Good day, ladies and gentlemen and welcome to the first quarter 2009 Entertainment Properties Trust earnings conference call. (Operator Instructions). I would now like to turn the call over to Mr. David Brain, President and CEO of Entertainment Properties Trust. Mr. Brain, please proceed.

Thank you everybody for joining us this morning. This is David Brain. Let me start with our usual preface, which is as follows, as we begin this morning, I would like to inform you this conference call may include forward-looking statements defined in the Private Securities Litigation Reform Act of 1995 identified by such words as will, be, intend, continue, believe, may, expect, hope, anticipate or other comparable terms. The company's actual financial conditions, results of operations may vary materially from those contemplated by such forward-looking statements. A discussion of the factors that could cause actual results to differ materially from those forward-looking statements is contained in the company's SEC filings, including the company's report on Form 10-K for the year ending December 31, 2008. Let me say again, thank you for joining us. We always appreciate your investment of time and interest particularly today in a time of volatility and seaming capital markets rehabilitation. With me to provide you all the company news and updates, of course Greg Silvers, our Chief Operating Officer, and Mark Peterson our Chief Financial officer. As we get underway this morning, please remember there is a simultaneous webcast available via link from our website at eprkc.com. If you can, please go there now for the visual dimension as well as this audio portion of the presentation. Going to the first slide, here are your headlines for EPR. Earnings, although not entirely satisfactory are consistent with expectations and guidance, portfolio tenant fundamentals are ascending in start contrast to general headline, economic reporting and third development project challenges are being met and be cleared impart and impart with some delays and adjustments in income, but no investment write-downs. I'll elaborate on this headlines a bit. Mark will go through the detail on the financials, Greg about…

Thank you, David. Let me begin with the review of the numbers from our recently completed first quarter. As you can see on the first slide, our net income available to common shareholders decreased 17% compared to last year from $21.5 million to $17.8 million. Our FFO also decreased 9% compared to last year from $31.8 million to $28.9 million. On a diluted per share basis, FFO was $0.84 compared to $1.11 last year for a decrease of $0.27 or 24%. As David mentioned, we are usually talking increases, not decreases. So I wanted to give you some upfront context as to what impacted the numbers this quarter. As you have probably read in our earnings release, this quarter’s results were significantly impacted by our policy to record interest income from notes receivable on a cash basis rather than on an accrual basis when the expected timing of receipts significantly differs from the contractual terms. Although the underlying circumstances are different, we had the same accounting result for two of our significant mortgage notes related to Toronto Life Square and Concord with balances outstanding of approximately $101 million and $133 million respectively at March 31st. From an accounting perspective, each of these loans has been impaired this quarter since payments have not come in according to the contractual terms and future payments are also not expected to come in according to the contractual terms. However, it’s important to not confuse loan impairment with loan loss. In each of these cases, the management of the company has determined the fair value of the underlying collateral. Taking into account, a recent property appraisal, is in excess of the carrying value such that no loan loss reserve is necessary. However, what this does mean to the company is at beginning January 1 2009,…

Thank you, Mark. As you heard this morning, our emphasis this quarter has been targeted at bringing clarity to our three large development projects. As you will note we have significantly decreased our capital spending with only $21 million of investment in the first quarter. The largest portion of this was the continued funding of our Schlitterbahn development to the tune of approximately $10 million with the balance focused on smaller investments in existing projects or developments that were already underway. I would like to focus some minute on the progress that we have made since our last earnings call on our three large development project. With regard to Schlitterbahn, we discussed our plan on our last call and I am pleased to report to you that we've successfully executed the grain plan that was laid out. I direct your attention to the slide presentation for additional color. Specifically we have reduced our commitment from $175 million to $163.5 million. We have significantly increased the collateral and cash flow coverage on our mortgage investment by adding two highly successful water parks in Texas to the security. We have increased the existing interest rate from the existing terms and added participating features which created upside for the investment. We have included features that provide for the annual escrowing of a full years interest obligation and the developer of the project has evidence the necessary additional equity to allow the water park phase to open in the summer 2009. Based upon last year's cash flow from the existing Texas water park and the pro-forma cash flows from the Kansas park we anticipate a coverage ration of approximately 1.7 on the fixed obligation. Additionally as we've indicated in the press release, the developer has also entered into an option agreement which if exercised…

Thank you, Greg. Thank you, Mark. Well all of our presentations have been a little more extended and hopefully a little more illuminating than usual this time. With all that being said I don’t have to extend it instead of comments before we go to your questions. Just to remind you that the headlines as I outlined to you to begin with, that we feel like really things are on track, consistent with what we have outlined to before as expectations for the company. That our fundamentals are in great shape and our tenant base largely in the development projects that have the points of challenge we are in the process of clearing up and making progress and importantly those things we have reassessed our investment positions relative to the values of the properties and we are in good shape with no investment write downs. So with all that said, we will open it up to questions and Tania, are you there?

Yes thank you. [Operator Instructions]. And your first question will come from the line of Jordan Sadler. Please proceed.

Thank you, good morning.

Morning.

The first question just regarding investment opportunities in what you are seeing out there in terms of cap rates maybe as it relates to theater assets or other opportunities that you may see?

Jordan, it is Greg. I think there is two distinct groups. There is distressed sellers out there who are looking to raise capital and there is also our traditional theatre operator opportunities. We are seeing opportunities in both areas. The distressed sellers really with prices in accordance with how desperate they are for the capital really without relation to the asset. The other side prices in accordance with the performance of the asset and what the tenant can pay. But there is significant opportunities in both. It's in just with this capital constrained market. We are not at this point exercising on those opportunities.

right and to follow on what Greg said I would say those two camps, you probably have a great chasm of cap rate depiction and that is with distressed sellers we see things that 11 cap type things, but just across my desk, a couple of opportunities of very high performance asset and people know in this end market that these are well-received assets and these are non-distressed sellers that are asking 7 caps. Now, I don’t know that those transactions will clear at 7, but there clearly is this chasm between, because the assets are performing well. Distressed sellers are at high cap rates and non-distressed sellers were at cap rates we even saw year ago.

As it relates distressed group, I think couple of months ago you had said your buy assist that wait until you see cap rates rising further on some of those assets before maybe raising capital to execute or take advantage. Is that story still be view?

We want to get the numbers to where it make sense for us on a capital raise and right now given our price, we're not there but to the good point of the fact that we're known as the player in that arena, indeed our assets and so we continue to see all those transactions, yet everyone is waiting for us to start clearing those transactions.

We felt like clearing up some these issues that are kind of vain down stock, we know that some of these development issues is important, we get those clouds cleared, we have then clear sailing and we probably get a better execution of raising capital as well after some of these more offensive and defensive opportunities. As we hopefully indicated you, we're well in the process of doing that, we got a little more ground to cover, but hopefully we'll be there and we'll off the defensive posture of fixing a few things and we'll be under the offensive posture of taking advantage of good opportunities.

Can you actually reconcile for me, you seem to still have strong enthusiasm for the Concord project given sort of the state in New York, budget, but can you reconcile that enthusiasm with the decision not to extend the same developers loan maturities?

We just thought not to extend because we're keeping all of our Concord available to us to play. We're at this point kind of negotiation on this, we are in the negotiation on this and we wanted to keep all of our options available to us and to extend those notes would have taken options away from us this time negotiation, so we'll keep them in place.

Do you think that New York state would push even further and maybe try and get the license upgraded to Class 3?

Certainly is being talked about and you can go also with the press, not just from us. There are all kinds of discussions about Class 3 licenses in that area, New York coming to full casino gaming. New York has significant problems, New York has been long time exporting significant tax dollars to New Jersey and Connecticut, they know that, they want to reclaim those tax dollars. I think all options are on the table are being discussed at the state and even at the federal level, aiming further non-traditional tribal lands to be Indian gaming facilities as well. So, lot of been have talked about that.

Where do just stand in the process of the negotiation with the developer? I know he is suppose to be raising additional financing, is that sort of the status quo, he is going to come back to you, when you can raise additional financing, or when the markets open up?

That's the primary thing that's going on yes and his efforts to reconstitute the original game plan after the dislocation of many of the committed parties on the financing stack.

Can you give us the appraisal values on the Concord land? Did you have an updated one, actually on Schlitterbahn by concluding the additional assets you took position of, so what would be the new LTV?

Jordan, can you repeat that question?

Appraisal value on Concord, the 1584 acre track and then the LTV on Schlitterbahn considering the new assets that were added to the collateral?

On the appraisal value on Concord, I don't know whether we're in a position to disclose that. It's substantially in excess.

Even a 50% LTV type range?

Essentially yes, it's more than two times.

And Schlitterbahn?

Schlitterbahn, the LTV would be a similar number.

Thank you.

Your next question will come from the line of Anthony Paolone.

Thank you. Is the appraisal value on Concord contingent on the developer being there?

No, it's not contingent on a casino even being there.

I guess I'm having tough time understanding this why this 20 million in those unrelated notes play into Concord, why not just go after the developer for your 20 million bucks?

I can't take you through everything, but it really is. We follow the string down with variety of courses of action. One of those course of action is to go ahead and foreclose and we don't think that's favorable right now is to continue to negotiate to get this thing more in place. It would be more disruptive and more extend the realization timeline of our investment, but that certainly is one of options available.

What is the collateral for the 20 million and then with respect to Concord, what's kind of first up to get your collateral out of that? Is it developer's personal guarantee or what it is there?

No, in both situations you have foreclosure actions, they are both supported, both Concord and those not are supported by collateral but you would pursue first Tony, and to David's point the problem and without going into too much detail as you can imagine is that if you can work out and negotiate a deal, you are going to as David says realize on our collateral or realize on a solution much faster than if you are going to be involved in contracted litigation to foreclose on an interest. It's very similar to what we saw in Toronto and since that a, we pursue negotiated settlements for experiencing where at all possible.

Okay. And during that process I don't recall the rate that you are accruing interest aspect, I assume that through this whole process even though it's not coming through your income statement you would still be due that money at some point in time.

Yes that's still occurring, definitely we're just not recognizing for purpose income statement and FFO.

That's true for both the Concord note and the two other $20 million of notes.

And do you have any legal obligations to fund the rest of Concord?

No it is our feeling that the agreement we're operating under the second phase of funding that project is defined is no longer happening in place and so we're in a negotiation position whether we fund anything more.

Okay. Then on Schlitterbahn can you talk a little bit about the revenue split, I think you mentioned in the press release and how that works?

Right. It's very similar Tony to what we do in theaters, that we have our participating revenue above its threshold amount. So if you look at with that number is such we would anticipate if the Kansas Park performs as its formula that we will see some participating rents in the first year.

And that performance has been under the reduced scope or the original plan?

Under this reduced scope.

Yeah, under the reduced scope. We think the threshold of the participating rent threshold is very achievable and therefore there is the potential, we would not include it any of it but we think its very achievable and there is the possibility for upside revision as that thing performs the level and we get into the percentage rents.

Is that investment become purely mortgages on the parks? Was there a Schlitterbahn corporate guarantee and personal guarantee there as well?

We have the parent entity on the parks now, I mean we have basically all of the parent entities assets saving apart, they are [canvassed] in part which is in a joint venture which is not allowed to be pledged.

Okay.

But here are no other entities yet.

I see. And on Toronto Life Square I didn't catch you mentioned I think the amount of the first mortgage that was being refinanced, I didn't catch that.

It's approximately 119 million Canadian.

That's what's outstanding now, but is there amount that those mortgage holders willing to refinance?

Tony, this is Mark. Our term sheets are for anywhere from $100 million to $120 million, so it could be all the way from really no money out to slight off little.

20, 000 Canadian pay down, so we have a couple of term sheets.

To the extent that thing is put out to bid and a buyer emerges beyond your basis do you have any intention of topping that bid or trying to stand or would you just take the money and move on?

Tony, we may have an opinion upon that, in fact we've been instructed kind of by the receiver to not make perfectly clear our intentions as that kind of may disrupt the marketing of the property.

It is not a bad result.

okay. And what is the cash NOI on that? On the project right now.

About $15 million.

That's US dollars?

Canadian.

Canadian.

Okay. And then just on Cosentino, what's your investment there?

About 20 million.

Yes, 20 million.

And what's the I guess earnings impact now, do you have expenses in the revenues or what's sort of the head?

Well, let see obviously we've removed the income on the lease and then we have budgeted some expenses of effectively owning the property.

Like a TRS and operating, it's going to be discontinued to operate under really our do external lease by contractor.

It release about 450.000 of rent per quarter is roughly what we are recording before plus we have baked into our guidance expenses that will be ours now not that significant but there are expenses.

Okay. And then just last question, I think you have some movie color exposure and I think they have had some trouble lately are those rents current to those assets fund?

Yes, those assets, let me give you some background on that, Tony, so we can understand. You got to understand the issue movie co had exposure to a large financing that basically their credit facility that came due and as they had not paid that off that triggered a provision in our lease, though the lawsuits that you saw were actually our lawsuits to take back our properties. Subsequently they sold four properties, paid off their credit facility and have no outstanding debt and as a result we dismissed the lawsuits.

They were settled in current.

Yes.

Okay and thanks a lot for the supplemental package, much appreciated.

Okay, great.

Your next question will come from the line of Michael Bilerman. Please proceed.

Yes, good morning. Greg Schwartz here is with me as well. Maybe just talking about Toronto Life Square, you are talking about the $15 million cash NOI, that is in place today?

Correct.

And what is that sort of based off in terms of where occupancies at, how much of the digital signage is leased versus. Go ahead.

That is based upon kind of where occupancy is at today and the signage contracts that we have in place. So we are really looking at about 11.5 million of real estate and 3.5 million of signage.

And I think you talked about potentially that coming back into guidance in the fourth quarter and so what is your assumption that is baked into your guidance in terms of the contribution?

Effectively a quarter of that NOI, so a quarter of $15 million?

There is no expectation?

Yes, obviously less first mortgage interest.

Yes, less first mortgage service.

Right, but there is no growth in NOI between now and the end of the year.

We are just forecasting the conservative.

Yes, we are giving a flat, although the reason of the expectation is that that particularly the advertising signage revenue grows as it has a lot of capacity to do something.

The $15 million today, what is a reasonable stabilized number for the project.

I mean we think over the stabilized version is closer to a $20 million number.

Right.

And we are all talking Canadian dollar?

Yes.

Okay and then maybe going back to Cappelli, the $20 million is effectively the stellar finance that you had in White Plains, correct?

No.

No.

There are three notes with Cappelli. The ones that we are talking about they are actually due in payable this quarter. One was secured by his interest in New Roc along with the personal guarantee. The other one was secured by his personal guarantee and we had various options on certain projects. The third one, the White Plains note was not due. This quarter is not due till 2017 and that one is secured by his White Plains interest in addition to his personal guarantee.

And another borrower.

And another borrower is personal.

And that note is current?

Yes.

And that note is how much?

Each of three notes are 10 million each.

Each are 10 million each? The loan is coming due on White Plains is subject to some NOI targets. This is for the 2010 maturity, the 114 million? I mean where are you today, would you able to extend that loan under the current NOI?

At this point I think with the lease outstanding, technically we will meet the hurdles, though we have been in discussion with the lenders and it is our expectations that note can be extended based on this current operating performance.

It can?

Can, yes.

Yes.

Affirmatively can be extended based on this current operating performance.

Correct.

I think Greg has a question as well.

And just clarifying on the tenant weakness and the $0.14 that you had in guidance from the last quarter, is that over and above the $0.04 on filings this quarter?

Yes, the $0.04 was not anticipated in that guidance, that is correct.

Again and just on the extension, on the renewal of the line and how far discussions at the moment, have any of the 235 million being committed from the lead vendors already?

No, not formally committed, but we have had discussions and we have a good idea of what the commitments will be, but they are not technically committed at this point.

Okay. Thank you.

And your next question will come from the line of Paul Adornato. Please proceed.

Hi, thanks. First of all, with respect to Toronto Life Square, you said from an accounting perspective, equity ownership would not be a bad thing. I was wondering if you could talk about it from a strategic perspective as well? Are there any enhancements or ways to create value that you as an equity owner will be able to bring to that property?

Well we do think, Paul, that A, we have got a premier asset and as David alluded to earlier this signage revenue that we are planning for this year is significantly lower than where we think the potential of that signage revenue is. And so there is clearly opportunity we think to grow that business. We have a premier theater asset in the downtown area. We know we like the asset and we do think there is significant upside in the signage potential.

And from a customer perspective, is the property properly managed, is the customer experience adequate?

It appears to be so in the sense that it doesn't appear to be, the drivers of this was the refinancing, not necessarily operations. They don't have any known tenant issues. Everything seems to be fine. As we reported last year, I think our last earnings call though, the Future Shop that operates, there is the number one Future Shop in the province of Toronto, it's in Ontario, I apologize. We have the Adidas flagship store for the entire province, so everything seems to be performing well.

Okay and with respect to the retail vacancies, first of all on Filene's Basement, just to be clear this is a Filene's Basement that is scheduled to close. Is that right?

No, if you remember we talked about Filene's in our last call that they had vacated their space. We had filed suite against them and have a substantial claim for their vacating up the space. They had reached the reason we did not take this and Mark can elaborate more on this, they had entered into negotiations with us to settle that claim and then subsequently conversations were dead and they filed for bankruptcy.

Just to add to that our claim was something close to 8 million because of extended freed up the remainder of their release because they left early. The receivable that we left on the books at the end of the year was 1.5 million and as Greg mentioned they had entered into discussions with us. We felt good that we are going to collect the 1.5 million at least. We actually thought and may possibly could be upside. What changed things was the bankruptcy literally two days ago that was announced bad debt.

We're still pursuing a client, but for now we're going to write it off.

The other thing I want to point out is Filene's otherwise has no income in 2009. This was something that was from 2008 that we thought was collectible that's we now reserved.

Could you talk about the leasing prospects for that space as well as the other vacant retail?

We have LOIs that were negotiating on both of those spaces and fillings, I think what we said Paul last time is anymore where we used to talk with confidence about LOIs. We don't anymore till their actually signed deals, because anyway it just seems to be deals are constantly moving. We talked about in our last call about our two Bennigan's. We have entered into at least for one of those, we've got another one that we're finalizing the lease on, so we'll have both of those back online. As I said earlier, our overall occupancy has remained relatively stable throughout all of this disruption, I think mainly due to the success in the primary driver of the theater anchored elements of all of our centers, but it's far more predominant in our other centers than it is in White Plains.

On the LOIs, how fresh are they? Have they been outstanding for a while?

In one of them we're swapping leases, right now. Until it gets done, we just don't consider it done.

Finally with respect to kind of overall operations, you guys now have quite a number of "live situations" and I was wondering how the current management team is able to handle all the active situations that they have to be involved in?

I think, Paul if you notice, we had an announcement that we filled an 8-K in April, talking about the addition of Jerry Earnest II, our team. Jerry come to us with an extensive background from the mortgage industry, he was with Capmark, before that, what was GMAC. So, as we are working through some of these issues and they predominantly relate to our mortgage positions, we felt an importance to add to that. Jerry was a board member of our, so he is familiar with the company, he is familiar with the assets, familiar with the transactions and he brings a wealth of experience of these negotiated settlements and working through these issues. So we have in fact supplemented that benchmark.

Just as you say, we have more live situations, we've been added to the capacity to handle more live situations with as Greg indicate somebody that's depth of experience and also hits the ground running full knowledge of the company and it's all that's investments.

Okay. Thank you.

Your next question will come from the line of [Jay Hatfield]. Please proceed.

Good morning. With regard to the Schlitterbahn note, does that potential upside kick in as early as this summer?

Yes. It does.

I know I have one conversation but I didn't quite catch, what is the potential upside should we think about that potentially equity like returns or just a little above the 7?

I think the goal is to get our return back to the 10% number that the original deal was structured in. I'd be totally candid with you and I don't think we will achieve that in the first year, but what we talk about is in a conjunction with this participating feature and as we alluded in our press release, the ability to get pay downs for certain land parcels that we hope to sell off. We think, we can migrate that project back to that 10% cash-on-cash return that we originally structured the project.

As a base return of seven and upside to potentially 10, it's got to 40% to 50%, so as Greg, said we don't have to expect that to achieve all of it's upside in the first year, but at the same time that is the structured potential.

I think it's important to note that we are building at about 40 acres and we've got over 360 acres, so there is lot of land there that has capacity to be sold. But we wish to pass down.

We have indicated in the press release that we have entered or the developer has entered into and option on a 60 acres parcel that was submitted as a potential casino parcel for the casino award in Wyandotte County Kansas which would result in a substantial pay down to our outstanding obligations.

So, you actually don't just participate in the upside of three water parks also with regard to anything else built on the vacant land?

Correct. And to the extent that it pays us down and we can move our expected returns closer to the original 10% number that we had structured the dealer.

Okay. And then you had mentioned potentially making some opportunistic acquisitions, but sellers are holding out for lower caps, your own preferreds have actually lagged, both the rally and the comment and also the credit market, would you consider repurchasing any of the, actually particularly the convertible preferred seem to for some reason trade worse than the straight preferred then being traded by different pockets of investors but would you consider a repurchase?

If you think what we will do, when we get back to the point that we have capital that's available to us that we will look at all of those investments options whether they be new theatres, existing theaters as you say convert and I think you just make decision on what you think is the best investment for that new capital.

I also think most of activity you are seeing with converts is convertible debt and a deleveraging process or a basically buying back in the convertible debt and showing a gain. This is convertible preferred, so we consider equity, there is no maturity or bullet out there and also I think secondly liquidity is king as I mentioned in my comments, and so to go the other way and actually buyback convertible preferred is colored to retaining our liquidity, so those are the two things, but as Greg mentioned, we will look at that, we continue to look at that and have been approached on that.

Well certainly relative to making an acquisition, you would have to get the preferred you are trading and put the Cap rates of 15%, there will be challenging to make a real estate acquisition, there will be…

You are in that mood.

We look at those things as you do.

Paul, this is David, it's a combination of guarding carefully, liquidity as Mark and Greg indicated, we've also had thoughts and conversations with different capital market players, about that, then we traded, there are hard to combined. I don't think its certainly a something more where at this point nothing where we have any plans to tell you about.

And would you consider selling assets, just given at this location.

Always.

I think that the convert preferred's actually trade pretty actively. Instead of going and bidding there would be liquidity there?

Right.

Okay great. Thank you very much.

Thank you.

Okay, bye.

And your next question will come from the line of (inaudible). Please proceed.

All of my questions have been answered. Thank you.

Thank you.

And your next question will come from the line of [Erik Lee]. Please proceed.

Hi, this is actually [Ambika Goel], can you provide some color on your 2010 debt maturity, specifically the White Plains assets, where are you relative to the NOI threshold in order to extend that loan and does that accounts for the filling to bankruptcy?

I think Ambika, the most definitive statement that we make is we have executed a term sheet for that extension.

As I said we expected with its current prospects to be extendable and were as Greg indicated we are working over with that with the lender right now.

And both of the mortgages that are rolling in 2010, others non-recourse or is that we put it back to the company?

No, the White Plains loan is not recourse the $56 million loan related to Concord is resource.

Okay. And then turning to the wine business, can you give some color on the asset that you are releasing or trying to sell, just more color on what exactly occurred?

Like I said without getting into personal as Ambika, there was a management change that we thought was taking the property in the wrong direction and therefore thought in the best interest of the asset, and in our interest we should take those properties back and find a new tenant or sell those properties. So it it's pre-wineries of vineyards and some tasting rooms associated with those wineries it's in predominantly the vineyards area Napa. We just think for the long-term value that was the right thing to do.

And what's so specific, which vineyard is this again?

This is a Cosentino.

Cosentino vineyard.

And so the acquisition value of that was how much?

Approximately $20 million.

Are there any contingencies is on the line facility related to taking back that asset and having to release it is there anything that we should be keeping an eye on?

One was not financed.

There is no debt on it.

So, it has no debt on it.

Okay. Great. And then turning to Schlitterbahn, are you receiving percentage rents from your other parks or just from the development project?

It's all three, it's a cumulative. We talked about 15 billion '09 number.

17 on an annual rate.

Run rate number.

Frankly, it's somewhat speculation on the $20 million to $25 million. It's just a matter of what you think that signage will go for and the occupancy, so that is an estimate in either case.

We probably have tempered our estimates there a little bit, but it does have beyond even $20 million that we're indicating here this morning probably does have potential backup towards the 25 million which is our gross if you want to be about those assumptions.

Okay. Great. Thank you.

All right. Thank you, Ambika.

And your next question will come from the line of Bob (inaudible). Please proceed.

Thank you and first thanks for the increased disclosure. I think it's really important and helpful. And the Schlitterbahn transaction, congratulations on that. I think that’s taking a bad situation and really improving upon it. So good job with that. Questions on the Toronto, just to not to beat a dead horse, is this project coming significantly over budget or what was the original pro forma NOI because it just seems incomprehensive bulwark. If 20 or 25 was the original pro forma NOI for this project and a 330 cost that you would have gotten into a second position on it, just doesn’t seem like there's enough return to have taken that risk.

Well I think part of it is a function of kind of the premier asset. You'll recall we entered into a purchase and sell agreement for this asset at $325 million in August of last year. So, there is a lot of perceived value as David indicated in the signage that the expectation level when the signage and the economy is responding to more advertising that we think that in '08, that number will be closer to $25 million and at the time we had several offers who believed in that and the property was significantly ahead of our position and the construction loan position was.

Several offer at what time?

In August of last year.

Okay, at a very frothy part of market, but when you originally underwrote the deal, $25 million on 330 is what a 7.6? And so, what was the interest in doing that? Whether it's premier or not, were you speculating that there would be a lowered interest, cap rate compressions that you might be able to get out or, what?

If you understand the structure of the deal, the way it was originally entered into, is we could buy the assets. We can buy 50% of the asset at a stated cap rate. That cap rate at the time was 9%, though we could buy our 50% of the assets, we have got a 9% cash-on-cash return for our 50% interest and we would have been repaid back, anything beyond that.

We would get our balance of our money back and that would occur through a refinancing of the first, which was very reasonably expected, given the time we entered into the deal. Plus we are not the developer, we are the lenders. So we are looking at it the first and second and in more from what can that support and as Greg mentioned combined with the option at 9%, we were comfortable with our position.

Okay, fair enough, well. We can disagree. But one last thing, David, you started off the call talking about how you told the Street that your numbers were going to be X and so this big decrease or miss on a headline basis was the Street's fault. From an investor standpoint, I would say that the company really should do a better job of guiding the Streets stronger. The numbers are out there, they don’t change, you should help move them down.

All right, well, there is just a fine line between and you are not supposed to be guiding people around, but we are trying to be informative. I hear you and the time a lot of these things change literally week-to-week as to what approximately the resolution and whether we have recognition of income. So I tried in the last call to communicate this out there. We clearly then popped down our dividend and that was the Q, essentially as I indicated for this revision. But I hear you. It is a different time in terms of particularly these assets in particular of their level of predictability particularly quarter-to-quarter, month-to-month.

To add on the Concord project and later this month, there is still discussions ongoing about potential payment.

Yes, just within week, so.

It's a ongoing process and if there was uncertainty whether that was going to be recognized in the quarter or not, we decided to be conservative to go with this cash basis as required by our policy, but that was one of the other things that played into it.

Okay.

We could argue whether the accounting was aggressive or conservative to begin with many event.

Let's move forward. Hopefully, you can have successes like improving the Schlitterbahn and we won’t have to have another call of rationalization and apologies.

Right.

And your next question will come from the line of Jordan Sadler. It's a follow-up question.

Sorry, just quickly on the retail portfolio. I think Greg, you went through and historical occupancy is around 95% and if you exclude the big-box stuff that's vacant now. It's still there, any additional watch list tenants, anything we should anticipate, anybody non-current, I know you have quite a few restaurants in there and some other, more dicey looking tenants that may be smaller.

Right now, we don't have anybody out there. We just had as an example, we just had an outback in Canada vacate but we've already signed the lease for the new tenant there. So, other than natural turn as we see things, no, Jordan, we don't have like a watch list of key tenants that were watching and if you look at our overall perspective, we don't have exposure. When you look at the Circuit City, that was our only Circuit City. We don't have that kind of concentration of retail tenant exposure across our platform.

My last question is just on the term loan related to the Concord that expires and matures September on next year, any additional talks there given what happened with that project?

Yes, there are discussions with that lender about extending their as well.

Has the change in the plan at the Concord then an event of default there or.

No, it is not.

Okay. Thank you.

Your next question is a follow-up question coming from the line of Anthony Paolone. Please proceed.

Thanks. I just wanted to confirm on the dividend policy, you reduced the dividend but, since you reduced the guidance came down more and historically you kind of run it on a payout basis. Do you feel comfortable with the current dividend?

Yes, I think the dividend is represents about our normal payout ratio of FFO given the range that we address to 340 to 360.

Okay, and then just one follow-up on Schlitterbahn. Do they have the ability to repay early?

Yes.

Would it be, just at par, just thinking if their parts would blow the doors off and suddenly you are earning a much rate of return, can they repay early and that you may actually recoup the originally underwritten return?

I told you that is a possibility, although, we are kind of looking at this as, this is not the project that we originally envisioned and therefore, paid back is not a bad answer.

Okay. Understood, appreciate it.

Your final question is a follow-up question coming from the line of Michael Bilerman. Please proceed.

Just going back to (inaudible) where the 11.5 million for the retail. What sort of occupancy is baked into that?

Existing occupancy.

Which is that? What level?

87%.

87 to 88%

So if you were pro forma that out at 95, that 11.5 goes to where?

Probably 12.5, 13.

So its all the upside is taking the signage, effectively from 3.5, up over.

That's too approaching 8 to 10.

Then I just want to, you talked about last quarter being the 70 million run rate, and you talked previously without including this into your guidance in the fourth quarter. So, are we not going to get from $15 million today to a $17 million run rate by the end of the year?

It's not that Michael. Part of that is in some aspects of this year with some of the tenants, you have some pre-rent periods that would on a run rate basis be different than what you're going to actually receive this year.

Your 15 in the cash, 17 was in place that sort of a cap or after pre rent.

Right.

And just going back to Bob's question, because my understanding is this project did come out significantly above what initial cost was.

Right.

What planned is a 330 project?

Right, it was originally a kind of a 275 project.

And that’s the basis that you made your investment on?

That’s correct.

And the NOI numbers didn’t change when you under-wrote it 275, effectively getting to the high end that you envisioned a $25 million number, at 275 a non-cap would get you that now?

That’s correct.

Okay. I just one on Schlitterbahn, I don’t believe there is any mention on the previously disclosed $25 to $30 million equity injection from the family and where does it stand?

That’s been done as a necessary port to open the park up. The family is also to preserve and make sure that the star bonds are going to be available on an ongoing basis. We need to break the star bonds escrow and they are going to buy star bonds as a way of interjecting additional capital into the project and that should happen in the next 30 to 60 days.

And just going back to the loans on Concord and Toronto Life Square all that’s been accrued interest, you didn’t feel anything necessary to why your not looking any cash income to remove the accrued portion on Concord and Toronto Life Square?

No, in both cases, management estimated the value considering these appraisals that were done which were well in excess of the carrying value that include accrued interest. So, we’ve have seized accruing interest on both those projects, so the balance won't grow, because we'll receive the cash when it comes, so they won't grow and then current appraisal as I said is higher than the carrying value that includes the to-date interest.

Right and then just finally the supplemental is extraordinary helpful, so I appreciate you putting that out there, I said one question, as you look at your investment dollar page, page 7. If we look at the retail theatres, I guess the 104 is your Toronto Life Square, is it correct? Mortgage notes and related receivable. On page 7.

Okay. Page 7. I am on page 7. Sorry I was on different page.

That mortgage notes and related receivable in retail theatres is that 104 for Toronto Life Square?

Yes.

And then the accounts and notes receivable that's where your effective, the Cappelli loans are sitting?

Yes. Some of accounts receivable right.

Would normal account receivable but is $30 million of notes are embedded into that number?

Right.

Okay. And then if you are to break up this 1.9 billion between theatres and retails, what would that split be?

I think that slide that David showed, can you pull that back up.

Is the slide show available as a download other than just clicking on the link, if its not then you can make that available prior to calls.

50% is little over of total asset. But little over 50% is theater.

52.

Well under 20% is other retail.

Theatre located retail

And to your point Michael, it will be available after our call probably the few hours on our website.

Okay. It is just helpful because it hard to follow you. If you make it available as a PDF just when the call starts, that way we can follow along and print it, it will be easier, so 80% of that 1.9 billion is direct theater?

When I comment on, I’m talking about overall assets. So I am not talking really off the base of $2.7 billion, of that number 50 plus percent is theaters and about, a little under 20% is non-theater retail. That’s the little difference in taking 20% of that number, it's 20% of that total gross assets.

Effectively 540 of the 1.9.

Yes, that's 20%.

It seems a little bit high. Okay, all right. Thank you.

And there are no further questions at this time.

Well I appreciate, everybody tuning in, the chance to talk to you and of course we’re always available further. If you would like to give us a call if you think something more, we look forward to. As I said in closing my comments, improved results, we are getting some things cleared up. We expect to improve on that further and we look forward to join you next quarter. Thank you.

Thank you

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect and have a great day.