Ladies and gentlemen, thank you for standing by, and welcome to the Duke Realty Quarterly Earnings Call. At this time, all participant lines are in a listen-only mode. Later there will be an opportunity for your questions. Instructions will be given at that time. (Operator Instructions). As a reminder, today’s conference call is being recorded. I’d now like to turn the conference over to the Assistant Vice President, Investor Relations, Shona Bedwell. Please go ahead.

Thank you, Leia. Good afternoon everyone, and welcome to our quarterly conference call. Joining me today is Denny Oklak, Chairman and Chief Executive Officer; Bob Chapman, Chief Operating Officer; Howard Feinsand, Executive Vice President and General Counsel; Mark Denien, Corporate Controller; and Randy Henry, Assistant Vice President of Investor Relations. Before we make our prepared remarks, let me remind you that statements we make today are subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. Some of those risk factors include our continued qualification as a REIT, general business and economic conditions, competition, increases in real estate construction costs, interest rates, accessibility of the debt and equity capital markets, and also other risks inherent in the real estate business. And for more information about those risk factors, we would refer you to our 8-K that we have on file with the SEC, dated February 29, 2008. And now for our prepared statement, I’ll turn it over to Denny Oklak.

Thank you, Shona. Good afternoon, everyone. As we all know, the world has changed significantly just since our last call in October. The uncertainty in the economy and capital markets continues to have profound impact on every business today. It would be an understatement to say that these changes have been very challenging times for all of us in the commercial real estate business. At Duke, we’ve been very focused on what those changes mean to us. We are now in a new year with a new administration and a new Congress. Clearly, the folks in Washington are focused on efforts to stem the downward spiral in the economy and stabilize the capital markets. We all know that even if these efforts are successful, we will not see the positive effects for some time. We anticipate continued slowing of our business throughout 2009 and into 2010 in nearly all of our markets and all of our product types. We do not see any significant improvement in the capital markets for the foreseeable future. In light of this outlook, we are taking significant steps here at Duke to right-size our business for the anticipated operating environment, and to conserve and generate new capital in as many ways as possible. In the remainder of our remarks, we’ll cover our fourth quarter operating results, steps we are making in liquidity management and expense reduction, and finally, our specific outlook for Duke for 2009. First, an overview of the fourth quarter. FFO per share for the quarter was $0.71. Included in this reported FFO were two significant items, a gain of 14 million on the repurchase of some of our preferred stock for $12 million and an impairment charge on our land and two buildings held-for-sale of $11 million. Excluding these two items are…

Thanks, Denny. Fourth quarter was a solid leasing quarter for Duke in spite of a very difficult environment. Matter of fact, December was our highest leasing month of the year. Total leasing activity for all of 2008 was 27 million square feet, down from our record leasing year of 34 million square feet in 2007, but comparable to our total activity in 2006. Our overall occupancy on all properties, including our properties under development increased by 65 basis points during the quarter to 88.9%. Our in-service properties also increased by 57 basis points to 87.4 -- 89.47%. Stabilized occupancy decreased because of the addition of several properties, which have been in service for more than a year, but still have some lease-up to do. I would also point out that our help for rental development pipeline at year end consists of only nine properties, totaling just 1.4 million square feet, which were 38.4% preleased. This is our lowest development pipeline since we went public over 15 years ago. We signed several major deals during the quarter in our recently developed projects contributing to our overall occupancy increase. First, we signed a lease for 653,000 square feet in our Grand Lakes building in Dallas with Farley's & Sathers Candy Company. The tenant also has an expansion option to take the remaining 408,000 square feet in the building later this year. At our Chesapeake Commerce Center in Baltimore, we signed two leases totaling 220,000 square feet filling both of our existing bulk industrial buildings and we are now 100% leased in Baltimore. We also closed on a land sale of a parcel to Chesapeake Commerce to the Port of Baltimore in December. And at St. Louis, we signed a 116,000 square foot lease with Monsanto for all of our Lakeside II office…

Thanks, Bob. Next I’d like to discuss the steps we have and are taking to improve our liquidity and address repayment of our debt maturities coming over the next four years. I’d like to point out that we currently have all of our future committed development costs and debt maturities funded through the end of 2010. We announced yesterday a reduction in our dividend to $1 per share annually. Duke Realty has increased its annual dividend every year since we went public in 1993. We did not take lightly the ramifications to our shareholders and potential long-term consequences of a dividend reduction. However, in light of the unprecedented, lack of available capital to refinance our future debt maturities and our view that this situation will continue for sometime to come, along with the near-term reduction in our earnings because of our inability to dispose of even fully leased high quality assets, we made the difficult decision to reduce the dividend. This reduction will allow us to retain capital to fund our future maturities out past 2010. We anticipate that the dollar dividend requirement will meet the required REIT distribution test for 2009, assuming no significant property dispositions. As Bob noted, we have good success on dispositions front in 2008, but the disposition environment is getting even more difficult as lack of availability of capital in the credit market continues. The proceeds from our $265 million of dispositions closed in the fourth quarter will be used to retire the $125 million of unsecured debt maturities coming due in February and to pay down our line of credit. We are opportunistically repurchasing our outstanding debt, which matures in 2009, ‘10 and ‘11, including our convertible bonds at discounts to par. In December, we repurchased $38.5 million and in January, we have repurchased…

Thank you. (Operator Instructions). We will go to the line of Michael Bilerman with Citi. Please go ahead.

Good afternoon. It's Irwin Guzman. Just a question on the guidance page that you offered. When I look at the high end there, the higher end of the building disposition guidance is commiserate with a higher volume at development starts. Can you comment on whether the starts themselves are dependent upon your ability to dispose of those assets? And secondly, whether -- why you wouldn't choose to sort of hold back that cash as opposed to putting it into further developments in order to improve your liquidity position?

Sure, Irwin. First of all, on the disposition side, again, we're just again estimating. We have several projects in the build-for-sale portfolio that we will be able to market this year. They will be 100% leased and they will be in service during the year. So we'll market a few of those. On the high end, again, it's a little bit of speculation on our part, but we were -- we did have good success in 2008. On the development side, as we said, we're really virtually halting all new development. We've just put some in our guidance so that you know that there may be some commitments that we want to and need to live up to with existing customers, particularly I would say in the healthcare arena that we have some development relationships with certain of the major hospital chains that will want to continue during 2008. And again, Irwin, if you look at things we said, we're very focused on continuing to improve the liquidity position and that will occur from a number of ways, including limiting the development starts.

One follow-up is -- it's Michael Bilerman. Denny, you bought back some preferred during the quarter, perpetual preferred obviously at half a par, so an effective 16% yield. How did you think about allocating -- I know it's a small number -- allocating that $12.5 million to the preferred, which has got a maturity date of never relative to buying back debt?

Yes. And Michael, you're right. It's a very small number. First of all, I would point out. But we did that very early in the fourth quarter, sort of in the first half of October when the preferred market at least for a lot of people, but particularly for us, was out of whack. And we acquired that stock. And then as we saw things mid-October through mid-November start to get much worse in the capital markets, we really ceased the acquisition of the preferred stock and then turned our focus to acquiring the -- at a discount the future maturities of our debt in 2009 and 2010.

Alright, thank you.

And our next question comes from the line of Lou Taylor from Deutsche Bank. Please go ahead.

Thanks. Good afternoon. Denny, in your press release you reference in terms of your JV development, even though there is still some funding to go there, that you have no commitment from your portion. Where is the funding coming from then?

In basically all of those joint ventures, Lou, we have separate project-related construction financing for those projects. All of our equity has been put in now that was required up front and the remaining development costs will be funded by those construction loans.

Okay. And then just as a follow-up in terms of you gave us some guidance on occupancy and gains, etcetera. How about in terms of your JV FFO? What are your expectations of a run rate or contribution from that line item in '09?

Well, again, I would say that when you look at our joint ventures that we have, we've got a few properties that have development, but when you're looking at that line those are pretty much some stabilized properties that we've had in joint ventures for a long time. Again, we would anticipate relatively stable income for that, although it's probably going to be under a little bit of pressure on the occupancy side also in some of those properties. Most of the income in that line comes from I'd say two places. One is our large industrial joint venture with JPMorgan and the second one is our Washington DC office joint venture with Eaton Vance.

Great, thank you.

And our next question is from the line of Sloan Bohlen from Goldman Sachs. Go ahead.

Good afternoon. Jay is on the line as well. Denny, just to your comments on secured financing you did in the quarter. The 7.5% interest-only with the 50% LTV, are those terms that you'd expect going forward as you encumber more assets? Or are you making an assumption about where those rates go?

That one we didn't close during the quarter, Sloan. That's one we signed a commitment letter in early January. So that's just a couple of weeks old. We do anticipate closing that loan sometime during the first quarter. Those are similar to the terms that we're talking to other people about. I would say that the interest rates on the loans kind of range between 7.5% and 8.5%. The loan to value is pretty consistent at roughly 50% of loan to value. And today I would say the secured lenders are actually looking more at coverage ratios than looking at loan to value today. So, again, coverage ratios in the area of 1.5 to two. And then again, on terms seven to ten years is a consistent part of all the discussions that we have going on right now. So they are all in that range.

Okay, all right. Thanks. And then a separate follow-up. Could you clarify on the impairment process, why it was just two of the build-for-sale assets or the land that you did?

Sure. I'll give it a shot and then Mark Denien, our Chief Accounting Officer, is here with us and he can straighten out my accounting lingo if need be. As part of every company's audit process, every real estate company, you go through an evaluation of all of your real estate assets every year, and that's just part of the audit and we've traditionally done that. The way the accounting rules for real estate work on the impairment side is you look at -- for properties that you're going to own long-term and plan on owning long term, you really look all the way out and look -- they do a discounted cash -- excuse me, undiscounted cash flow analysis and you use that analysis to determine any impairment charge. And so we went through every one of our assets and looked at all of our rental assets and we didn't have any impairment charges under the way the accounting rules were. Then the second piece is looking -- I'll call it looking at land that you own, and again on land you do a similar calculation for land that you intend to hold for long term and possibly ultimately develop, and so we did that analysis on all of our land also. And then the third piece, I would call it, are properties that you are looking to sell in the near term, either buildings or land -- either held-for-rental or held-for-sale. So we looked at all of our buildings that we were going to sell, and first of all, any held-for-rental that we think we might sell in the next year or so, we didn't have any impairment charges on those because most of those are depreciated down to fairly low amount on net book value and that's what you look at. Then on the held-for-sale, we did do an analysis of all those and looked at cap rates and there was a couple of buildings in there that we decided that we needed to record an impairment charge on based on where we think the cap rates are today versus our basis in those properties. Also we have several parcels of land that we have targeted for sale during the next 12 months or so. We went through the same type of analysis on those, and that one truly is more of a fair market value analysis and we recorded the impairment charge on that. So again, when you look at our portfolio, for the most part we're anticipating holding our properties and holding our land, and so we did not have a large impairment charges under the accounting rules the way they were. Long winded accounting answer there, but --

No, I appreciate it. Just which two assets were written down on the build-to-sale pipeline?

It's two office assets that are -- they are 100% -- again I would just point out on our build-for-sale portfolio, especially on the wholly owned, is it consists of pretty much fully leased properties. That portfolio overall is on the held-for-sale is 95% leased. So there's leases in place. We've got tenants paying rent. There were just a couple projects in there where we determined that the cap rates had moved far enough that we needed to record that impairment charge and I got to be honest I can't remember which two exactly they were, but they are two fully leased office buildings.

Okay, fair enough. I can follow-up offline. But thank you.

And next we go to the line of Michael Knott from Green Street Advisors. Go ahead, please.

Hi, Denny. I was wondering if we looked at page 28 of your supplemental of the debt maturity schedule, can you walk us through your start-up facility when it comes due. I know you had mentioned the possibility of an early extension on that at some point during the year. Can you update us on that and then your strategy on getting through these, the '10 and '11?

Sure. On page 28, we show at the top, when we show our debt maturities up there, we have a separate column for the credit facility. That's our line of credit and at the end of 2008, we had 474 million outstanding on that credit facility. Right now we're showing it in the 2010 maturity line, but we have an automatic, if you will, one-year extension option to take that from 2010 to 2011, and hence our discussion that we've got our maturities through 2010 covered right now. On the credit facility, we're actually having a meeting with our banks in early February to get them all together, to give them obviously an update on the company and talk about where we are. We would anticipate probably later this year having some more discussions on that line, again to look at something that might be of benefit to both us and to the banks. Obviously for the banks in today's world, I would say, reducing their commitment to us would be a benefit to them and our line is currently -- bears interest at LIBOR plus 52.5. Today that's pretty significantly below market. So I think they would also favor an interest rate increase. And for us, it would be some security on the line going out further. And those are the types of discussions that we would anticipate having. But, again, we're not having any of those immediately, Michael.

Okay. Any quick thoughts on the unsecured in '11 besides the line of credit?

Well, the two pieces of unsecured -- three pieces, I guess, in 2011, the bulk of that maturity, about 60% of that maturity is out in November of 2011 and consists of our convertible bonds that are out there. Those are bearing interest at 3.75%. We have gone into the market and repurchased basically a small amount of those I would say so far at a pretty significant discount and we're going to continue to look at that. Again, when you look at our capital plan, Michael, one of the primary focuses right now for the immediate future is getting some secured debt financings done, which will allow us really to build capital for those maturities if we ultimately need it and can't find it in any other sources in 2011. As I mentioned in the remarks, the secured market is open for people like us that have assets with absolutely no debt on them and can easily do a 50% loan to value and also have long relationships with a lot of these secured lenders, which we do. So that's our main focus for the short term, for the first quarter is to get a few of those done and then we'll continue to look at other alternatives to take care of those 2011 maturities.

Just one follow-up if I may, then I'll yield the floor. Would you expect to go pretty far on your comment that you could do, I think you said, up to $800 million of additional secured financing before you run into covenant issues? Would you expect to get part of the way there during '09?

Yes. Yeah, I think we'll make some substantial progress in that in 2009, and that's based on discussions we're having today, I would say. So I think we'll make good progress.

Thank you.

Thanks, Mike.

Next we move to the line of Chris Haley from Wachovia. Please go ahead.

Good afternoon. It's Brendan Maiorana with Chris. A question, Denny, on if I look at the size of your development pipeline today and then the expected level of starts for 2009, which is low, and then I think about your comments regarding the overall staffing level in the development business, how do explain your current year personnel level in the development business? What does that say in terms of your outlook for 2010 and beyond in terms of the recovery potential for that business?

Well, Brendan, first thing I'd point out is that amazingly enough -- I know this is difficult to believe to some extent, but our development volume that we're projecting for 2009 overall for the company is actually higher, not starts, but the volume is higher than 2008. That's because we have several significant projects that are already under way, including the BRAC project, which is the most significant. So we've got a lot of things in process already that take care of the overhead, if you will, that we have in place right now through this year. Again, looking forward, we don't know what 2010 will bring us yet. But as you can see by the statistics we gave you in the remarks that we've been very aggressive at managing and downsizing our overhead, even over the last year, and we'll continue to take the steps necessary to operate within the conditions as they come at us.

Can you provide us the operating expense reductions in a total dollar volume? Is there some color you can give us on that?

It is a little bit hard because they are occurring over time. They continue to occur. But I will tell you that our dollar volume of our overhead, if you went and looked at where our dollar of overhead was at the end of '07 to where we think it's going to be at the end of 2009 is -- hold on just a second, I've got that number here -- is down in the range of 20 million to 25 million.

Do you have a sense of how much of that is capitalized versus expensed for the income statement?

It's really coming out of both places in the ratio that we have of expense. I think one of the things that we look at, we have a lot of metrics that we use to measure our overhead really in all parts of our business. We have metrics to look at our leasing portfolio and our overhead that we have in leasing. We have metrics to look at our property management people for all the properties that we own and manage. We have metrics to look at all of our construction and development people. The one area that we look at that sort of shows the bottom line of all those metrics and controls is our G&A. Because things that don't get charged to, for example, our property management expense or our service operations expense or capitalized as internal construction, development costs or internal leasing costs, all those end up falling to the bottom line to G&A. So when we monitor where we are with our total overhead pool, we pay close attention to what's actually ending up in our G&A. Again, you can see from the guidance that we've provided for 2009. Our G&A is going to be roughly in line in 2009 with what 2008 was. That's a result of reducing the overall overhead pool in accordance with the reduction in the various areas of our business.

Okay. Thank you.

And next we move on to line of Dave Aubuchon from Baird Capital. Please go ahead.

Thanks. Can you elaborate a little bit how you came to your guidance on occupancy for 2009? If you just look back at the last recession, it looks like you lost about 650 basis points of occupancy. Do you feel like you're just in a better position this time around or the mix of the portfolio is different? Can you talk about how you thought about your occupancy guidance?

Well, I would tell you that we lost probably -- your 650, I don't have that in front of me, but --

On page 20 of the supplemental.

Pardon me?

It's on page 20 of the supplemental, looking at your peak to trough.

Okay. That did occur over a couple of year period. It didn't occur all in one year because you have some things that happen. We've looked very, very closely at our leasing, projected leasing activity for 2009. One thing I would point out, Dave, is that our lease expirations are relatively minor in the scheme of things, 10% or so for 2009. So the good news is we're in good shape there. And we've -- what we do is all of our people out in the field go through every one of those leases that we have in place on the maturities and then make assumptions as to whether those tenants are going renew or not renew and we have a pretty good feel for, I would say, 70% of those tenants that are out there that are expiring in 2009; probably 30%, we just don't know. So we specifically look at those. And then we look at every vacant space that we have within the portfolio and make some lease-up or non-lease-up assumptions, if you will. We've sent the message to our troops to really look closely and be very conservative in any lease-up assumptions that they have for this year. We've also looked at it from an overall point of view and made some adjustments to where we think it will end up based on historical experience that we have. But then the other thing I would point out is the 150 to 200 basis point decrease that I mentioned for '09 is on an average basis.

Right.

So on an average basis you've got to decrease more than that just from top to bottom to get that 150 to 200 basis point decrease, and so I think we've also factored into that. Again, I think that's probably more in the 250 to 300 basis point range in the core portfolio that we're estimating going down this year.

From year end to year end?

Yes.

Right. Thanks for that. And then one last question. How should we think about your opportunistic repurchases of debt? It looks like you've acquired about $35 million per month the last two months. Are you just going to be in the market until that discount disappears or you just retire the debt, or how should we think about that?

I would say we're just doing opportunistic repurchases. We've got people out there that are aware that we're -- we would do opportunistic purchases. So when somebody calls us, if it's a number that we think is the right number for us, we buy it. We have not taken the steps of trying to go do a tender. So I think we'll continue to have some, but overall at least probably for the next quarter it will be in smaller amounts.

Okay, thank you.

And next we have a question from the line of [Nick Pearsalls]from Macquarie. Please go ahead.

Good afternoon. Just a question. If I heard you correctly in your opening comments, you indicated that December was your highest leasing month in 2008, given just some of the other commentary with regard to '09 outlook. Was there anything unique to December that maybe kind of was bucking that trend?

Bob, do you want to talk a little bit about December?

On a square footage basis, Nick, the industrial leases obviously have more of an impact and we signed a couple fairly big leases in December. I mentioned one that sweet deal we did with Farley's & Sathers Candy. But the interesting thing about '08 for me was, we were pretty evenly spread across the year. The 27 million square feet of gross leases that I mentioned we did was almost evenly split across the four quarters, so December was big. But the whole year was pretty even, which is I think a tribute to our portfolio.

That's great. Thank you.

Next we go to the line of Jamie Feldman from UBS. Please go ahead.

Hi, this is Jon Peterson sitting in for Jamie today. Can you give us a little guidance on how you are thinking about leasing CapEx in this environment and what you are expecting for 2009?

Well, again, in my previous mention of how we really budget our leasing activity, we go space by space, renewal by renewal. And as part of that process, not only do we budget rental incomes and rates and lease commencement dates, we budget tenant expenditures, capital expenditures, tenant improvements and leasing commissions as part of all those. So we do it space by space. The message we send to our folks -- Bob mentioned our focus for 2009 of blend, extend and don't spend, and that's the message we've sent to the folks out in the field. Also to say, 'look, right now is the time to extend leases where we can', even if that means taking a little bit of reduced rent upfront. If we can blend that rate and extend the leases, we'll do that, and particularly we're very interested in doing that if we can reduce our capital expenditures. We monitor -- again, we have metrics on all of our leases that we look at every month on capital expenditures related to certain other leasing statistics, like total rental revenue, etcetera, and we have really good controls in place on that. So I think, again, you're going to see our capital expenditures coming in good shape during 2009.

Do you think it will be lower than 2008?

I would say that that depends on the overall leasing activity. My thoughts today would be that, yes, it probably will be lower than 2008, because I would tell you that our leasing activity is probably going to be lower than 2008. So that would be my feeling today.

Okay, and one last question. Can you talk about the geographic distribution of the staff reductions that you did?

They were pretty much across the board. Again, if you look at the newer offices we closed, obviously that was 100% staff reduction in those cities, but we didn't have a huge presence in any of those cities that we closed. We went and took a hard look, all of our business units, looked through what they would need for 2009, and again as well as our development and construction people and they really made across the board.

Okay, thank you.

And our next question is a follow-up from Michael Bilerman. Please go ahead.

Yes, it's Irwin Guzman again. Where on the face of the income statement are the gains and the bonds that you repurchased? Are the gains that you will have realized in the first quarter included in your guidance?

I'll answer the second one first, then Mark will answer the first one. The gains on the bonds that we repurchased so far in 2009 are not included in our FFO guidance for 2009.

And on the income statement, it's just an interest and other income. Keep in mind, it was under $2 million in total for '08.

Okay, thank you.

We have a follow-up from the line of Michael Knott. Please go ahead.

Denny, can you just remind us how the decision making works at the CBRT joint venture perspective additional investments?

Yes. Now that through year end, Mike, we've closed everything that we initially agreed to, and right now as we see opportunities in the field to do build-to-suit projects on the industrial side, we approach CBRT and discuss those projects with them. They will accept any of those projects before we sign the lease and do construction. So we're in some discussions with them on a few projects right now. Obviously, again, those are all -- that joint venture is focused on build-to-suit industrial projects and obviously, as you can imagine, the market's a little bit slow right now, so there's not -- I wouldn't say there's a lot of discussions going on right now, but there's a few.

Just to be clear, on the disclosure for the in-service build-for-sale, it looks like there are three industrial facilities. None of those would be eligible for the joint venture?

On those projects, they may become eligible for the joint venture when we lease them. We will obviously discuss those. Those are all in development joint ventures. The three industrial buildings are in our Browning joint venture here in Indianapolis or our Dugan joint venture or in our Columbus Rickenbacker joint venture, there is one in each of those. That's why they are in our held-for-sale because our partners' intent has always been to dispose of those properties post disposition. Right now we've transferred several of those properties from those joint ventures into the CBRT joint venture. So on these three if we sign a lease, definitely the folks at CBRT -- not yet, when we sign our leases in those, the CBRT joint venture will definitely look at those. Did that answer your question, Michael?

Yes, thanks. And then in terms of the markets, you're shuttering down for now, are there going to be any asset sales or land sales that you need to pursue as part of that?

The only market where we have any land that we closed was Southern California. We have two parcels -- two industrial parcels, both that will each hold one building in the 350 to 400,000 square foot range. At this point in time, we haven’t fully decided what we are going to do with those. We’ll look at them. I would tell you, again, we have looked at the valuation on those, and we feel pretty comfortable because those are really two unique in-fill locations that we had, again, in the middle of some current industrial projects that are really fully developed other than the lots we bought. So we think that we’ll do fine on those. That’s the only land in any of those new offices that we closed. We have no office land in any of those offices.

Okay. Just last quick question. Did you disclose where the dispositions were located that you had closed?

I don’t remember. I think our press release did. But I’d be happy to answer any questions. I have the information in front of me. If you would like me to just summarize, I’d be happy to do that.

And just where were those located?

They’re all over. We had -- two projects went into the CBRT joint venture, one in Indianapolis and one in Columbus. We sold an office building, the one leased to Monsanto. That was in St. Louis. We had a hospital come to us. The hospital came to us and wanted to buy our medical office building in New Jersey. So the hospital bought an office building in New Jersey. We had a tenant purchase an office building in Cincinnati, an older office building in Cincinnati.

Okay. Thank you.

We have a follow-up from the line of Sloan Bohlen. Please go ahead.

Hi, there. Thanks. I had just a real quick question for Denny. Where is your sense of where your current mark-to-market is? And then in relation to that, you were talking about doing blend and extend type leases. Where would those rates on those extensions or blends come relative to that mark-to-market?

It’s a little hard to say on the overall mark-to-market. But I would tell you that, first of all, on our industrial portfolio, I think where our current rental rates are pretty much at market and substantially all of our geographic markets. On the office side today, it varies a little bit market by market. In the Midwest, I would say that our office rents are pretty close to what market is today in the Midwest because they just haven’t moved around that much. There hasn’t been a lot of overbuilding in most -- any of our markets on the office side. In the Southeast, I would say today that in Florida, for example, we’ve signed some -- in South Florida some increased rental rate deals down there in the last six months. I would say Atlanta, which is probably the other bigger concentration of our office, pretty flat to down maybe just a little bit. Bob, would you disagree with any of that?

I’d say, generally, with the people we are talking to about extending their leases, you’re going to see a 3 to 7% reduction in the rent year-over-year with very little -- again, without any CapEx.

That’s upfront.

That’s up front. And then you can get lease bumps. So 2 to 3% lease bumps. So to answer your question, it’s probably 3 to 7% year-over-year.

Okay. And then just maybe the same question asked in a different way. What kind of rent reductions would get you to that negative 5 NOI for the low end of your guidance?

I think that one has as much to do with overall occupancy as rental rates. Again, our negative 5 would sort of be our pessimistic outlook on where our occupancy goes between now and the end of the year.

Okay. Fair enough. Thank you.

And we have a question from [Shields Dey] with Regiment Capital. Please go ahead.

Yes. Thanks. I guess to some extent this question may have been answered along the way. I wonder if you could just maybe comment on the difference you are seeing between rental rates for some of the office properties versus the industrial (inaudible), I guess the question is really much harder is it to try and get rates in the office in the suburban office space?

You know, I would say that in most all of our markets, the suburban office has held up okay in most of our markets. Probably a little bit better than the industrial so far because they are just a little bit more -- there have been at least more of a lack in demand on the industrial side. But I think that it’s -- again, it is a little bit across the board, but we’re not seeing a lot of rental rate deterioration today in the office portfolio, but we are seeing a really slow demand. Bob, any further thoughts on that?

No. I agree with you.

Great. Thanks a lot.

And we have a follow-up from Michael Knott. Please go ahead.

Hi, Denny. I was just curious if you could comment on why you think the CFO search is taking a little longer than you initially thought.

Well, there’s I would say a couple reasons. One is, again, we believe that we are in very good shape internally with the staffing that we have in place and can cover things. So we’re being fairly particular about the person and the type of person that we want and are looking to hire. Then I would say just to get relocation to Indianapolis is a little bit of a challenge and always has been for us, particularly at senior levels. So I think it takes us a little bit longer than it does people that may be headquartered in Chicago or New York or DC, et cetera. And I probably didn’t factor that in as much in my initial assessment of how long it was going to take as we’ve seen. But we continue to have very good conversations with people, good candidates that we’re still talking to. And we have come close with a couple of folks, but for various reasons, it didn’t work out; and the truth is, none of the reasons had anything to do with our company. It was various other things, including relocation issues that have slowed us down on those.

Okay. Do you have a good pipeline of candidates right now?

Yes. We do.

Okay. On relocation part, can you just bring them out on a recruiting trip when there’s 10 inches of snow out? Doesn’t that help?

Well, if they were here today, they would see that. With our -- I guess, we got 11 inches on Wednesday. Is that right? So I wouldn’t say that would be the greatest recruiting trip. We could always bring them out to a Colts game, except the Colts season is over now unfortunately.

All right. Thanks.

Thanks, Michael.

And speakers, I’ll turn the call back to you. We have no further questions.

We want to thank you for joining our conference call today. Our first quarter conference call is tentatively set for April 30 at this same time, 3:00 PM Eastern. Thanks, everyone. Have a nice day.

Ladies and gentlemen, that does conclude your conference. Thank you for using AT&T Executive Teleconference Service. You may now disconnect.