Ladies and gentlemen, thank you for standing by, and welcome to the Duke Realty Fourth Quarter and Year-End Earnings Conference Call. (Operator Instructions) I’d now like to turn the conference over to Mr. Ron Hubbard. Please go ahead.

Thank you, Cynthia. Good afternoon everyone, and welcome to our fourth quarter earnings call. Joining me today are Denny Oklak, Chairman and Chief Executive Officer; Christie Kelly, Executive Vice President and Chief Financial Officer; and Mark Denien, Chief Accounting Officer. 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. For more information about those risk factors, we would refer you to our 10-K that we have on the file with the SEC dated February 25, 2011. Now, for our prepared statement, I’ll turn it over to Denny Oklak.

Thank you, Ron. Good afternoon everyone. Today I will highlight some of our key accomplishments from our asset and operational strategies during the quarter and for the year, Christy will then address our financial performance and progress on our capital strategy. We will then share more details on our 2012 guidance. Our solid operational performance and significant progress in repositioning the composition of portfolio consistent with our strategic plan resulted in an outstanding year for Duke Realty. I’ll first touch a little bit on the overall market conditions we are experiencing and how that is affecting our business. As the overall economy continues with this new normal recovery at slow growth rates, there continues to be a relatively modest demand for space across all product types, particularly suburban office. There has been virtually no new supply of space over the last few years, so even with only modest demand occupancies continue to increase particularly in the industrial space. The industrial sector continue to gain traction in the fourth quarter of 2011, initial data from the holidays retail season indicates a better than expected growth in sales, consumer spending continues to surprise on the upside, and there has been a choppy yet steady upward improvement in supply chain and trade indicators over the last year. Recently, data has shown relatively strong growth in intermodal traffic across the country and exports have ticked up as well. Both factors will help strengthen industrial demand if trends continue. As a result, barring any global macroeconomic shocks to economy our outlook is for continued (indiscernible) slowly improving demand for warehouse space in our market. We’re still having numerous discussions about potential industrial build-to-suit development opportunities but our customers are slow to make commitments. We are hopeful that some of these discussions will turn into real…

Thanks very much Denny and good afternoon everyone. Now, I would like to provide an update on our 2011 financial performance and progress on our capital strategy. Despite the challenges we faced given our cloudy domestic economic climate and the rippling effect of the European debt crisis, I am pleased to report that our fourth quarter and yearend 2011 core AFFO with $0.30 and $1.15 per share respectively. We had another strong quarter and finish to the year closing 2011 $0.01 ahead of consensus estimates for the quarter and at the high of our guidance for the year. As Dennis mentioned earlier, as a result of our strong leasing performance combined with a significant progress we’ve made on our asset reposition strategy, we were able to achieve 2.3% same property NOI growth. As you can imagine our team is focused on growing rents. Rents are holding and we are beginning to see some growth in rates. This metric is also helped by our asset repositioning strategy including the Blackstone sale. December was strong and we have a good level of activity heading into 2012. Bottom-line we delivered AFFO of $0.78 per share which represents a healthy 87% dividend payout ratio, and ended the year with a much better CapEx to net effective rent profile than in years passed. As a result of our asset strategy expectation again we are positioned favorably going into 2012 as planned. From a capital strategy perspective we completed a very successful year in which we raised over $1.6 billion from asset sales. We were moved from negative to stable liquidity (ph) as we demonstrated our ability to execute and further strengthen our balance sheet while working to improve coverage and leverage ratios. Specifically, we reduced unsecured debt by over $500 million and redeemed a $110 million of our preferred series and stock which carried a 7.25 rate all according to plan. We also further bolstered our liquidity by executing an early renewal of our $850 million unsecured revolving credit facility and increased the potential maximum facility size to $1.25 billion at significantly lower cost and extended the term for up to five years. We also used the proceeds from our capital raising activities to further increase our investment in quality industrial and medical office acquisitions as we planned, and we closed the year with over $210 million in cash. As we look forward to 2012 we have $354 million of debt maturity which we plan to repay through a combination of disposition proceeds and refinancing with long term unsecured debt. Additionally, we plan to redeem our preferred series M which carries a 6.95% coupon in alignment with our capital strategy objective. With that I will turn it back over to Dennis.

Thanks Christie. Yesterday we announced a range for 2012 FFO per share with a midpoint of $1, and AFFO per share with a midpoint of $0.78. Last quarter, on our call, in our meeting with many of you at Mary (ph), we told you that the Blackstone transaction would be $0.10 to $0.12 dilutive to FFO per share and $0.02 to $0.03 dilutive to AFFO per share. Our FFO guidance is virtually in line with our prior communication, with the additional $0.02 to $0.03 representing a decrease in our service operations primarily related to the wrap-up of our large third-party project with BRAC and DC are partially offset by additional leasing activity. Our AFFO guidance, which you know is what we focused on, is actually slightly better than we communicated during the last quarter, essentially equal to 2011. This guidance really reflects what we’ve been saying for the past two years that our repositioning strategy would not be dilutive to us from an AFFO per share basis. Now, for a few specifics on some of the key performance metrics outlined in the 2012 range of estimates we provided on our website yesterday. Our average portfolio occupancy rates for 2012 is 89.5% to 92.5%. Lease expirations are relatively low this year at 7%. Our guidance, midpoint of 91% suggests we will continue to slowly improve our current occupancy levels consistent with forecasted slow growth in the U.S. economy. Same-property NOIs projected at a range of positive 2.5% growth to a negative 1.5% decline. We had excellent performance on same property in 2011, so we are building off a bigger base. We again assume modest occupancy and red grow in the core portfolio in 2012. On the capital recycling front, we project proceeds from building dispositions in the range of $200 million…

Thank you. (Operator Instructions) Our first question will come from the line of Michael Bilerman with Citi. Please go ahead. Josh Attie – Citi: Hi, thanks its Josh Attie with Michael. Can you give us more detail on the fourth quarter acquisitions? I know you provided an aggregate stabilized yield of 6.7%. But, can you talk about the industrial and medical office yields separately in terms of yield and maybe price versus replacement cost?

Sure Josh. Once again I think you really have – you do understand and I know that you all do the work on what our focus is there. Again this is new modern bulk facilities on the industrial side, focused in the key distribution markets. Our acquisitions in the fourth quarter were primarily in Chicago and Dallas with one again additional building out in Southern California that’s part of a bigger package. These are all, as we said, fully leased primarily on long term leases, the high credit tenants. Therefore that’s in the range, the cap rate range that we’ve disclosed. I would also say there is a huge difference in the cap rates on bulk industrial and the medical office just because of the type of prosperities we’re acquiring. On the medical office most of the acquisitions were in Texas in the fourth quarter, some in Houston, a couple of buildings in San Antonio with an expanding relationship with Christus Healthcare System, again all fully leased properties, long term leases, significant hospital credit on all of those properties. Josh Attie – Citi: How competitive are you finding the acquisition market?

Well, I think the acquisition market for those type of properties is still very competitive, but we were I think fortunate to be able to do some of these in a relatively off market way with our connections that we have obviously getting just within the whole industrial business, and then with our connections we have with the healthcare systems, we are able to do some of these in an off market way, and I would say probably 50% of what we did was in more off market type transaction. Just as an example, I mentioned Christus transaction. We did competitively bid a medical office building with them in San Antonio and we were the successful bidder. Then they came to us and asked us if we would like to acquire a portfolio of some properties down in Houston, in Katy, on one of their hospital campuses. So, we ended up acquiring three properties down in Katy at what I would consider a below market deal. We also acquired some medical office properties in Indiana with the St. Francis Healthcare System, we have an ongoing relationship with that was not a marketed deal. We acquired another medical office building in Indianapolis from St. Vincent which is part of the extension system. That was an on market deal. We are really using all of our resources to find the kind of deals we are looking for Josh. Josh Attie – Citi: As you think about future acquisitions, how aggressively do you want to expand into some of the lower cap rate markets like southern California?

Well, I think we’ve continued to say that we want to have a presence in the southern California market. But I think you know we’ve been very cautious and really moved very slowly there, we’ve only got two assets. We’re going to continue to look at that market. Again, as we really convert us to be premier industrial REIT and focused on the bulk industrial, we’ve said we really believe we need to have a presence in the southern California market because a lot of our customers do business there. If you want to do business with those customers in southern California you need to have that presence. Again, we are not looking to go in there in a huge investment way, but we want to continue to have a presence and grow slowly over time as we see good opportunities for us. Josh Attie – Citi: Okay, thank you very much.

Thanks Josh.

Thank you. Our next question will come from the line of Ross Nussbaum with UBS. Your line is open.

Hi, it’s Gabe Hemohi (ph) with Ross. Just on the 2012 AFFO guidance, can you talk a little bit about expectations for leasing and a maintenance CapEx especially following the closing of the Blackstone sale?

Sure. I think we’ve mentioned regularly as we talk about our re-positioning strategy, one of the reasons for repositioning out of the suburban office portfolio is that it’s very CapEx intensive. I think you can see that again we are really – as we now have much more industrial property, we would anticipate the capital expenditures, our second generation re-leasing capital expenditures, overall from a company point of view to go down very significantly in 2012. And by very significantly I think we can anticipate a decrease of 20% to 25% in the overall second generation capital expenditures that we have to make as a company. Once again when you think about that I believe that our guidance really supports that. As we said the repositioning would be dilutive on an FFO basis, but virtually non-dilutive flat to even maybe accretive on an AFFO basis because of the reduction in these capital expenditures.

And Christie, I'm not sure if I heard this correctly, but on the preferred redemption, is that still expected to get done or is that no longer on the table.

It is still expected to get done.

I think Ross maybe had a follow-up to go. Ross Nussbaum – UBS: Yeah, hi guys, I have got two follow-ups for you. The first is with respect to your same-store NOI growth guidance for 2012. Could you break out what the same store revenue and same store expense expectations are?

You know, we don’t have that actually in front of us Ross, but I think if you look at the statistics in the fourth quarter results, again that portfolio that is showing up in our supplemental package now in the fourth quarter is really post the Blackstone sale. So in another words, those properties are out because they were sold before the end of the quarter. I think if you look at the relative ratio of revenue and expense growth that we were showing in the fourth quarter I think it would be similar to that, but we can follow-up also and get you that information. Ross Nussbaum – UBS: Yeah, I appreciate it. Only because when I look at it, the fourth quarter numbers in particular, the expense growth trend for the industrial portfolio is only up 1.3% for office. It was actually down year-over-year 1.9 and those don’t look to me to be – they help you in 2011, my guess is they are not going to be as helpful in 2012 in getting to the bottom-line in a line number. Is that a fair guess?

Well, I think it gets to be more complicated than that because you have to look at – if you look at the industrial business – most of the tenants pay their expenses directly. There is just not a lot of expenses there, and you know the modest growth makes total sense to me. On the office side again I think you have to look at kind of the combination of expenses, but again a lot of that get to pass through, so you see some things in the expense sign that also really have an effect in the revenue side. In other words expenses are going down, and I don’t have an answer for you immediately as why our fourth quarter expenses went down a little bit. That means our revenue went down, because we didn’t bill those back to the tenants. I think it really has a corresponding effect, and through this we internally here don’t pay a whole lot of attention to the components. We disclose that because you all like to look at them, but we don’t really pay a lot of attention because we are looking at the net bottom line result. Ross Nussbaum – UBS: Okay, second question. I don’t know if I missed this. Did you comment on what your releasing spreads expectations are particularly for the bulk industrial portfolio this year?

I don’t think that I did mention that. But I think when you look – I think in some of the comments in our prepared statement, we are not looking for huge run rate growth heading into 2012. I think we’ve done very well. If you look back quarter by quarter throughout 2012 and it’s laid out in the supplemental package, we had improved every quarter. We are starting to see some positive rent spreads on the industrial side which I anticipate holding positive heading into 2012 but I don’t see huge increases again. So, I think we will see positive spreads in the zero to 3% or 4% range. On the office it just depends, what market we are in, but I still think we will probably see some negative pressure, but again I don’t think those are going to be huge negative spreads, but in the 0 to 5% range. Overall, I think with our mix in property now being much more industrial, we will sort of see an overall positive spread in 2010, but I don’t think it’s going to be a huge spread. Ross Nussbaum – UBS: And just to clarify, is that cash or GAAP you are referring to?

GAAP. We always look at net effective rent, so we take into account all the free rent periods. Ross Nussbaum – UBS: That’s what I thought. Okay, final question. I got a couple of your investors asking me this morning, and I know the small component of the portfolio, but MOBs and retail, the same store growth in the fourth quarter was off the chart, was this just the occupancy gains or was there anything other than the occupancy gains causing this?

In the retail would have been occupancy gains and free rent burn off, a combination. In the MOBs it’s multi-occupancy gains. Ross Nussbaum – UBS: Thank you.

Thank you. Our next question comes from the line of Ki Bin Kim with Macquarie. Your line is open. Ki Bin Kim – Macquarie: Thank you. Going back to your guidance, could you provide cash same-store NOI growth expectations for 2012? And, could you also talk about, if you look at your expirations that are occurring, what vintage year is expiring for industrial and office on average?

Well, first of all the same store guidance we provide is cash. That’s how we report same store. It’s all just on cash NOI basis. So the number that we disclosed in our range of estimates is in cash basis. Second, as we mentioned we have only got about 7% of our leases expiring this year, and on an average I would say those are between probably 4.5 and 6 years. Going back that’s the average needs expiration terms even. Ki Bin Kim – Macquarie: Okay, and last question. How much G&A are you capitalizing, and given that your construction volume is coming down for construction services, how are you accounting for that and how much of that can you possibly see come back into the income statement?

Well, none is going to come back into the income statement. It never has. I mean we have been holding and we have been saying this for probably the last four years at least that we adjust our overhead cost accordingly to the bright sides of our business. As we go forward and our business changes, we have no choice but to adjust our cost. I think that’s really being reflected by our G&A expense, when you look at it again over the last four years I would say that G&A has been relatively flat. We have actually gotten to go down a little bit, but we have been anywhere from, I would say, $39 to $43 or $44 million (indiscernible) consistently for the last four or five years and we pay obviously quite a bit of attention to that, and we adjust our total overhead structure to account for the changes within our business and we’ll continue to do that. So that number is not going to fluctuate. Ki Bin Kim – Macquarie: So you are saying you don’t capitalize G&A just to be clear.

No, there is – some of our overhead is capitalized. No, we don’t capitalize G&A, but we keep our G&A at the same level. Ki Bin Kim – Macquarie: Okay. I'm not sure if you talked about it, but what is the yield difference between what you are going to buy and sell for 2012 roughly?

Well, we have been saying again through this whole repositioning strategy that we thought – that we believed on a cash on cash or AFFO basis that our dispositions and acquisitions would be within about 100 basis points, so it would be about 100 basis points or so or maybe even a little less on. There will be a little bit of dilution going from the suburban office to the bulk industrial and medical office on an AFFO basis. The truth is if you go back to I guess about $2.5 billion or so of transactions on both disposition and acquisition side over the last two plus years, it’s been right at about that 100 basis point dilution to move $2.5 billion of suburban office into the industrial and medical office. Ki Bin Kim – Macquarie: All right, thank you Denny.

Thank you. Our next question comes from the line of Sloan Bohlen with Goldman Sachs. Your line is open. Sloan Bohlen – Goldman Sachs: Good afternoon. Denny just a question on the investment strategy for industrial. A lot of what you acquired was stabilized, but of course the trends have been pretty strong particularly in the fourth quarter. Are you getting to the point yet that you are taking lease-up risk on an acquisition or on the development side are there any market that you build out and it’s back?

We are really not focused on taking lease-up risk on the acquisition side today. We’ve really been focused on, again well prioritized but particularly the bulk industrial. Okay, have newer assets with high credit terms, longer term leases, and I think that just helps balance our portfolio. You know we still have a fair amount of vacancy out there. We are about 92% lease in our 107 million square feet of industrial, so we’ve still got some vacancy risk in that bulk industrial portfolio and we really are inclined to add to that risk. What we’ve been saying for the past couple of quarters as people started talking about spec industrial, we said generally speaking we aren’t there yet and I would still say we aren’t there yet. We are, as I mentioned we focus a lot of discussions on building suit industrial properties. I would say we are sort of looking at couple of markets where spec industrial might make some sense later this year, but there would be nothing imminent from us on the spec industrial side. Sloan Bohlen – Goldman Sachs: Okay. Just a question on the office dispositions. Do you have anything in the market today, and then is the pricing fairly consistent with what you sold with the Blackstone transaction?

Yeah, we closed in January about a $44, $45 million sale in Raleigh of some non-strategic assets. We are not getting out of Raleigh office. It’s a great market that we had. Four or five just non strategic assets or either older assets are not in our core sub markets. We closed on that. That pricing was very similar I think to the Blackstone pricing, maybe a little better, but close. We do have other properties in the market. Today when you think about our office portfolio, it’s really concentrated first of all on the east coast in Washington D.C., Raleigh and then southern Florida over in Broward County, and we are really not looking to move any of that product other than what we just sold in Raleigh. Those markets again are still holding up well. The other three office markets basically that we have today are St. Louis, Indianapolis and Cincinnati with again just a little bit in Nashville. For the most part our targeted dispositions we still have some take us from that 33% down to the 25%. Those are going to be concentrated on some of our older assets primarily in Cincinnati in St. Louis. Anyhow we’ve got various packages that we are working and in getting out into the market and some packages that are already flowing around in the market. We will continue to move in that direction. Sloan Bohlen – Goldman Sachs: That’s helpful. Just one quick one for Christie. Beyond the series and redemption, is there any plan for further debt pay down over 2012?

Yes Sloan, we will definitely take a look at what we might be able to do from a de-leathering perspective according to the capital strategy. So, we are very focused on achieving our target that we’ve set out to do here, and so you can expect more of that from us provided that we can execute in accordance with our asset strategy as we’ve done in the past. I think 2011 is a good example of what we are able to do. Sloan Bohlen – Goldman Sachs: Okay, thank you guys.

Thanks Sloan.

Thank you. Our next question will come from the line of John Stewart with Green Street Advisors. Please go ahead. John Stewart – Green Street Advisors: Thank you. Denny I just wanted to follow-up on Josh Attie’s question on the yield split out between the different property types in the fourth quarter. I know you disclosed stabilized return of 6.74%. And then in your comments you said that industrial was in the range. I wasn’t quite sure what range you were referring to, and then if you – I didn’t catch if you split out where medical office came in?

You know John I didn’t really split that out, and I guess what I said is I think the range – the cap rates are pretty comparable for the quarter on those two property types. Maybe it’s 10 basis points lower for our bulk industrial and 10 basis points higher for the medical office. But again, if you look at the profile of those properties, again we are basically 100% lease properties, new properties, high credit. Today the markets for the bulk industrial and the medical office, the cap rates for those kinds of properties are pretty darn close. John Stewart – Green Street Advisors: Okay, that’s helpful thank you. Just given that there are almost entire released, what is the growth expectation or your expected IRR on that series of acquisition?

Well, we focus on acquiring some properties that have – with the leases in place that have red bumps in them. So we are generating future NOI growth in those properties, and virtually all of those properties have annual red bumps in them built into the existing leases probably in the range of 2% to 3% something like that on an annual basis. That’s what you can expect from those acquisitions. John Stewart – Green Street Advisors: Okay. And the three industrial asset sales that you highlighted in the first lease during the quarter, I'm sure there was a story to them. How does that deal with the asset strategy?

We’ve got one building, I'm trying to get the list here John to remember, one building in Dallas I know that was a vacant building that was probably a 25 to 30 year old building that we’ve owned for many years since we first got into Dallas back in 1999, and so we sold that. And then we had in Indianapolis another 300,000 square foot building that again we built as a build-to-suit back in 1984 I believe, and we had a user come in and acquire that building. Then we also sold a small portfolio of three home – sort of flexi buildings, up way north of Alpharetta in Atlanta, and we just sold those because we have nothing else close to those and they really weren’t the big bulk industrial building. Again, strategically we are always looking through the portfolio and seeing what it makes sense to sell at any one time, and couple of those things were either held for sale or leased. So that’s similar to the one that we sold in Dallas. John Stewart – Green Street Advisors: That is helpful, thank you. Lastly, Christie can you help us understand what’s the hold up on the series M. We have something tied up with $200 million cash on the balance sheet, why wouldn’t you just take that out today?

Due to timing John, nothing specific, and we were also just looking opportunistically at what our net acquisition pipeline look like which I had indicated was quite strong. Just from a prudent perspective we wanted to make sure that we were taking advantage of all the opportunities out there. John Stewart – Green Street Advisors: When should we expect to see that redemption?

Shortly.

Our next question comes from the lane of Brendan Maiorana with Wells Fargo your lane is open Brendan Maiorana – Wells Fargo: Thanks, good afternoon. Question for either Denny or Christie. Looking at the guidance you guys have very low roll over, as you highlighted I think it’s only 7% for 2012. I don’t know it’s a little bit a surprise that maybe occupancy wouldn’t move up higher. Are you expecting either a low level of new leasing activity for 2012 or lower than average renewal rates for ’12?

No, I think when you look at what our expectation are today, we are kind of expecting the same sort of overall net absorption for 2012 that we had in 2011, and again if you think about it we were up about one plus percent when taking 2011, and I think the guidance that we gave for 2012 shows this up about 1%, that’s still a pretty significant amount of net absorption even with only 7% expiring you just have to do quite a bit of leasing. To pick up that 1% when you’ve got 140 million square foot portfolio now. Brendan Maiorana – Wells Fargo: Is there renewal rate, what are you guys expecting for renewals overall? I mean how does that kind of compare to where you guy have been in the past?

I mean you’ll see the renewal – first of all the overall actual renewal rate is very similar to what we’ve had in the past. We always run 75% to 80%, we were down a little bit in the first part of last year, which we knew we were going to be with a couple of larger expirations on the industrial side. But I think you’ll see us running in that 70% to 80%. And then on the run rate growth, as I mentioned a little earlier I think mostly flat to slightly positive run rate growth overall in 2012. Brendan Maiorana – Wells Fargo: And then, Denny, forgive me if I'm missing something here. But aren’t you only kind of moving occupancy up 30 basis points or so, aren’t you at around 90.7 today and you are looking at 91% as average for ’12?

Yeah. I think it’s a little bit higher than that when you look and you factor in some of the effects of some of our short term leases, in the month to month leases. We never know whether they are going to stay or not Brendan. It’s really probably closer to 1% or 1.2%. Brendan Maiorana – Wells Fargo: Sure. And for the AFFO guides, do you guys think that that number is being helped out disproportionately because you have got lower rollovers this year or – I mean I understand that it’s getting better because of the Blackstone transaction and not having the 10 million square feet of suburban office this year versus last year. But, on a kind of same store basis do you think that TIs and leasing commissions are going down on a comparable space basis. Do you think there are static, do you think they are moving up, can you give us any color on that?

Well, I would say, first of all, I mean it’s helped maybe slightly, but I only have 7%, but we typically run about 11, maybe 10% to 11%. So, it’s not a huge difference overall. I do think it’s being helped out obviously by the sale of the suburban office portfolio. But what I would also say is, generally speaking, the CapEx profile for us is improving more quickly on the bulk industrial side. So, the CapEx as a percent of net effective rent, the way we track it is getting better on the industrial side much more quickly than it is on the office side, and now with a much smaller office portfolio the trend is going to be better on the outside for us. Brendan Maiorana – Wells Fargo: Okay, that’s helpful. Last one, on the land and the impairment, maybe I'm missing this, but it looks like your balance sheet, your land balance, actually moved up by not much but maybe 300,000, 400,000, 500,000 something like that. Is that net of – did you guys acquire land in the quarter and is that net of the $12.9 million write off?

Yeah, it’s on that. We did acquire just a small piece really in Dallas when it came in connection with a couple of building portfolio acquisition that we did, there was some land adjacent. The truth is we are virtually out of bulk industrial land in Dallas anyway, so it was a good acquisitions on the land side for us there, up in great line. Brendan Maiorana – Wells Fargo: The land balance that you are showing, I mean the acquisition that you are showing stripped out the land out of the basis, right, for the 6, 7, 4 cap rate is exclusive of the land?

That’s correct. Brendan Maiorana – Wells Fargo: Okay. Can you give us a sense, it was at the 98 acres of land or was there something more than that in the acquisitions in the quarter?

I think that was it.

That was it I think Brendan. Brendan Maiorana – Wells Fargo: That was it, okay, and it was about 13 million or something?

Yeah, it sounds right.

Thank you. Our next question comes from the line of Dave Rodgers with RBC Capital Markets, your line is open. Dave Rodgers – RBC Capital Markets: Denny, just following up on some of your comments earlier in some questions regarding especially the development in industrial. I think if you look at the Class A large block space in a lot of your higher quality market, vacancies in those assets might some 5%. When you compare with your buying to what you could build for today, how far off on the development yield do you think you are and how rapidly has that been coming in if at all for that narrow subset of I guess what you would like going forward?

Sure Dave. I would tell you, I guess first of all starting with what we’ve been buying versus what we can build for, we’ve been paying a lot of attention to replacement cost. I think we’ve been buying pretty close to replacement cost at all of our acquisitions, but particularly we look at that on the bulk industrial side. It’s pretty close. And now I think when you think about that buying in high fixed cap rate for bulk industrial with a tenant in place, long term leases, good locations, to take the spec development risk you really need a couple of hundred basis points above that before you are going to take that spec development risk. So, I don’t think rents are at the point where we are going to see that 200 basis point spread at this point in time, until we see a little bit more rent growth. There might be a couple of markets that are exceptions to that but not many. Then the other thing I would say is, what happens is everybody starts looking at vacancy rates within a market and say, okay well when it gets to 5 or 6 or 4% percent vacancy then we are going to start building. Well, we pay attention to that but the other thing we really look at is, what’s the demand. So, it may stabilize at 5% or 6% vacancy but there may not be a whole lot of demand behind that to fill up vacant space. If anybody in our company wants to start a speculative development project they better have a long list of prospects before they come talk to me about it. I think that’s the one piece people are missing today is that backlog of great activity which still is not built up like we would see in any kind of the normal time. Dave Rodgers – RBC Capital Markets: Okay. Christie, a follow up for you as well, and thanks for that color Denny. An earlier comment you had made Christie, I think related to taking out additional prefers throughout the year and improving the balance sheet, you had made a comment depending on what happens on the asset market you would look to do more or less of that. It’s also that perhaps you are tracking more of the long term unsecured debt market or perhaps the term loan market and I would love to know kind of where you be comfortable calling in those additional preferreds given what’s happening in the various debt markets.

Yes, I think Dave just to clarify I was specifically referring to unsecured and our activities to pay down unsecured maturities. As it relates to preferred I would love to be able to take down the oath but we are not able to redeem them until 2013. I think just from perspective I am comfortable with the level of preferreds that we currently have. As I stated previously, we have really been focused on taking down our more expensive preferreds, and as it relates to what we are looking to do at the end those were at 6.95 and then we’ve taken down everything above that and we plan to do so with the others as well. Dave Rodgers – RBC Capital Markets: Thank you.

You are welcome.

Thank you our next question comes from the lane of Dave Aubuchon with Baird. Your lane is open. David Aubuchon – Robert W. Baird: Yeah, thank you. Denny you had mentioned in your prepared remarks that you are having a number of discussions with tenants about doing build-to-suit industrial projects, but tenants are still slow in making those decisions. Do you get a sense on what’s sort of holding those tenants up right now because as you mentioned it seems like the industrial metrics are sort of pushing in the right way, do you get a sense of, again, what’s maybe holding them from making those decisions right now?

Well, I can’t say anything for sure Dave, but my sense is it’s still just the uncertainty. You know, everybody is still – there is still a fair amount of uncertainty with everybody about where their business is headed in 2012. Because things are not, as we keep saying, and we all know, things are picking up but there is just not a lot of momentum behind that. I think it’s just – most companies are really taking a look, they are monitoring it almost on a day to day basis, and really being extremely cautious before they pull the trigger. So, just for some perspective on that, in a normal time on a bulk industrial build-to-suit building your discussions might last two or three months from the time you start talking to somebody till the time you are ready to sign a lease and get going. Today these things are taking six or nine months, then they may go on hold for three months and then they may come back and take another three months. So, it’s just really a different environment, and it’s just a sense of cautiousness on the part of users and I think just overall uncertainty as to where their businesses are going. David Aubuchon – Robert W. Baird: And you said, just answering the previous question about how deep a demand pool you would need to sort of start a specular (ph) project. Can you categorize how maintenance or how deep the pipeline is on the build-to-suit side right now. I mean could you see sort of a flood gate open if we get a little bit more sustainability and confidence in the economy?

Well, I think where we are in the cycle in industrial is again – as I think somebody mentioned earlier in one of their questions, in most markets a lot of the large vacant blocks have been taken up. In most markets if you are looking for something over a half million square feet, there aren’t a whole lot of choices if any. You look at the under 200,000 square feet then there are still a fair amount of choices out there. What’s going to happen is as users come along I think the first area you are going to see is build-to-suit in the larger spaces. Because in most markets today you are not going to see developers go out and start 800,000 square foot spec building, you know, a million square foot spec building. So, at this point in the market when user needs 600,000 square feet to a million square feet it’s probably going to be a build-to-suit. Again, I would tell you the discussions that we are having with folks out there are all on the larger both industrial buildings, and so, again, I think that’s where we will see the build-to-suit activity and then we’ll see that build-to-suit activity for a period of time, and then as the market and economy, if hopefully some day it gets back to more of a normal position, then you will see the build-to-suit level of activity decline and the amount of spec building go up including on the larger spaces. David Aubuchon – Robert W. Baird: Okay. Then my last question is, the 800,000 square foot tenant in Atlanta that you lost, the industrial vacancy, did you get any specific commentary about what you are leasing prospects are there to sort of back fill that space?

Yeah, we are talking to two or three people, at least one for the entire space. I mean it’s a huge backlog but there are some discussions going on. David Aubuchon – Robert W. Baird: Okay, that’s helpful, thank you.

Thank you. Our next question comes from the line of Vincent Chao, with Deutsche Bank, your line is open. Vincent Chao – Deutsche Bank: Good afternoon everyone. I’ve just got a follow-up question on the acquisition side in light of the pipeline of deals that you are tracking right now, I mean should we be thinking about the $300 million to $500 million coming earlier in the year or later in the year, and same thing on a disposition side. Now, you said you had $45 million that closed early in January. But for the rest of the year how should we be thinking about that?

Well, I guess first of all on the acquisition side, we did close about a $50 million medical office acquisition also in the first month here up in Chicago. So those kind of offset, and then if you look at the rest of them I would say if you think about acquisitions it’s probably going to be fairly balanced throughout the rest of the year. We’ve got discussions in progress and things going on now, but I don’t see it weighted more heavily towards first part of the year or the second part of the year. Dispositions I think will probably be a little bit more weighted towards the second half of the year. But again, we’ve only our guidance is – compared to obviously the past couple of years our guidance on the building disposition is somewhat more modest, at 200 to 300, since we’ve already closed $44 million, wherever you put them isn’t going to have a huge effect. Vincent Chao – Deutsche Bank: Okay. And then just going back, I thought I heard Christie you mention looking to replace pending mortgages with unsecured, was that correct?

No, you didn’t Vince. Vincent Chao – Deutsche Bank: Okay. I'm sorry then. In terms of the mortgage maturity is the plan there just to pay them off as they come due?

Yes, pay them off or extend maturities out, another tenure long term. Vincent Chao – Deutsche Bank: Okay.

Get some attractive tenure indicative pricing out there. Vincent Chao – Deutsche Bank: Okay. Thinking about the lease expirations, not very much this year in 2012 but from what you have seen – I mean are there any cores where you are tracking from potential large move outs like you’ve had in a couple of quarters here in 2011?

No, not really. Even as you look to the whole year there aren’t any real sizable lease expirations out there. I would say the largest one on the industrial side this year is probably 400,000 square feet range. Vincent Chao – Deutsche Bank: Okay, that’s helpful. I think that was it from me thanks.

Our next question comes from the line of Michael Bilerman with Citi. Your line is open Michael Bilerman – Citi: Yeah. Denny, just wanted to come to (indiscernible) the loan high, which you have deemed to be pessimistic and optimistic. Can you just sort of, as you think about that sort of terminology, what sort of economic growth is a pessimistic scenario that would move the company towards the low end of guidance, and what’s sort of the optimistic scenario. I'm just trying to figure out that terminology of using that terminology in your guidance, what’s sort of driving that?

Sure Michael. I would first of all go back to probably our conversation or what we were saying about a year ago. If you looked at a year ago most economists and most folks were predicting for 2011 2.5, maybe 3 at the beginning of the year percent GDP growth. Quite honestly we weren’t that optimistic and unfortunately we were I think closer than most people. We were kind of thinking in the 1.5% to 2% range and that’s a really a lot closer to where we ended up. Today I think people again are probably in that 2% to 2.5% range. I think we are probably in that range for kind of the – if you are looking at the midpoint between the pessimistic and the optimistic in that 2% to 2.5% range. So to me our pessimistic side would be as if we see like very little GDP growth, so 0% to 0.5%. Our optimistic would be, if we probably see 2.5% to 3% because it doesn’t take as much on the upside to actually improve, because we've been cautious and cover ourselves on the downside, so it would have to fall further us to get close to that bottom. So those are the kind of numbers we’re thinking about Michael. Michael Bilerman – Citi: I just wanted to clarify within an occupancy line, there is a bullet point that says outside the guidance driven by lease up of portfolio, is that upside optimistic end or – I just didn’t know what that was in reference to?

Yeah, I think that’s right. Upside between the midpoint and getting above the midpoint and maybe even higher than the optimistic would be really just we would exceed our leasing expectations for the year. Michael Bilerman – Citi: So that’s timing of when you get to a certain occupancy level but also exceeding the 92.5 average occupancy for the year?

Yes, definitely. It really – you mentioned it here, but I just want to point out, timing of leasing on average occupancy is huge. Again, the more leasing we get done in the first quarter it just has obviously a huge multiplier effect on our average for the year. If we can see some really good strong activity in the first quarter, then – it certainly makes that optimistic side or above a lot more achievable. Michael Bilerman – Citi: These are the 89.5 to 92.5, is that your average in-service occupancy on the total portfolio, i.e., 135 million square feet or just your share effectively the joint ventures and the holio (ph) and the 110 million square feet?

It’s on a 100 percent. Michael Bilerman – Citi: 100 percent. Just going to back to Brendan’s question, the 89.7 was the average but you ended the year 90.7. What you’re saying is embedded in that 90.7 is 75 bps to 100 bps of short term leases that are going to come out of the portfolio at the beginning of the year?

Well, you’re exactly right that there is 75 to 100 bps of occupancy in that short term. We never know what they are going to come out Michael unfortunately, that just makes it hard to predict. Our average guidance the way we do it assumes they come out some time during the year. Some probably earlier in the year rather than later, because if they are in there for three months and they expire at the end of January or end of February, at this point in time in that guidance we’re probably taking a mile. Michael Bilerman – Citi: Right. So, the reality is – even if you’re starting at 90.7 it sounds like even if you have some of these short terms leases not coming out for a little while, to get down towards the bottom half of this guidance range would take a much more difficult leasing scenario, and you’d have to lose a lot more and not retain as much tenants even with a low rollover in which case getting to a 91.1% to the midpoint of the occupancy seems a good target at least as a base line?

Yes, I mean that’s clearly – yes.

That’s correct Michael.

The only other comment I would make is, whatever we put what we call the pessimistic here downside, however you want to describe it, we’re also saying, well, that could be affected on occupancy but a number of these metrics just by defaults. So, if tenants – we only have 7% of our portfolio leases expiring during the year, but if you get a couple of tenant defaults in there that can also have an effect on that average occupancy. Michael Bilerman – Citi: Okay. And then lastly, you used to have and you stopped this at the beginning of ’10, your internal overhead cost summary where you broke out G&A both from what was P&L, what went to the services, what went to rental operations, and then how much you are capitalizing both for construction and development and what you are capitalizing for internal leasing cost. Can you just give us a sense, the last time you had put out the numbers you had about, call it $20 million that was capitalized for construction development, and about $25 million for internal leasing, that was back in ’09. Where do those numbers sort of shake out today for ’11 but also as you think about 2012?

Well, let me talk about – I guess if I look at 2011, I think – I would just relate this to you as to our total overhead focus. As I mentioned earlier I think when Ki Bin asked the question, our G&A has stayed relatively flat and that’s the number we obviously monitor to make sure that we’re not at an overhead level that’s causing that G&A go up. But just to put in perspective I would say, roughly 2010 and 2011 were relatively flat on an overall overhead basis. Heading into 2012, we probably reduced our total overhead costs by probably $12 million to $15 million. If you look at total overhead costs that’s probably down. We’re probably 30% to 35% below where we were back in 2010. And then it dropped down some in 2011 and now it’s dropping down even further in 2012. So basically since what I am getting at is if the overall overhead pool has dropped by that kind of percentage and basically our G&A has stayed relatively flat, that means the amount of overhead where capitalizing has also dropped by the amount of our overall overhead reduction if that made any sense. That complicated explanation I just gave you is one of the reasons we took that schedule out. But I think you understand what I mean Mike. Michael Bilerman – Citi: Yes, okay, thank you.

Thank you. We have a follow up from the line of Dave Aubuchon of Baird, your line is open. David Aubuchon – Robert W. Baird & Co.: Yeah thanks, just a quick follow up. The 45 millionish asset sale, the Raleigh assets that closed in January, is that early in the discontinue ops, did you had them in Q4.

Yes.

It is. David Aubuchon – Robert W. Baird & Co.: Okay, thanks.

Thank you, and we have no further questions at this time. Please continue.

Okay. Thank you everybody and we look forward to talking to you at the end of next quarter if we don’t see you at one of our meetings before then. Thank you.

Thank you everyone.

Thank you. Ladies and gentlemen that does conclude your conference call for today. Thank you for your participation and for using AT&T executive teleconference service, you may now disconnect.