Greetings. And welcome to the Washington Real Estate Investment Trust Fourth Quarter 2012 Earnings Conference Call. As a reminder, today’s call is being recorded. Before turning the call over to the company’s President and Chief Executive Officer, Skip McKenzie, Kelly Shiflett, Director of Finance will provide some introductory information. Ms. Shiflett, please go ahead.

Thank you, and good afternoon, 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 our release, please contact me at 301-984-9400 or you may access the document from our website at www.writ.com. Our conference call today will contain financial measures such as core FFO and NOI that are non-GAAP measures as defined in Reg G. Please refer to the definition found in our most recent financial supplements. The per share information being discussed on today’s call is reported on a fully diluted share basis. Please bear in mind that certain statements during the 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. We provide a detailed discussion of these risks from time to time in our filings with the SEC. Please refer to pages eight to 15 of our Form 10-K for a complete risk factor disclosure. Participating in today’s call with me will be, Skip McKenzie, President and Chief Executive Officer; Bill Camp, Executive Vice President and Chief Financial Officer and Laura Franklin, Executive Vice President and Chief Accounting and Administrative Officer. Now, I would like to turn the call over to Skip.

Thanks, Kelly, and thank you everyone for joining us on our call today. Many of you participated on our Strategy and Guidance Call two weeks ago, so first I would like to highlight some of the announcements we made on that call and then get into our fourth quarter performance. We are continuing our simplification of risk diversified strategy to focus on office, multifamily and retail assets; committing to a live, work and shop in Washington DC focused for future investments. Beginning in 2007 through 2011, we sold a number of one-off assets that we deemed to be non-core in transactions totaling over $270 million. These non-core assets included suburban office and industrial properties that we believe had low growth prospects in years ahead. This activity culminated in late 2011 when we sold our underperforming industrial portfolio for $350 million as part of our renewed strategic plan to focus on in-sell urban and metro centric assets and the office of multifamily sectors and well located retail and medical office assets. The industrial sale was a huge success in our view as we recognized an almost $100 million gain and reinvested the proceeds in the higher quality assets that met the criteria of our plan. Now to continue this process to strengthen our portfolio and growing the Washington DC market we are exploring the 2013 disposition of our 1.3 million square foot Medical Office Division. We believe that simplifying our business model into three core sectors will enhance our focus on property types with proven long-term growth potential in a market with the added bonus that we expect to capture significant embedded value for the potential sale. We believe this transaction will provide WRIT the most efficient source of capital to fund the continued improvement and upgrade of our portfolio as…

Thanks, Skip, good morning, good afternoon, everyone. First, I would like to discuss our overall fourth quarter and year end performance and then I will get into some of the portfolio details. Fourth quarter core FFO was $0.47 per share and core average is $0.37 per share. Full year 2012, core FFO was $1.90 and core FAD was $1.50. Overall, core FFO and core FAD were extremely steady over the course of the very choppy 2012, only fluctuating $0.01 or $0.02 in any given core. With core FFO generally meeting our original expectations of falling in between the $1.87 to $1.97 range that we set for at the beginning of 2012. For the fourth quarter, same-store NOI increased 1.2% compared with the fourth quarter of 2011 despite of our overall occupancy comparing to the third quarter same-store NOI increased 2.1%. The quarterly improvements were driven by lower operating expenses in the quarter which we continue to manage aggressively. The two best performing sectors continue to be retail and multi-family, well office and medical office trended negative year-over-year. These sectors posted improvement over the third quarter performance. Rental rates on the GAAP basis continue to pull significant increases. In the fourth quarter of rents and the new leases surpassed rents on expiring leases by 9.5% led by the office sector which increased the 11.8%. The primary drivers behind the increase in office were new signings of our recently purchased building in [Boston] an increase of 28%. A few deals at 2000 M Street up 20%, multiple deals of 1500 Wilson and Roseland up 34% and our couple of deals at 1901 Pennsylvania Avenue up 25%. When we look at these leases recently signed that are not yet generating revenue, we anticipate embedding growth in the next few quarters which is already…

Thanks Bill. WRIT was founded in 1960, 53 years ago, since that time we've been through government expansion and oil crisis, sky high interest rates, recessions and S&L and banking crisis, massive over building, the telecomm boom and bust, the deficit that turned into a surplus and internet craze that changed how we communicate and the great recession to rival the Great Depression. We have been through all of that and we are still here today. Through it all, WRIT has been led by a strong management team that constantly seeks to position the firm for future growth and enable them to build shareholder value for many years to come. Right now, we are furthering our strategy of positioning our assets to drive future growth, that repositioning leads us back to the markets’ basic three groups office, residential and retail. They are the three prongs of several projects. They are the three largest markets in Washington DC and the three largest asset classes followed by all of you. All of us continue to believe Washington DC has always been and will always continue to be one of the best real estate markets in the world for building long-term shareholder value. We will now open up the line for your questions.

(Operator Instructions) Our first question is coming from Brendan Maiorana with Wells Fargo. Please proceed with your question.

Given your comments on the last call that you guys are looking to target acquisitions to upgrade your portfolio which will likely [create] a relatively lower cap rates, but you seem to assume that you are probably not going to do much on the acquisition side so that you guys have the proceeds from the (inaudible) sale in pocket or could we see anything earlier?

Brendan, it is possible that we could front load a couple of them but (inaudible) agree to you we are not going to get over our speeds in having a huge acquisition pipeline prior to the transaction but keep in mind, I mean, we have done reverse 1031 transactions and we would like to do some repositioning as well. So, it's a possibility. I can’t say that we have anything definitive in our hands right now but it is a possibility that we could have some acquisitions prior to that.

Okay and how much in investment capacity would you guys say you have on the balance sheet today?

Investment capacity like what can we do without selling anything?

Right.

I don’t have any problem going up, the line stays at $20 million. So if we wanted to [fund] up line by $250 million worth of property, I don’t have problems in that.

Okay. And then, what's the (inaudible) expiring rental per square foot on a relatively low cost for 2013? Can you guys comment at all on your expectation for releasing spreads in (inaudible) for the year?

Sure. I agree with you. This year coming up in particular, fairly low year, particularly in the office sector which is a good thing since the office sector is a fairly weak market right now. So if you look at our supplemental, for example, our office market, we only have about 9% of our annual rent expiring this year which is about as low as its been in a long time and the average rent is about $31 on those expiring leases. We continue to think that on a rollover basis in the office market the ones with the most exposure, we're probably on a cash basis now, minus single-digit negative rollover. So, you know, let’s say minus 3% to 7% on cash basis but positive on a GAAP basis. Our Medical Office Division has about 13% this year, which I would put that in the average category and we are probably in the high to negative on a cash basis rollovers with closer to flat may be modestly up on a GAAP basis. Retail is a little bit of a wild card because we still think we have a very strong market. We have some big leases at very low rents but they are a little bit of a head [fake] because they have option fixed options in there. So I am a little bit hesitant to give you a number on (inaudible) but to the extent we have retail rolling it isn’t encumbered by a fixed rate options it’s going to be exercised. We expect to continue to see may be as much as double-digit rent increase.

Our next question comes from Dave Rodgers from Robert W. Baird. Please proceed with your question.

Good afternoon, guys real quick the two big tenants that roll in 2013 and ‘14 that you have listed are Sunrise and General Dynamics. Can you refresh us on what the plans for the tenants are if you know and where they are and what your plans are with those buildings as they are leasing.

Sure. Okay, let’s talk about Sunrise first, Sunrise is in our 7900 West Park building, they subsequent to quarter end it’s not reflected in our numbers, but executed a short-term extension. So they will be in a property for short-term extension. So we don’t expect them to leave and whether they stay over the longer term, I am not sure as you know they were recently acquired and I think they are going through a lot of decision making internally and we don’t know what their long-term strategic plan is. I think they are going to stay certain I can't say that, and the fact that they did a short term expansion is both a commitment to the property but yet not a full time commitment. General dynamics one of their locations is in our mind with two property (inaudible). I can’t say I know what they are going to do there, given everything is going on in defense industry I would be less positive about that. I think they are under utilizing that space, it’s a great building and the fact were marketing and some other vacancy we have in that building. I like to think that we have a really shot of leasing that space prior to when it comes up. But if I had to game plan it, I would put it below 50% for them to stay, although they haven't given the notice that they are absolutely not going to renew. And then the other general dynamics space we have with M [Conoco] and I think that they are happy down there. I don’t really have any specific information on that.

With regard to your comments about development and redevelopment, capital spending for the year outside of leasing commitment, have you put any numbers to that and what was in the guidance?

In terms of the capital commitments. We haven’t given guidance on how much money we are spending on the capital side, but generally speaking this year the capital was let me look and just see where we were. We have basically the JV development type stuff that will start on the green road projects $50 million and the other one is $95 million total some of that's equity that's already been put into those projects. So the spend rate on those projects is something much less. I'm going to say its around a number of $30 million or something like that. And then in terms of the internal projects for the existing buildings, I'm going to have to come back to you I don't have that at my fingertips. But suffice it to say we spent I think around $20 million or $25 million last year.

And can I just lastly on the potential sale of medical office, is there any identified G&A that would go specifically with that portfolio if and when it goes.

Well, its hard to say exactly Dave you know lot of the G&A with that division you know a vast majority of it are a property level people that are in the asset. So a lot of them would go with the buildings, building engineers etcetera. etcetera. And there is some G&A at the corporate level but…

It’s not significant, there maybe somewhat from the asset management, but with the growth anticipated in the other sectors we are looking to retain talent for utilization there.

Right, as you know Dave we are doing basically the we have to do 1031 with pretty much the entire proceeds balance. So the individuals corporate would probably be working on the assets that we'll be acquiring.

(Operator Instructions) our next question is coming Michael Knott from Green Street Advisors.

(Inaudible) I believe you mentioned on the guidance call that you want to redeploy maybe 50% of the proceeds to downtown DC office if and when you sell MOD, and I think you also said that you don't think the valuations for DC office work with your view on fundamentals. So if and when the time comes, if valuation is still not to your liking what do you see yourself feeling then.

Let me just clarify your opening premise, we said we thought that's where the opportunity would be, and necessarily say we are definitely going to do 50% downtown office buildings, its just by the nature of the size of the assets and the amount of capital we have to spend that's likely to be where the opportunities will be. It’s all going to be independently opportunities there. It’s hard for me to say what 2013 is going to bring. There's a lot of property that's going to be coming on the market. I do think there's going to be attractive opportunities downtown. I can't say I know specifically, but we are not going to overpay for something that we wouldn't ordinarily value as a good investment.

And just on topic of sequestration, so the deadline is coming up in a couple of weeks any thoughts on how this plays out and potential impact on your portfolio.

Who knows, the people that go behind the closed doors and Congress, they don't even know the answer to that question. I personally think that the can is going to kick down the road further and I think it will be somewhat harmful to the leasing markets honestly. I mean this non-resolution of this issue even if its any resolution would be better than what we have right now. It’s extremely difficult to get tenants to make decisions. If you look at the most recent delta, I'll give you an example, the most recent delta report that was published at year end delta is depending on who you talk to one of the more widely followed market reports for the area, they cited in that report that this was the first time since 1970 that the Washington Metro area had negative absorption. That’s a pretty outstanding comment that it is the first time and whatever that is, 43 years, that the DC area has had negative absorption. So what we're going through is not good from a long-term basis. So, I am hopeful that a decision will be made, but honestly, I mean, we don’t know the answer to that. We were as discouraged anybody by it.

One thing that we have seen is just that as an example of that is we've seen certain office tenant come and say we need to expand, but we only need to expand or we only need to take new space if we get a contract from the government. So, they are waiting on whether or not, they can’t sign documents until they know whether they have a contract and quite honestly over the last two years, anytime anyone’s has ever said that, it’s never come to fruition.

We have reached at the end of our question-and-answer session. I will turn the call back over to management for any further or closing comments.

Okay, thank you everyone, appreciate your interest in the company and look forward to talking to you in April.

Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.