Douglas Emmett (NYSE:DEI) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Jordan Sadler – KeyBanc Capital Market: Wanted to dig into (84) if there was any incremental insight you could offer, I know sounds like Ted you mentioned that it is incorporated into the revised guidance the transaction?
Theodore E. Guth – CFO: Yes it is.
Jordan Sadler – KeyBanc Capital Market: What does pricing look like though, how should we think about the economics on the transaction.
Theodore E. Guth – CFO: When you say what the pricing looks like we gave, we bought it for $89 million it’s 225,000 square feet, what’s the…
Jordan Sadler – KeyBanc Capital Market: Cap rate?
Theodore E. Guth – CFO: We are not big on cap rate and in terms of getting into too many of those details I think we’d like to wait until it actually closes.
Jordan Sadler – KeyBanc Capital Market: How occupied?
Jordan L. Kaplan – President and CEO: It is mediocrely occupied we signed a new deal with Larry Flynt. And we’ll come out with some better deal after the deal closes, but we are real pleased with the deal I mean that the deal it’s going to take, we are going to do rehab, we are going to do it lease-up and we are going to do much stuff to it, it’s a building with great, used to be the Great Western headquarters. Its well-located great volumes exactly what we look forward and like to do.
Jordan Sadler – KeyBanc Capital Market: Kind of like core plus transaction?
Jordan L. Kaplan – President and CEO: Yeah.
Jordan Sadler – KeyBanc Capital Market: Then just on sort of the expectations the detail ex-AIG was helpful, I’m just curious looking at sort of the supplemental maybe drilling down some of the bigger role exposure over the course of the next four quarters in Sherman Oaks and Warner Center. Specifically based on what you see in market rents there and those markets, sub-market what do you think we should expect in terms of what rents do?
Jordan L. Kaplan – President and CEO: I don’t that our – if I managed here and I don’t know that world necessarily drives what rents are doing but I will tell you this, Warner Center is a market that what we are pleasing, it’s recovering. Now it’s not going to recover in rental rate until the occupancy gets up closer to the 90%. But in terms of the leasing activity out there, I mean, now they speak themselves, look at last couple of quarters. So, we are really, it’s a market that’s moving and I know I have said this blew in the face, but there was a time when Warner Center rents were higher than the Encino/Sherman Oaks rents. And today Sherman Oaks is a very hot market and it’s doing extremely well for us. As earlier was said, all of these markets and I am pleased that this quarter we were all able to make it clear that even including Hawaii, we’re seeing rents move up now with the exceptional Warner Center. Maybe I am not answering your question, so I am not sure.
Jordan Sadler – KeyBanc Capital Market: Should we expect the Sherman Oaks and Warner Center roll that happens over the course of next year to roll down what magnitude or roll flat or what have you. It looks like you have 300,000 square feet plus in each market $33 range, call it?
Jordan L. Kaplan – President and CEO: I don’t have the information on this call to answer that, I mean maybe Ted can look into it. Or he’s sort of studying his face. He’s thinking of that that, looking at that. He’s trying to figure it out.
Theodore E. Guth – CFO: I think that two markets are very different. I think that you know, now let’s talk about each one of them maybe. So, Sherman Oaks has been, as you know, one of the first markets to come out of the recession. It’s been doing really well. It was a sort of quarterly fluctuation going down which actually represents an interesting story we had. We’ve been trying, as you know, to sort of move tenants towards Warner Center and obviously with the growth in occupancy in the last couple of quarters we’ve been having some success. And then in Sherman Oaks we had a 30,000 square foot tenant in the entertainment technology space that wanted to expand, wanted to have a bigger floor plate and so they were, as a result, they moved out to Warner Center, so not at our portfolio, because we don’t have bigger floor plates out there. But it’s – that movement of tenant is actually what we been trying to do. We backfilled a bunch of that space already in the quarter and we’ll have very little doubt that that market is doing really well, and rents are going up there. So, I think we’ve…
Jordan Sadler – KeyBanc Capital Market: I can circle back to you on market rents after the call.
Theodore E. Guth – CFO: Right.
Residential Development Opportunities
Joshua Attie – Citi: Are there any changes or can you give us and update on the residential development opportunities in the portfolio that you mentioned a couple of quarters ago and do you still envision starting some of those in 2014?
Jordan L. Kaplan – President and CEO: Oh yeah. When we’re working on them, I’m not sure there is going to be – it’s a slow process as I said before, but we’re working on them. There is not – I know there’s a lot to update in the real minor details of getting elements for planning but moving along.
Joshua Attie – Citi: So I guess now that we’re close to the 2014 could you give us some sense of the dollar amounts of starts that you could see next year?
Jordan L. Kaplan – President and CEO: Can we wait a quarter, another quarter to get some things finished up and then I’ll maybe we’ll focus us on that giving you a better feel for that…
Joshua Attie – Citi: And separate question you had a large cash balance and you put some of that to work and you still have some. But are you considering a credit facility again? I know in the past that you felt like having $400 million of cash precluded the need for a credit facility but are you rethinking that?
Jordan L. Kaplan – President and CEO: Well, you know what we’ve done is we’re storing cash and now comes out in 2015 which is a floating rate loan so we have a lot of in that pool we can pull equity I think relatively easily. Do we want to do it, we got to looking out on the horizon of what’s coming what the needs are? And we’re going to refinance our loans. So should we refinance our loan and carry into a credit line or should we refinance that loan and take the cash out. We’re working through that right now but it’s going to be some mix of that because that. Well, there is similar place we are storing equity too but that’s the main place we are storing it where it’s pretty flexible and available.
Joshua Attie – Citi: Is that the $90 million pay down we did?
Jordan L. Kaplan – President and CEO: Yes.