Good day everyone and welcome to the Alexandria Real Estate Equities Incorporated First Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. And at this time I’d like to turn the call over to Rhonda Chiger. Please go ahead.

Thank you and good afternoon. This conference call contains forward-looking statements within the meaning of the federal securities laws. Actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the Company’s Form 10-K, Annual Report and other periodic reports filed with the Securities and Exchange Commission. And now, I would like to turn the call over to Mr. Joel Marcus. Please go ahead.

Thanks, Rhonda, and welcome everybody to the first quarter ‘14 conference call. With me today are Dean Shigenaga, Peter Moglia, Steve Richardson, Marc Binda, Andres Gavinet and Amanda Cashin. So my take on the first quarter really echoes our theme that was presented in Investor Day December ‘13 on our return to stable growth with increasing FFO per share growth NAV per share growth really a very clean quarter, strong [core], solid operating metrics and very positive external growth. As many of you have read Michael Porter of Harvard has spoken off I mean written off on about kind of the urban clusters. And it’s useful to reflect that ARE has really chosen to focus the bulk of its efforts and the bulk of its precious capital in the leading urban innovation clusters with the focus on quality buildings locations and tenants in each of those submarkets, ultimately reaping higher value stronger and more durable rental streams in up and down cycles, deeper and more creditworthy tenant base, tenant rollovers more protective again on releasing stronger rental rates, more pricing power, lower cap rates and lesser CapEx. We also noted in our press release that we celebrated our 20th anniversary as a company and proud of our exceptional track record starting with the mere $19 million back in 1994 and addition them today a total market cap of $39 billion and we’re probably been able to generate a return of about 579% from IPO through the end of the first quarter. On macro comments on the FDA, they have been actually 12 FDA new drug approvals through April 24 of this year and 50% were ARE plant tenants, very proud of that. There is part of the 2012 Drug Act, the new breakthrough designation court order if you will was…

Thanks Joel. I'd like to run you guys through or highlight two notable life science trades that offer further proof that life science real estate in the core market is achieving cap rates at or near those of Class A office products. And in addition, I'd like to present some office trades that occurred in and around our submarket to offer additional context for your valuation of our operating portfolio. So first, I'd like to discuss the depending sale of Vertex headquarter research building in the Seaport Fan Pier submarket of Boston. Outside of HCP’s purchase of this portfolio in 2007, this is the largest life science real estate transaction we have seen with the purchase price of $1.125 billion or a $1,022 per square foot. Vertex occupies a 100% of the 1.08 million square feet of lab and office based. The project also contains 50,000 square feet of retail phase and 740 parking spaces. Based upon publicly disclosed information and our own estimates, we believe the cap rate of this trade was in the low sixes, likely near 6.2 upon lease up the retail space. If the property had been located in Cambridge, we believe that cap rate would have been much lower. We know that there was at least one other bidder at that price point, but senior housing properties trust was the buyer. We had a very early look at this transaction through our relationship with the developer and the brokerage for marketing the property. And although the real estate is Class A and Vertex is a solid tenant, we are unsure if Fan Pier will be able to compete with Cambridge for life science Tennessee over the long-term as it is lacks the ecosystem Kendall Square. That ultimately led to our exit from the bidding process…

Thank you Peter and good afternoon everyone. I’d like to highlight two key points we may for Marc’s truly underlying the theme of stable growth that Joel referred to earlier as it’s well underway in our Gateway cities where we’ve concentrated our significant capital allocation in Class A urban science and technology campuses. First we’ll discuss the truly stellar performance of our core doing great part to our best in the business fully integrated regional teams. Second the ability of our teams to capture additional growth opportunities in the best locations such as the recent 500 Townsend Street acquisition in the SoMa district in San Francisco. First the quarter is performing very well as we reported cash and GAAP increases of 10.4% and 18.2% respectively this past quarter for renewals in releasing space. The business imperative for our investment grade tenants to commit the space is clearly evidenced by the truly stellar 96.6 occupancy rate for North American operating properties, up 240 bps from Q1, 2013 and just 292,000 square feet of rollovers remained to be resolved in 2014 or just 1.9% of our operating asset base. We are seeing tenants with 2015 rollovers also pursuing early renewals to ensure they secure a high quality space in these key clusters. Drilling down a little further in Alexandria’s key innovation clusters, we can see the broad and strong business patterns outlined by Joel manifesting themselves in these healthy real estate indicators. In Cambridge, we are tracking demand of more than 2 million square feet in the market from both life science and tech users. We expect our mark-to-market on rollovers for the balance of the year to be in the 9% range on GAAP basis as [the switch are] concentrated in Cambridge where we think continue to drive rents in the…

Thanks Steve, Dean Shigenaga here. Good afternoon, everybody. I’ve got three important topics to cover. First, I want to provide an update on our balance sheet which has positioned us to support stable per share earnings growth. Second, I want to provide key updates on important strategic capital related events for 2014. And lastly, I'll provide a summary of key drivers of our $0.05 growth and guidance for 2014 FFO per share and continued confidence in our ability to deliver solid growth and cash flows, net asset value and per share earnings in 2014 and beyond. Starting with the balance sheet update, we continue to focus on a strong and flexible balance sheet which will allow us to execute on our business strategy. We have almost $9 billion in gross assets, up 32% since we received our initial investment grade rating in 2011. We have over $1.3 billion in liquidity. We have only $20 million and $61 million of debt maturing in the remainder of 2014 and in 2015 respectively. We anticipate continued improvement overtime in net debt to adjusted EBITDA on a trailing 12 month basis driven by growth in EBITDA and near-term projected land sales. Our fixed charge coverage ratio continues to improve as our business benefits from the continued migration of high quality tenants into Class A collaborative science and technology campuses in urban innovation clusters. Our fixed charge coverage ratio has improved significantly to 3.3 times or up about 50% since our initial credit rating assessment. Our unhedged variable rate debt of 26% is currently at a level to support an opportunistic bond offering in 2014 without having to terminate swap contract as we use the proceeds from the offering to reduce outstanding variable rate bank debt. We expect unhedged variable rate debt to be approximately…

So operator if we could open it up for Q&A please.

Yes. Thank you. (Operator Instructions). And we will take our first quarter today from Emmanuel Korchman with Citi. Please go ahead.

Hey guys, thanks for taking questions. Dean I will start with you, looking in your sub, you have a comment on the marketable securities balance underlying gains going up pretty significantly but it didn’t look like the biotech index sort of went up same amount. Could you talk about what might be happening there is just sort of a single need and that’s really outperforming or something else?

Well, I think in the follow on to our comment Manny, last quarter we had touch briefly on the upside and the value of our investments been easily two times cost and most of those investments are healthy cost. So you did have couple of securities that driven primarily by one that have a significant increasing value during the quarter and that’s reflected through equity, so just for everybody’s note here that is not part of our P&L or income statement. But I think they’re going to find us from time-to-time. You will see some pretty meaningful growth in the value that will reflect in our investment holdings on the balance sheet, primarily as privately held or private investments and private companies transferred into a public security and that really occurs into. One as the company is for public or two the required by a public filtrated company and we end up with a unrealized increased in valuation and that will allow us to have liquidity events overtime as we been fit providing a little bit of weather income from time-to-time.

Thanks guys for the explanation. Your exposure [India] went up in the quarter, previously had spoken about decreasing our exposure (inaudible) sort of idea?

That’s all FX.

But it looks like your number of assets went up unless I’m mistaken?

We brought one asset from redevelopment into operating that was fully vacant.

Got it. And then my final question, you guys have increased your debt issuance guidance within the notes, but you haven't increase any of your sort of sales guidance. And given the environment that Peter spoke about what assets trading at, pretty low cap rate. Have you thought about selling more stabilized properties and kind of rolling those into other lands and so other sort of the nominal properties, rather than selling out to the bonds markets?

As you know, we did that in a couple of submarket during later part of 12 and early part of 13. And so that program is done and we're really focused more on the land sale opportunities we have to use together obviously with bonds to invest in both redevelopment and development projects.

Thanks Joel.

Yes. Thank you.

And we'll now go to Jamie Feldman with Bank of America Merrill Lynch. Please go ahead.

Great, thank you. I know you guys touched on, in a couple of different ways on your JV prospects, I think you mentioned something like contributing land. Can you just clearly say, actually how we should be thinking about the JV going forward? And when we might see some activity and how?

Well, I think if I said a quarter or two ago, we would hope to have a JV in place, where we would be a majority partner, hopefully sometime late second or early third quarter and it would be focused on 50, 60 Binney properties on potentially on a 100 Binney. And because the opportunity is there on leasing or pretty sizable the dollar amount of building that project out approach $750 million so it's ideal for a JV opportunity where we can also earn fees and promote et cetera. So, that's haven't changed from the discussion we have maybe at Investor Day or thereafter.

Okay. And then reading the press release, if I read it correctly, so you talked about it potentially taking about Executive Chairman role in several years, can you talk more about what that means and if that means maintaining the CEO spot or not?

Well, I think it’s -- probably the easiest way to think about it is that under the new contract, I’ll continue to as CEO of the company through December 31, 2016, beyond that the contract will be what it is, or it may change, I don’t know. But I’m focused on this quarter.

Okay. I mean I guess, if you are Executive Chairman, would you stay as CEO, those are distinct roles, you can’t keep both?

I think they’d two distinct roles.

Okay.

Yes.

And then finally, when you guys were quoting rents you talked a lot about tech rents and life science rents, so you -- as you think about your major markets; are you tempted to go more down the tech route at this point than life science and how are you thinking about that decision?

Well, I think if you focus on kind of what we’ve said and how the supplement is presented and the press release, we haven’t changed our focus from these critical core urban science and technology clusters. I mean, if you walk into Mission Bay in our lobby, you’ve been there many times, you will see I think the moniker is Alexandria Science and Technology Mission Bay Campus. And so we have focused primarily on the life science industry, but as Steve said, it’s clear that the integration of information technology, engineering and other disciplines with life science continues unabated especially as we get into the digital healthcare age. And so these markets tend to melt together. So I think our focus won’t change, we’ll continue to focus on class A buildings, AAA locations urban campuses, innovation clusters.

But as you think about the rent growth, you're seeing in the market, is it rising faster for a traditional tech space or should I say tradition for modern tech space than it is for life science space?

Yes, I think the rate of increase is probably a bit higher in the technology sector than it is the life science sector. Having said that as we've seen healthy rental rate increases in Mission Bay and Cambridge and Seattle and San Diego as well, so they’re all very healthy.

Okay, alright. Thank you.

Yes, thanks Jamie.

And we'll now go to Sheila McGrath with Evercore.

Yes, good afternoon. Joel, I was wondering if you could talk a little bit more about the land acquisition in SoMa, how long you think it will take to entitle the pricing? And also you mentioned in your prepared comments that your recent acquisitions were tenant driven. I was just wondering if you're already in discussions with tenants at that site.

Yes, I’ll let Steve comment on that and then I’ll come back to some other items on the acquisitions.

Yes. Hi Sheila, it's Steve. On 500 towns and the entitlement process, we’ve actually submitted to the city as of last Friday. So the development team is very experienced team. We were able to go ahead and execute on that quickly. We expect that to take anywhere from 12 to 18 months. And we are on that full time. And as far as the pricing, I think, as you think about the pricing and they were two other bidders as well who were essentially at that price point. Relative to the rental rate increases, it's very consistent with the pricing that we've seen in the past for other high profile parcels like this one.

And our internal team and our external team have ongoing discussions with potential tenants. So that actually even to some extent began in a shadow fashion before we closed on the transaction. I think if you look at the acquisitions, both in San Diego and in Greater Boston, those have primarily been driven by either existing tenants or new tenants who have come to us needing real estate solutions where we couldn’t accommodate them with existing assets. So that as I said in my prepared remarks has driven some of the acquisition activity. And again it’s driven a lot by FDA approvals and the biotech sector being among many of the companies being pretty plush with cash and ready to do expansion, undertake expansion.

Okay. And Dean, a couple of quick questions, if you were in the bond market today 10 year debt, where do you think you could execute roughly?

Yes. Let me say while Dean is giving some thought to that. If you look at our last two bond deals, both were 10 year. If entire likely we wouldn’t do a 10 year bond deal; we would look to latter maturities and we might have them maybe somewhat shorter and somewhat longer duration bonds as we are thinking about this.

Okay.

Yes, I’d have to say probably somewhere depending on treasuries and treasuries have been moving around quite a bit but call it somewhere in the low 4% range on 10 year line.

Okay. And then Dean any comments on other income? It was a little bit higher than we had forecasted in the quarter. What was that? And if the quarter if you think you had any weather impact in the quarter?

Two questions, Sheila; the first one regarding other income. I’d say nothing really unusual in other income in the first quarter. I would say if you’re thinking about a run rate, you should think about roughly $3 million a quarter or $12 million of other income for the year. And then as far as weather because it’s been a key topic for earnings for REIT this quarter, we’re no different in the sense that our portfolio was exposed to the weather conditions in the quarter across the country. But the benefit we have is we do have a tripe-net lease portfolio, so the tenants to bear across cold weather or heavy snow, as well as heating and cooling costs depending on hot or cold weather. So the true difference here is we had limited P&L exposure as a result of our tripe net portfolio.

Okay, great. Thank you.

Yes, thanks Sheila.

Next is Steve Sakwa with ISI Group.

Thanks, good afternoon. I just wanted to I guess go back to the JV and just make sure Dean in the supplemental where you’ve got the guidance staged, and you talked about the land and sales (inaudible) strategically venture your capital, just kind of roughly 150 to 250. Are basically all the sales actually tied up in this Binney project and if not, are there other assets that you’ve got currently on the market today for sale?

Yes, let me say before Dean takes you through that. No, they aren’t all Binney. We’ve got about $35 million having nothing to do with Binney that’s in the forward part of the pipeline. And then Dean can give you some of the Binney stats.

Yes, I think the way Steve to think about Binney is if you turn to the supplemental near the very back in our feature and near term projects, on page 31 of the supplemental, our book value on 50/60 and 100 Binney is roughly $286 million. So, our goal would be to bring in and still maintain a majority position, but sell an interest in the land for development there. And you can apply a factor, if you want to assume something just sort of something in the 45% range for a partner for the sake of doing some math. And we expect to be north of book as we sell an interest in that opportunity there. So Binney is an important component but nowhere near. We still have a number of transactions that Joel mentioned that are smaller that are moving through and we think we are going to close the gap here on the remaining that has not been discussed somewhere in the $60 million to $65 million range. And we will provide more details probably over the next quarter.

Yes, so that means about 35 near term, you got another chunk for Binney and then a chunk that Dan just described that could in the [$50] million to $65 million range that’s kind of behind Binney. So we hope to accomplish those during 2014.

And Joel, I can appreciate you’re not giving too many details on the joint ventures negotiated, but are there -- I mean do you have kind of one partner that you are kind of actively going through right now or are you still kind of reporting partners or are there kind of issues that have come up in the discussions?

No, we are negotiating with one partner.

Okay. And then I guess just on the bond deals, what -- I guess is there anything that kind of triggered sort of pushing this off? I know back at the Analyst Day you talked about setting conservative guidance having to deal effectively beginning of the year. And I can appreciate this deal might happen in the second quarter, but basically, it got pushed off six months. Is there anything specific that kind of pushed that back obviously with your benefit to weighted -- I'm sure you wouldn't have forecasted the [rates] going down per se. So, is there something that kind of drove that decision?

Yes, I noted in your note that you had indicated that we said it would be early in the year. I don't know that we said that precisely, I think what we said is we had modeled that as if it would be earlier in the year, which would be the most conservative approach to it. But we have always thought about opportunistically taking advantage of that. We wanted to see -- we wanted to get through the tax square payoff, we've looked at the secured debt market, because we now have a huge amount of unencumbered NOI over 80%. So, we've been busy looking at that market as well. And I think we still see an opportunistic chance to do what we want to do that maybe outside the 10 -- within the 10 and outside the 10. So, I think that comment was we modeled it early, but we never committed to do it day 1 of 2014. I don't think that was ever on our mind.

Okay. And then I guess just lastly, Dean in terms of land sale gains, maybe I missed this in your comments. But would the land sale gains I guess to be related to the Binney sale or would they be separate sale.

Well, we haven't given guidance on gains for land sales and any gains would be excluded from our core FFO numbers. But we do expect the assets that are currently under advanced negotiations would be sold at a modest gain or a small gain.

Okay, thanks. That's it.

Yes, thanks Steve.

And we’ll now go to Jeff Theiler with Green Street Advisors

Hi, it's Kevin Tyler here with Jeff. I had a question. There was an article about a potential Alexandria partnership with Rice University's BioScience Research Collaborative. I know you guys have had success with deals like this and recently with the NYU deal in New York at the Alexandria Center for Life Science but do you feel it's in a bit on your current appetite for University related transactions and more broadly for a larger footprint in Houston?

Yes. I don’t want to comment on future market but I would say that our focus is not so much on University related transaction. We don’t think that’s where we want to keep our focus, I think, one, because the NIH budget is muted. That our experience along clearly would indicate that those budgets are more difficult to take operating monies for rental payments and we've never historically tried to tie our business to that factor. I think our focus has always been on the science and technology, urban cluster, innovation, locations and we want those to be near major urban centers, multiple centers, with [spawn] technology, which provides clinical trial opportunities, etcetera. I mean, New York is the paradigm example; Longwood is another great example; obviously UCSF. But we wouldn't just go to some random city and do a one-off deal with the University. That's not what we do. It would be an integrated campus made up of quite a number of participants in the ecosystem and that’s how we think about it. So if we do something in another location, it would be according to our strategic plan, not like a one-off deal.

That’s helpful. Thanks very much. I think the rest of our questions have been answered.

Thank you.

And we'll now go to Michael Carroll with RBC Capital Markets.

Yes, thanks. I'm not sure if you guys talked about this yet or not. But can you give us an update on the Ariad situation? I know the tenant has had some positive announcements, have there been any update about the amount of sub-lease space they want to do at 75, 125 if any?

Yes. I think I specifically indicated in my comments Mike that we have frequent dialogues and meetings with Ariad obviously because they are the tenant in our development project at 75, 125. I don't have any news or update on their sub-leasing activities, as they say it’s the last [offer] they were interested in sub-leasing all over a portion of the smaller building and that’s as far as we know that they have had discussions with a number of parties on that. But there is no update that I have specifically.

Okay. And then the increase at the bottom end of your guidance, was that largely due to the, I guess pushing back the bond offering in your model or pushing back in the year?

No, I think Dean went through the couple of items. He will just recap it for you quickly.

Yes, Mike not at all. The $0.05 growth as I stated earlier, I will rattle through quickly or $0.02 of that came from core related to early renewals. Primarily a large lease in Cambridge for 130,000 square feet $0.01 from value creation projects from lease up of additional space but we plan to deliver this year at 499 Illinois, $0.01 from acquisitions. And then $0.01 from various items included in that were updated assumptions for bond offering in 2014.

Okay, great. Thank you, guys.

Yes. Thank you.

And next is Tom Catherwood with Cowen and Company.

Yes thank you. Dean we look at this quarter pretty strong internal growth obviously, from a GAAP standpoint you are up 3.8% and your leasing spreads were strong as well. As we think about it though given the guidance raise and the strong performance we were somewhat surprised that you didn’t raised the same store guidance for the full year. And we are wondering as we think through the rest of the year is growth going to moderate somewhat internally or is there something else kind of driving leaving the guide where it is?

No I think we are doing very well relative to our guidance on same store, both the traditional GAAP view as well as the cash view. I think our cash tax as an example of 43 for the quarter if you just compare it the midpoint, the midpoint of 46 for cash basis NOI growth still puts us tracking for a 5%. So I think that you are going to see collectively as we proceed through the year, same store performance move closer to the midpoint and I think there is room to be on the upper end relative to those midpoints both on GAAP and cash.

Got you. And then Peter appreciate the outlook on some other recent sales. It looks like cap rates are coming down on some transactions, but when I look at you guys I mean you are trading at roughly at 6.4% implied cap rate and there seems to be some sort of a split between how public markets are viewing these and what they are going for in private transactions. I want to know your sense of kind of what’s driving that split and if you still see cap rates compression to the rest of this year.

Well, I guess Tom what I could tell you is that any time that we enter into a transaction the core markets we’re just seeing more and more people involved and that’s just driving the pricing further and further. And then after something trades I get an email or a call from somebody looking to find out why did it trade so well and we talk it through and then it turns out to be a good on transaction and a good comp and we talked about here on the earnings call. I think this is the third quarter in a row I’ve gone through some pretty good comps that would give people an idea of what makes you trade for it doesn’t seem to translate when we look at our implied cap rate. So I can’t be answer why there is a gap, I don’t quite understand it. But I will, I certainly think that we’re going to continue to see more and more investment in this sector and pricing will continue to be strong.

Got you. And then kind of building off of that, obviously a lot of interests in the sector not only assets, but in the kind of business itself; we’ve seen the entrance of senior housing obviously with the Vertex deal into the now life science real-estate sector which Kilroy has purchased in Seattle as they’re entering the sector as well. And obviously given the growth that you guys are seeing the value creation potential you’re seeing it’s kind of obvious that you would see more competition. But do you see some potential for that competition to even to some of your main areas or no someway affects your business strategy?

Well, I think it’s -- you have to distinguish between somebody owning a building or two or three or whatever even a big building like the Vertex building at Seaport Center versus somebody who has fully integrated teams in the ground who’ve operated for 15 to 20 years and who have a kind of base second to none. So, I don’t think we get much worried about the competition. As Peter said, we think it is absolutely fine the cap rates are being driven lower because that gives us a chance to create value whether I think say Peter likes to say rather than buying somebody else’s value and that just happened, impacted us. We have great opportunities for growth, I mean we can literally double the size of the company on a square footage basis on the land we own we hope to monetize a lot of that in the near-term has been said and on board EBITDA, but it haven’t stopped our growth in the core urban innovation centers. So I think just a acquisition or purchase doesn’t make a life science real estate company that really can expand multiple markets.

Got you. Thanks. I appreciate it.

Yes, my pleasure. Thank you.

And we will go to Gabe Hilmoe with UBS.

Thanks. Joel, just on the redevelopment property as 225 second, I am just trying to get a sense of what the opportunity is there, is that a version play from office (inaudible) and I guess what type of use it can be?

Yes, it’s an existing tenant that house outgrown their space and asked us to find a specific solution for them. And so yes, it’s a retrofit.

Okay. And then I guess on the move out, I mean I guess for you, I think (inaudible) to support is that a asset that something we can get put into, I guess for sell bucket or is that plan to redevelop that as well?

Yes. We’re actually already are in discussions with potential tenant to take that building, so we are advancing that more than likely going to be a retrofit into a lot building from currently a specialized use.

Okay. And then, I guess last from me, just going back to 500 pounds, any interest there or opportunity you bring in a capital partner or will that be all Alexandria 100%?

Yes, it would be Alexandria 100%.

Okay, great. Thank you.

Yes, thank you.

And at this time, there is one name remaining on the roster. (Operator Instructions) And we'll now take a follow-up question from Emmanuel Korchman from Citi. Please go ahead.

Yes, it's Michael Bilerman with Manny. Good afternoon.

Hi there.

Dean this 130,000 square foot large renewal, when did that become effective?

All right, effective in the first week.

Right…

Right. It was an original lease; there was a lease with an original lease end day in 2016. So, we have an opportunity to do an early renewal that started in the first quarter.

And just doing the math $0.02 is a $1.4 million. So, that's $11 a foot greater than what you would have expected, or what that's currently paying today In terms of a mark-up?

There was a very healthy mark-up on this space on a cash basis. And because it's, it's got a good term on it, as we get a GAAP benefit increases well with the annual steps.

So yes Michael, very solid step on rents.

Yes, it's a big building and it's a triple A location in the heart of Cambridge.

Hopefully it doesn't surprise you because BHP had massive steps in their Bakken holdings as well this quarter. So,

No, I just, I thought it was relative to renewal that was schedule to expire not forgetting that was 16 that you brought forward because I was just thinking about the delta from what was already in guidance, but this is effectively a new lease that you have brought forward or renewal that you brought forward, we are able capture a significant amount of markup, but I was just trying to make sure that I understood the dynamics of what was in guidance versus now. Now I understood it.

Yes. And the reason that happened actually is this was a tenant that’s had some pretty great success recently. And they are nervous about the opportunities to expand in Cambridge or even maintain themselves and so they emerged and came to us to try to put this field together. So that’s the market dynamic there Michael but as you know from the tour you guys took in January.

Yes, is there other opportunities like that where you can bring and I know you are always aggressively leasing space, but is there other role that you can pull forward from future years that can help growth in the near term?

The answer is yes.

And do you a number, I mean is there a certain size that you are working with right now in terms of transactions and leasing? I know the leasing volume at least in the quarter was lighter than what the history has been.

Yes, Jeff, because we have, so this is one of the smallest yearly rollovers I think in the history of company. The answer is yes, but I don’t think we want to re-revise guidance here on this call, so we just stay tuned.

And then just last question, just as you think about sources and uses this year, you’ve made the decision to fund the extra $100 million of your effective -- use of capital through acquisitions and development spend all with debt. And so I’m just curious in your mind, you worked so hard to get the balance sheet in the position, at what point do we start thinking leverage neutral? Because as it stands right now and you think about sources and uses in the guidance, the extra 100 million completely get funded. So what point did you trigger?

Yes, I think that's not an accurate for trail. So maybe Dean, you want to comment on that.

Michael, it’s Dean here. I would say in my comments, what I would like everybody to remember is that we have tremendous EBITDA growth occurring in ‘14 and continuing into '15. And if you recall my prepared comments touching on the fact that trailing 12 net debt to adjusted EBITDA will continue over time to migrate lower at a lower leverage point over time. And this is going to be driven primarily by EBITDA growth. But in this year, we do have some projected land sales, which we feel very comfortable with and that will help as well. But the EBITDA growth continues beyond ‘14 and that's your primary driver of balance in it. And on a trailing 12 basis, you're going to see continued improvement in debt-to-EBITDA. So, we did have a spike on a current quarter annualize, but that has more to do with funding and relative timing.

Right. No, I -- and I understand that. But all that is to create EBITDA growth that you're pushing in selling the land and not [introducing] assets, all of that was known, right? What I'm just trying to think about is this quarter you've added a $100 million to your uses of capital. You're finding that 100 million irrespective of the EBITDA growth, irrespective of the land sales all of which was fully discussed at the Investor Day. Your funding the extra $100 million of capital spend with debt and all I was trying to think about is knowing the future uses of capital that will be on the [common], think about the San Francisco land use just bought, you’ll have a development. At what point in your mind has it triggered the need for either to sell more assets given how robust the market is; Peter has talked a lot about that on the call or the need to raise common equity which I know you have talked about not wanting to do? And so that’s and I am just trying to balance out a little bit.

Yes, I think you will see Michael and it’s a really good question and we have to think about this everyday obviously because our target debt to EBITDA as we said, we want to migrate not only from broadly the [6.5] but hopefully over coming years lower. We clearly we will see we hope a larger amount of land sales this year than even the guidance has provided and we clearly would look at low yielding assets as a possibility for asset sales. And so, we have said we aren’t going to raise common equity this year. So, I think that we expect the land sales to make up the majority of what we need to make sure we are in the target debt to EBITDA ranges.

Okay. So I guess any incremental potential new use you would have need to actually raise the asset sale guidance if next quarter we come around and you have another $15 million of opportunity at that point, we would actually see an increase?

Yes. And I don’t want to -- I want to be really careful because this is a public call but I think you will see over the coming quarter, the $15 million that we spent on the tons of acquisitions will be fully covered as an example by a sale of an asset that we haven’t commented about we are still negotiating but we believe we’ve got a good probability of success. So I think in a sense it’s a little bit of match funding.

Okay, thank you.

Yes. Thank you for the great question.

And there are no other questions. At this time, I’d like to turn the call back to Joel Marcus for any additional or closing remarks.

Thank you very much. We managed to keep it within the hour. And I appreciate and look forward to talking to you on the second quarter call. Thanks everybody.

And thank you very much. That does conclude our conference for today. I’d like to thank everyone for your participation. And have a great day.