Ladies and gentlemen, thank you for standing by. Welcome to Douglas Emmett’s 2008 first quarter earnings conference call. Today’s call is being recorded. At this time all participants are in a listen-only mode. A question-and-answer session will follow management’s prepared remarks. [Operator Instructions]. I would now like to turn the conference over to Mary Jensen, Vice President of Investor Relations for Douglas Emmett. Please proceed. Mary Jensen – Vice President, Investor Relations: Thank you. With us today are Mr. Jordan Kaplan, President and Chief Executive Officer; and Mr. Bill Kamer, Chief Financial Officer. Please note that this call is being webcast live on our website and will be available for replay for the next 90 days and by phone for the next seven days. Our press release and supplemental package have been filed on Form 8-K with the SEC and those are also available on our website at www.douglasemmett.com. During the course of this call, management will be making forward-looking statements. We caution investors that any forward-looking statements are based on the beliefs of, assumptions made by, and information currently available to us. The actual outcome will be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations and those differences may be material. For a more detailed description of these risks, please refer to the company’s press release and current SEC filings, which can be accessed in the Investor Relations section of the Douglas Emmett website. Please note that the market data sources that are referenced in management’s prepared remarks are CB…

Thank you, sir. [Operator Instructions]. And our first question comes from the line of Michael Bilerman with Citi. Please go ahead. Michael Bilerman – Citi: Hi guys [inaudible] with me as well. Just a quick question on the marked-to-market, you talked about it sequentially going down about 400 basis points, but I know we are mixing in that in a bunch of different things. But Jordan you talked about rents in your market sequentially actually being up and at least the leases that you signed in the quarter had cash rent spreads of 21%. So I am just trying to figure out if you have lowered your asking rents or if you have… or market rents really not up for that spread scenario? Jordan L. Kaplan – President and Chief Executive Officer: Well, market rents… first of all, I have never been in love with that metric, but the bottom line is that first you have got the rents that are rolling of being from a peer, you know being from a later and later period where rents were stronger. So you are making a comparison that doesn’t that’s still in both by the beginning rent, the rent from the old lease and then we are asking rents and so that would naturally narrow as it moves forward. The question is to where the rents were generally moving up on March. I think they are, the zestful of movements it’s really hard to tell. I mean you can anecdotally point to leases where you say look rents are going up and you can anecdotally point to leases where they’re flat. And I don’t' think there is a long enough trend to really make a statement that they are absolutely flat or they are absolutely still going up. They have certainly…

Hi, I’m just wondering realizing that you probably don’t want to get into which specific assets you are interested in, on the deal volumes that you expect to, to come to market that you are currently tracking, what it is the dollar volume of assets that you are tracking or that you expect to come back and what is the split between office and multifamily? William Kamer – Chief Financial Officer: Well, let’s see. There is a pretty strong pipeline, certainly $1 billion plus. In the actual deals that you do that number could swing dramatically. There are some residential and then there is some large office. So if you end up hint of hitting it on the large office, it could be mostly office, if you end up hitting a large residential and some office, I don’t know how that will play out. In terms of the pipeline itself, there is a good amount of both, but I think it is coming. Michael Bilerman – Citi: And can you just talk about, if you are seeing any movement at all from West LA into Downtown, I know this is something that people talk about, something that you hadn’t seen it until now. Is any of that sticker shop starting to take effect? William Kamer – Chief Financial Officer: No, not really. As I said before, when you hear about a tenant moving from West LA to Downtown, it’s the sort of exception that proves the rule. It makes into the paper whereas, there are tenants moving out of Downtown to the West side all the time. So the West side is pretty tight now. So maybe there is not as many tenants moving to the West side, but still going to hear about a lot of cases. I think…

Thank you. Our next question comes from the line of Ian Weissman with Merrill Lynch. Please go ahead. Ian Weissman – Merrill Lynch: Yes. Good morning, good afternoon. Jordan, the West side has actually held up pretty well, if you look at the latest broker statistics, but maybe you could talk specifically about the North LA suburbs, specifically Woodland Hills, Warner Center where you had vacancy go from let’s say the high-single digits to the low teens. Obviously the mortgage market has affected that and there is a lot of sublease space, what is sort of your outlook for that market and where you expect rents to go over the next, call it 6 or 12 months there? Jordan L. Kaplan – President and Chief Executive Officer: Well, I think that it’s one of the markets that we are in that have some… still have remainder of some larger tenants, and it was a market that was still in the process of reaching its full potential as things started to turn. So it’s probably… I hate to use the word, tough, or say it’s one of our tougher markets to lease up, because we are leased up into the 90s there, it’s still a very good market. Over the short term now, I suspect that to the extent there is a fall off in the pace of rental growth, you will see it more there than you probably see it in some of the other places. In terms of the market over the long-haul, I still believe it’s a very good long term market to be in because there is a great mix of housing and the population or education and workforce and amenities and if you live out there and you work out there it’s a very comfortable commute…

Thanks. Your next question comes from the line of David Harris with Lehman Brothers. Please go ahead. David Harris – Lehman Brothers: Yes, good day guys. Is it possible to talk about the terms that you are offering to the investors on the fund in terms of the management fee structure of the promote, what sort of leverage you might be adopting within the fund? Jordan L. Kaplan – President and Chief Executive Officer: Yes, I don’t mind saying that. It’s basically… it’s basically a fund where the asset management fee is 1.25% and the leverage, the expected leverage levels will really range between 50% and 65% for office with a maximum of 65% on office and for residential, that will range between 50% and 70% with a maximum of 70% leverage on residential. The promote is effectively there is some little minor twist to it, but it’s basically 20 over… 20% over an 8 and it’s expected that the we will invest… take a position also equivalent to 20% equity position. So, we will have a 20% equity investment and we’ll have a promote that’s 20% over an 8% return. David Harris – Lehman Brothers: And the GE buildings that you referenced or the six-tenth if I should be characterizing them in a different way, the recent acquisition of the buildings that you are putting, would those go in a cost for you, you with being able to mark up? Jordan L. Kaplan – President and Chief Executive Officer: Basically, they would go in at our costs plus an 8% return, an annual 8% return on the equity we have invested and we bought them into an LLC and we’ll just transfer, so we have a certain amount of equity, we’ll put in the LLC to make that transaction…

Thank you. Our next question comes from the line of Rich Anderson with BMO Capital Markets. Please go ahead. Rich Anderson – BMO Capital Markets: Hi, thanks and good morning still guys. Jordan L. Kaplan – President and Chief Executive Officer: Hi, Rich. Rich Anderson – BMO Capital Markets: I just wanted to clarify, the mark-to-market numbers 31.2, that’s the higher office portfolio Honolulu and LA? William Kamer – Chief Financial Officer: Yes. Rich Anderson – BMO Capital Markets: Okay, I just want to make sure that. The higher guidance, is the increase in guidance a function exclusively of the fund? Jordan L. Kaplan – President and Chief Executive Officer: It’s primarily a product of the acquisitions that we did in the first quarter. Rich Anderson – BMO Capital Markets: The fund would… you would lose NOI, right the REIT would, you gained fees but I don’t know would the fund be initially sort of additive to your FFO outlook? Jordan L. Kaplan – President and Chief Executive Officer: Well, because we are assuming, we are doing the fund [inaudible]. So you mean if we removed the --. Rich Anderson – BMO Capital Markets: I am saying, you have six properties you bought, you are going to put them into the fund, lose 80% of the NOI, gain fees, like that? Jordan L. Kaplan – President and Chief Executive Officer: You mean over the long term? Rich Anderson – BMO Capital Markets: Yes. Jordan L. Kaplan – President and Chief Executive Officer: I think it depends on the success of the properties. I mean… I think we have so far the properties were contributing in the front, I believe will be very successful. So probably if you looked at and say, when you want to sell those on the REIT…

Thanks. Your next question comes from the line of Michael Knott with Green Street Advisors. Please go ahead. Michael Knott – Green Street Advisors: Hi, guys. Jordan, I apologize if I missed this earlier, but does the fund have any geographic constraints? Jordan L. Kaplan – President and Chief Executive Officer: It’s not worded very strongly right now, but it’s… the intention is pretty clear that the fund is constraint to Hawaii in the coast and the West coast. I mean I didn’t say, you absolutely can’t buy anything in Denver, but all of the purpose language of the fund is for acquisitions in the coastal markets and in Hawaii. Rich Anderson – BMO Capital Markets: But the coast probably defined not just your current markets? William Kamer – Chief Financial Officer: Up and down the coast. Rich Anderson – BMO Capital Markets: Okay. And what’s your observation if any about pricing movements over the last 12 months and markets outside of your existing portfolio and is that anymore attractive today than it was say six or 12 months ago? William Kamer – Chief Financial Officer: Well, I think San Francisco, I think one has a good long-term prospects and I don’t think pricing, I mean, may be it’s come off somewhat early to the way it has here, but for us to move into that market right now, we’ll want to come out even more, we have a higher comfort level here. San Diego, I’m seeing no assets that we’re intended to go and certainly want to – we would have wanted anyway and then I haven’t seen a lot come available there that you can really key into and say okay, here what’s happening with pricing there. Orange County is not a market we were ever focused in…

Thank you. Your next comes from the line of Dave Aubuchon with Robert W. Baird. Please go ahead. David Aubuchon – Robert W. Baird: Thanks. Jordan, with regard to your acquisition opportunities, would you say… do you think there is more inefficiencies in the office market right now or the residential side? Jordan L. Kaplan – President and Chief Executive Officer: I think that the residential historically trades just tighter than office, and so I think the residential is more… a little more dislocated than office. I think there is a little more desperation on the residential side right now than there is on office and that doesn’t necessarily mean that you get better returns in residential than in office because residential always trades so tight anyway. But it’s loosened up let’s say more from where it typically is our office and then the office is loosened up, maybe that’s rightfully so though. I don’t know. Both have come off and there is product unavailable on both fronts. David Aubuchon – Robert W. Baird: And do you feel, since you’ve outlined a pretty good case that the initial contributed assets are going in at a pretty good return already do you think it’s likely that your next deals in the funds are going to be concentrated toward the residential side or should we not assume that? Jordan L. Kaplan – President and Chief Executive Officer: We are, I would say we have very good residential and office deals that we are right working on, I mean we’ve got good pipeline. I mean it’s really, and I’m feeling very good about it. You guys heard me last quarter or maybe last year, we are working on stuff and we are just getting there, it’s almost feeling like practicing instead of doing, now we are actually doing. David Aubuchon – Robert W. Baird: Your comments regarding large opportunities that applies to the residential side as well? Jordan L. Kaplan – President and Chief Executive Officer: Both residential and office. David Aubuchon – Robert W. Baird: Bill, a question for you, can you just update on the… where the share buyback authorization stands and how much it was? William Kamer – Chief Financial Officer: First of all, I want to welcome Dave Aubuchon back into our quarterly calls. We missed you last quarter. And on the issue of buybacks, we… what we have said before is that we don’t announce any authorizations we have, to the extent that we have, we do buyback, obviously with our approvals. But we are not putting out any number ahead of time to create expectations that we might buy when we are not… we will announce deals that we actually do. David Aubuchon – Robert W. Baird: Great. Thanks for you time.

Thank you. Your next question comes from the line of John Guinee with Stifel Nicolaus. Please go ahead. John Guinee - Stifel Nicolaus & Company, Inc.: Thank you.

Hi, John. John Guinee - Stifel Nicolaus & Company, Inc.: Hi there, couple of quick ones. Did you ever break down the price for building of the six assets you acquired for $610 million?

[inaudible]. The once we did on the buildings, it’s five buildings, separating value, allocating value, we did it. John Guinee - Stifel Nicolaus & Company, Inc.: No, did you disclose it an SEC document?

No. John Guinee - Stifel Nicolaus & Company, Inc.: Would it be appropriate to ask you to do that now?

No, I mean we have disclosed the amount we are going to disclose I think on the portfolio. John Guinee - Stifel Nicolaus & Company, Inc.: Got you. Okay. Second, just as a clarification, we're assuming you're paying... you are getting paid 125 bips on the equity, not the whole gross fund amount?

Yes. John Guinee - Stifel Nicolaus & Company, Inc.: And then, when you decided to go with the fund versus raising common, is this… are you raising the fund because it's in your D&A and you are very comfortable with that, or did you do a trade-off and say, look at 26 or more… $26 of share or greater, I’m more interested in raising common? And is there a cost of capital analysis that you did comparing the cost of capital raising the fund versus cost of capital of the common?

That's a very good question. I would say that we did announce as just what you are talking around. We looked at where our stock was, but it's… and we felt like it wasn’t even a close call, let’s just say, that we will be willing to be diluted. But I also think it's fair to say they were prejudiced by our D&A. John Guinee - Stifel Nicolaus & Company, Inc.: Got you. Thank you.

Thank you. Your next question comes from the line of Mitch Germain with Banc of America Securities. Please go ahead.

Hey, good afternoon everyone. Just a couple of quick questions, and I apologize if I missed this. The entire six-tenths [ph] can be contributed at once?

Yes. It's in an LLC. We're just going to transfer the LLC interest over to the fund.

You mentioned that, but I just wasn’t sure. And I know that you guys have planned some redevelopments on a couple of the assets. Just to clarify your comments, that'll be done within the fund?

Yes, it's going now.

Yes, it's all happening within the fund.

Yes. Well, It's all happening within the LLC.

Got you. And just... how does it work? Does the fund have right for first refusal on any future investments?

No. The… we're practically the general partner or we're in charge of the funds. So, I mean if we think something is good to buy then we're buying it for the fund. It's not... there isn't some other kind of fund group that decides that they want something to go [inaudible] we’re it.

So, basically the fund vehicle will be your sole acquisition vehicle on a forward basis?

Exactly. The entire external growth strategy of the REIT is being executed through the fund.

Thanks, Jordan.

Thank you. Your next question is a follow-up from the line of Michael Bilerman with Citi. Please go ahead.

Yes, just to clarify, the $500 million to $1 billion, that's the total enterprise value of the fund or is that total equity?

Equity.

Great. Thank you.

Thank you. Your next question is a follow-up from the line of David Harris with Lehman Brothers. Please go ahead.

Hi, [inaudible] fun question today. Hey, is there a chance that... does the… or should I say, does the recognition of the promo, is that going to be possible at any time other than the winding up of the fund, i.e. could you harvest this up to three, four, five years or something?

Well, actually what happens… and we've been spending a lot of time on this issue. It's funny you should ask about it or about how the fund’s accountings impacts the REIT and what isn’t reflected in the REIT's numbers and in FFO and going through the AFF. The... typically, funds and especially when you buy properties in a firm like this and you have these type of investor, you do... you're working on a very tax-efficient structure. Now, we happen to be very focused on being tax efficient as a REIT because we just like being tax-efficient. So, we’re actually as REIT managers more focused on tax efficiency than on, let's say, driving up some particular metric like the FFO or AFFO. So, we’ll always take sort of the tax savings route. The funds may... where you see the impact of the promo in a fund is as a property’s cash flow is growing value, you'll go out and you'll refy and you’ll generate distributions from those refis that are tax-free and I suspect also will flow through and not be taken in really as income, but when you are private and you own a fund you think that's a great day, right, because you're getting cash. And I think the REIT will be happy it's getting cash too. So, I'm not sure that I think you might see… other than the asset management fees, I think you might see a real lag in the recognition of the success of the real estate owned by the fund until we actually do go and sell the properties, even though we will be getting economics... published and pretty good economics from the fund.

It becomes a little challenge for us to include that by the way of valuation. Obviously, you can get at it more from an NAV perspective or an FFO. The other question I have got is you point out that starting a fund with $610 million of specified properties and it is in contrast to what you’ve done before where you have outlined pools, which is pretty standard model of course.

Yes.

Did that affect your hurdle, i.e., wouldn't the hurdle have benign have you not been willing to put the $610 million in? I mean it's a great comfort to the investor to see the $610 million rather than a sign-up to a blind pool, isn't it?

Yes. I guess. No, it didn't affect. We actually are using with very, very small variations. The terms are the same as our terms of our last funds when we were a private company. So it didn't affect anything. I think we actually I am glad we did that deal and it’s a real good deal because it's encouraging. It's helping speed investors along, let's say, in terms of getting subscriptions and commitments because even though we have an incredible track of record, which you guys have all seen in our S-11 our last… in the nine funds we did as a private company, I think we’re being looked at a little bit as sort of a new… a different sort of animal right now because we are... it's a public company, it is the general partner as opposed to Dan, Ken, Chris and I. And so, the same way, you're answering little bit that to the public, you have an obligation… public company, you have an obligation to the fund. Well, very similar questions you guys were asking. And so I think we have to prove ourselves up again with the public REIT being a good GP, a good producer for the fund, and so this deal helps us rebuild, let's say, in our new uniform credibility as good fund managers because that's a structure that we want to continue and get back firmly in place the way we had it in place in the past as a private company. The other little bit of a headwind that were running up against right now is that we aren’t typically… we don't typically promise [inaudible] the returns that we've actually delivered. I mean we have delivered returns that were well north of 20 IRR, and we typically promise once more conservative returns and we’re not… we don't go and say, we are doing… we're jumping around the markets where people are really on their heels. And so when we out raising money, I do hear a lot from people like they're kind of hopping today as they want to be in distressed debt or distressed equity. Distressed is just a word everybody is focused on. And yes, I love to buy those sort of highly distressed situations, but it's not exactly what we do and we are describing the fund as doing really what we do [inaudible] what we did on the last nine funds. And so that's a little bit of a headwind because I think most people are sort of allocating money, particularly money from foreigners, that are allocated in US dollars, I think they're allocating them for, let's call it, distressed situations. And we don't describe ourselves as being acquires of distressed situations. We have a strategy that you guys are today with in the markets that we're in.

What are the returns that you are indicating to investors that you are talking to today, the 15?

We are telling investors the same thing that we told them on all nine of our last funds, which is that we will deliver to them… to the investor between an 11 and a 14 IRR. Now, we dramatically outperformed that on every fund, but that's what we say.

And that's what, net of fees and net of taxes?

Net of everything. Well, not net of income taxes, but, yes. It's their distributions, which they received, their checks and the cash flow… they are making investment and the cash they get back to the investors after everything will be between an 11 and a 14.

Okay. Great. Thanks so much.

All right.

Thank you. Our next question comes from the line of Michael Knott [ph], Green Street Advisors. Please go ahead.

Hi, Michael.

Hi, Jordan. I missed the first couple of minutes for the call. So this may have been spoken about earlier, but it sounds like you're pretty far along with this fund and it seems like a pretty wide gap to have to have between $500 million and $1 billion of committed equity. What’s the likelihood that it’s hit the lower… upper end of that range, and what's the timing for when it will be settled?

Well, we haven't had a first closing. So, we’ve given ourselves room in terms if you guys don't want [inaudible], but the reality is… I mean I actually just described on the… maybe with the last question that was I asked that in one sense I think we are getting a good response, but we are running up against the headwinds of most of that like there is a lot of big foreign investors that can write very large checks. But they do seem to be incredibly focused on [inaudible] distress, whatever situations, [inaudible]. And so, I think… I have been doing a lot of traveling and I think that when we meet with them, we’re able to catch their attention and obviously when they see the returns that we’ve delivered in our last funds that catches their attention and when they see what we have done here in the markets that we we're in. But until we really lock those subscriptions down and see where they are at, I won't really know… we are comfortable giving that range of $500 million to $1 billion. And maybe the $1 billion and maybe $500 million.

Okay. And then just to be clear, the promo structure is based on everything over [inaudible] on an unlevered basis, right?

No, it's not levered or unlevered, it's the IRR to the investor. So once the investor has received their money back with an 8% return, then the promo kicks in.

Right. So an 8% on their equity?

Yes.

Okay. Thanks.

Thank you. Ladies and gentlemen, this concludes the Q&A session of the call. I will turn the call back over to Mr. Jordan Kaplan for his concluding comments. Mr. Kaplan?

Okay. Well, I guess that the summary from all of the discussion that we've had is that I feel like Douglas Emmett is very well positioned to weather any potential economic storm with our team and our position obviously of multi-family portfolio, and I also feel like we are in a great place right now to take advantage of what's going on in this market. So, I hope you all enjoyed the call and I appreciate you joining us today. And we'll see you next quarter. Thank you.

Thank you. Ladies and gentlemen, that will conclude today's teleconference. We do thank you again for your participation. And at this time you may disconnect.