Welcome to the Camden Property Trust Fourth Quarter 2011 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Kim Callahan. Please go ahead.

Good morning, and thank you for joining Camden’s fourth quarter 2011 earnings conference call. Before we begin our prepared remarks, I would like to advise everyone that we will be making forward-looking statements based on our current expectations and beliefs. These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information about these risks can be found in our filings with the SEC and we encourage you to review them. As a reminder, Camden’s complete fourth quarter 2011 earnings release is available in the Investor Relations section of our website at camdenliving.com, and it includes reconciliations to non-GAAP financial measures, which will be discussed on this call. Joining me today are Rick Campo, Camden’s Chairman and Chief Executive Officer; Keith Oden, President; and Dennis Steen, Chief Financial Officer. Our call today is scheduled for one hour, and as a result, we ask that you limit your questions to two with one follow-up and rejoin the queue if you have additional questions. If we are unable to speak with everyone in the queue today, we’ll be happy to respond to additional questions by phone or e-mail after the call concludes. At this time, I’ll turn the call over to Rick Campo.

Thanks, Kim, and good morning and afternoon to everyone on the call. Our pre-conference music was chosen today to commemorate the 50th anniversary of the Beach Boys. I know, we’ve received number of e-mails about the Beach Boys, they maybe a little too old for this crowd on the call, but for some of us the good vibrations are definitely a continuing theme in the multifamily business. We are looking forward to catching the wave of continued strong operating performance in 2012. I want to thank our Camden teams that made our strong 2011 operating performance possible. We ended 2011 strong with same-property revenue increasing 6.7% over the fourth quarter of 2010, and 5.5% for the year, which leads the sector in revenue growth so far. Same-store net operating income increased 8% for the quarter, and 7.1% for the year. We expect 2012 to be a repeat of the strong growth that we had in 2011. Strong macro factors continue to favor our business. On the demand side, falling home prices and tougher mortgage underwriting has kept competition from single-family home limited. Our customers have been doing very well in a slow job growth environment. Nearly, 60% of the jobs created in last two years have gone to people 34 years old and younger. The average income of our residence has increased from $61,000 per year to nearly $67,000 in the last year driving the ratio of rent paid to income down from 18.5% to 18% in a rising rent environment. Historically, the rent to income ratio across our portfolio has been around 22%. While more young adults are working now, there are still 1.8 million living at home or in roommate situations, most of whom are waiting to move out into apartments. Multifamily supply is increasing from post World…

Thanks, Rick. Consistent with prior years, I’m going to use my time on today’s call to review the market conditions we expect in kind of in our four markets in 2012. I’ll address the markets in the order of strength by finding elaborate each one as well as our view as to whether we believe the market is likely to be improving, stable or defining in the year ahead. Following the market overview, I’ll provide additional details on fourth quarter operations and our 2012 same-property guidance. Starting with an overview of Camden’s markets, we’ll begin in Texas and North Carolina, whose markets received our top five spot this year, and all ranked as an A or A minus. Austin received an A rating with a stable outlook, the same rating as last year. As expected, Austin’s same-property revenue growth ranked number one in our portfolio in 2011, and we expected to remain near the top in 2012. Approximately, 15,000 new jobs are projected in 2012, which should easily absorb the 3,000 completions coming online this year. Dallas also earned an A with a stable outlook. Coming in just behind Austin at number two for 2011 revenue growth, favorable market condition should place Dallas in the top five markets again in 2012. Job growth is forecasted at 50,000 this year and the completion of 8,000 new apartments will be right in line with the 20 year historical average for completions in Dallas. In Charlotte, we view that market as an A with an improving outlook. We began seeing strength in this market during the second quarter of 2011, and by year end, it was one of our top performers. Rents continue to accelerate at rapid pace, and with current occupancy at 96%, Charlotte should be one of the best markets in…

Thanks, Keith. I’ll begin today with a couple of comments on our fourth quarter results. Camden reported funds from operations for the fourth quarter of 2011 of $64.3 million or $0.84 per diluted share, $0.01 per share above the $0.83 midpoint of our prior guidance range of $0.81 to $0.85 per share. Results coming in $0.01 per share above the midpoint of our guidance range resulted primarily from two items. Property revenues exceeding our forecast by $1.5 million due to higher than anticipated revenue growth across our same-store, non-same-store and lease up communities, driven primarily by rental rate increases, slightly higher realization rates on other property income, and better than anticipated leasing velocity at our two development communities and lease-up. We finished 2011 with a 5.5% increase in same-store revenues, towards the top end of our prior guidance range of 5.2% to 5.6%. Total property expenses continue to perform inline with our expectation for both the fourth quarter and year-to-date periods. For full year 2011, same-store expenses grew 3% over 2010, equaling the midpoint of our original guidance range for 2011. A $1.5 million favorable variance in property revenues was partially offset by higher than expected G&A and property management expenses of approximately $700,000. This unfavorable variance is the result of higher incentive compensation expense, as we adjusted full year accruals to reflect our actual 2011 performance, although the components of income and expense were generally inline with our expectations for the fourth quarter. I would now like to discuss our 2012 guidance. You can refer to page 27 of our fourth quarter supplemental package for details on the key assumptions driving our 2012 financial outlook. We expect 2012 projected FFO per diluted share to be in the range of $3.30 to $3.50 per share, with a midpoint of $3.43…

(Operator Instructions) And our first question comes from Jana Galan at Bank of America/Merrill Lynch. Jana Galan – Bank of America/Merrill Lynch: Hi, thank you. I was curious, if you could talk a little bit about the acquisition environment, and you’ve already been very active starting off the year. If you could talk about the cap rates on those transactions, and maybe what you’re anticipating to spread between acquisitions and dispositions could be going forward?

Sure, the acquisition market, we think it’s going to be pretty good this year. Towards the end of the year, people started pulling assets from the market, and at least from what we hear from the broker community, there is a fair number of broker opinions value that, what are coming out and there is a fair number of owners that are being pushed by their banks, and other vendors where we have debt maturing this year. So we think it’s going to be a pretty good acquisition environment. As far as cap rates go, the good news is, there is going to be more assets out there, the bad news is, cap rates are low. So cap rates on acquisitions are going to be anywhere from depending on core portfolios of 4.25, sort of outside core market somewhere in the 5 to 5.5 range. In terms of acquisitions versus dispositions and the spread between acquisitions and dispositions, last year, we were sort of right on top of each other in terms of ability to sell dispositions assets pretty much at same price we’re buying acquisitions at. This year we’re budgeting somewhere between 150 and 250 basis points of negative spread between acquisitions and dispositions, but if the market remains blank, we’ll probably do better than that. Jana Galan – Bank of America/Merrill Lynch: Thank you very much.

The next question comes from Eric Wolfe at Citigroup. Eric Wolfe – Citigroup: Hi, thanks. Looking at the multifamily starts number, they’ve obviously been trending up off of pretty low bottom, but looking at the competition, a much higher percent or rental now versus condos in the mid-2000. So I just wanted to get your thoughts on whether this trend is something to be concerned about, and even though the effected total starts remained impressed, the actual number of apartments delivering is going to be pretty close to where it was in the mid-2000s?

Yeah, Eric, this is something that we’ve been tracking for long time, and we watch very carefully. When we talk about the starts in multifamily, we include both components, both up for sale, and for rent. Even in this environment, that proportion has moved up slightly, but it’s – the bigger issue is the total number of starts, not what’s moving around within the category of multifamily. And just to put that in perspective, because I know there is a lot of concern and fairly starts have moved up from the bottom. At the bottom, we were at a run rate of something around 75,000 annual starts. And right now depending on whose numbers you’re using, we’re probably in the 150,000 to 160,000 annualized. One of the data providers that we used because there is a – it does a great deal of – has done historically a great deal of work in these particular areas is Ron Witten. And Ron just recently brought his forecast down for total multifamily starts to be below to the 200,000 level throughout 2014, and in his previous forecast had starts moving up close to the 250,000 in the 2014, ’15 timeframe. So there is a lot of analysis that goes behind that. But the bottom-line is that, recently the trend has been towards a more moderate view of the total starts. And just to put it in perspective, as it relates to Camden’s portfolio, I mean one of the things that we have used historically, and this goes back 20 years, it’s a pretty decent of rule-of-thumb, and in our business, it’s not perfect, but it’s like any rule-of-thumb. There is a reason that people have used it over the years. If you think about in any given market, roughly five jobs creates…

So I would not call it deferred, because deferred implies that you’re sort of, it implies something different than what happened. I would call it, where we had choices to make, for example, a paint job that’s on a community that’s at the margins. And you live with it another year, we absolutely made those decisions in 2009 and 2010. So we knew that there was going to be a catch-up component primarily around things like big ticket items like paint jobs, we’ve got far more paint jobs that we pursued last year, and budgeting again in 2012, than we did in’09 and ’10, and that makes up, that’s primarily the different, Eric. Eric Wolfe – Citigroup: Great, thank you.

You bet.

The next question comes from Rob Stevenson of Macquarie. Robert Stevenson – Macquarie Research Equities: Hi, good afternoon, guys. Rick, you talked earlier about getting the development pipeline up to $1 billion. Is this just a temporary increase, or do you feel comfortable running at that level, longer term which is close to 15% of your enterprise value? And I guess how are you thinking about also using joint ventures or funds to offset some of that risk to you guys?

Well, we are not comfortable with having $1 billion in any one year, because what happens in this pipeline scenario is that, you start one, you finish one, you start one, you finish one. So we’re comfortable on the $400 million, $500 million range, sort of annually as we’re completing our properties. But as we’re completing developments and adding new ones, but we definitely are not going to get to the level that we were at the peak in the last cycle. And the big difference in this cycle is that, we’re funding the development with equity, as we go, our balance sheet is a lot stronger than it was in the last cycle. Generally, we will not do joint ventures per se to offload the risk, we will do some in our fund. But I actually found that joint ventures in the past didn’t necessarily offset the risk when you had to deal with your joint venture partner with respect to bringing new capital on the table sometimes. So oftentimes joint ventures really don’t reduce risk much. With that said, we are definitely going to keep an eye on the total number of on balance sheet exposure that we have relative to the size of the company, and the strength of the balance sheet. Robert Stevenson – Macquarie Research Equities: Okay. And then, Keith, if I miss it or did you talk about the rent growth on the January, February or March renewals yet?

Yeah, we gave the January and February numbers in the range of 7% to 8% on rentals. Robert Stevenson – Macquarie Research Equities: Okay. And then quickly, Dennis, you said, you already owned 20% of the little over 4000 JV units you just bought out your partner’s interest in. These assets will be in the same-store pool for 2012?

They will not. They’re going to be in non-same-store for 2012, and they won’t actually come into the same-store pool, maybe not until 2014, because they’ll be out part of this month. So they’re not going to be in same-store. Robert Stevenson – Macquarie Research Equities: Even though you already owned a portion of it.

Yeah, because we actually consolidated them on January 20, something. And we will not be reporting in the same-store pool. Robert Stevenson – Macquarie Research Equities: Okay, thanks, guys.

The next question comes from Alex Goldfarb with Sandler O'Neill. Alexander Goldfarb – Sandler O'Neill & Partners L.P.: Good morning to everyone there. Just the California investment, it was definitely eye opening, just given that you guys haven’t done anything in California for quite sometime. Just want to get a little bit more color, what finally prompted you guys to go out there? And does this reflect the start of more investments, do the numbers now pencil, that make it worthwhile to allocate capital to California, or was this more of just a one-off?

No, we’re committed to California. Clearly, the challenge has been in the past that the cap rates have been difficult to make the numbers work. But bottom line is, we think the California market is a great market long-term. Particularly, their acquisition of the Glendale track just was a very, very opportunistic kind of transaction where we are buying the land at substantially less than it was offered for and worth in the past, and then we’re able to generate a very attractive development yield on that project. We still have our Hollywood in buying or so many buying project that we’re working on in California, and we’ll continue to be active in California. Alexander Goldfarb – Sandler O'Neill & Partners L.P.: Can you just give us sense what the expected returns are there on the Glendale deal, and how much below market you’re on a per dollar price what you paid for the land?

Well, the land was under contract before we acquired it at the peak of the market at around $32 million, $31 million plus or minus, we bought the land for $23 million. Alexander Goldfarb – Sandler O’Neill & Partners L.P.: No. Not the Hollywood, the Glendale?

That’s Glendale. Alexander Goldfarb – Sandler O’Neill & Partners L.P.: Okay.

That is Glendale. And we’re projecting a unlevered or a non-trended return around 5.5, 6 and with a trended in the 6 to 7, 6.5 to 7. And we think that’s a pretty attractive transaction. Alexander Goldfarb – Sandler O’Neill & Partners L.P.: Okay. And the second question is, on construction lending, it seems, that it’s still quite strict, the banks are still pretty tough in giving construction loans out. In your sense just speaking like all of your merchant friends, is there a sense that this is coming from the regulators that’s keeping the banks from lending or is this more that it’s internal to the banks like they just do not want to take any construction risk, and therefore they are being very careful in where they actually do construction loans.

I think, it’s both. I think on the one hand, the regulators are pushing them to get merchant builders that have stranded loans, that haven’t been able to either sell those assets yet to pay off. So you’re getting some pressure from regulators. We’re hearing that from our banks. And then also, it’s just the banks asking questions today that they didn’t ask in the past, which is questions like what are your continuing liabilities, and what ratio of capital do you have in your entity to continue the liabilities demand that they are just not willing to take a merchant builder’s guarantee without any capital behind the guarantee. I mean, some of these merchant builders were 50:1 leverage to their capital. And I remember asking some of my merchant builder friends who will not be named here. What was your ratio of actual tangible capital and not your real estate value, but real liquid capital to your debt? And the bottom line is that, they said that it was infinite. They couldn’t calculate the number because you really have not liquid capital. It was all just their joint – the equity was reflected on the balance sheet with their joint venture interest in their promoted interest if you will. We actually talked to a banker that said that their bonuses were going to be eliminated because of downgrades, because of credit ratings on those kinds of loans. So with that said, it is a very difficult environment today, it hasn’t you’re not back to the sort of heavy days in 2005 and 2006 where any merchant builder to get a loan without much trouble. It’s a very difficult time, and I think the other interesting piece of that is, it’s not just the debt that’s the governor on multifamily development, it’s the equity. You have a number of equity people that were out there who have said; well I’m going to do two deals in Houston. I’m going to do two deals in Washington DC. And the merchant builders are fighting for that equity. So it’s both the equity side of the equation and the debt side of the equation that’s the governor and the mark, and that’s why when those – taken those numbers down and others have taken, their construction starts down. It was almost sort of happening in August, September of last year, but you haven’t seen really any major improvement in the credit market since then. Alexander Goldfarb – Sandler O’Neill & Partners L.P.: So the point is that, despite the pretty solid story for apartments in terms of limited supply and people choosing the rent, it’s probably known just you don’t see any cracks in the construction lending, it sounds like it’s going to be pretty strict for a while?

I think so. Alexander Goldfarb – Sandler O’Neill & Partners L.P.: Okay. Thank you.

The next question comes from Karin Ford at Keybanc Capital. Karin Ford – Keybanc Capital Markets: Hi, good morning. Keith, I wanted to follow up with you on your rating for Washington DC this year. I know you took it down from an A to B, but after hearing your commentary about the challenges there, I was surprised that you rated it stable. What gives you confidence that that market shouldn’t be labeled deteriorating given many things, that seem like are going to be issue later on in the year there?

Well, I think there is a lot of hindering about the potential for issues later in the year, but if you look at where most people are on forecasting job growth in DC, we’re still in the 30,000 to 40,000 job range for DC, and while the others some, there is some supply coming online even that market is still with jobs and projected supply is still above a 5:1 ratio for 2012. And if you look at our, so in terms of thinking about our numbers going forward in DC, we’re still projecting roughly 4.5% revenue growth in DC and that’s in most years in this business that would be considered to be a really strong number, but relative to some of our other markets where we’re getting double-digit revenue growth, it doesn’t look strong. So it’s – given what’s happened in the last few years in terms of rent growth, and the fact that we’re 8% above the peak rents than in DC relative to most of our other markets where we’re still below the peak. It’s time certainly for a little bit more cautionary note, but 4.5 revenue growth that in any of our markets in any given year, I will take that any day. I think most of the – it’s not that it was not a different scenario out there that you could kind of get in your brain and trivialize out. But I can think of half a dozen of those, but I think the most likely outcome for 2012 is still a year where we get 30,000 to 40,000 jobs. We bring on 5,000, 6,000 new apartments and we still get the 4.5% rent growth. Karin Ford – Keybanc Capital Markets: So it sounds like the job outlook is really the thing we should watch for whether or not we need to change the scenario or trivialize it later on the year?

Absolutely. Karin Ford – Keybanc Capital Markets: Okay.

Because the supply side of the thing is already baked. Karin Ford – Keybanc Capital Markets: Right.

It is what it is. Karin Ford – Keybanc Capital Markets: Yeah.

We are going to get – that’s the kind of deliveries we’re going to get. And I think the variable that we will all be watching is this job growth. Karin Ford – Keybanc Capital Markets: Okay. Second question, I know you said your purchases, move-outs for home purchases was stable across the portfolio in the fourth quarter. Were there certain markets where the number was up more than the portfolio as a whole? I think one of your competitors said they saw some – an increase in Phoenix, do you guys see any markets where you saw a tick up in that number?

If you look at it across-the-board, you’ve got a – in our portfolio the range is pretty broad and so it’s kind of hard to say, was any broad brush, what’s going on. All the way from Ohio and Denver, it was almost 17% for the fourth quarter. You had – Atlanta was in that range, 17%. But at the other end of the range, you got, California is still at 5.9%, Las Vegas or Austin is at 7.4%. Most of the Houston markets were in the 10%, 11% range. So it’s not that we don’t have markets that are higher, it’s just that even the markets that are higher are below the average rate that we’ve seen in our portfolio for the last 20 years, which is somewhere around 18%, 18.5% range for a long-term average. So even in outlier market, where you see 16%, 17% relative to ’12 or ’11 that things like a lot, but relative to historical averages, it’s still extraordinarily low. Karin Ford – Keybanc Capital Markets: Okay, thank you for the color.

The next question comes from Rich Anderson with BMO Capital Markets. Richard Anderson – BMO Capital Markets: Hey, good morning.

(Inaudible) Richard Anderson – BMO Capital Markets: So, Rick, your comments about construction financing being hard to come by. That kind of surprised me, because I guess I’ve been hearing that banks are lending for multifamily construction more these days. Is this a new phenomenon?

Well, I think they are lending more than they were. Richard Anderson – BMO Capital Markets: Right.

But they’re not at full till the way they were pre-bust and pre-financial crisis… Richard Anderson – BMO Capital Markets: But it’s trending up, isn’t it, not?

Clearly, it’s trending up. Richard Anderson – BMO Capital Markets: Okay.

I mean starts have gone from 70,000 units or 75,000 units to 150,000. So obviously those are, when you look at the pure increase, you could say construction lending has doubled and it clearly has. The question though is, can the merchant builders ramp up as fast as they could in the last cycle. And part of the issue is that the structure of their businesses has fundamentally changed, where in the past the banks would make them construction loans without regard to the capital that they had behind their companies to pay those loans back. And that’s a different animal today. Richard Anderson – BMO Capital Markets: So I guess, I meant when I say trending up, but trending up substantially. Let’s start with my statement.

They are. Richard Anderson – BMO Capital Markets: Okay. Just so and we’re clear.

When we started, post-Wold War II low, and you have a historical number of 300,000 and you go from 75,000 to 150,000, that’s substantial. Richard Anderson – BMO Capital Markets: Yeah. Okay. I just wanted to clarify that statement.

Rich. Rich, let me give you the progression, and again... Richard Anderson – BMO Capital Markets: You are eating up my question time here, but go ahead.

Go head.

The progression is in the U.S. starts, and these are Witten’s numbers. And so the 11 actuals would have been 150, that ‘12 projected as 186 in the 2013 projected as 177. Now, if you go back to 2009 in that progression, you get the risk number, which was up 75,000 apartments. Don't misunderstand our message, starts have increased and based upon these numbers, they are likely to increase again in 2012, and then moderate to roughly 175 in 2013. To me that's not the question, because what that level of starts translates to in our markets, like the Camden level, where we’re looking at starts and completions, that translates into roughly 43,000 apartments. And we’re projecting 438,000 jobs in 2012, that’s a 10:1 ratio. It’s not yet zero, and 43,000, but it’s a decent size number of completions across Camden’s market, just it’s dropped by the historical relationship of jobs to completion. So I think what – where people are, where they’ve started the [handling] is thinking that, because you get this progression from 75 to 150, that the next data point is likely to be 300, and the one after than 600. And it’s just not in the cards. Richard Anderson – BMO Capital Markets: Okay.

I mean that could happen. So it’s a matter of scale. Richard Anderson – BMO Capital Markets: So the reason why Ron has reduced the supply outlook is a function of what?

Two things, but there’s three things, construction lending that we’ve talked about. Richard Anderson – BMO Capital Markets: Yeah.

The equity availability, and the sort of selectiveness of the equity capital that’s out there. And then third, which is an interesting number is that, construction costs are starting to rise. So when you look at the numbers in terms of what construction yields could be with costs going up, Witten’s analysis, takes into account that it will – as you go forward in the cycle, it will be harder to make numbers work, and therefore from a return perspective, and therefore you won’t have as many starts. Richard Anderson – BMO Capital Markets: Okay. And then my second question is, if you could just find for me what the stable mean?

Stable means that it’s looking – when we’re giving those Ag that go with it, it’s looking out over the course of 2012. Though at the beginning of 2012, you start out a point in time, you have a budgeted renewal rate increase, or things getting tighter or not as tight over the course of the year. So stable just mean, things are stable, if it’s a tight market at the beginning of the year, it’s likely to be a tight market at the end of the year. Richard Anderson – BMO Capital Markets: Okay. So, it’s not like market rents aren’t moving stable. It’s relative to where the starting point will be in the beginning of the year?

That’s correct. Richard Anderson – BMO Capital Markets: Okay. How many of the stable markets are, the starting points are very high, that makes sense?

Yeah, so Austin? Richard Anderson – BMO Capital Markets: Okay. Any of the A markets I guess?

Yeah, Austin, Dallas, Charlotte, but Charlotte is improving [really] certainly. Richard Anderson – BMO Capital Markets: Then anyone on the top of the A list. Okay, thank you.

Yeah.

The next question comes from Paula Poskon at Robert W. Baird. Paula Poskon – Robert W. Baird & Co., Inc.: Thanks. Good afternoon.

Hi, Paula.

Hi, Paula. Paula Poskon – Robert W. Baird & Co., Inc.: Can you talk a little bit about the strategy of how you’re identifying assets for dispositions? Is it more asset specific, around age or quality or more call on the market or sub-market dynamics or just a caught in the outplay on the cap rate environment?

So, our discipline around dispositions is almost always around the notion of sub-market quality and asset quality. We also have a very, we look at a five-year return on invested capital, which includes CapEx, rent growth and much of other things. So if you look at the five-year return on invested capital and you just take the bottom fourth quarter of our portfolio, so that sort of defines the hunting range for the assets that get on the disposition list. It starts with returns that are substandard because rents aren’t growing fast enough, or CapEx is too high, within that then we look at things like the direction of the submarket, asset quality, is it still – is it gotten to the point where it just not – we can’t operate it to a Camden standard anymore. And that’s how we fine tune the list of the bottom quarter of performers. And so, for 2000, we’re ramping up dispose this year in the $250 million range. So depending on the average asset size we’re talking about 6 to 8, probably 6 to 8 Camden communities out of 200. Paula Poskon – Robert W. Baird & Co., Inc.: That’s helpful. Thanks. And I know you talked a little bit about move-outs to home purchasing. Could you talk a little about move-outs due to rental rate increases, and what’s happening there trend wise and are you still able to backfill with higher quality tenants?

Yeah, we have experienced in the last two years, higher move-outs outside the to purchase home category, primarily around job relocations and financial instability. Those have moderated. And for 2012, we don’t think those are going to be – we think we are past the worst of the kind of tenant credit concerns. And as Rick mentioned in his comments, our credit quality across our portfolio has actually improved pretty significantly since last year. And the percentage of rent on average that our residents are paying is in the 18% range, which from a historical standpoint tells us that we’ve got room to grow on continuing to push rents. You’re always – when we are pushing rents, you always have the possibility that at the margins, yes, the person can pay it, but they are annoyed because of it. And we do our best to manage through that process. But at the same time, when you are raising rents on average of 5.5% across an entire portfolio like ours, there’s a lot of touch points there with people that are paying higher rent. I think the more interesting way to look at it is, where we are with regard to peak rents in our portfolio. And we are still not – this is as the numbers kind of hard to get your head wrapped around because we’re all talking about rental increases and how good the market is right now. But we have not yet, on average in our portfolio gotten back to the rent level that we were at in February of ’08. Paula Poskon – Robert W. Baird & Co., Inc.: Would you say that’s the majority of your markets or just a handful?

No, it’s probably two-thirds of our markets are still below peak rents or further above. And I understand the concept of you drowned in the river and the average depth was only 4 feet, but it’s a bit large in our portfolio, it just tells you that we’ve got lot of room to grow, particularly in markets that have lagged in the recovery. I mean, the Las Vegas is still 18% below peak rent and Phoenix is still in the 9% below peak rent. So we still think we got a lot of room up for growth in our portfolio from the markets that got beaten up the worst. Paula Poskon – Robert W. Baird & Co., Inc.: Thanks. And then just one final question, back to the new supply. Are you seeing, are you finding it anywhere more difficult or taking more time to get plans approved or get through the entitlement process just given how many municipalities have cut staff over the last several years and now at least in certain markets where there is more new supply on the radar screen, we are certainly hearing that here in Fairfax County, where the staff is overwhelmed and just can’t get through the workload?

I think that’s definitely a initiative we have been facing is municipalities have cut staff, and even in places like Houston where a month or two behind on one of our space, our 55 and older property primarily because the building inspectors hadn’t inspected buildings in a longtime. So you had new people and they cut staff and its taken longer to get things done because of the limited staff folks and then the people that are on staff are having to be educated both our side and their side to be able to get things accomplished. I think that’s definitely a key issue and that it’s taking longer to get things planned and longer to get them build. Paula Poskon – Robert W. Baird & Co., Inc.: That’s all I have. Thanks very much. Yeah.

Yeah, on the other hand municipalities are seem to be much more motivated these days to have a taxable interest rather than rolling out, so. Yeah, unfortunately they don’t communicate in house, they’re some inspectors they maybe helped you – help you, gave your project sort of its own, but once its in the upper they tend to be just sort of [side load] and they do what they do. Paula Poskon – Robert W. Baird & Co., Inc.: Great. Thanks very much. That’s all I have.

You bet.

The next question comes from Michael Salinsky at RBC Capital Markets. Michael Salinsky – RBC Capital Markets: Good morning, guys. First question, did you get new lease rates, what you guys expect new lease growth in 2012. And also just given how aggressively you pushed in the fourth quarter on renewals? How do renewals compare to input – renewals compared to current market rates in the portfolio?

The first question was on rental rates? Michael Salinsky – RBC Capital Markets: No, your new lease rates. You quoted I think 7% to 8% number for the fourth quarter. I am just curious just to what you – but your new lease rates were significantly below that. So I’m just curious as you look at ’12 kind of what you dialed in for new lease rent growth?

So if you think about – but the number that we gave you was for renewals, for both, for January and February. So from a revenue management standpoint, we’re looking at the model it’s forecasting out. No further than 120 to 150 days, so as we go put together our budgets, we’re looking at what’s the total amount of rental increase that’s going to happen for that individual community. So our revenue growth, forecasting, we don't forecast the difference between new lease rates and renewal rates using our revenue management tool. We do that through our property management folks who make depending on that community, every community has its own historical renewal rate and they break it down between renewals and new leases and have a rental growth rate assumption for that market. So, our own target at the midpoint is 5.5% across the entire market, but it varies pretty widely across that from community to community and within each community depending on how many renewals they historically have versus new leases. Michael Salinsky – RBC Capital Markets: Okay. Second one is just a book keeping question. Can you walk through what you’re expecting in terms of real estate tax growth for 2012, as well as utilities and also just, in terms of sources and uses, what you’re expecting in terms of total development outlays, including land purchases to back stock the pipeline?

Okay. As far as kind of expenses, I’ll talk about that one first. We have a 3% growth in expenses, 4.3% is real estate taxes and if you kind of look at where we probably have the highest increases in real estate taxes it’s going to be in our Texas and Florida market. And a couple of those markets, all of those markets are probably greater than 5%, but was offsetting that to get us to a 3% growth rate. The other big line item in expenses is salaries, we’re actually budgeting to only go up 1.5% and that is because we had negative experience in 2011, as that relate to large medical claims, so that’s the next biggest category. And the only other item of size that I’d talk about is kind of R&M and we are looking at [R&B] and relatively flat zero to 1% in ’12 over 2011. Michael Salinsky – RBC Capital Markets: Okay. Did you give the development spent?

Yeah, development spent for 2012 is going to be approximately $200 million. Michael Salinsky – RBC Capital Markets: That includes additional line purchases to backstop the pipeline or no?

Yes, it does. Michael Salinsky – RBC Capital Markets: Okay. Thank you.

Our next question comes from (inaudible) at ISI Group.

Thanks. I was just hoping to get a little bit more color on the increase in the average income for your tenant base, it seems pretty pronounced given what we’re seeing internationally in terms of waste growth. Is that more concentrated in certain markets or is there something going on that you need your portfolio?

I think, it’s really across the portfolio, and what’s happening is, as the rent increases and renewal rates increase, what’s happening is, people who took advantage of lowering rents were they could afford a better located or maybe higher quality apartments than they hand in the past, they were able to move up, sort of B buyers moving up into A properties because of the lowering of the rents. As the rent cycle has turned around, now what’s happening is as folks that aren’t necessarily their incomes haven’t gone up enough to offset that rent, they certainly have to actually move down market. So what’s happening is that our people are, so the new people coming in the door are – they have higher income. So it’s not necessary that our existing rent basis is increasing at a very significant rate, because obviously 61,000 to 67, 000 is pretty big increase relative to what’s going on in the income growth. So it’s really people moving in that have higher incomes and people moving out that have lower incomes because they were pushed, they came up during the rental decline cycle and now they’re having going back down market in the cycle. We haven’t seen a lot of variation in markets, it’s already happening in all the markets in a very similar way where people are just getting the higher quality residents coming in the door, when our lower quality residents are having to move down market.

How does that 67,000 compared to the prior peak, and do you worry about as you kind of upgrading tenants that just by the nature of that definition they are better qualified for ultimate home purchases, later on the cycle?

Well, I think, I don’t have the numbers for the peak at this point; we can look them up and give you those offline. But I think that even these, even the residents are coming in now that have higher incomes, still have the same issues with respect to the people that are in there, credit scores are better, but the balance sheets of these people are pretty limited in terms of down payments and the ability to get home loans. I don’t think that our – that the people are more out to buy a home, but obviously, when you have higher incomes, they have the ability to do that. I think one of things we looked at is sort of the age range, and our age range really hasn’t changed that much. And what drives home ownership is really demographics based on age, those are the people get the higher propensity they have to own homes. And so from that perspective, even though our income is up, our average age has not risen. The – sort of early 20, mid-20s group continues to be the dominant demographic force that is pushing our business. They tend to be very high propensity to rent folks. And so even if they have better incomes, they are not going to go buy homes until they get to that sort of sweet spot of the demographic to buy homes, which is really 35 to 45 years old.

Understood. That’s helpful. Maybe just one quick follow-up, I know you’re talking about this kind of jobs to completions ratio and the average about 5:1. Can you give a little more color at the market level for – let’s call it the top five or six markets in your portfolio?

Top five or six ranked buy?

Sure. In anyway you have them?

Yeah. I will get back to you offline.

Sure, that’s all from me. Thank you.

Okay.

This concludes our question-and-answer session. I’d like to turn the conference back over to Rick Campo for any closing remarks.

Great, well thanks for staying on the call. And we will be taking music requests via email for the next call. So we’ll see you at the next conference. Thank you.

Conference is now concluded thank you for attending today’s event. You may now disconnect.