Welcome to the Washington Real Estate Investment Trust First Quarter 2009 Earnings Conference Call. As a reminder, today's call is being recorded. Before turning over the call to the company's President and Chief Executive Officer, Skip McKenzie, Kelly Shiplet (ph), Director of Finance will provide some introductory information. Ms. Shiplet, please go ahead.

Thank you and good morning everyone. After the market closed yesterday, we issued our earnings press release. If there is anyone on the call who would like a copy of the release please contact me at 301-984-9400 or you may access the document from our website at www.writ.com. Our first quarter supplemental financial information is also available on our website.Our conference call today will contain financial measures such as FFO, NOI and EBITDA that are non-GAAP measures and in accordance with Reg G we have provided a reconciliation to those measures in the supplemental.Please bear in mind that certain statements during this call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially.Such risks, uncertainties and other factors include but are not limited to the effect of the current credit and financial market conditions, the availability and cost of capital, fluctuations in interest rates, tenant's financial conditions, the timing and pricing of leasing transactions, levels of competition, the effects of government regulations, the impact of newly adopted accounting principles, changes in general and local economic and real estate market conditions, and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2008 Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.Participating on today's call with me will be Skip McKenzie, President and Chief Executive Officer; Bill Camp, Executive Vice President and Chief Financial Officer; Laura Franklin, Executive Vice President and Chief Accounting and Administrative Officer; and Mike Paukstitus, Senior Vice President, Real Estate.Now I'd like to turn the call over to Skip. George F. "Skip" McKenzie: Good morning and…

Thanks Bill and good morning everyone. Overall our real estate portfolio showed a stronger than expected performance this quarter. On a same-store basis, our economic occupancy was 93% compared to 95.4% in the same period one year ago, and 93.6% at the end of the fourth quarter.This quarter WRIT executed over 235,000 square feet of commercial lease transactions with an average GAAP rental rate increase of 11.1% of expiring leases of an average lease term of 3.6 years.Rental rates on the residential sector increased 2.2% compared to the same period one year ago. In the office sector we executed leases for a total of 63,000 square feet at an average rental rate increase of 13.4% on a GAAP basis.In the medical office sector, we signed leases for a total of 11,000 square feet at an average rental rate increase of 9.8% on a GAAP basis. Our medical office portfolio continues to be the most occupied sector at 97%.In the retail sector, we executed leases for a total of 21,000 square feet with a rental rate increase of minus 5.2% on a GAAP basis. This slowdown was primarily generated from the walkout of the 6000 square feet tenant, which represented a 28% of the Q1 retail leasing activity.Additionally, the retail leases this quarter involved non-typical retail of leases more similar to industrial transactions in less than trans (ph) space. In the industrial sector, we entered into leases for a total of 140,000 square feet with a rental rent increase of 13.4% on a GAAP basis. This was higher usual leasing velocity, thanks to three leases in excess of 15,000 square feet signed take it, and VIP and Saint Clair (ph).Our two apartment development projects, Bennett Park and Clayborne was 79% leased, and 82% leased at the end of the first quarter. This compares to 79% and 64% at the end of the fourth quarter. We have experienced increased activity at both of these properties over the last month, with Bennett Park at 88% leased and Clayborne now at 89% leased.Now I would like to open the call for questions.

Thank you. (Operator Instructions) Our first question comes from Mark Biffert with Oppenheimer & Co. Please state your question.

Good morning guys. Related to leasing, I have a couple questions just on what you're seeing from the discussions -- last quarter you had mentioned you're negotiating with the World Bank on their renewal next year. And across your other portfolio you have a sizeable renewal -- amount of renewing as well. I am just wondering what you're hearing from tenants and the likelihood that they will renew versus those that have said that they are giving backspace?

Okay, good morning Mark. As it relates to World Bank, I am extremely optimistic that that's going to be signed very soon. I'd like to have said we would have it signed today but I can't say that right now. But I am extremely optimistic on that front.With respect to the rest of rollover, it's actually for the balance of 2009 just to clarify, it's actually a very light year. We only have something on the order of about 6.5% of our economic lease income rolling for the balance of this year. So this year is actually a very light year.As it relates to 2010 which I think is where you might be seeing a little bit of a bleep up in some of our exposure, one of the tenants is LaFarge out in the Western Corridor and actually Harman project -- I don't have any particular entail on that right now. We've just begun the process of trying to discuss with them that World Bank lease that I had just mentioned that actually is the biggest sort of participant in those 2010 rollovers. And those are probably the two ones that stick out more than any other. Yeah, across the street we have a 40,000 square feet lease at our Atrium office building and they have renewed. How long was that for Mike? That was for --

Another five years.

Another five years. So, those are the three biggest exposures and with the dramatically biggest impact being the World Bank lease. That's a 148,000 square feet, and that's high $40s rents. So, that has a huge impact on that number.

How about the rest of the portfolios, the retail, the industrial portfolios?

We don't have any giant tenants rolling in those areas. I would say just sort of from macro level, I mean the markets are soft. We've actually been able to have a pretty good retention rate even throughout this. As I reported on my the comments we were 76% for the first quarter. Having said that, it's going to be sort of a bear-double environment for the rest of the year in my view. I think we're going to have continue to have retention rates that we've experienced historically. But I'd be lying if I didn't tell you that the leasing dynamics market wide are relatively soft.

Okay and then last quarter you, Bill I think mentioned that your occupancies would be in the 90 to 95% range with industrial being at the low end. And it appears that industrial is already down at that low end. I mean what are your expectation in terms of being able to maintain occupancy at that level through the rest of this year?

Yeah, I mean I think we can -- I mean we have been hit pretty hard in the industrial sector. Interestingly enough probably the area that we've been hurt as much as any is down the 395 Corridor, where -- which has historically been one of our strongest markets, which is our Northern Virginia Industrial Park. We have two buildings down in the Fortune area. And I think I've mentioned on previous conference calls, one of the things that's really impacting us in that market is these aren't historical -- these aren't the traditional large Bay industrial buildings. These are small Bay warehouse generally 5 to 20,000 square feet and they are mostly consumer oriented type operators. So we would have small general contractors in there. We actually have a Deer Park distributor in there, for example, that's actually doing well. But it is those type of users that are down there and they are being hit by very much the same forces that are hitting the consumer retailers that have problems today.

Okay. And then Bill if you can talk a little bit about what you're hearing from the GSEs on their underwriting. Today it seems like the coupon rates continue to fall, and I am just wondering what they are basing that on and given the longer terms that they are also offering people on a fixed basis?

Well, I mean we did the Kenmore loan at -- I mean that was a 5.37, at 10-year rate -- that was a 10-year deal. I would say today we are probably in that same ballpark. Quite honestly, treasuries have come up but the spreads have gone little bit. And so, we are kind of modeling right now anything can change. But right now we are kind of modeling that we'd be at the same kind of level somewhere in that 535, 540 maybe as high as 550 range on those apartment loans that would come due. So, I think that GSEs are actively in business. I think they probably make more money on the bulk. I don't know, but I'm guessing they make probably more money on the multi-family than they do on all the housing stuff that's defaulting on them.So, they probably need that business, and I think they are still at the terms quite honestly that the proceeds are locked up. It's typically 65% loan to value or 125% debt service coverage, depending on where you numbers shake out one of those two will cap the proceeds on how much you can generate out of the building.

Okay thanks.

Sure.

Thank you. Our next question comes from Anthony Paolone with JP Morgan. Please say your question.

Just a follow up on the GSE debt discussion. Do you intend on taking out any excess proceeds from the up-coming maturity in October or even throughout the apartment portfolio given that attractive financing source near term?

Right now Tony I think the plan is to just re-finance the 50. I think that logic would say you want to wait through the summer -- the spring and summer lease-up in those buildings. It's the active time of the year to lease buildings up and the more occupancy you have the higher your proceeds are going to be. I mean there is a little bit of a risk on the interest rate. But I personally don't see -- I don't see the interest rates being able to move too quickly too soon. So it may be a -- it may be a situation where when we have stabilization of Bennett and Clayborne that we lock in the rest of it.However let me just say this, as we can do the 50 million refinance with 2 of the 5. So we're un-encumbering. So from a ratio perspective, we're un-encumbering three assets, that's always a good thing for ratios. And quite honestly, adding secured debt while I am eliminating unsecured debt, put some strain on ratios that the credit rating agencies look at. And if that gets too rather less, I am looking at the rating agencies downgrading our debt at some point if I continue on that path, something that I've to analyze, not saying that it will control what I do.

Okay, that's helpful. And then just another question is I was wondering if you can provide just your thoughts looking out the next 12 to 24 months on the deal environment. I mean do you have the potential of some movement with maybe like Archstone assets on the apartment side or just any variety of opportunity funds that bought assets aggressively on the office side. And just what your thoughts are in terms of maybe those things hit into the market or how you see yourselves maybe getting involved?

We monitor the market closely Tony to be quite honest with you, there hasn't been much of that available today. There's limited product available in the market, the transaction activity has been extremely slow. There have been some transactions but very small quantity of them. We're monitoring the market closely. We don't think just from a temperature and pricing standpoint that super attractive pricing is out there in our market. As you know everybody seems to think this is the best market in the country. So there haven't been any screaming buys at this point. But we are monitoring it closely and to the extent there are those super attractive opportunities, we plan to evaluate them on a case-by-case basis.

Okay, thank you.

Thank you. Our next question comes from Michael Knott with Green Street Advisors. Please state your question.

Hi guys, did you mention anything about asset sales in your comments?

We did not mention anything specific but I can give you general comment. We have announced in the past that we had the Avondale Apartments on the market. And just to give you the latest update on that, we do have that contract is firm with a buyer. And we anticipate actual closing on that next week. So, that's sort of the glide test that's on.We do have another property on the market today and that's our Crossroads warehouse; it's a very small transaction. So, it's not going to move the needle too much up in the Baltimore Washington Corridor area. Those are the only two projects we have actively on the market now.We have received a number of unsolicited interest on properties, which we are evaluating, but nothing from any of those. But we do anticipate closing on the Avondale Apartments sale next week.

Would you care to share any details on that?

I'd rather -- it's not -- it's double top secret but I never like to talk about a transaction that hasn't occurred yet. And we certainly today that it occurs and the check clears that, we'll put out a press release.

Okay. And Bill, you talked about having several options for future unsecured maturities, how does issuing additional equity or potentially cutting the dividend factor into the menu of choices that you talked about?

Well obviously those are all choices, and you evaluate them all equally. And I'll take the second part of that question first, in terms of the dividend, if we look at our taxable income for this year, obviously projections and who knows exactly how things are going to shake out. But if we, if we look at our taxable income this year, and we include the gains that I am taking on the converts, and gains that we will, we anticipate we will take on selling 50 to $70 million of dispositions, we will have a taxable income, pretty much equal to our current dividend.So for this particular year at least I don't think I have a whole lot of grip of them. In terms of equity, obviously we raised a little equity in the first week of the year. I'm not opposed to doing that. We valuate that versus recent -- more at leverage or selling more assets quite honestly everyday I look at that stuff. So it's a matter of deciding if you need capital and when you need it and what the best option is to get it at that point in time.

Okay and you guys have about 50 million left under that original program?

No, it's about 92 or 3.

Okay, and Mike, could you comment on Suburban Maryland office versus Northern Virginia in terms of leasing fundamentals, connect demand perhaps inside outside the Beltway? That would be helpful.

Well again I think the dynamics of inside, outside are very similar. Inside Beltway obviously being much stronger than outside. Generally speaking, we've seen increased vacancies in Virginia outside as opposed to Maryland which has been a more steady environment. The markets that we're in, on the office sector generally we're favoring much more favorably than the market in general.The markets vacancies are much higher than the ones who are experiencing. But we have some, we're seeing some aggressive deals being done in one project going to block your pipe (ph). The good news is that we're closing just by everything that's occurring in that marketplace. So we're getting velocity but we're not getting your tremendous growth out of that.And then in Virginia, for the most part, we're pretty stable, our two Virginia properties on Dulles or fall and 1600 Wilson Arlington the same way, it's almost 100 leased. So we're trying to close down Dulles. We've got 6000 foot we're close to signing. And there's some others in the pipeline they could stop that or close that gap and then at Magi (ph) other project, they are the one deal Skip had mentioned. There is a rollover net asset next year that we're working on right now.

This is Skip, Mike. I would say that -- I mean just region wide I think I mentioned in my comments that leasing velocities are down, I mean fairly dramatically. And in the recent Delta report, I think they've reported a negative, almost million square feet of net absorption in the first quarter region wide. That's not necessarily good. I mean, the first quarter is usually a slow quarter admittedly but you'd almost have to say region wide almost everywhere just transactional activity, leasing, sales what have you in all property types is significantly abated.

Okay. And then my last question and I'll get back in the queue. Skip, how would you evaluate the possibility of in the future investing in the new areas of the DC marketplace, not the Massachusetts down with the ballpark et cetera, I'm just curious your view on that?

Yeah, I mean Mike, I think we would certainly approach there opportunistically, I mean I think those are certainly emerging markets, and their day will come, they will be dynamic in particular by the baseball stadium, you can see the vision there. And it could be an exciting place, and I think they're going to be evaluated on a case-by-case basis. And certainly today if you were to make a move in one of those two markets, you'd want an extraordinarily good deals, because you're going to be looking at a lot of downtime, in those two particular markets.But just from a long term sort of visionary sort of point of view, I think that those are -- will be major parts of the city. I think over time they will fill in like the rest of DC just like the East End did 20 years ago when you might have asked the same question. And they certainly would -- long term strategy will fit in, but today if you were to make a move on either those sectors you'd want a pretty good discount.

Okay. Thanks.

Our next question comes from Dave Rodgers with RBC Capital Markets. Please state your question.

Hey good morning guys. Thank you. First question on the One Central Park and move-out, can you give us a little bit of additional on that? And particularly with respect to prospects and the incremental impact to second quarter versus first quarter FFO, is that significant?

Dave, that was a vacancy that occurred almost a year ago. And that was United Communications group. Over the last year I will be honest with you, I've been very disappointed in the leasing performance there. It's a market that has that building historically has been a very tight building. And I would say that we felt pretty optimistic when United Communications moved out that we would lease it up quickly but we have not done so.It's little bit unusual in that it's not contiguous. There is a number -- that tenant grew sporadically throughout that building. So it had some space on four, some space on six. So it's very heavily broken up. We've actually leased some of it but we've done a little bit sort of the two steps forward, two steps back over the unit -- meaning 12 months and really that have made little progress.We've actually -- over this timeframe have actually hired a third-party broker to assist our leasing team in leasing that space up. So we do have activity on it. I'd like to say I'm optimistic about leasing some of that up, but I'm not going to jump for joy and tell you that I'm really pleased with the leasing activity there.Long-term I think that's going to be a good building and a good market. If you're familiar with its location, it is right up the street from NIH, and NIH and Bethesda Naval Hospital which is across the street from it, they're going to be major beneficiaries of many of the initiatives that are going on, especially with Walter Reed moving to Bethesda Naval. So I think long-term it's going to do fine, but it's a rocky road right now to be quite honest with you Dave.

Thanks for that color. With respect to distress, you obviously talked about it, it was an earlier question on distress in the market overall. It hasn't I guess fully emerged as -- maybe we'd all anticipate it at this point and likely still on to come. But how do you think Skip about positioning the balance sheet and how to take advantage of that when it does come?

I mean we think we're in good spot. If the opportunities came, we think even today we could make a move. I mean obviously like everybody else we would like to have less leverage. So we could be even more aggressive and make bigger moves on that. But quite frankly right now, we don't see that opportunity out there, we don't see as I just mentioned a caller ago, that they're just are not screaming buys in the marketplace today. And do I think that they will occur? I don't know, I really don't know whether in the Washington DC region, if we are going to see the screaming discounts that many people are forecasting for many markets in the country.Will I think we'll see better deals? Absolutely. I do think we will see more attractive rates of return on investment and I think we are poised to do so. But I am not so sure we are going to be seeing that $0.50 on the dollar type transactions year we saw in the last time we had the meltdown in the early 90s.

Okay. Final question, Bill, I think you mentioned earlier in response to another question you characterized the discussions with GSE. Could you characterized discussions with the other lenders maybe with respect to the term loan for next year or just broader discussions on potentially the unsecured side whether from institutions or banks and characterize those two sources of capital in your discussion?

Let's start with the term loan, as I mentioned in my prepared remarks we are in final discussions on extending the term loan. It's an extension. It's not a renewal. So it's not like a new loan necessarily. It's kind of a blend and extend type of situation that we are looking at.Other classes are little bit more -- I think the loan rate right now is we pay a swapped out fixed rate of 4.45 on that term loan, that was a two year loan that was set in February of '08. Quite honestly the concept behind this obviously is not done yet. The concept is just to take it out to the end of or towards the end of 2011. And the rate so I'm extending it about by 17 months and the rate would probably be up 75 basis points or may be little higher than that.That's kind of where it is at. If you asked me where new term loan terms out like, what the market looks like. If I went for new two year term loan today, I'm kind of guessing a little bit -- to be perfectly honest with you today because I haven't talked to people about yet. I mean I talked to a couple of banks, it's not a lot. What you're seeing in today's market is you're seeing floors on LIBOR rates, somewhere around 150 to 200 basis points. So 1.5, 2% floors, so and if -- you can get those floors waived obviously if you swap it with whoever you're getting the loan with, and you can either get it waived or becomes a non-factor.The spreads are 275, 300 over for a credit like us, and might be -- isn't little lower today, than it was a few weeks back…

Yeah, I appreciate the color. Thanks guys.

Thank you. (Operator Instructions). Our next question comes from John Guinee with Stifel Nicolaus. Please sate your question.

Hi, thank you. Nice quarter guys.

Thanks, John.

Question -- you talked about the relative strength of investments sales market in DC versus rest of the country. And you also talked about the seemingly availability of debt in DC and then your desire to delever a little more. If you kind of add that all together it would imply a much more aggressive disposition 50 or $60 million in 2009. So my question is really two-fold, why not more than 50 or 60 million of assets sold in 2009? And then second what is the -- more of the dispositions, like one small industrial apartment, what are the reasons there?

Well, we -- first of all we like our diversified portfolio. John, I think, there is but let's go to the -- your question is why not more dispositions. And I think as Skip said, earlier he said there was several properties that we've had unsolicited offers on. I think when you go to the broader markets and really show to market that you want to try and sell building, I think everyone thinks that you're willing to give it away. So --

I think that's a good point.

You know I think right now, what we're seeing is these one-off transactions that are unsolicited by us, some of them are attractive. And we're going to look at them and quite honestly, the number could go higher than 50 to 70 million, which is where I'm advertising. It could go higher but with the market the way it is and the fact that money is as tight as it is, and some guys can get lending and other guys can't. And these are one-off buyers. Sometimes you just I am not ready to say or saying that we're going to push the disposition program up, we're looking at a lot of stuff.

I think we agree with you John. We thinks it's a valid comment and we were evaluating it. I think as Bill mentioned that number could be greater than at the end of the year but maybe we're being a little conservative on our numbers. But we feel comfortable with the numbers that we put on the table in terms of our projections. And it very well could be a larger number than that when the chips are finally counted at the end of the year.

The other point, John, I think is that even if we were decided we were going to sell another asset and then move down to path we're kind of at the end of April here. By the time we actually get it all done and said and done, we're going to be very late in the year or it could be certainly late third quarter and if not fourth quarter. Some of these things may push out and we haven't given any guidance on dispositions next year. They could push out the next year too. So it's kind of I don't know if we're going to hit higher than 70 million this year or not but I think the thought process is, we're going to continue to work on a lot of different things. And if someone hit that number may go up this year or it may kind of wiggle into next year.

Great. Thank you very much.

Sure.

Our next question comes from Chris Lucas with Robert W. Baird. Please state your question.

Good morning everyone.

Hi Chris.

Bill, just kind of follow up on train of thought here on the capital side. I guess two quick questions; one is that, have you even bothered to look at the unsecured market at this point and is there any pricing that's being dented about that you would care to discuss?

I have not -- quite honestly I think there is some of our REIT counterparts out there that that have tested the waters in the that market. And I don't think at this point -- I actually, Chris, I actually think that at some point in the future that market might become more attractive but right now that pricing looks pretty expensive.

Okay. And then just in terms of thinking about the debt maturities over the next couple of years, it seems like the general consensus is to try to get as much pay down through the sort of 2012 timeframe. So, given that as a sort of conventional wisdom, what's the thought process on just extending the line into essentially the end of 2011 as opposed to further out?

Well, we have an option at the same terms. Our line is at plus 42 basis points, the rates now are under 1% for us to borrow.

I guess some, I'm sorry, I'm talking about the term loan is really what I am talking about --

The term loan, well the thought process, I will be more candid, the thought process is that term loan is with our lead line and credit bank. It is under the same covenants and various things at that line. If we extend the line, the line matures in November of 2011. And if I want to keep that term loan basically, I have a penalty if I pay it off. So my cheapest source of capital with regard to that term loan right now is just to negotiate an extension rather than pay it off and issue a new term loan.And they are unwilling to move it beyond that maturity date of the line because then they'll have exposure to the same set of covenants that they have now. And I think they're not really interested in keeping covenants exactly the same. I don't think any bank is.

Okay, that's helpful. And then just I guess kind of a technical question and if Laura, maybe she can help me with this. I am just trying to understand the APB 14-1 application and what was the actual adjustment in terms of interest expense for the quarter?

Sure. As you saw in our press release we mentioned which included a gain on extinguishment a $0.05 in the first quarter of '09, and $0.03 in the first quarter of '08. If you exclude the gain Chris, it's basically $0.02 in the first quarter of '09 versus $0.03 and of the same $0.03 obviously in the first quarter of '08.

Okay. I think there is a footnote that references of -- I don't have it in front of me, about $1.2 million of adjustment for each quarter and that was the part that I was struggling with.

We basically have, excluding the gain we have 1.2 in first quarter about 900,000 of that is the non-cash related to any of the one of the fair value adjustment.

Okay.

The difference for that you see how that back in our Fed is basically the amortization of the fair value on these mortgages in the first quarter.

Okay. I'll probably need a little more help on this, if I can get you offline that'll be great.

Sure.

That's fine.

Thanks a lot.

Sure.

Our next question comes from Michael Knott with Green Street Advisors. Please state your question.

Hi guys, I was just going to ask for an update on Sunrise?

Okay, Michael, I guess the (inaudible) Sunrise is as they were advertised in the marketplace, they're attempting to sublease a significant portion of the premises, I think they announced the prior call. We're working with them to assist them and subleasing 60,000 square feet is what they've identified as excess space needs. And they've actually guided decent amount of prospects on, I would say, almost all of that space. And we're actively working with them to facilitate the releasing them of some of those lease liabilities. So that's sort of an ongoing process. Nothing is firm; it's all... you know, subject to change, but I feel pretty good about the activity on that space and the ability for us to basically help them sort of deal with their G&A issues on a going-forward basis.In terms of them as a tenants, for us, they've been phenomenal tenants, they are current on their rent. And we recognize that they've still more things to do in terms of their business plan going forward, but I think they are making some progress.

How was that billing received in the marketplace from potential subtenants?

I think the activity has been very, very good. Let me just make sort of a general market comment. I mean one of the... sort of the... if you might hear negative comments about Tysons Corner on general today is one of the issues is that there is a tremendous amount of construction activity going on into Tysons. They have... let's call the half lane project, which is adding lanes to the beltway, which is a lot of disruption in the vicinity of Tysons Corner as well as the whole metro construction project is now underway.So sort of a macro level, you are hearing concerns just from the marketplace on the willingness of some new tenants to want to expand the Tysons because of those sort of just big macro level issues. They don't really are property necessarily relates to the whole market as a whole.Having said that as I mentioned earlier, I mean these guys have had really activity on our space. We're probably one of the, if not the most prominent buildings on the beltway there. So that has wonderful signage opportunities. Sunrise has a sign on the building. The other building across the street Capital One has an equal prominence building signage. So they've had good progress there.

Are you fielding to address as there is... given our pricing, the price points of that building is substantially below new delivery in the marketplace. So it's a fabulous deal for a tenant to come in there and get that location at that price.

Okay. And then on the retail portfolio, maybe you mentioned that and I missed it. But can you just talk about your feeling as to the help of your retail portfolio looks like occupancy was up a little bit sequentially and you had to roll down just a little bit of releasing on a cash basis. Can you talk about your expectation of where the entire retail portfolio, where rents are versus your in-place rents?

Yeah, I can make a general comment on that, Michael. First of all, firstly I think you should just ignore the rent roll down in retail. The activity this quarter was so light, it was 21,000 feet, and it had sort of an aberrant tenant in there. It had on the backside of our Montross (ph) crossing shopping center, it had Quaza Industrials (ph) and on the back side of the center. And then as Mike mentioned I think in his comments, we had a workout tenant for another part. So it's really... it's kind of an aberration. I don't think that negative 5% is indicative of where our leases are relative to market on a macro level. I think we are showing that our rolling leases over the next 12 months are slightly below market, so that we're still... I would say as we release over the next 12 months, we will see modest or moderate rental rate increases on that on those rollovers.Having said that, I would comment that retail is still a very tough environment for our tenants out there. As we reported, we're still experiencing higher than historical bad debt expense in the retail world. And we are hearing from our tenants that their sales are down fairly significantly.The good news is, is that we have primarily super market anchored grocery centers and in-fill locations, and those are doing well. We are... we sort are keeping a close eye on as we do have two power senders, and we're keeping our eye on some of the big boxes out there. We don't know if any other further problems other than the Circuit City that we had in the fourth quarter, but we are keeping a close eye on those. But I'd say we are reasonably optimistic given the region that we are in that we're going to sort of get through this okay. But we're not going to see a sort of those 20% rental rate increases a 98% occupancies that we have enjoyed over the past five years, maybe over the next 24 months.

Okay, Thank you

Our next question comes from Chris Lucas with Robert W. Baird. Please say your question.

Robert W. Baird:} Two quick questions, just a follow up; what was the bad debt expense for the quarter?

The overall number?

Yeah

Cash number was 1.4 mil, and the GAAP number was 1.76.

Okay. And then just following up on a comments, Skip, any prospect on the Circuit City space? I know it's early.

Let me answer this two ways. Do we have a prospect on it? Yes, Chris, but I wouldn't factor in a permanent tenant in that space. It's a very difficult retailing environment. We will probably get some rental income on that space over the next 12 months with some seasonal tenants. We'll probably do like a Halloween store, and we'll probably do like a Christmas tree store. So we'll probably actually mitigate the income dislocation from Circuit City. But as a practical matter, the chances of putting in a 23,000 square foot tenant on a permanent basis there over the next 12 months, it's probably not that good right now. But from an income basis, I think we will cut down some of that with some seasonal tenants.

Great. Thank you.

Thank you. Ladies and gentlemen, there are no further questions at this time. I'll turn the conference back to management for any closing comments.

Okay, well thank you everyone for listening to our conference call today. I hope you are enjoying this good weathers we have here at Washington. And we look foreword to discussing with you the results of the second quarter. Have a good day.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you all for your participation.