Good morning, and thank you for joining us today for the Hovnanian Enterprises fiscal 2009 second quarter earnings conference call. By now you should have all received a copy of the earnings press release however, if anyone is missing a copy and would like one, please contact Donna Roberts at 732-383-2200. We will send you a copy of the release and ensure that you are on the company’s distribution list. There will be a replay for today’s call. This telephone replay will be available after the completion of the call and run for one week. The replay can be accessed by dialing 888-286-8010, pass code 17857471. An archive of the webcast slides will be available for 12 months. Management will make opening remarks about the second quarter results and then open the line up for questions. The company will also be webcasting a slide presentation along with the opening comments from management. The slides are available on the Investors’ page of the company’s website at www.khov.com. Before we begin I would like to remind everyone that the cautionary language about the forward-looking statements contained in the press release also applies to any comments made during this conference call and to any information in the slide presentation. I would now like to turn the presentation over to your host, Ara Hovnanian, President, and Chief Executive Officer of Hovnanian Enterprises.

Good morning and thank you all for participating in today’s call to review the results of our second quarter and six months ended April of 2009. Joining me from the company today are Larry Sorsby, Executive Vice President and CFO; Paul Buchanan, Senior Vice President and Chief Accounting Officer; Brad O’Conner, Vice President and Corporate Controller; David Valiaveedan, Vice President Finance; and Jeff O’Keefe, Director of Investor Relations. On slide three you’ll see a brief summary of our second quarter results. As usual we give all of this data and more in our press release which we issued yesterday. There are three points on this side that are worth highlighting. On the third line down, you see that our net contracts per community during the most recent quarter showed a 25% year over year increase for the quarter. This is the second consecutive quarter we have achieved an increase in year over year contracts per community and its certainly encouraging considering the consistent year over year declines we saw for the past four years. Another positive trend on the fourth line down you see that our cancellation rate decreased during the second quarter of 2009 to 24%. This is the lowest quarterly cancellation rate that we have reported since the third quarter of 2005. A cancellation rate in the mid-20’s is close to more normalized levels. Third and third from the bottom, you see that we purchased $525 million of face value of debt for $208 million in cash. These transactions resulted in $525 million reduction in our outstanding debt and $311 million of pre-tax gain from debt extinguishment. During the first half of fiscal 2009 we’ve reduced our debt by $620 million as a result of the debt exchange and open market repurchases of our debt resulting in the…

Thanks Ara, let me start off by making a couple of points about our current land supply. If you’ll turn to slide 21, it shows our owned and optioned land supply broken out by our publically reported segments. On a trailing 12 month basis, we own slightly more then three year’s worth of land. On a relative basis this compares well to our owned land position of our peers which can be seen on slide 22. The good news is that each quarter we worked through more of our own land and we will eventually get through all of it and be able to replenish our land supply with lower cost land at the bottom of the housing cycle. Over time this sale of older land combined with purchasing new land at market prices will cause our gross margins to gradually increase back to normalized levels. Of course if the market improves and we can raise prices the timeframe to return to normalized margins will shorten. I will now talk about the land related charges that we took during the second quarter. We continued to walk away from land options when they don’t make economic sense. During the second quarter we walked away from 1,187 lots and took a write-off of $9.1 million related to these optioned lots. On slide 23 it shows how these charges were broken out between our various segments. Our remaining investment in option deposits was $43 million at April 30, 2009, with $31 million in cash deposits and the other $12 million of deposits being held by letters of credit. Additionally we have another $56.5 million invested in predevelopment expenses. The next category of pre-tax charges relates to impairments which is also shown on the same slide. We incurred impairment charges of $301.1 million related…

Thanks Larry, there’s a lot of talk out there about green shoots or indications that things are starting to get better in the overall economy or in specific industries. We just told you about the positive monthly trends we’ve seen in net contracts per community in six of the last seven months as well as cancellation rates returning to more normalized levels. We also gave you some examples of MLS data in markets that are showing signs of improvement. We see evidence that the housing starts may be finding a bottom. If you look at total housing starts since the end of World War II, which is depicted on slide 34, you see that the only year where production was below a million starts, was last year in 2008 when there were just a little over 900,000 starts. Other then that, the seasonally adjusted current rate of 458,000 homes is the lowest level since World War II. This is significantly below any level of production we’ve seen in over the 60 plus period of time shown on this graph. Most demographers agree that approximately 1.4 million households will be forming each year this decade and in the coming decade. This translates to annual housing demand of about 1.9 million homes needed every single year this coming decade. These current levels of low production can’t last much longer against the rising tide of a growing demographic population. Housing is a classical cyclical industry, not just here but throughout the world. Housing tends to lead countries into and then out of recessions. If you look at slide 35 you see some examples of improving conditions in housing markets in Australia, New Zealand, Spain, Ireland, China, and the UK. While these metrics which indicate that things may be getting better, are certainly more…

(Operator Instructions) Your first question comes from the line of Ivy Zelman - Zelman & Associates Ivy Zelman - Zelman & Associates: First question I want to ask you relates to your gross margins and backlog, realizing you said you’re focused on cash and we understand that, can you just give us some indication if the margins were substantially higher then the 8% plus that you reported for this quarter and the second question just relates to understanding again your finished lots versus undeveloped.

We’re not making any projections about gross margins, you can see the trend that has occurred sequentially from the first to the second quarter but I will say that I don’t think there’s anything in the backlog that would lead to a dramatic improvement or decrease in the gross margin from what you saw in the second quarter. Ivy Zelman - Zelman & Associates: The second question related to better clarification on the total owned and optioned inventory, how much is developed versus undeveloped, the finished versus unfinished.

Well we break it down only on the owned, the option loss we don’t give that same breakdown. The slide number is 20 and— Ivy Zelman - Zelman & Associates: I was a little confused by that slide, that’s why I asked you to clarify it.

Okay, well what that means is 45% of the lots that we own have at least 80% of the development costs already in place. Some are finished, some are a 100% finished and some are almost finished and have just the last 20% remaining. The middle category means they’re in process of development, they’re not 100% finished nor are they undeveloped. They’re in the middle. They average about 50% developed. And finally the last category is, they’re something around raw land. They may have some expenditures but if its less then 30% of the total land development cost we categorize them in that last category.

Your next question comes from the line of Dan Oppenheim - Credit Suisse

You have certainly done a great job opportunistically retiring debt and reducing near-term obligations, but if we start to look through the downturn here and kind of focus on what’s the next step and think about your future opportunities, leverage is still quite high so how comfortable will you be redeploying the cash you’ve built up to pursue and opportunities and what are the things that you’d need to see in order to make you comfortable doing that.

Well first of all clearly we have found ourselves in a much more highly leveraged position then we ever imagined given this downturn. We have to balance our cash uses clearly going forward. As we described on prior calls although we didn’t reiterate it on this call, our primary strategy going forward with new land acquisitions is through joint venture vehicles. We have had very solid experience in this area. We’ve done well over a dozen joint ventures with major financial institutions. They have been our partners through the vertical. I can say that some did very well. Some did not do so well, those that obviously were entered into the peak of the marketplace. However our relationship with all of the partners has been excellent. There is a lot of interest out in the investment world to buy assets and team up with a company such as ours at what is perceived to be at or near the bottom of the cycle. That allows us to really utilize our capital very efficiently and assuming we meet anywhere near our projected pro formas, we need to get a much better then normal return on our investment, better then if we invested in our wholly owned basis. So that’s really our key strategy for going forward. In our 50 year history we’ve obviously seem many cycles. We’ve got a lot of experience in buying distressed assets both land and distressed loans. We were active in 1991 during the RTC days. We have been looking and looking, finally literally in the last I’d say 90 to 120 days, we are starting to see some great opportunities in the marketplace. We just entered our first contract in buying our distressed opportunities, we’ve been on many others. We never quite got them at the right price but we’ve gotten a great opportunity buying in this case actually it was the debt which is secured by property but we’re entering into a tri party agreement with a friendly foreclosure with the original developer. We think its an excellent opportunity for us to generate some very solid profits even at today’s dismal sales pace and sales price. That’s really our key strategy going forward. Clearly we ought to maintain the liquidity that we need to pay down our debt as well and try to get our ratios over time to improve. Obviously if we have further losses and impairments, equity is going to go to or easily be low negative and that’s going to take some earnings to bring that back into line so we can start getting some positive ratios. But we think we have a plan in place to make that happen.

Thanks for the color, that also addressed the follow-up question, just with the update on the joint venture partners, so I guess, what’s the type of scale that you’re looking at generally when you’re looking at these land opportunities, the 160 lots, should we expect more deals of that type of size. Is there a specific focus on scale or geography there.

No, we’re really just looking opportunity by opportunity and I can tell you they are all over the board. We just had a land committee review this morning where we are looking at a 41 lot opportunity up in northern California, its very small. Then on the other extreme we’ve seen some tightly clustered portfolios that are substantially larger then that. And interestingly investor appetites are all over. Generally speaking there’s more interest in larger deals but there’s also interest in medium and small sized deals as well, fortunately. Different players have different appetites so, we think there’s a very receptive market out there. The issue has not been finding investment partners, the issue has been getting the solid deals under contract. We finally just got our first opportunity under contract and actually we closed as of a day or two ago. So that’s just happened in the recent weeks. So that’s the key first step because we can talk to all the partners and potential partners in the world, they want to see specific deals and now that we have one, we’re finding good reception out there.

Your next question comes from the line of Joshua Pollard - Goldman Sachs

Can you walk through the capital plan over the next few years, specifically hitting a few points, number one how much debt can you repurchase under your debt covenants, and how can you actually increase the number or the amount of debt you can repurchase. Number two, how much can you actually borrow under your facility. I know you have paid back that $100 million already. Three if you could talk about what your thoughts on raising equity and four, can you help us understand why land purchases are on the table just given your current debt position.

Similar to what we told the market at the end of the first quarter, we’re not going to provide specific details on what our restricted payment basket will allow or won’t allow with respect to the buyback of bonds. All the information regarding the limitations on restricted payments can be found in the SEC filings for each of our individual debt issues. There’s several baskets that are available to us under various limitations on restricted payments. We remain in compliance with and expect to remain in compliance with all of our debt covenants. There’s no maintenance covenants associated with any of those bonds. Its safe to say that there are some very specific significant limits. Its complicated to make all the calcs and it does change depending on our individual situation from month to month. With respect to our revolving line of credit it’s a $300 million facility that’s primarily set up for letters of credit but we can use up to $100 million at any time for borrowings which we did at the end of the second quarter and have subsequently repaid it and that $100 million remains available to be redrawn if we ever choose to do so.

The land one is fairly straightforward, while we’ve purchased land [given] debt our plan as I mentioned was really to leverage the opportunities of joint ventures so that while we have closed on this property we really see that as kind of a staging area until we’re prepared to close with the joint venture that would replace 80% of the capital that we have put in it. And by the way, we’re talking about doing these joint ventures on an all equity basis initially, probably no debt. Although at some point we’ll be able to put on moderate levels of debt definitely below 50% and definitely consistent with what we’ve done in the past, always staying nonrecourse so that our exposure is very limited. But as I mentioned earlier, we’ve been through these cycles many times. Every time finally if we stay disciplined we ultimately find land opportunities that prove to be great values in the long run and that’s going to be critical to building our equity base back up. We can’t cost low enough in this environment. We have to replenish our land supply at much lower costs. And if we do that we can generate some sizable profits and start replenishing our equity. What we’re doing now, exact same discipline we did in the 80’s and the 90’s. We only buy, we do not buy hoping for appreciation. We buy land parcels that work today and that are sizable discounts to where they were a couple of years ago. The benefit is if we buy them that generate a reasonable return today, when and if the market recovers and we certainly think it will at some point in the near future, then we’ll generate some very substantial returns, far better then our pro formas, and we’ll start refilling our equity basket. In regard to the question, and you were supposed to only be allowed one question. We’re going to have to give you grief about this four-pronged sneaky approach, but we are open to looking at equity in the future however we just want the equity markets to stabilize. We want the market to get a little more comfortable with where we are and have our stock price go up a little bit more before we’d consider that.

Quick follow-up is any update on May, the month is over, were things equally as strong as April, a little worse, a little better. Could you give us some color on that.

Yes, I think May was similar to April is probably the way to, we don’t have the specific data to provide to you right now but I’d say May was very similar to April.

Yes, the sales environment continues to be very reasonable right now. I’d hate to use the word solid because everything is relative, but so far so good, more continuation of what we just recently experienced.

Your next question comes from the line of Michael Rehaut - JPMorgan

First question you mentioned the 23 net contracts per community in 2009, if you could just extrapolate the first half of the year, but you also mentioned that it was still difficult to make money at these levels. What type of absorption do you need to turn a profit and does that [inaudible] get back to the 40 and 50 absorption rate that you had.

It’s a combination of absorption and margin, so probably close to a level that could make sense if we were back at normalized margins, but having both absorptions be roughly half of what it was on average over the last decade and margins be well below half of normalized, it just doesn’t work.

Obviously its very different from location to location. Actually in North Carolina you could probably do okay at 24 homes per year. In most locations in California or Arizona, you need to be in the 40’s. So it depends but I’d say closer to 40 would be much, much more efficient. And part of the reason for that its pretty obvious, you still have to staff a sales office. You have to keep it clean and so forth, and you have to have a minimum amount of construction to have at least one person. That stays whether you’re doing 20 homes or 30 homes. And then you might add some more personnel as you get to 40 or 50 but it just becomes a lot more efficient.

Then what are you modeling into your own forecast given all those kind of headwinds that you mentioned regarding the tax credits going away and the impending foreclosures coming up and the spring selling season ending over the next couple of months.

We run a lot of different scenarios in terms of longer-term forecasts to gradually get us back to normalized absorption pace and gradually get us back to normalized margin, but in terms of budgeting anything on a nearer term basis say the next 12 to 18 months, we use current pace and current price and no assumption of improvements in either.

But what we do is we stress test it in our cash flow and treasury models to make sure we are comfortable and have the liquidity we need in the downside scenarios. We’ve done that and we’re comfortable with our position. Obviously it takes us longer to build our equity base in those scenarios but we’re comfortable with our liquidity position.

Your next question comes from the line of Joel Locker – FBN Securities Joel Locker – FBN Securities : On the land impairments, how much of the $301 million was on fully developed lots and how much was on partially developed or raw.

We just don’t have that breakout. Joel Locker – FBN Securities : And I guess the other question is more theoretical, on the slides you see how things are post WWII, but if you go back say another 20 years where you’re facing say a deleveraging period in the 30’s, you saw housing starts drop below 400,000 or so for I think a three year period and—

Where do you have that data because we’d love to get it. Joel Locker – FBN Securities : I’ll email it to you.

No seriously because we’ve not seen it back—

But one important thing to keep in mind the population of the United States has grown dramatically— Joel Locker – FBN Securities : I was saying on a population adjusted basis, it was between I think 250 and 400 or so for 31, 32, and 33.

Our numbers that go back to WWII are not population adjusted so we’re down way below WWII levels and the population is dramatically higher. I don’t remember them off the top of my head but I want to say we were down around 100 million plus population at that point and we’re up around 300 million today. There’s really no comparison. But anyway, I might have interrupted the point you were making.

Your next question comes from the line of Megan Talbott McGrath - Barclays Capital

I guess I wanted to get a little bit more regional color especially on the California market, you put up a lot of different data there, some of it positive in terms of months supply and inventory and you talk about being worried about the $10,000 tax credit going away, but in terms of your results in the western segment, you’re prices came down pretty dramatically, sales the most dramatic I think of all of your segments. So I guess my question is, is the tax credit really helping you. Is it worth it given that it looks like you’re still having to make a lot of price concessions to get the volume. And if you could give any sort of general color on what’s going on there for you in California.

I tried to be pretty clear on the commentary that the positive was the velocity in sales pace, the negative is what’s happened in prices everywhere but absolutely positively the tax credit has been very helpful in California, much more so then just a Federal level where, the Federal level credit was only for first time homebuyers. It was only $8,000. In California it was $10,000 on top of the $8,000 and the $10,000 was for all price points. It clearly improved the California market from what we can see, much more then anywhere else in the rest of the country. Now generally speaking during that period it hasn’t improved it so much that its dropped the sales price, excuse me the sales price decreases, although I will note that last month we’ve and we’re just trying to verify the data, we’ve heard some positive anecdotes that sales prices just in the most recent month in California went up. So it’s a positive impact without a doubt. In general we’re constantly looking at the two alternatives of price and pace and generally speaking we as a homebuilder are more willing to drop the price to keep the pace and velocity up, generate cash flow, burn through the old land, and create the cash [inaudible] that in future land parcels at greatly discounted rates.

And then given that a good portion of your mothballed land is in the west, any sense of what you need in terms of pricing especially given what you’re seeing in some of these new land deals, to really start building on that old mothballed land again. And just as a clarification, are the mothballed lots in your total lot count.

The mothballed lots are in our total lot count and the answer to the first part, it varies dramatically by community but we have some locations where we consider unmothballing them for a $10,000 home price increase in that marketplace if its coupled with a reasonable velocity because unmothballing is dependant on pace and price. So in some cases $10,000 would open a community back up. If it’s a $300,000 home that’s a 3.5% increase. In other communities it may take a $20 or $30,000 price increase to make it worth our while. Its also a little different whether it’s a developed lot or an undeveloped lot that’s mothballed. But I’d say from $10,000 price increases on we’ll begin to unmothball some of those properties.

Your next question comes from the line of David Goldberg - UBS

First question is actually, and you talked a little bit around this, but I was wondering if you could drill into it, on the land that you’re thinking about buying in the JVs, you are potentially looking at more foreclosures as you mentioned in the opening comments and maybe more pricing pressure, and I’m just trying to get an idea how you like about margin of safety when you go out and look at land and what kind of profitability you could maybe potentially be able to achieve in the joint ventures if prices went down further in the next few months.

It’s a good question and one we talk about. First generally speaking for land purchases we are targeting a 25% to 30% unlevered IRR and often its at a minimum of a 10% pre-tax profit after everything. So if it’s a $300,000 home then you’ve got a $30,000 safety cushion so to speak to get to break-even. We have seen much greater stability in pricing over the last four, six, eight weeks, and much greater stability in velocities. Nonetheless its reasonable that one would be cautious but in the first transaction that we finally purchased, we are buying in what I’d consider an A minus location, land at 50% of what it cost to put the streets in. So and we’ve got the land for free, zero. So I guess basically we’re kind of looking at that and saying, okay we might not be right at the bottom and maybe there’s a little downside risk, but generally speaking on an A location if you can buy it for zero for the land and put, buy the streets in for 50%, how wrong can you be unless we go into The Great Depression. So that’s the gamble we’re taking and that’s part of our rationale.

And the follow-up question, just about the impairments this quarter and what I’m trying to reconcile is I understand you cut prices but I would have thought that the pickup in sales pace would have had more of a benefit or had a, insulated you from the impairment charges that you took and I’m just trying to get an idea when you look at the tests, degree wise, magnitude wise, what do you think the changes in pricing more relative to the change in pace, and why didn’t the increase in sales pace and the improvement in the environment help insulate you a little bit from the size of the impairment charges.

The first thing I’d say is that you have to look at this community by community and when we took the impairments we tried to highlight in the script that there were some specific instances in the northeast, all of them were Hudson River waterfront or very close to Manhattan where we’d seen some very significant declines occur very rapidly. We had some situations on the west coast where we actually raised prices and had better absorptions. Obviously we didn’t have impairments in those communities. On the other hand where we’ve seen markets to where we’ve had significant foreclosure action even if we’ve been able to improve pace, the amount of price decreases that occurred caused us to trigger additional impairment. So I think that price is a more important factor, they’re not equal, when you’re looking at triggering impairments.

I think its fair to say, once you trigger then the amount of the impairments could vary by velocity and how long its out there. But in terms of whether it triggers it all, price is the more significant factor. And by the way, the price decreases, we saw a lot more pressure on prices in the fringe markets. Clearly that’s where we see more of the foreclosures and the reduced demand and we really had to adjust prices there more. In the same market but going in closer to the employment centers or the coast, we might have actually seem some price increases. So you can’t paint for example southern California with one uniform brush. There are very different things going on in different locations.

Your next question comes from the line of Nishu Sood - Deutsche Bank

First question I wanted to ask was about your mothballed lots, by the way thanks for all the detailed information but if I look at the 9,800 mothballed lots you have, that is close to half of your owned lots so just kind of painting a scenario here, looking a year out let’s say that the market is skidding along the bottom still or very slow recovery let’s call it, but, so that these mothballed lots are in this scenario still economically unviable. Or you can’t really monetize them effectively. You would be a year from now pretty close to running out of lots so just wanted to get your thoughts, if that’s the scenario we find ourselves in, what do you do in that situation. Are you forced in that situation then to go out and acquire a lot more lots or to sell these mothballed lots.

First of all I think our owned lot position is a little over 22,000. If you take these out we’re approaching 13,000 of owned lots not mothballed and if you look at our recent sales pace, and you annualize that, that’s actually a couple of years supply if we didn’t purchase any new lots. In some markets, like Houston and Dallas and parts of Washington and a couple of other markets, Minneapolis, etc., we are still purchasing lots on a lot by lot basis often times and most times after we’ve actually got a sales contract. I believe last quarter we bought about 400 on that basis. So if you add that in as well we think we’ve got a reasonable supply. Add to that what we hope to purchase on the joint ventures, we’re comfortable that we’re not going to run out of lots before we have to unmothball these.

We still have 13,000 lots that are under option and as we mentioned a lot of those are Houston, Dallas, DC and other markets to where those options remain economically viable and we’re taking them down on a flow basis. So you’ve really got to look at the optioned in combination with the owned net of the mothballed I think to get to the answer you’re looking for and that is a still very significant supply. But we’re not overly concerned about it on an overall basis.

On the revolver, the $100 million drawdown, I just wanted to get a sense of the rationale for drawing it down. Even if you hadn’t drawn it down you would still have close to $700 million in cash on the balance sheet so why draw it down this quarter.

Well as I tried to explain in my prepared comments, there were benefits to the calculation of what we could free up under our restricted payment baskets and our covenant. That’s the primary driver for it and there was no negative impact of drawing that money down and we have subsequently repaid it.

Your next question comes from the line of Alex Barron – Agency Trading Group Alex Barron – Agency Trading Group: I guess I have kind of a backwards looking 30,000 foot view question and that is, your own lot position has come down relatively little over the last three years compared to the number of deliveries you have done, so I’m wondering I guess in hindsight why have you continued to exercise lot options as positions as opposed to completely walk away from all those contracts.

Well first of all, in certain markets again like Houston and Dallas and in other locations, even right now in Virginia and Maryland and Minneapolis, we have land that’s under option. Its been renegotiated and it makes sense in today’s marketplace to do that. We continue to do that now. Those are properties that generate positive contribution for us. If you go back on Monday morning, are there some that we wish we didn’t execute or exercise our option on, sure there are. But we have to make each decision with what we know at that point in time. Obviously walking away, and we haven’t been afraid to walk away from option contracts, we’ve walked away from many but based on the information we have, at that time, we make it our best estimate decision. Alex Barron – Agency Trading Group: My other question is, it looks like the impairments seemed pretty large this quarter at least relative to my expectations, so I think you mentioned that you didn’t expect much of an improvement in the margin next quarter so I’m wondering what, one is what was the benefit from gross margin from previous impairment to the gross margin this quarter and why wouldn’t there be a bigger benefit going forward.

Well one example would be that we took impairments on the land that still is mothballed and you’re not going to get any benefit in gross margin reversals until such time as we actually begin to sell those mothballed lots. There are other lots that we will be selling that we incurred additional impairments on and that will have an incremental benefit to margin. I didn’t say we wouldn’t have any margin improvement, I said there wouldn’t be dramatic margin improvement in backlog.

Your next question comes from the line of Timothy Jones – Wasserman & Associates Timothy Jones – Wasserman & Associates : First question, you stated that there was a shortage of homes in certain markets and that you raised prices in other markets, can you name the markets in both cases and how much did you raise prices on average.

First of all what I said and there was some of the specific examples I gave, by historic standards, we’re undersupplied in number of lots, number of homes, and that’s in the existing home market. Typically four to six months supply in normal healthy markets exists throughout the country. I gave several examples, Stockton, Bakersfield, where it fell below that number. Now its healthy in terms of number of months supply, prices though have remained challenging and that’s because most of the listings and the sales in those markets have been foreclosure sales and REO sales so the velocity has been good, prices have dropped, and people are taking advantage of it and that’s working well. Now I mentioned and you asked about price increases, I’d say that has occurred in the closer in markets, specifically in southern California and some of the San Diego suburbs and in the closest in markets to LA or Orange County and there have been increases. I’d say over the past 60 days in those locations maybe 1.5% total has been the price increase which is positive. Its nice to have a positive but putting things into perspective they’ve dropped 30% plus so 1.5% is a positive trend. But it doesn’t nearly make up for where it was.

And you’ve been around the block long enough that what we’re really saying is is the fringe markets are going to be the last to recover. We’re beginning to see better signs of stability in the closer in markets that are better located then we are in the fringe markets that are still being adversely impacted by foreclosures. Timothy Jones – Wasserman & Associates : Forty-one years, the second question is that $90 million project that you mothballed on the Hudson River, what stage of development was it in and did the $8 million write-off that you took on the Hudson, did that have a, was that related to this project.

No, they’re two different projects, both on the Hudson River by chance, two different cities but $8 million was our portion of the write-down. That was in a joint venture and that’s in a building that’s under construction. The other one is developed land. Its almost all developed but its for a mid rise buildings that are unstarted.

Your next question comes from the line of James Wilson - JMP Securities

One last question would be, could you go over a little bit kind of geographic exposure on your JVs and what of the debt is recourse, nonrecourse.

None of the debt on our existing JVs have any form of recourse or maintenance guarantees to us and the best evidence of that is we’re four years into this downturn and we’ve had no capital calls or any forced injection of additional equity even though we’ve written down our investment in JVs dramatically. We always took a low leverage philosophy with our JVs, or at least what we thought at the time was low leverage, 50% debt to cap and its increased to 70% plus only because we’ve written down the value of our investment in JVs and we’ve not had any banks require us because they are nonrecourse in nature, no maintenance guarantees, etc. Geographically we’ve got JVs in the Washington, DC market. We’ve got some in the northeast, so that’s really, primarily in the DC and northeast markets.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Thank you very much. We were glad to give at least some glimmers of positive light. We hope that by the time of our next conference call next quarter we’ll be able to share with you some more. Thank you and we look forward to chatting and updating you again.