Hello and welcome to the Lexington Reality Trust fourth quarter conference call. The earnings press release was distributed over the wire this morning and the release of supplemental disclosure package will be furnished on Form 8-K. In the press release and supplemental disclosure package, Lexington has reconciled all historical non-GAAP financial measures to that most directly comparable GAAP measure in accordance with the Regulation G requirements. If you did not receive a copy, these documents are available on Lexington’s website at www.lxp.com in the investor relations section. Additionally we are hosting a live webcast of today’s call, which you can access in the same section. At this time, management would like me to inform you that certain statements made during this conference call, which are not historical, may constitute forward-looking statements within the meaning the of the Private Securities Litigation Reform Act of 1995. Although Lexington believes expectations reflected in any forward-looking statements are based on reasonable assumptions, Lexington can give no assurance that [inaudible] will be attained. Factors and the risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements are detailed in today’s press release and from time to time in Lexington’s filings with the SEC. Lexington does not undertake a duty to update any forward-looking statements. With us today fro management Will Eglin CEO and President, Robert Roskind Chairman, Pat Carroll Chief Financial Officer, Natasha Roberts Executive Vice President and Director of Real Estate, and other members of management. I’d like to turn the call over to Will for his opening remarks.

We are pleased to have delivered strong results in our real estate portfolio for the fourth quarter 2008 as we continue to execute well on our opportunities to de-leverage the balance sheet, improve liquidity, and address debt maturities. For the quarter, our reported funds from operations were $0.37 per share after a net $0.01 per share impairment and a two-tenth per share non-cash charge relating to a forward equity commitment. Adjust for these and other one-time items during the year our funds from operations per share were $1.57 in 2008 and this was inside our guidance range. We’ve made great progress with respect to our overall leverage. We de-leveraged our balance sheet throughout 2008 and reduced debts, including our share of joint venture debt, by approximately $686 million year-over-year. From an investment standpoint, in the fourth quarter we continued to stay focused on capitalizing on tumultuous conditions in the debt markets by repurchasing $88.5 million face value of our 5.45% exchangeable notes at a 31.6% discount. We continue to see good opportunities to repurchase our own debt, and subsequent to quarter end we repurchased an additional $13 million of our exchangeable notes at a 34.2% discount and a yield to maturity of about 21.5%. We plan to continue to take advantage of these market dislocations, which offer extremely high risk adjusted returns with the added positive of reducing our leverage. This trend is likely to continue in 2009 and we view the repurchase of the debt with significant discounts as a great opportunity to create value for shareholders, and we expect to continue to use our financial resources to retire debt at attractive discounts going forward. In addition, we continue to improve the company’s financial flexibility as we reduced our balance sheet leverage by $103 million during the quarter and…

During the quarter, Lexington has gross revenues of $105.1 million comprised primarily of lease trends and tenant reimbursements. The decrease in rental revenue in fourth quarter ’08 compared to fourth quarter ’07 relates primarily to the sale of properties to the Inland joint venture in the fourth quarter of ’07 and the first six months of 2008, and two lease terminations we received in the second quarter of 2008. The reduction in interest expense of $11.2 million relates to the de-leveraging of the balance sheet. Particularly the repurchase of $239 million of the exchangeable notes and $70.9 million of the trust preferred securities during 2008. During the fourth quarter of 2008, debt satisfaction gains included in continuing operations for a $26.6 million and these relate primarily to satisfying a portion of our 5.45% exchangeable note at a discount to the original principle. The debt and preferred equity retirements we completed during 2008 are summarized as follows. On the exchangeable notes, we retired $239 million via a cash payment of $169.5 million and the issuance of $23.5 million worth of common shares. That was 1.6 million common shares at an average price of 14.5. That resulted in about a $46 million discount. The trust preferred securities we retired $70.9 million by a cash payment of $44.6 million, which resulted in about a $26.3 million discount, and we also repurchased some of our preferred C shares. We retired $24.4 million worth of them was 502,000 preferred C shares by a cash payment of $7.5 million and the issuance of common shares valued at $11.2 million, which was 728,000 shares at an average price of $15.35, and this resulted in a $5.7 million discount. When you summarize all three of the repurchases that we did, we retired $334.3 million of these securities by…

During the fourth quarter, we sold 17 properties for $49.5 million. Including the 47 properties that are held in joint venture, our portfolio now totals approximately 48 million square feet as of December 31, 2008. At year end, we were approximately 94% leased and expect to remain at or above 92% through 2009. This is a modest decrease from our prior expectations that is reflective of the current economic environment. Out of the 24 leases signed during the fourth quarter, six were new and accounted for about 120,000 square feet, and 18 were renewals or extensions, which accounted for about 1.4 million square feet. We lost approximately 1.2 million square feet of occupancy due to lease expirations that were not renewed and bankruptcy rejections during the quarter. This includes the two Raytheon building in Long Beach that expired on December 31 and the building that was leased to Linens 'N Things in Logan Township, New Jersey that was vacated due to lease rejection in mid-December. Credit underwriting is key for new leases and the monitoring of the credit on the tenants in our portfolio is of great importance. Linens 'N Things, formerly our tenant, rejected our lease and vacated a 260,000 square foot warehouse in December, which generated approximately $1.3 million in annual NLOI. Circuit City, which occupies a 288,000 square foot office building, generated approximately $2.9 million of that NOI has rejected our lease and we expect that building to be vacant at the end of February. That being said, we currently do not have any other material delinquencies in the portfolio, and we are pleased with how well credit quality is holding up in such a severe economic contraction. Our credit watch list includes Bally's Total Fitness, they filed Chapter 11 but continue to pay rent, Kmart, and…

Again, I think it’s important to note the success we’re having in our capital recycling strategy. We did very well on our fourth quarter sales and debt repurchases and are continuing to make good progress on the property sale front. Overall we believe Lexington has the right strategy and is well positioned to capitalize on opportunities to lower our leverage, and we continue to do well in our leasing efforts and our portfolio is well positioned and diversified. We continue to make very good progress in reducing our debt, managing our refinancing needs and maintaining adequate levels of liquidity. And to reiterate, over the last four months we’ve taken actions to reduce our 2009 debt maturities by about $300 million to about $87 million today, and our new credit facilities have improved our financial flexibility. Our current expectation on guidance is for funds from operations per share to be in the range of $1.35 to $1.42 in 2009, and this range does not include items that should be considered non-recurring, such as lease termination revenue and gains on discharge of indebtedness. Operator, that concludes our formal remarks and we’ll turn it over to you to conduct the question and answer session.

(Operator Instructions) Our first question is from Sheila McGrath – KBW. Sheila McGrath – Keefe, Bruyette and Woods: Your stock is trading at about two times FFO and if there’s like a near-term risk either on the maturity side or a need for significant equity, and I was just wondering if you could walk through, Will what you view as your biggest near-term risks for Lexington and your thoughts on any near-term equity capital requirements?

Well, if you look at our cash plus our existing line capacity and compare that to our maturities this year, we think we’re in pretty good shape. The two big mortgages that we have in our balance sheet debt that are maturing in fourth quarter, one is 255 California Street and the other the facility down in Houston that Natasha mentioned that we’re marketing for sale. Those numbers total $38 million and both of those properties are being marketed for sale. One at 255 California Street is a very well located building in San Francisco that we expect there to be a decent market for. If we’re unhappy with the prices that we get for those assets we can either use line capacity to pay them off or perhaps restructure those loans with the existing lenders. So I think in a relatively short period of time we’ve really changed the outlook tremendously just from the standpoint of working down our 2009 maturities. Sheila McGrath – Keefe, Bruyette, and Woods: So you don’t have any needs for new equity issuance either in your view?

We don’t. We really want to try to get through this period without tapping the equity markets. It’s obviously good to know that there are other tools available to us to improve liquidity, but our focus has been on asset sales to try to create that liquidity. Sheila McGrath – Keefe, Bruyette and Woods: Then, Pat, if you could give us some information on what you expect the convert on non-cash adjustments to be to interest expense or did you go over that?

We estimated for 2009 the impact would be about $2 million as an increase in interest expense, which isn’t a cash payment. Sheila McGrath – Keefe, Bruyette and Woods: And last question, on the guidance that one adjustment that impacted for the securities that an adjustment is not in your guidance for that is there?

That’s correct.

Our next question is from John Guinee – Stifel Nicolaus. John Guinee – Stifel Nicolaus: Aaron and I are here having a beer, John Guinee here. I think it’s Pat, maybe it’s Will, but you guys have done a remarkable job of having your gains on debt extinguishment match your impairment charges and losses associated with asset sales. Do you expect that to continue in 2009?

No. I don’t see how they’re correlated. I don’t think that they would move in lock-step with each other, no. John Guinee – Stifel Nicolaus: Second, where do you think you’ll be at the end of 2009 for Concord? Right now it looks to me like a book value of about $450 million and your prorated share of the debt is maybe $330 million?

Yes. Our investment at year end is about $114 million. That’s right. John Guinee – Stifel Nicolaus: And what total write-downs have you taken so far?

Since inception Concord has taken $31.1 million on its loans and $84.7 million on its bond, so we’re 50% of that.

Our next question is from Jeff Miller – JMG Capital. Jeff Miller – JMG Capital: I didn’t see it in supplemental. Could you just walk through kind of where you are regarding any new covenants and ratio requirements you have given the new-term loan that you just did?

Yes. The covenants are almost identical to the current on, the one we refinance out of. In certain instances they were actually a little bit better for us, but we are well within the covenant guidelines in our loan docs. Jeff Miller – JMG Capital: So you don’t see any pressure going through the end of ’09 and then how about into 2010?

No, we don’t.

Our next question is from Anthony Paolone – JP Morgan. Anthony Paolone – JP Morgan: Natasha, I think you mentioned occupancy for ’09 projected down to about 92% and I think your year end was 93.3% and you had mentioned Harcourt potentially going out. I’m just trying to get a sense as to how much speculative leasing do you need to get done to hit the 92%, given what you know about tenants that are probably not sticking around?

Harcourt I assume is empty through year end so that’s a vacant building. The other big one is the Sam’s Real Estate Trust that stays vacant through year end. Properties that become vacant in 2009 stay vacant. Anthony Paolone – JP Morgan: And is that all that you have assumed to get to the 92%? I’m just trying to see if you need to do any other leasing if the expected vacancies get you below 92% and you need to do some leasing to get it back up to 92%?

No. The expected vacancies get me to 92%. The only assumptions I’m making are there’s leases where we either have a renewal already or are very close to having one. The Harcourt is not one of them. The Sam’s Club is not one of them. Federal Express is not one of them. Anthony Paolone – JP Morgan: So to dip below that it would have to be something more unexpected occurring.

Exactly. Anthony Paolone – JP Morgan: Pat, do you have an estimate or a number for unencumbered cash NOI that the portfolio has right now?

The properties that are in the borrowing base, the 72 properties, they generate about $11 million quarterly of NOI, and the properties that are unencumbered and not in the borrowing base, I don’t have that in front of me, Tony.

But, Tony, they consist mainly of properties where we have that are either vacant or have occupancy less than 80%. Anthony Paolone – JP Morgan: Those are the assets that are unencumbered and not in the borrowing base.

That’s correct. For example, Light Street is not in the borrowing base and that’s a significant asset that came out of the former term loan that’s now in our unencumbered pool. Anthony Paolone – JP Morgan: In renewing your line in the term loan that you just did, I guess you have the option to essentially double the amount. What would you need to do to increase the capacity there? What would the banks need to see? It sounds like there might be some criteria there.

New assets for the borrowing base. The borrowing base presently supports a little more availability than the 250, but exercising the accordion involves adding more property to the existing borrowing base. But that could come in the form of properties that we presently have encumbered by first mortgages that mature in the next couple of years. And in 2010, for example, we have about $111 million of mortgages maturing but we’re expecting continued occupancy on properties representing about $90 million of that debt, so we’ll have a lot of properties that are cash flowing that we can put into the borrowing base. Anthony Paolone – JP Morgan: In terms of the dividend and thoughts on dividend policy, you cut the dividend down to the $0.18 a quarter but the IRS gives you the ability to do a lot in stock at this point, for ’09 at least. Why maybe not take advantage of that or not?

Well, I think our first choice having cut the dividend to a very low level in relation to funds from operation is to take advantage of retained cash flow and dispositions as our source of liquidity. That being said, it’s great to have that extra tool in the toolkit as we seek to address the factors that are hanging over our share price, but so far we’ve chosen to try to create liquidity from the property market versus in the equity market. But decision on that is a board decision and if we feel like we need to use those additional tools in order to get the share price back to a better valuation that’s certainly something that we will have to consider. Anthony Paolone – JP Morgan: Last question on Concord, the $8 million FFO number you put out for ’09 from that is that cash coming back to LXP or is that net of reserves, what exactly is that number?

That’s just a flat FFO. The amount of cash coming back to Lexington will be less than that because they’ll be using some of the proceeds to de-lever the Concord level. Anthony Paolone – JP Morgan: Okay. And are there any further reserves assumed at Concord to get to the $8 million or if they take more reserves that would bring that number down.

That’s a clean number, Tony. To the extent that the additional reserves are acquired going forward, that would impact that number.

Your next question comes from Jay Hatfield – Infrastructure Capital. Jay Hatfield – Infrastructure Capital: It seems like now that you’ve been able to refinance your line of credit and your term loan and also have the ability to expand the borrowing base that you might be in a position to, not just buy back the corporate debt maturity, but to also start looking at the preferred, which would have a much higher IRRs and also be more accretive to FFO. Is that something that you would consider or at least consider with incremental sales right now? Your preferred are trading at about 27% yield.

No. We agree with you that the preferreds are a compelling buy, but since the exchangeable notes are a hard maturity in three years and that’s a recourse liability, we’ve decided to focus our financial resources on that since that’s a debt. But you’re absolutely right. If we were able to create more liquidity we would have an interest in buying those securities, sure, because they are very high yield and very safe. Jay Hatfield – Infrastructure Capital: So if you were able to generate some incremental asset sales then you would consider that because it seems like between cash and capacity on your line that you would have enough cash to take care of your corporate debt maturity, particularly if you buy back some of they preferreds and then get two and a half years of accretion at 27%.

We agree that buying preferred stock is more accretive to current period earnings, but our focus from a liability’s management standpoint is to, like I said, impact that hard maturity in three years. Jay Hatfield – Infrastructure Capital: I’m just saying like let’s say you said you have, I think, $80 million in properties for sale, if you were to execute on those and then you would have arguably excess capacity to buy back that debt would you then consider doing it or you’re not going to consider it until you’re completely out of that 2012 maturity.

I think until we have addressed our mortgages maturing this year and have given [inaudible] very good visibility on how we’re going to address our mortgages maturing next year, we’re going to use our financial resources to buy in our exchanging notes. We really don’t have the luxury to look at buying preferred right now. Jay Hatfield – Infrastructure Capital: What kind of cap rates are you seeing in terms of sales you were able to execute last quarter at quite low cap rates?

The sales were very good last year but the cap rate was a little distorted because we sold some empty real estate. So on the properties that we sold that were leased the cash cap rate was about 8.8%. We are actually in the market with several hundred million in property we’re trying to sell. We just have good visibility on about 85 million right now and that’s at a cap rate of on average about 8.2%. What we’re trying to do is sell properties that have mortgages in place that can be assumed because honestly that’s the way to get the best value for the assets right now. Jay Hatfield – Infrastructure Capital: Okay. So, you’re seeing a fairly significant demand or it’s not maybe as depressed as the equity markets?

It’s a tough market. There’s certainly less liquidity in it and there are fewer buyers, but we over the last two years have sold 1.5 billion of single counted real estate so I feel at this point that we’re better at it than anybody. So it’s not a great market to sell in but, again, if you have a property with reasonably long lease term and attractive financing that’s in place that can be assumed by the buyer, there’s a decent market right now.

Your next question comes from Charles Fisher – LS Partners Charles Fisher – LS Partners: Your program to spend about $72 million in ’09 on dividend and I guess you stated there’s another $63 million of free cash flow. Is the $63 million would that be encumbered or limited if you have to spend a bunch of money on TIs and LCs on buildings?

The $63 million was the amount of cash flow that we retained as a result of reducing our dividend from $1.32 to $0.72. So, yes, some of that money is available. We do have fairly heavy capital expenditure needs this year and next year. So I’m not saying that the $63 million necessarily is entirely available for debt repayment but it certainly increased our financial flexibility a lot. Charles Fisher – LS Partners: Is it fair to say that if you spend $5 or $10 million on a TI or LC program that you probably put that into your line possibly as additional collateral and borrow some money against it?

Well, we have some assets in order to go into the borrowing base we have to have 80% occupancy and we’ve got a couple of properties that have occupancy that are just below 80% to the extent that we were investing money in an asset to get occupancy above 80% then those assets could become eligible to go into the borrowing base. Charles Fisher – LS Partners: Could you give us an idea on, I know it’s hypothetical or it’s not yet closed, on the $85 million that you’re looking to sell or under contract or NOI, what kind of cash generation would that possibly give back to the company?

About $35 million. Charles Fisher – LS Partners: That’s a big number.

Yes. In this market $35 million can buy in a lot of debt given the discounts that are available today. Charles Fisher – LS Partners: One last question, Will, and this goes back to the first question. There’s give or take a $3 stock price with 100 million shares you’ve got about a $300 million market cap give or take, and there is projected in ’09 about 130 million of cash flow between dividends and the $63 million. So the company is trading at about 2.5 times cash flow, did I miss something?

No.

Our next question is a follow-up from Anthony Paolone – JP Morgan. Anthony Paolone – JP Morgan: Natasha, you gave us the budget for TIs and leasing commissions for the next two years. Do you have those numbers updated for 100 Light Street? Like what needs to be spent.

We still have $15 million to spend on CapEx at 100 Light Street that will be spent in 2009 and 2010 is another $2 to $3 million. Anthony Paolone – JP Morgan: Then with 100 Light and the TIs and LCs that you outlined earlier, is there anything else like maintenance CapEx or any other CapEx we need to be aware of?

No. That covers all the CapEx for 100 Light Street. As per TIs and leasing commissions, those are included in the $24 million that I told you for 2009 and $33 million for 2010 and some of that runs into 2011 the $20 million number. Anthony Paolone – JP Morgan: Okay. But there are no other expenditures we need to be aware of for things like maintenance or any expansions that you’ve committed to or anything like that?

No. We have no expansions that we’re committed to right now. Anthony Paolone – JP Morgan: Last question just on the debt side, can you give us a sense as to what the terms would be like right now to go get mortgage financing or to refinance some of the mortgages that are coming due this year on your properties? Because if I look at your supplemental the stuff that’s coming due in ’09 has about $39 million of cash revenues associated with it and it’s only about $50 million in maturities I guess you sold in asset after the end of the quarter. But give us a sense as to maybe where LTV term and rate might be.

It’s a little bit of guess work because there isn’t really a commercial mortgage market to speak of right now. But our working assumption is 7.5% interest to the extent our first mortgage lender is staying in the deal and rolling their loan.

Your next question is from John Guinee – Stifel Nicolaus. John Guinee – Stifel Nicolaus: Natasha, can you review the status on JP Morgan Chase in Indianapolis and the Aventis building in Parsippany and then also the big United Technologies industrial building in Maine?

I’ll start with United Technologies in Maine. We’re in discussions with them on a renewal. And with respect to the other two buildings, the JP Morgan and Aventis, both buildings are currently subleased and the sublease terms extend beyond the primary lease terms. So there will be no rollover. John Guinee – Stifel Nicolaus: So, if I was to put in the, when you go from sublease to primary lease when JP Morgan and Aventis cease being liable, what should we think about for the lease expiration at both JP Morgan Chase and Aventis?

JP Morgan Chase has another I want to say eight years of term on that building. And Aventis has two tenants in it. I don’t have the exact terms but easily five years, longer than five years beyond the Aventis lease. John Guinee – Stifel Nicolaus: Okay. And Pat, have you projected out your minimum dividend for 2009 in order to maintain REIT status?

We set the dividend at $0.72. That’s our minimum dividend $0.72. John Guinee – Stifel Nicolaus: And you think that’s still a good number?

Yes.

There are no further questions at his time. I’d like to turn the floor back over to management for any closing comments.

Thank you again for joining us this morning. We are very excited about our prospects for 2009 and as always we appreciate your participation and support. If you would like to receive our quarterly supplemental package, please contact Lisa Soares or you can find additional information on the company on our website at www.lxp.com. And in addition, as always, you may contact me or the other members of our senior management team with any questions. Thank you and have a good day everyone.

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time and we thank you for your participation.