Ladies and gentlemen, thank you for standing by, and welcome to the Duke Realty Second Quarter Earnings Call. At this time, all phone participants are in a listen-only mode. Later, there will be an opportunity for your questions. Instructions will be given at that time. (Operator Instructions) And as a reminder, this call is being recorded. I'd now like to turn the conference over to Ron Hubbard, Vice President of Investor Relations for Duke Realty. Mr. Hubbard, please go ahead.

Thank you. Good afternoon, everyone, and welcome to our second 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 our December 31, 2011 10-K that we have on file with the SEC. 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 during the quarter in both our operational and asset strategies. Christie will then address our second quarter financial performance and progress on our capital strategy. Then, I'll finish up our prepared remarks with some comments about our outlook for the remainder of 2012. By all accounts, the second quarter was a great success for Duke Realty and I'm very proud of our team for their accomplishments. We signed over 4.9 million square feet of leases in the second quarter and started development of $63 million of industrial projects and $65 million of medical office projects. All of our new development starts are 100% preleased with the exception of 431,000 square foot spec industrial start on our land in Chino, California. Our in-service occupancy percent increased slightly to 92.2%, while our overall portfolio occupancy was relatively flat at quarter end at 92.0%, really due to the speculative development start. We made continued progress on our asset repositioning strategy with $103 million of acquisitions, comprised substantially of bulk industrial properties and disposed of $27 million of flex industrial, retail and land assets. On the capital front, we issued $300 million of new unsecured debt at a company record low effective rate of 4.47%, lowering our cost of capital and reflecting an endorsement from the market on Duke Realty's improving credit strength. Christie will speak more in depth on our capital activities in just a moment. From a macro perspective, halfway through the year, the economy is moving along at a relatively tepid 2% growth rate. Recent economic indicators have been mixed, with some of the manufacturing and freight data points slightly moving to the downside. Despite that, our overall leasing activity has held up well in both…

Thanks, Denny. And good afternoon everyone. As Denny mentioned, I would like to provide an update on our second quarter financial performance as well under the progress on our capital strategy. Our second quarter 2012 core FFO was $0.26 per share. The improvement in Core FFO per share from $0.24 per share for the first quarter of 2012 was mainly driven by an increase in average occupancy, higher lease termination fee income, as well as the full quarter savings on dividends related to the first quarter repayment of our Series M preferred shares. First, as you can imagine, the timing of the lease buyouts is very hard to predict that we are generally recognized total termination fee income of $7.5 million to $15 million per year for the last couple of years. Our original guidance for the year was $5 million to $10 million, consistent with our normal run rate, and we still expect to be in that range. Second, G&A expense in this quarter was a little higher than we would expect for a go forward run rate due to less overhead costs being absorbed into leasing and development for the second quarter. As the development starts that we have announced for the first half of the year, pickup in volumes, we expect more overhead to be absorbed and accordingly G&A expense to decrease slightly. We’re comfortable with our G&A guidance that we have given of $38 million to $43 million for the year. For the quarter, we generated $0.21 per share in AFFO, which translates into a conservative dividend payout ratio slightly below 81%. Our year-to-date payout ratio is below 83%. We are pleased with our operating results for the quarter and anticipate continued solid execution throughout the rest of the year. Turning to the capital side of…

Thanks, Christie. Yesterday, we tightened our guidance for FFO per share to $0.98 to $1.06 for 2012 in recognition of our positive leasing activity and operational performance year-to-date. We continue to remain comfortable with the range of estimates for the key operating metrics we've provided to you in January. As alluded to you on the last call, we still expect to be near the high end of average occupancy because of the strong year-to-date start and the fact that we have only 3% of our leases expiring during the remainder of the year. We are proceeding as expected with acquisitions and dispositions though the timing is a little weighted towards the end of the year. We also have a strong backlog of new development projects that we believe we can execute during the second half of the year. Most importantly, we are focused on executing our operating asset and capital strategies in undoubtedly more volatile economic climate these days. We firmly believe executing on our plan will strengthen the Duke Realty platform and provide for steady long-term earnings and dividend growth for the market cycles. Thank you again for your support of Duke Realty and now we'll open it up for questions.

(Operator Instructions) We go to the line of Joshua Attie with Citi. Please go ahead. Joshua Attie – Citigroup: Hi, good afternoon. Can you tell us, give us more information on the termination fee, what it was related to, was it one tenant or several tenants?

It was several tenants, I'd say it was a couple larger ones of – and one was in Raleigh were we terminated a tenant and immediately backfilled it with an other tenant, so that's really why we did – did it because we have the opportunity to – basically relocate an existing tenant into a larger space. And then the second one was the project I mentioned up in Chicago where we had existing tenant that we relocated and expanded and as part of that they actually provided us a buyout on some of their space that they were leaving. So, it was – both the transactions were really good deals for us. Joshua Attie – Citigroup: Thank you, and one more question, can you talk about the acquisitions that you made in the quarter? I know the initial yield is around 6.4% to those, do you have the opportunity to move that up over time, did some of those leases have escalations in them, and I guess how did you underwrite what the return would be on those assets over a period of time beyond just the initial yield?

Yeah Josh, all of those assets have rental rate increases, it pretty much annual. Rental rate increase is built into them. I just – I’d make a couple of comments on that because, again we are still finishing up our asset repositioning strategy when you look at it. so we’ve got roughly $500 million to $600 million more of industrial growth to occur, we’ve got about $500 million of additional suburban office to dispose off and then about $300 give or take million of retail to dispose off. So we're still focused on getting to those targets by next year, which we’ve been saying for a long time now. but we’re being a little bit more selective as we go through and the volumes are lower, because we've done some very large transactions as you know over the last few years. And again, when we’re trying to do that, I think we run into some timing issues. so a couple of things, we may be buying some things before we actually get our dispositions closed, but we really know where we’re headed. So again, it's all part of that process. So you may see us acquiring again a couple of stabilized assets that fit into our strategy before we've had a chance to sell some of our unstabilized assets. so it just looks a little different. I mean the truth is, we’re really using the proceeds from our ATM to fund the new development starts, which is as I mentioned we’re getting really good yields on those. If you look at our pipeline today, our average yield on those development projects is 8.25%. So we think that’s really good accretive use of those funds. So I think that answers your question, but I also just really wanted to give some color on our thought process. Joshua Attie – Citigroup: I guess also what I was driving at a little bit is what’s the value creation story behind some of these acquisitions? It seems like they’re fully leased and there are some embedded rent bumps, but the cap rate seems – it seems on surface to me to be a little bit full. Do you think the value creation comes from NOI growth or cap rate compression? I’m just trying to understand how the value of these assets goes up two, three, four years from now and where that increasing value comes from?

Yeah. So going back, there are two things. Yes, clearly NOI growth in these, and again they’re all in real strong markets. so we think we’ll get very good NOI growth there. but then my other point is we’re still selling some assets that even though they might not match up on a quarter-by-quarter basis, they’re going to match up. and as we've been saying and as we've proven, we're not diluting our AFFO as we reposition the portfolio. so sometimes you will see us buy a stabilized asset that we think it’s a great long-term asset, and it's just not matched up, let's say, a suburban office disposition, but again we're still looking at it that way that it's part of the non-dilutive repositioning that we're still going through. Joshua Attie – Citigroup: Okay, thank you.

We’ll go to the line of Paul Adornato with BMO Capital Markets. Please go ahead. Paul Adornato – BMO Capital Markets: Hi, good afternoon. Looking at the medical office development pipeline both existing and perspective, how much of that would say is repeat business?

Well, a fair amount of that Paul, is repeat business, but we're really pleased that we started a new relationship with Scott & White Healthcare in Central Texas this year. And they had not been really a customer before and we’ve got in relationship and we've started two projects with them as I mentioned, and we've got a couple more coming. So that's an example of repeat business. But then again I think a lot of the other starts, we continue to start various projects for Baylor or Baylor-affiliated companies. So it’s really been sort of a nice mix of repeat customers and now we're also adding some new ones there. Paul Adornato – BMO Capital Markets: Okay. And could you also just talk about just the overall environment for medical office development? Is it very fragmented like the industrial development landscape might be?

I would say, it's not anywhere near as fragmented as industrial, but industrial, as you know, is very fragmented when you look from market-to-market. But there is a number of developers out there, and I'll just say a number of high quality developers out there, but it's certainly a lesser number when you look around the country than you find on the industrial side. Paul Adornato – BMO Capital Markets: And has there been a shakeout among those developers over the last cycle like there has been elsewhere in real estate?

Yeah, I would say a little bit so. I think the number is down. There has been some consolidation and again a few of those private developers like in the other product types or at least that we’ve seen I'd say on the industrial and suburban office side really aren’t around anymore. So I think the number of folks out there is less. Paul Adornato – BMO Capital Markets: Okay. And finally, just looking at the spec industrial development, maybe you could generalize and just tell us what your kind of qualitative and quantitative criteria for pulling the trigger on a spec industrial might be?

On a spec industrial? Paul Adornato – BMO Capital Markets: Yeah.

Again, I would say we’re obviously not doing a lot of it. We’ve only started one and now have just a couple of others in the pipeline, so we're being very selective. and again, I think that market rates and some of these markets have begun to move up market rental rates. So I think we're seeing some ability to start these developments. but just on a bottom line basis, I would tell you, our yield requirements on spec developments probably, it's somewhere between 100 basis points and 150 basis points above what we think the market cap rates are today. So we're still getting that spread. It's just that today cap rates are pretty low and especially on the industrial side, I would say in most of these markets, so our developed yields are a little bit lower than they would have historically been, but I’d tell you we’ll be getting above the same spread somewhere in that 100 basis points to 150 basis points range. Paul Adornato – BMO Capital Markets: Okay, thank you.

Thanks, Paul.

And our next question comes from James Feldman with Bank of America. Please go ahead. James Feldman – Bank of America/ Merrill Lynch: Hey, thank you. A couple of questions, I guess the first sticking with development. If you look at your balance sheet and see how CIP has grown over the last couple of quarters, how do you think about the level of where you’d be comfortable growing the development pipeline too? It seems like I mean we’ve doubled since last quarter, actually doubled each in the last three quarters starting from a pretty low base, but how should we think about that?

Well, I think two things about that, Jamie. One is, I’m really pleased with that development pipeline because as we said it’s 86% leased basically when we started. So the risk profile of that development pipeline is really very low right now, because we are being very conscious on spec, but we’re also watching the overall level of our development pipeline. And we’re really very focused on keeping that no more than about 7%, 8% of our overall balance sheet. And I don't think you're going to see it get any bigger than that. James Feldman – Bank of America/ Merrill Lynch: Okay. And then can you talk about the depth of interest in both the MOB – build-to-suit pipeline and warehouse?

Yeah. I would say it's good, very reasonably good right now. It’s probably down a little bit from what we saw six months ago just because we’ve signed several deals. So our pipeline was bigger, but the good news is we actually got those deals signed. Today there is a lot of talk going on build-to-suit warehouse business and we’ll see how real some of these are, sometimes it's a little hard to tell when you are making proposals whether they're really real. But I think it's pretty strong, and I would say it's very strong on the medical office side of the business. There is a lot of activity going on. And I think our sense is, now that we're a couple of years into this Affordable Care Act and now that it’s been upheld by the Supreme Court. The healthcare systems are prepared and starting to look at the things that they need to do in their business and how these changes will affect them. And they’re starting to make some commitments for growth, the new facilities to take that into account. James Feldman – Bank of America/ Merrill Lynch: So when you say very strongly, what’s like the total magnitude, what's out? I know you’ve said in the past, the different institutions will only pick one developer to kind of limit how much you can really do, so like what do you think is your potential pipeline?

Well, I think our backlog of prospects, we’ve been starting – we started about $200 million last year, $175 million, $200 million of medical office, which was down from where we were pre-downturn, but that was still our highest year in a couple of years. This year, we’re already well over $100 million of new development starts. I would tell you, our backlog today is probably $200 million to $300 million of prospects that are out there that we’re working on, which I would consider very strong. James Feldman – Bank of America/Merrill Lynch: Do you think that it grows a lot more after – let me think, kind of after the election and things seem a little more settled than on the legislative environment or that’s about a good run rate?

I think that’s about a good run rate. I don’t see any of those factors really causing it to change one way or the other very significantly. But again, I think that $200 million to $300 million of kind of backlog at any one time, projects we’re working on there is really a good run rate. James Feldman – Bank of America/Merrill Lynch: Okay. And then finally for Christie, you had mentioned I think an 80%, 81% dividend payout ratio on AFFO. How should we think about the prospects for dividend growth and where you’re comfortable with that ratio?

I think Jamie, as we sit today we’re very comfortable with the conservative nature of our business and keeping that dividend payout ratio in accordance with our guidance. And then as we move forward, in 2013 and beyond, I think you can expect us to re-look at the dividend. James Feldman – Bank of America/ Merrill Lynch: And the growth rate kind of in line with AFFO?

Yes. James Feldman – Bank of America/ Merrill Lynch: Growth, okay, all right. Great, thank you.

We’ll go to the line of Brendan Maiorana with Wells Fargo. Please go ahead. Brendan Maiorana – Wells Fargo Securities: Thanks, good afternoon. Question for you guys and I apologize, because I jumped on a little bit late. So I’m not sure if you addressed this. But it looked like the leasing volumes on the bulk side were a little bit light, and I think we’re in; expirations were a little light as well. But I’m just wondering, are you guys seeing any sluggishness, any slowdown because of some of the macro concerns that are out there specific on the bulk side?

Brendan, I would say that I think this was kind of a relatively normal quarter for us at overall 5 million square feet of leasing just under 4 million on the bulk. We just came off such a high quarter in the first quarter it looks down, but that 8.6 million square feet of leasing we did in the first quarter was pretty much a record quarter for us. So that $5 million to $5.5 million range is pretty standard for us. So and then the other thing, I’d point out is that leasing activity probably is going to slow some as our occupancy gets up, just the level of leasing activity because we’re now 93.6% leased in the bulk industrial. So you’re just not going to have as much, which is a good thing. So and then back just to the overall comments, I would say we haven’t felt any real slowdown. I mean you never know everything is a little bit cyclical. It seems like anymore we always get a little bit of summer doldrums when we head into it. My guess is July, I haven’t seen our July numbers, but my guess is a little bit slower and August would be slower. But I think that’s just cyclicality right now. So today, I would say we have no indication that third or fourth quarter overall are going to be pretty much on line. But we’ll probably have a better idea that after Labor Day, because things just do tend to slowdown anymore in the summer. But really, activity has been pretty good. But again, as we’ve gotten more leased up and we have less vacant inventory out there, the deals just aren’t as frequent, which is fine. Brendan Maiorana – Wells Fargo Securities: Is the balance of the space that you have to lease up, as you kind of lease up your space, I imagine you lease up the stuff as easiest quickest, is what’s remaining because you don’t have that much left a little over 6% on the bulk side. Is it just a more challenged space to lease up and so it’s going to be a tougher goal a bit from here?

No, not necessarily, but I would say there’s not many big spaces left. I’ll tell you we got – I’m not even sure we have any over a 0.5 million square feet. I think maybe around 300,000 square feet is probably our biggest vacancy. And some of that vacancy is still in the new products, so getting the last 250,000 square foot space filled. So I would say, no, it’s not of lower quality, if you want to call it space. It’s just smaller spaces, which the activity has been pretty solid on, but not as good as the larger bulk spaces. Brendan Maiorana – Wells Fargo Securities: Okay. And then it looked like the bankruptcies were high this quarter as well at least on a square footage basis, is there anything anomalous that happened in the quarter that caused that number to spike up?

We have one in Dallas, a home furniture in about, I think it was 378,000 square feet in a warehouse that did file bankruptcy and terminated this quarter. So it was a little bit of larger one. And I would say it’s been a little bit surprising to me. We’ve had a couple of surprised bankruptcies this year that we weren’t expecting and it really had stabilized through latter half of 2010 and 2011. But the first six months of this year, it picked backup a little bit. And I don’t know that that’s a sign of anything, it could be – it’s only in a couple of places. But we did see that and that’s the one that occurred in the second quarter. But the good news is we’ve got really good activity on that space. So I think we’ll get a backflow pretty quickly, because I guess that probably is our biggest space we’ve got out there now. Brendan Maiorana – Wells Fargo Securities: Okay, it’s helpful. And then just as we think about the balance of the year, and I know you were talking with Jamie about the development pipeline. As we look forward, do you think this proportion of limited spec, and mostly built-to-suit is likely to persist for the balance of this year and into next year or if the market and the economic kind of chunks along at this sort of slow recovery space, or do you think that if conditions hold us, there are in a new supply and risk is low that you guys will continue to expand the spec development in the market to where it make sense?

Well, I think for the rest of this year and on into the first part of next year anyway it’s going to stay pretty much as it is. Pretty limited spec development and more on the built-to-suit side, I think we’ll get some more built-to-suit. Again, as I mentioned on the medical office, pipeline is pretty big. So I think we’ll get some more of those signed. And it’s hard to paint a picture that we’ll do in the next six months or so, any more than one or two more spec projects if that many. Brendan Maiorana – Wells Fargo Securities: Sure. and then just last one, any difference, what’s the premium, I know you talked about the premium on spec versus market cap rates, the 100 to 150. What’s the differential when you’re looking at the built-to-suit return versus spec?

Well, I’ll tell you it’s probably 50 to 75 basis points today, because in this environment the build-to-suit industrial development is going on out there. With the competition today, there isn’t a huge spread over what acquisition yields are going for. If you’ve got a long-term lease with a high-credit tenant, you’re only looking at maybe 50 plus or minus basis points spread over what the market acquisition cap rates are. So again, if you got to say acquisition cap rates then go up 50 for a build-to-suit and up another 75 to 100 for spec. Brendan Maiorana – Wells Fargo Securities: Okay, that’s helpful. Thanks.

We’ll go to the line of Ki Bin Kim with Macquarie. Please go ahead. Ki Bin Kim – Macquarie Research: Thank you. Turning to your development side, how would you gauge the value creation on, maybe if you had to split up between industrial and medical office. I mean I do see that your expected total yield is about low 7s. But if you had to split up between the two different segments, what do you think those are worth in the open market, once stabilized?

Well, I would say again, I think you’ve got that 125 basis point and 150 basis points spread over today’s values, what cap rates would be. And maybe a little bit less than that on the build-to-suits today, but I think pretty much on the medical office stuff. It’s probably that in the 150 basis point range. Maybe a little bit less than that, maybe more than 100 basis points range on these industrial build-to-suits today. Ki Bin Kim – Macquarie Research: And can you remind us on your land beings, how much of that has been written down, and based on impaired values does it? How far are we from making that land being more viable for development?

Ki Bin, I’ll take the first part of that. We started back in 2009. If you remember, we took a significant impairment on our bills or held-for-sales property. And to that point, as we’re holding our land today, we’ve took probably a 33% write-down, and overall we’re looking at holding our land at $0.77 on the $1. And where we are right now, we’ve got $0.5 billion that we’re holding for development going forward split 70% towards industrial and 30% towards office in alignment with our strategy.

That land is really where we’re starting those spec industrial projects and the spec office project that we started down in Houston, and then also a lot of our build-to-suit activities occurring on that land too. Ki Bin Kim – Macquarie Research: Okay.

That’s right. Ki Bin Kim – Macquarie Research: So, on the remaining portion on land, I know it’s kind of a tough question. But on average, within industrial piece first because I guess is most of it from a market rent standpoint, how far are we from hitting that hurdle rate?

Well, I would say, again, there is two pieces of land. What Christie mentioned was the stuff that we just decided we weren’t going to develop and we’re not holding for sale and we did impair that. And I would say, almost three years now since we did that we probably sold about 20% to 25% of that land at basically right at or a little above the impaired value. Then the rest of that land, which is in the neighborhood of $0.5 billion, I would tell you that for the most part today’s rental rates could probably support development on there. The real issue is demand. There is still just not enough demand in most of these markets for us to feel comfortable starting a spec development, because it’s just going to take too long to fill it. So, I don’t think we’re that far off on the land as far as rental rates. Again, I think it’s just what’s really going on in the markets.

Yeah. Ki Bin Kim – Macquarie Research: All right. Thank you.

Thank you, Ki Bin.

(Operator Instructions) We’ll go to the line of John Stewart with Green Street Advisors. Please go ahead. John Stewart – Green Street Advisors: Thank you. Denny, what stabilize cap rate do you think you could achieve on the both distribution building and Chino if you were to sell that today?

Probably, somewhere around 5, 5.25. John Stewart – Green Street Advisors: Okay. And Christie, sorry to belabor the point, I wasn’t quite sure, I wanted to make sure that I understood exactly what you were saying about the land, and I guess for starters on the $500 million that you do intend to build on, did you say that you are carrying that at – so you’ve taken at 30% impairment on that land or the write-down was only on the non-core land?

Non-core land, John. John Stewart – Green Street Advisors: Okay. And I thought, I heard you say that the 70/30 split was 70% industrial and 30% office did you – I presume in medical office?

No, it’s office, not medical John.

Yeah, John we really don’t have any land to speak of on medical office. That’s almost always built on the hospital campuses with the long-term land lease. Again, the office land that we still own, I would say a couple of things on that. We still have land in the markets where we have office, places like South Florida and Raleigh, and some parcels in some of our Midwest offices like Indianapolis. We also have some land that we talked about last year left in those markets where we sold basically all of the assets to Blackstone. And so, at this point in time, our plan is to develop that when it makes sense, but it’s pretty much all build-to-suit activity. And just again as an example, we had a parcel land, we sold all the Atlanta assets to Blackstone, but we had a parcel land up in North Atlanta, up in Gwinnett County and we are doing the Primerica build-to-suit on that. John Stewart – Green Street Advisors: Got it, okay. And then how much – what’s the annualized NOI from the retail holdings?

Mark has got…

Yeah, I think we’ve got that in…

It’s not a huge piece right now. If you look at year-to-date, our total was about $5.5 million for the first six months.

For the quarter, it’s about $5.5 million.

I’m sorry, for the quarter. So, about $5.5 million for the quarter, so it’s about $20 million to $25 million, John.

That’s perfect. John Stewart – Green Street Advisors: Okay, yeah that makes sense. And then lastly, just a housekeeping question, Christie, was the lease termination fee in the same store results for the quarter?

No, it wasn’t, John. John Stewart – Green Street Advisors: Okay, thank you.

You’re welcome.

And we have a follow-up from the line Joshua Attie with Citi. Please go ahead.

Hey, Josh. Michael Bilerman – Citigroup: Can you hear me?

Yeah, go ahead. Michael Bilerman – Citigroup: Perfect. That’s Michael Bilerman. I had my phone on mute.

Hi, Mike. Michael Bilerman – Citigroup: On Page 28, just the development pipeline, so out of that $460 million of projected costs, how much capitalized G&A and capitalized interest is embedded into that cost?

It’s a little hard to say, because it’s all over the board project-by-project. But I would tell you capitalized G&A, it’s roughly in line with fees that we pay to outside providers. So, typically if you were to assume in there 3% development fee and 2% or 3% construction, management fee, so 5% or 6%. That’s roughly the kind of overhead, maybe a little bit less than that. And then interest, that just depends on the length of the project. So, I don’t think there is any rule of thumb on the interest capitalization, but I would say as far as the operating overhead, probably 5%. Michael Bilerman – Citigroup: And that’s 5% of development cost, not of revenues, correct?

That’s right, 5% of project cost. Michael Bilerman – Citigroup: So that’s probably between the two, this yield is being depressed upwards to probably 50 basis points, 60 basis points from the capitalization of those costs.

Yeah, I suppose. I don’t think we ever look at it that way, because those are true part of the project costs, but you’re right, yeah. Michael Bilerman – Citigroup: And then, Christie, I think you said the G&A, you’re going to start capitalizing more. Can you just give us a sense of how much G&A has been capitalized year-to-date? And then how much you expect for the full-year, just as we start to – obviously this is affecting FFO and obviously affects the yield on the development pipeline?

Yeah, I think the way I look at that, Michael, is if you look at our guidance of G&A, and there were just some comments as it relates to the quarter being a little bit higher. What I was just trying to articulate is the fact that it’s really gets down to timing, and timing of the development starts that we announced together with looking at the lease up. And when you look at the overall range that we gave for the year being between $43 million and $38 million, we’re really comfortable with that G&A. And we’ll be right at the mid-point to maybe even a little bit better, depending on how the developments unwind here throughout the second half of the year, which has got some nice momentum on it.

I don’t have in front of me exactly what the dollar amount of what we’ve capitalized so far this year. But again, I would say for mostly on the construction development side, it’s roughly 5% of our volume that we have during the year...

That’s good, when you look at it.

Just to put it in perspective, we’ll probably have 500, maybe a little bit more of construction volume this year. And then there is some related to the leasing fees that we have. That number is a little harder to pinpoint, but it’s just based on leasing volume and again sort of probably kind of a 50% of what market leasing commissions would be is what we capitalized there. So, hopefully that helps. Michael Bilerman – Citigroup: And then just on the Chino project. What’s the development cost on that?

I think it’s about $25 million or something like that of the total project cost on that project, yeah $25 million. Michael Bilerman – Citigroup: Okay. And so you were saying that the development the 7.4% goes to 7.9% excluding it. How does that work or did I not hear you’re right?

Say that again. Michael Bilerman – Citigroup: I thought we had heard that you said the development pipeline, excluding Chino would move up 7.9% relative to the 7.4%, but that just seems way too big of a spread for us?

No. I said the 7.9% was sort of our average yield over the leased term.

Yeah.

And they were basically 100% leased high credit tenants and on a long-term leases. So that excludes Chino altogether.

Yeah, and I want to circle back on that comment really quickly, which might help with some of this in perspective. I just want to – just roll back the clock to ‘09 when we really started to articulate the asset strategy. Since then we’ve invested over $2.5 billion in our business. And in terms of those investment dollars, about 30% of those investment dollars have gone towards over 90% leased product, quality product with high credit tenants, and 70% of those dollars have been allocated towards developments both build-to-suit and spec, as well as opportunities where we’ve got lease up in the acquisitions that we’ve done like Premier. Michael Bilerman – Citigroup: The 7.9% reference is what the $416 million of developments on Page 28, excluding Chino?

No, no, the $102 million that we started this quarter excluding Chino on a GAAP basis.

So the 7.4% on Page 28, is a cash basis for a whole pipeline. The 7.9% is the GAAP basis on the second quarter start excluding Chino. Michael Bilerman – Citigroup: So, even though that has protected stabilized yield, that’s projected stabilized yield – cash yield?

Cash on year one, year-end.

Other 19.25 is the GAAP yield over the turnover lease. Michael Bilerman – Citigroup: Got it, got it. Just last question just on the $261 million of acquisitions year-to-date that a 5.6 – at a 6.6 cap rate. The rents are about $5, they’re obviously 96% leased. What are market rents? What is the average lease duration for those assets?

For the acquisitions? Michael Bilerman – Citigroup: Yeah, just looking at this on Page 30, right you did $261 million in terms of the total dollars you’ve to put into them and them 6.6 yield that works out to about $5 gross rent and that rent or net rent 96% occupied. I’m just trying to get a sense of what the lease duration is of that and where market rents are for that space?

Well, I don’t have that exact number in front of me, but I’ll tell you that I think roughly that’s probably a – it’s a longer term average lease term based on the kind of assets we’re buying so it’s probably six or seven years. Michael Bilerman – Citigroup: You think that net rent is at or below or above market?

I would say pretty much at, but again, they all have annual ramp ups. Michael Bilerman – Citigroup: Okay, thank you.

And we’ll go to the line of Jason Jones with Wells Fargo Securities. Please go ahead. Jason Jones – Wells Fargo Securities: Hey, guys. I was just looking for a quick update on where you stand on your – just thoughts on your current balance sheet metrics and where you see those kind of trending over time?

Sure Jason, this is Christie. Just to talk a little bit about the balance sheet metrics. As it relates to overall leverage, we ended June at about 48% effective leverage, and we’re driving over the long-term portion of our strategy to move that to 45%. It was up a little bit here in the first quarter just because we took advantage of the market on the $300 million unsecured offering that we did. And specifically as it relates to coverage, we ended the quarter at 1.81 times fixed charge coverage, and over the long-term, we’re driving that coverage ratio above 2, and then we’ll be driving that further as we drive into the end of 2013. And then looking at debt plus preferred to EBITDA, we ended June at a little over 8, tick over 8. And we’ve been really looking to take down our more expensive preferred and we’ll be doing so in February on the [odes] that are out there and we’ll be looking to drive our debt plus preferred to EBITDA to below 7.75, here in the long-term over our capital strategy, so nice progress, strengthening balance sheet, and we remain focused on it. Jason Jones – Wells Fargo Securities: Great, thanks.

Thanks, Jason.

And we have no further questions.

I’d like to thank everyone for joining the call today. Our third quarter earrings call is tentatively scheduled for November 1. Thanks again everyone.