meal replacement, more convenient environment. That clearly provides opportunity and in the QSR business as we've been talking about for long-term on smaller shop really continues to just amazed at how they are kind of cutting out the mid-tier casual dining category and providing as quite you know high quality products, more curated by the consumer in a faster environment. That's just a low hanging fruit but that energy certainly are and those types of retailers are the ones that we clearly see taking advantage of it as we release opportunities within our portfolio.

You know Jeremy the other thing you got to keep your eye on which I think is a real positive for the open air space is there is -- there are certainly more women’s apparel tenants that are considering open air versus or developing new concepts for open air versus just malls, I mean we did a couple of Lemon pop deals over the past few quarters, one in Melville Mall that I just love how it's performing, one in Ellisburg, that we did. And so those retailers open mindedness to where with respect to their business plans they can create value, I think is a real positive to the type of products that we have.

Good. Appreciate that color. And then Don, in terms of these Sports Authority, I know it is a little early here and hard to put a probability on but assuming you could get those back, do any of those have the potential to lead to some bigger redevelopments here given that they are in some of your better centers?

Yes. It is funny; I mean Brick isn't doing right. We are working hard at Brick Plaza to redeploying that shopping center and one of the Sports Authority is the Brick Plaza is opened, it's a box, big box that opens up another set of opportunities. You know what we’ve been doing with respect to remerchandising East Bay Bridge, we would love to get that back to be able to remerchandise it. And then more Assembly Square, Assembly Square and you know that power center is now adjacent to a pretty dam successful mixed-use project. So even though it pays a lot of rent, wouldn't mind that either. So there is when I look down through them, they can turn into some real causes from a value perspective but again short-term hits.

Okay. And then just one last quick one for Jim here. I was just wondering if you can talk about the free rent you are giving at the office space at Assembly and Pike & Rose and what those tenants take in occupancy here over the next few quarters. Should we really be thinking about stabilized yield for those, the office components of those projects, not hitting until kind of a mid-or late 2017?

It's going to be coming in, in mid-'17 that's correct, Jeremy. When you factor in those periods and timing as we get those tenants moved in again all the spaces committed. Now it's just a question of getting the tenants in the space.

Thank you. Our next question comes from the line of Ki Bin Kim with SunTrust. Your line is open. Please go ahead.

Thanks. So if I think about what you guys have said during this call it seems like no real slow down and not slowing down on taking space back and releasing it. But how about for bigger items like A, I'm not sure if there's a Phase 3 for some of your larger projects? But given what's going on the road does it at all impact your decisions to embark on to larger more heavy capital projects?

We are not at a point where we're at a go or no-go with respect to the third phase of Pike & Rose, the third phase of Assembly, I can't tell you there are a lot of things we're working on, some of which are on call. But when we are at that point the investment committee decision, the capital allocation decision will certainly -- decisions will certainly take into account where we are at that time in economy, what we believe in terms of future and what we're comfortable of doing and how much risk we would like to take to our offload, which we can do. So as of today, I'd have -- you should assume nothing different with respect to third phases or fourth phases of those products or anything else we're looking at. As the year plays out, as '17 plays out and we're getting through investment committee stage, you can bet that we'll have more to say about it.

Okay. And just quick one on CocoWalk. You look at that project, we talked -- I think we talked about it before. It just seems like a bigger scope potentially with kind of empty small shops around that asset. Any progress update on what you're trying to do with that asset overall?

I'm so going to jump in here before Weilminster starts telling you about all the great ideas he has got. Here is an awful lot of stuff that we are thinking about and working through. Ki Bin, I don't want to place you off gear, but I'm not going to say anything further about either CocoWalk or Sunset until we got something to say on it, because I don't want to take you up and then down and then up and then down, and that's the process that we go through with respect to a true redevelopment analysis. There are a number of ways we could go there. Some of them have a larger scope; some of them are more simplistic. The overall IRRs and the risk adjusted nature of each of those opportunities is what we're going to consider. I'm just not ready here in -- on figure of 10 to go further.

Ki Bin, I would just comment that if you're spending any time in that market you're seeing some very good things happen there. So we're pleased with momentum that we see in the market. But again, as Don said, not ready to talk about any particular plan.

Thank you. Our next question comes from the line of George Auerbach with Credit Suisse. Your line is open. Please go ahead.

Thanks. For Don or Jim, on the 10 box opportunities with the 450,000 square feet plus. Just to clarify. Are all these likely redevelopments or do you expect that some or most of these would be just redevelopment with normal CapEx? And fairly [indiscernible] --

I love that. Well, I love that question George.

You have to probably let him finish the question before you can answer.

It's the good part. Just -- I guess the projects that you expect to be at larger redevelopments, how significant of a capital investment could it be?

Yes. So if you were working here and we were looking at these 10 assets and spending time within the cities, in the communities that they're in doing market studies of what's missing not only on a retail but potentially in mixed use basis in each of these places, you know that -- you would know that it takes little bit of time. And the idea of figuring out what should each of these be is where we start. We then put on the overall paths of okay, how likely is it to get it done, where is the balance in our business plans. If I work getting that and I am, I would suggest to you that half of these would be releasing, a couple of them would be minor redevelopments and a couple of them would be larger redevelopments. I can't give you a capital number, because I'm just guessing at what I'm saying. But that's the --what I’m trying to do is to give you the process that we’re going to go through to make sure that this I want to say once in a lifetime but once in a decade opportunity of having unencumbered sections of the real estate gets you very thoroughly and that we don’t just lap it an inferior tenant in order to get out the material same-store growth back.

I guess it’s fair to say that. I’m sorry.

No, I’m sure that is not enough for you in terms of what you're trying to get but that's about what it will be, it will be some mixture between those three possibilities at all 10 centers.

That is helpful but I guess it is fair to say that we shouldn’t expect any NOI contribution from these assets for the 10 boxes in 2016 maybe half of it comes in 2017 and the rest is beyond that.

I think that is right and if in the case of redevelopment when you look at redevelopment as certain things that are really clear that pretty quickly that you can’t create economic value because of other things in the property. In those cases I think in almost all of us here we got demand for space. So you may see a couple of quick releasing opportunities that may even provide some small level in 2016 but by and large you will see it in 2017 forward.

That's helpful and last one from me. Jim, any comments on where I guess can you remind us how much common equity is implied into the guidance range? And I guess just given some of the uncertainty in the world and your funding needs in the current pipeline, any thoughts on overnight vis-à-vis the ATM issuance?

Part of the reason we have the balance sheet we do is always maximum flexibility towards never be in a position to have to raise a particular type of capital at a particular point in time. That's something that we really work hard to protect and preserve. As we look at overall equity needs for the year, probably in the neighborhood of 200 million to 250 million but again we have the flexibility to do it through our ATM, potentially an overnight that -- it’s all about making sure that we have the flexibility and as we’ve been working really hard that you can see to make sure that as we are working through all this value creation that we have actually been prefunding a great deal of it, and you can see that when you look at our debt-to-EBITDA metric which has remained low despite the fact that we have lot of developments to start producing EBITDA yet. So that gives us lot more flexibility if that stuff comes on and importantly puts us in a position where we can fund the growth that we have underway multiple ways.

Thank you. Our next question comes from the line of Vincent Chao with Deutsche Bank. Your line is open. Please go ahead.

Hey, good afternoon, everyone. Just a few follow-up questions here. Jim, in the equity of $200 million, $250 million I think last quarter you are talking about more like $150 million is this increaser there just due to the JV acquisition or is it something else that has changed in your thinking regarding some other sources of funding?

That's pretty much it, and it's a good question, Vin, because we could potentially take some of that equity through an asset sales which we don’t have plan, but as we demonstrated last year, we’re always looking for that as well, but the increase is largely a reflection of taking down $150 million investment in our joint venture.

Got it. Okay. Thanks for that. And just going back to the Splunk conversation from earlier can you just remind it do you have to know how much of that space was sort of geared for future growth as opposed to just selling so much spaces they need today?

Jeff?

Yes. We are 100% sure, Vin. I mean, we enjoy they're talking about of leasing couple of floors but the plans can be evolving on that, so I’m not 100% sure. We do know they're pushing to get in to the space and we do know that they are hiring a ton of employees right now. So we think all that's still been in flux.

Okay. Got it, and then just moving to we talked about Sports Authority quite a bit but just in terms of normal rollover, can you remind us what, if any, Nobles and Staples are rolling over in 2016 and 2017?

We don’t have that rollover, Vin; we will have to follow up with you on that.

We're ready for you on that one, Vin.

This is a little disappointing guys. But that's all right.

Yes.

Wait, I can -- let me just opine there. I can't give you the specific number. But there are one or two -- there is one more de novo that we're very actively in discussion with them, which is coming up in the next 18 months and we're already working with them and talking about downsides of space and looking at other options for the space that will be coming back. They have no options available. So it’s a clear slate for us to attack. In Staples, we are very aggressively looking at our portfolio at Staples; it's a staggered rollover schedule at Staples. But we're certainly very focused on the office supply category and how you're working on backlog opportunity, should we get in these spaces back.

Okay. Appreciate that. And then just on the tenant discussions I mean it sound like the discussions are little longer, little bit tougher negotiations. But the market seems to be -- it seems it's priced in a higher probably recession relatively they're sort of within the start of year here. And I'm just curious when your conversations really started to get more difficult?

Well, I would just say that it's difficult following the great recession that we referred to the retailers. I mean this is not --

I was listening to Chris before and then -- and I couldn't be helpful but struck by the fact that I've been here in the same thing for Chris for the past two years. And it's that I even wrote down on piece of paper here to talk to him later. But you're not -- I mean we are not seeing a significant difference from a year ago with respect to that. And again, I kind of think this comes down too, where are you trying to get to, because expansion plans remain for -- he went through the litany of retailers, it's just where? And if that's a smaller list or that's come back a bit, what are the chances that we're going to get our fair share or better than our fair share of those opportunities and we think that's pretty good. But, yes. There is still tough conversation.

Oh, then that's helpful. I mean the fact that you're out leasing a shift from what's been for a while that's I think a key distinction. So thanks for that. That's all I have. Thanks.

Thank you. Our next question comes from the line of Floris Van Dijkum with Boenning. Your line is open. Please go ahead.

Hi, guys. Thanks for all. I know everyone is probably winding down, so quick question. When you guys look at expanding into a new market or increasing your investment in new market how much of that is opportunistic versus strategic? You just expanded significantly in Miami. How much of that was opportunity based, or how much of that was strategic based?

Floris, that's a strategic decision, clearly a strategic decision. The one thing that we got comfortable with over the years a little bit is what it is -- where were the places in this country that were logical extensions for us that we felt very, very good about the positive changes on a macro level over the next decade or two. The more we looked at not Florida or Miami in particular within Florida, the more we felt that all the investments that's happening downtown, all the investments that's happening in that marketplace was not -- was what it is, but it wasn't the same as what was happening where the full-time population lives. The more we looked into those areas which included Coral Gables and included Coconut Grove the more we got really excited about the possibilities of those being underserved places that were on a real up swing. Frankly, six months later or 12 months later from when we did it and two years later from when we started thinking about it, we're actually more optimistic in terms of what's happening. If you look, don't look hard at the press and some of the deals that have been done in or around Coconut Grove over the past year 12 or such a 15 months, and I think you'll say, oh, man, maybe these guys are on to something. So that was very much a strategic decision.

And if you guys look at other markets, are there any other markets that you are in, I'm thinking may be of Chicago? Is there a strategic reason not to be in that or will you at some point potentially look through to grow that market as well?

That is on Jim Taylor's to-do-list, go-list, important list for 2016. So do me a favor and keep asking that question every three months. Operator Thank you. Our next question comes from the line of Chris Lucas with Capital One. Your line is open. Please go ahead.

Don, just may be to summarize the conversation about where the tenant conversations are, is it more about their feeling the pain of rents higher than it is about their caution about store openings? Is that kind of where we are with this?

I think it’s a combination. I think it’s a combination, Chris. When you’re sitting in your -- I always try to take it to the board rooms of any company and in those board rooms or conversations about earnings growth and longer-term plans and it's like anything else. You don't just turn things on and off unless you have crazy times like 2008 and again there is no sign that we see anything like that. So instead you start tweaking all your pieces, number of store openings, your cost structure, your product lines and store size all of that stuff. So on a combined basis there is not one thing that to level when we say retailers applying there is one thing out there, there are very many different business plans and all we try to do as a company and as a business is to be attractive towards many of them as possible and not be tied to any one retailer, any one category within those retailers or any one geography. So when you look at from that perspective and you truly get back to demand versus supply on your particular real estate that’s why we are probably more optimistic than hearing a lot elsewhere.

Okay. And then my last question. If we circle back to sort of the very beginning of the Q&A and talk about the acquisition of the Clarion interest, when I think historically about how you guys have talked about the portfolio I think Don, you have always talked about how proud you are of the fact that it is a few assets, very highly valuable, large assets. When I look at the six assets that are in this portfolio for the most part, they tend to be at the smaller end and several of them don't really fit what I would consider Federal markets or micro markets. So when I think about the answer to the question you talked about having more bandwidth. So the question that I would ask you is -- is that because of the reorganization, should we expect smaller core assets to necessarily be a bigger piece of this portfolio going forward because you have more bandwidth or how should we be thinking about this transaction?

Very clear question Chris, the answer is no, we should not be thinking that. And that this is a discrete investment decision and when you sit and specifically think about this discrete investment decision know that we have a 11 years of actual experience in knowing how these particular assets act and not act. And all six of them aren't great. No question about it from the standpoint of are they does one size fit all for you, not at all. But as a portfolio with an opportunity to either sell the 30% that is that we did own or buy the 70% that we did not own in this discrete transaction we think we can make some money in that and add some value here. Don't take that and expand that to the company's overall business plan, the way you just described because that wouldn't be the case.

Thank you. And that does concludes today's Q&A portion of the call. I would like to turn the call back over to Leah Andress for any closing remarks.

Thank you everyone for joining us today and we look forward to seeing you all at the Wells and Citi conferences in the coming weeks. Thanks guys.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone have a great day.