Good afternoon ladies and gentlemen thank you for standing by and welcome to the Macerich Company’s second quarter 2010 earnings conference call. One note that today’s call is being recorded. At this time all participants are in a listen-only mode. Following the presentation we will conduct a question-and-answer-session and instructions will be provided at that time for you to queue up for your questions. And now I would like to turn the conference over to Ms. Jean Wood, Vice President of Investor Relations, please go ahead.

Hi, thank you everyone for joining us today on our second quarter 2010 earnings call. During the course of this call management will be making forward-looking statements which are subject to uncertainties and risks associated with our business and industry. For a more detailed description of these risks please refer to the company's press release and SEC filings. As this call will be web cast for some time to come, we believe it is important to note that the passage of time can render information stale and you should not rely on the continued accuracy of this material. During this call we will discuss non-GAAP financial measures as defined by the SEC’s Regulation G. The reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is included in the press release and in the supplemental 8-K filings for the quarter which are posted in the investors section of the company’s website at www.macerich.com. Joining us today are Art Coppola, CEO; Ed Coppola, President; Tom O’Hern, Senior Executive VP and Chief Financial Officer and also joining us today is Randy Brant, Executive VP, Real Estate; Randy overseas our department store and retail leasing. I want to invite you all to attend our Investor Day on October 5. And with that I would like to turn the call over to Tom O'Hern.

Thanks Jean. Today we’re going to be discussing second quarter results, our capital activity, the opening of our fantastic new malls Santa Monica Place marketplace and our outlook for the rest of 2010. Our operating metrics were strong for the quarter, our occupancy levels were improved, retail sales increased and same-center NOI was positive for the second quarter in a row. The releasing spreads turned positive after being negative in the first quarter of this year. Looking at the spreads, we signed leases on 331,000 square feet of space that was 224 deals, on average this includes consolidated as well as joint venture assets. The average new starting rent was 39/34 a foot for a positive releasing spread of 4.6% over the expiring rent. Occupancy levels increased to 130 basis points compared to a year ago, we were at 91.8% at June 30 compared to 90.5 in June 30 of '09. Average rent in the portfolio increased to 42.31, that’s $42.31 compared to just about $42 even at year end. Occupancy cost was 13.9% and that’s based on the trend 12 months ended June 30. Looking now at FFO, FFO per diluted share was $0.57 for the quarter that compared to $0.67 for the quarter ended June 30, 2009. It’s important to keep in mind that as a result of our stock dividends of last year and our equity offerings of October and April, that we now have over a 141 million shares outstanding that compared to 89 million shares outstanding for the quarter ended June 30, 2009. As a result of that we had quarterly earnings dilution of approximately $0.17 per share from the additional shares outstanding in the second quarter of 2010 compared to the comparable quarter a year ago. Same-center NOI was up 2% compared to the…

Thanks, Tom. As you know over the past couple of years going back to September of 2008, when the capital markets crashed, we had to begin to make some difficult decisions and as we moved into the fall of 2008 one of the first decisions we had to make was the conservation of capital. And the biggest place to conserve capital for us is in our development program and our redevelopment program, and at that point in time in September, October, November of '08 we had 30 to 40 projects in our shadow pipeline. Some of them were fairly eminent, some of them were under construction, and some of them were a little bit further out. We sat down and we said all right we are in a very capital constrained market, and we have a financial crisis, retail sales are plummeting, and we need to cut this back to mission critical, and we cut it back to Scottsdale Fashion Square as you know, which was open last year very successfully to Cerritos the completion of the Nordstrom relocation, and we are now in the process of remerchandising the old Nordstrom wing, finishing up on Northgate in New York, but most importantly in the real key decision that we had to make with Santa Monica Place. And we had to make that decision in November of 2008 if we were going to open in August of 2010. And it was a tough decision, there was a lot of money it was $275 million, and there was a perception in the market place that the company had liquidity issues given the debt that was coming due in the following year from our mortgage debt view point, and also given the term notes that were coming, just the uncertainty in the whole…

(Operators Instructions) We will go first to Craig Smith of Bank of America/Merrill Lynch. Craig Smith - Bank of America/Merrill Lynch: I just want to thank you guys; you threw a heck of a party in Santa Monica on Friday. I felt like I was in a resort more than shopping center. But thanks a lot for that and my question is I don’t know if you have done any research on this or have an opinion. But what areas surrounding the Santa Monica place will you be drawing at, at greater pace when you were when the old enclosed mall was open? Has the trade area grown and what areas might be delivering stronger sale?

Let me take a step at that and Randy may want to jump in. The area that we are drawing from now that we didn’t use to draw from is 20 feet away from us. It the Third Street Promenade. When it was an enclosed mall we weren’t drawing from the Third Street Promenade at all expect for a one thing and one thing only and that was our food court. And that was the first thing that embedded the Broadway Deli and Broadway The Street and that was what you walked into. And the food court was always successful, I think we have people counters in that food court, we were running 16 million people a year through that food court. And that was as we are closing the center down even we were running back a huge number. But we were never getting business you never seen people move from the promenade into the enclosed mall when you stood on top of the enclosed mall. Today when you stand on the third level of the open air having torn the roof off that’s all you see is people coming from the promenade into the shopping center. Now by the way I have always maintained that the promenade itself is an anchor to Santa Monica Place. When you got 250 - 300,000 people doing 800 or $1000 a foot right next door to you, that’s an anchorage as much as Nordstrom and Bloomingdale's is an anchor, this is much as the amusement Santa Monica peer is an anchorage. So that is the first place right there. Then along with that the tourists. Santa Monica Place without question and I am talking about this is kind of from the retailers based upon who they are already selling to and who…

I think, one of the things that we are going to experience is a deeper presentation and to the more mature customer Third Street Promenade except for Fred Segal which is just off Third Street Promenade had very little appeal to anyone but juniors. With our tenant mix we’ll be bringing in the more mature and more well to do customers from Malibu and I think all the way to Manhattan Beach and most of beach to beach cities?

Yeah, Randy and I were at the Bloomingdale Charity event Wednesday night a few five nights ago and they limited it to 200 people and there was a high dollar ticket item but they at their private shopping day on Thursday and then on Friday I mean, they’ve got their highest consuming credit card customers for all of Bloomingdales coming to the store and of course you have Nordstrom you didn’t even open yet and we know that Nordstrom is going to do something at this store even though it’s not a huge store but it’s a big size store which were 135,000. Said that it's big enough, it’s adequate. They are going to do something really special and we have huge aspirations I know they have huge aspirations, so you know and people like Hugo Boss, I was talking to the manager of Hugo Boss yesterday, he said, we are doing really good but he said, so far people just so overwhelmed by the place that they are just in awe of the beauty of it, but they almost stopped walking into the stores yet. So, it’s our typical, quite a few high end customers that we have personal shoppers for that will turn into the store once every two months and spend a lot of money. But they are not going to come out on a weekend when they know there is a 100,000 people that only cant find parking place they are going to find a way to sneak in, but even yesterday there were quite a few celebrities that were noticed and I guess in terms of trade area, the word is, it’s going to be a destination for Southern California. So anybody who comes to Southern California is going to have to come to Santa Monica Place if they want to get the full experience. It’s hard to say that about a shopping center, I’ve never been into a sale and I don’t know another shop. It’s very few of them that you can say that about. Craig Smith - Bank of America/Merrill Lynch: Thanks a lot and congratulations on your new mall.

Shopping center, retail, not a mall. I keep telling my wife and kids we tore the roof off, quit calling it a mall.

And we will move on to RBC Capital Markets, Rich Moore.

With 97% of that mall leased and Cerritos 100% leased, it sounds like even going beyond the Santa Monica, there is something good going on for retailers. I mean, should we read the recent leasing successes as retailer demand starting to really comeback?

Let me jump in and Randy may go further speak on the points that I can't. We monitor big earnings reports in earnings calls transcripts. I don’t want my leasing teams wasting their time listening for an hour and a half following you can read the transcript in 20 minutes, but they have to read the transcript of every one of their accounts, and we are in an account based system. All of our top retailers are making a lot of money, because going back to February of last year they redid their business model, and that was a secular change. And they redid their business model to make money on less sales. And now they are very confident in their profit margin, so they are really willing to pay a little higher than a higher cost of occupancy, because they know what difference does it make if I'm paying 16% occupancy versus 15%, when I'm really confident on my profit margin on the other 84% of my sales. If they are not sure what the profit margin is going to be on the bulk of the sales, they don’t want to pay a 10% as a cost of our occupancy. So, I think you have seen it with us, you have seen with the other big comparable names to us. I think you have seen volumes pick up. I know with us you saw in the quarter leasing volumes pick up. And I am not calling it robust, but the retailers are making money, they’re talking, they are clearly coming to the realization that the supply of rate centers is limited, and we are blessed to have well over 80% of our EBITDA, and now that number has just gone up because we’ve manufactured a Triple-A flat piece of EBITDA from Santa Monica Place by getting that open for business. They know that when they do business with us they are going to get prove them winners. And they know that there is a limited supply of those. So you are in a good position there, just in terms of the retailers attitudes, Randy, you want to add some color to it.

Well you touched upon it. The retailers did change their business model. They have lots of cash. Every percent of increased sales, a large percentage is going back into their pocket and they want to expand. You know you said you wouldn't call it robust, I would certainly call it robust in our Top 25, 30- shopping centers, it’s very robust. And the retailers want to make deals.

On the committed side, we said 92% of leases 97% committed. I also mentioned earlier in the call that the 5% between the leased and committed if those guys aren't signed by Wednesday or Thursday of this week, we are back to 92% committed and leased as far as I am concerned, because those guys have just lost their leases.

And then you had kind of mentioned that redevelopments have once again come under the horizon. Would you see any ground up development at this point? I mean you had talked a little bit at ICSC about maybe outlet centers that kind of thing but is there a regional mall ground up development or lifestyle centers any thing like that?

Well, we are clearly going to have two major ground up developments Phoenix, Scottsdale marketplace in the next 10 years. I can't predict when they are going to open, if you made me dial it in, I would say somewhere between four and seven years is when they will open, and may be one of them will open three or four years from now, and one will open five or six or seven years from now. We got to wait until the Phoenix marketplace really begins to come back. And that’s when you are really begin to get the rents. I mean it would be silly to build something and lease it into a headwind on a piece of property that irreplaceable piece of property, and the two sides, one in particular the North Scottsdale site we have, two of them they are irreplaceable. As Scottsdale Road is 101, and it will be silly to build something before it is time. So those are the two ground ups. We are being approached by other folks. But it is mainly in the re-development arena. And again, I want to go back to the re-development. I mentioned some of the examples of the bigger re-developments between walls and the oaks doubling in size, and now Santa Monica Place. We’ve been doing that for a living to 35 years. And it was only two years ago that we basically said okay, other than these four we're putting everything on hold. Now that we have completed Santa Monica Place, we've got our balance sheet in order, we've got cash on hand, we've got the talent here, and we are sitting on a huge winner, retailers love winners. And there is isn’t a retailer at Santa Monica Place that isn't saying, "my gosh your people…

Okay good, thank you. And then if I could real quick, I know you’re not going spend $600 million, the rest of your cash, on redevelopments. Do you have any plans for the $600 million that you have on the balance sheet?

Yes we are going to treat it as really precious long term equity capital. We are not going to feel compelled to spread investment. It is painful to be earning less than a half of 1% on it and in the meantime, my friend [Melton Cooper] said to me one day in the toughest of times 18 months ago he says you can never be too thin, you can never be to rich and you never have too much equity or too much powder on your balance sheet, he’s right. Who knows where the economy is going. We can always use it to further un-encumber the balance sheet, and then take un-encumbered assets as mortgage of some due, and then take those un-encumbered great assets and that could be your dry powder for when the next big opportunity comes through. So we are accessing every thing. I think once we go through a complete reevaluation over the next 30 days of the reality of our redevelopment pipeline, and the possibility even though I said don’t expect any acquisitions, and the possibility of maybe something happening in that arena, then we will evaluate whether or not it makes some sense to maybe use some of that capital just pay down some of the debt, including debentures, including mortgage debt, things like that.

Okay good thanks. And Tom when is the queue coming out?

Today, Rich.

Next we'll hear from Michael Bilerman with Citi.

Maybe Tom sticking with you, can you sort of walkthrough I think you said you've reiterated the guidance 260 to 280, with $1.22 year-to-date sort of leads a pretty wide range for the back half of the year, can you highlight where your comfort level is within that range? I know there is a lot of seasonality heading into the fourth quarter, but an average of how do you sort of get from Point-A this past quarter’s result, up the Point-B which would be the implied second half or so?

Well, I think for starters Michael, you’ve got the impact in Santa Monica coming online, so we’ve get $7 million or so of NOI coming in from that asset just for this year. We had a variety of things happening, we had some swaps burn off in April that were pretty expensive. And so we are going to pick up some benefit there as it relates to interest expense. Our re-financings are rolling through, this is going to really provide a pretty significant benefit. We’ve got some loans at coupons of 7% and even 8% that have been refinanced and we haven’t got the benefit of that, yet. So that'll flow through the second half. And then obviously, we’ve got a lot of seasonality, we’ve recognized virtually no percentage written until the fourth quarter, and that as a result of the accounting rules, where you can’t recognize that until you have exceeded the annual breakpoint. So we typically always had a lot of seasonality, and this year will be no different. Plus we will have the positive impact to the refinancings with lower coupons as well as Santa Monica opening. So I think if you…

And no body gauged been growing into itself this year. We also had some further gain, Cerritos has had some gains moving into the year. So there is redevelopment that still we're lagging through this year and are coming online gradually through this year, especially Northgate.

So Michael if you took the midpoint of the guidance at 270 and subtracted out the FFO year-to date through June which was about 22 and the balance I’d say would be split 47% or so in the third quarter and the balance 53% in the fourth quarter.

So could it be like at around $0.70 to high seventies in the fourth quarter and I guess its just that ramp going from 57 reported to next quarter up to 70 on a 140 million share base that's a pretty big dollar increase and I know Santa Monica comes on but I also thought that you were going to stop capitalizing interest. So then it would be that in a while it would drop to the bottom line? It wouldn’t be as big as of an impact, right?

We are picking up a lot of that, you are going to pick up percentage rents, especially leasing the bulk of special leasing that was during the fourth quarter and historically we've also had the bulk of our lease termination revenues come into third and fourth quarter and that's a guess, it’s a bit of a guess, I mean last year with 18 million of lease termination revenue that came through in the third and fourth quarter that’s not in the first two quarters. So, historically that’s been somewhat seasonal as well. So that obviously we are comfortable with it Michael and we wouldn’t reaffirm guidance at that level.

Right but I just want to make sure that in general restaurant would be very specific with the street in terms of what sequential and in terms of the ranges and moving up $18 million, just want to make sure that we understand the breakdown of what’s driving that sequential increase in FFO ahead with lease submission have probably been very light year-to-date at $33 million.

That matches where we were last year almost exactly.

And do you expect a bigger second half as well?

It’s hard to say, I mean historically that’s what we have always seen, I mean we've made, that's part of the reason we have wide ranges because certain things such as lease termination revenue unless are less subject to prediction and other things.

And then I just wanted a clarification, you talked about the average base rents in the portfolio and you gave the detail in the stop, both the consolidated and the unconsolidated were up relative to year end but they actually sell a little bit modestly from the first quarter and I know you mentioned the leasing spreads were positive so I was just trying to figure out what would have caused the average portfolio base rents do decline sequentially on the trailing 12 months if the lease spreads were positive?

Well, lease spreads were positive on average, on wholly owned assets they dropped slightly and joint ventures they were up fairly significantly and I'll have to get back to your question on average rent, if the question was, how come average rent dropped between now and year end, I actually think it was up slightly.

It was relative to year end, it actually sequentially from the data in 3Q

I'll have to get back to you on that Mike, I don't have it right now.

Christy McElroy from UBS has our next question

Hey good morning, congratulations on Santa Monica looking forward to seeing it. Just with regard to following up on Michael’s question, with regards to your capitalized interest, I think it was $8.8 million in the quarter. Can you break out how much of that will start to get expensed now the Santa Monica and most traders are coming online Q3, Q4 and then just for the rest of it what other projects are your capitalizing interest on currently?

Well Santa Monica is obviously the biggest one and we’ve got roughly 80% of the tenants are open right now so some of that will continue Christy, then we’ve got a variety of other projects including Danbury and other locations where we’ve bought department store buildings. There's quite a few locations and we can't go through everything here and we typically haven’t done that but the bulk of it has been Santa Monica of the total.

So roughly call it 60% to 70% of it will start to get expensed?

Well of the Santa Monica piece, I would say of the $8 million, that would probably be reduced by $4 million.

By $4 million, okay. And then just following up on Danbury, I could be wrong but it seems you started to do some more work there, can you confirm that its big (Dicks) from Forever 21 taking the outside lean space and then do you have a replacement center already lined up for the old Forever 21 phase.

The answer to all three, this is Randy is yes.

Okay. Who is taking the old Forever 21 please?

I don’t have it in term, but I know it's committed. And the lese back is not signed.

And then given that you are sort of out there looking at potential acquisitions, can you provide some color as to what you are seeing sort of in terms of opportunities and pricing and just wondering if you looked at it pro-bridge and (inaudible).

Yeah, we have passed from pro-bridge in December, three or four months before it came to the market because it's owned by our partner Northwestern Mutual. And the reason we passed on it is not because its not very solid asset, it is a very solid asset, but we just couldn’t get our arms around owning that as our only asset in Hawaii and that’s why we passed on and we also have a member of our Board of Directors who used to be the Chief Investment Officer at Northwestern Mutual and sometimes you can know too much about an asset. But I think it will be a fine acquisition for whomever might buy, it just didn't make sense for us and we are very stingy about how we are going to approach our opportunities and I would definitely not model any acquisitions of any kind into our numbers anytime in the near future.

Okay, but then just in terms of what else you are sort of seeing out there, is it just sort of nothing.

Nothing.

We will go on to Ian Wiseman with ISI Group.

Yes, good afternoon. A question on Valley View Center, I know, I read recently in the Dallas press that you guys handed the keys back on the property. I was just wondering if you could just walk us through that and tell us maybe what the NOI on the property was given that you had about $7 million of debt service?

Yeah, I'd be happy to go through that with you Ian. Valley View is in Dallas, at the center we have a $125 million CMBS loan that matures in 2011, subsequent to the time we bought that center there's been a huge growth in the amount of retail space and the Dallas market has gone from seven regional malls to ten region malls from nine million square feet to 13 million square feet. In the overbuilding that trade area pretty significantly and adversely affected Valley View Mall, that combined with the consolidation of the department store business that really left us with two vacant anchors and a pretty low occupancy rate. So we made a really difficult decision recently and that was to turn the asset back to the special servicer. We've seen the NOI decline to its current level which is $5 million and that's on a $125 million loan and although the loan still remains on our books today, we expect to have title transferred and the debt released before year end. Its currently in the hands of a receiver and they are moving to make that transfer.

And Paul Morgan from Morgan Stanley has our next question.

On redevelopment that you talked about, I mean is there any additional detail you kind of, kind of what centers, I mean for example what types and there's a big project that for example Tysons is a big project that you have spent a lot of time planning and you know whether the metros under construction whether it would be something there or any other areas where you could seek kind of large scale investments in the copies over the next say two or three years.

Sure this is Art, I would be happy to amplify on that. Again, we are carefully taking a look at that over the next 30 days. Now one of those big opportunities is the 50,000 square feet of space that's sitting on top of the Bloomingdales building at Santa Monica Place but we have, really nobody knows about it. When I told a couple of retailers about it the other day, they said you've still got the 2000 feet there and we said yeah, it’s the third level of the old Macy’s building and it went up from one to this dinning bed and could be 50,000 foot bigger. So that’s going to be one area of focus and that's going to turn out as a huge winner. We talked about Danbury, huge, nice little (inaudible) of the of the five wings’ buildings and we are looking at some other things there. Broadway Sparta, we are under construction in the markets right now and that construction by itself is the addition of newer markets which is great and Nordstrom has taken one of their top five stores in the world and expanding it. But we are also working with Macy's to work out some plans for them to redo their store. We are talking about the possibility of adding a Bloomingdales to that center. We’re looking at the possibilities of an expansion of that center because when you've got line ups like a new name in, one of top three Nordstrom anywhere. Macy’s and then some great current specialty shops and you’ve got some inefficient parking structures, you’ve got an opportunity to completely revisit that. Probably Plaza could be our next Santa Monica Place, not in terms of it's entertainment value per se because its more of a buttoned down…

That’s great is it too early for you to kind of have a feel for dollar volumes of investments say in 11 and 12 that you might have from.

Yeah now it’s too early. Trust me; I would love to give you real exact numbers and returns I would've loved to give them to you yesterday. But it's too early to give you those numbers but clearly, throughout some exemplary numbers on Danbury like throughout on Tyson that I felt that we were going to achieve above market development returns both on the office component and the residential component when we deliver that $400 to $500 million expansion, we do have a partner but that’s just 50% of that roughly 2014 or so whatever the market is right. But we’ll give you those numbers as they develop. The number is going to be very major some of them you know Ventura the expansion up in Ventura was a $15%-$20 dollar expansion but you know the 15-20% return on it also so some of its fine tuned in, but some of it is very significant, so what we see a lot of opportunities and we are now ready to go ahead and dust off the old pipeline but also embrace the new one.

My other question is just on leasing and you could comment on maybe where we are seeing some of the pickup in the occupancy. Is it new concepts from larger store formats, many anchors type things and maybe some color on kind of A's versus the B's?

It's been a combination of all of the things. We’ve had a lot of our activity from H&M as they move west, we’ve been able to secure a number of deals and there is a lot of interesting deals that are not yet executed. New concepts like Charming Charlie's is expanding and the accessory concept, All Saints. And a lot of the core retailers are beginning to expand again, so it’s really been a mixed bag.

Any differentiation we keep hearing a lot about I guess between the twin A's and the B's?

Well, look the retailers always want the A's, but we had some good occupancy gains in activity in the B's, don’t you think Randy?

Absolutely, the A's and B's have been very, very strong. Fortunately we have only got 4%, 5% may be of our EBITDA comes from C's.

We will move on to Tayo Okusanya with Jefferies & Company. Tayo Okusanya - Jefferies & Company: Can’t wait to see it on the fifth we will definitely be there. In regards to the quarter, wonderful but little bit more on the cost side. And just operating expenses, G&A come in meaningfully since first quarter. I’m just curious in regards to the back half of 2010 how sustainable that will be especially on the G&A side? Tom O’Hern: The question was on G&A was higher in the quarter and is it going to be higher going forward. Tayo Okusanya - Jefferies & Company: G&A was lower in the quarter. And operating expenses too were much lower than I was expecting, you still seem to be doing a very good job of cost containment. Tom O’Hern: In the G&A you kind to have to look at the full year together, because some of that is timing difference on certain re G&A costs like audit fees, annual report, production of things like that but year-to-date we are at about $11 million that compares to $10 million through last year, and I’d say on an annual basis quarter-by-quarter we are going to run between $5 million and $6 million a quarter on average. And that’s probably a good run rate. One of the reasons you see a drop in operating expenses, part of its cost containment but part of it is also is that we had a total of four major assets that moved from being wholly owned last year to being joint ventures. So they no longer shop on a shopping center operating expense line, they are included in equity and income of unconsolidated joint ventures.

And next you will hear from Jay Habermann with Goldman Sachs.

Art could you touch on asset sales and what you are thinking about? I know in the last few calls you've talked about your top 50 assets and 80% of NOI, but are you thinking about, with all the capital on the side lines perhaps selling some of those lower tier assets and becoming a bit more self funding so using those proceeds to fund future re development or even pay down some of the converts coming to?

I think have been consistent in our projections of what we would like to achieve. We are in a rare position with in access of 80% now, as we bring Santa Monica Place online, clean and clear, especially that adds another couple of points of our income coming from A assets. And we want to get that to over 90% of our income coming from A assets and that’s going to come from a combination of manufacturing the income, either through releasing spreads, occupancy gains, expansions redevelopment, this also going to come from eliminations and dispositions. Valley View unfortunately was our first situation where we have had to take an asset and give it back to it's CMBS lender. But, it is the equivalent of selling an asset that is in a serious decline at a four cap rate. So, from an NAV view point it's pretty attractive. In late 2006 debt markets drive buyers of Cs and Bs. If buyers can borrow lots of money at low interest rates and leverage up with less debt, then your market for Bs and Cs gets much deeper. Now, so that's one thing that might occur. And that’s what we had in the end of '06. We took advantage of it, and we sold I think $600 million of Bs and Cs, and really as they've turned, out mostly Cs. Would I do that again? Would I do it today? Absolutely, and to some degree I think some of the larger institutional investors are going to find themselves realizing that there just a very few As available and they are going to be willing to invest in the Bs. Never really seen it happened yet per second, but if it does happen, are we going to be willing to participate in that, even though we are going to suffer short-term earnings dilution? I mean if you are selling an asset at $11 million ten multiple even B or C and your company trading at a higher multiple it's going to be short-term diluted. But it’s the right thing to do for an NAV viewpoint. And that’s what we do is create value. So, yes we would love to do it. I do believe that the market is going to evolve through that, and if it does we will not hesitate. J. Haberman - Goldman Sachs & Co.: And I guess just on Santa Monica Place with the plans to payoff the existing mortgage, do you plan on eventually putting on I guess debt on that asset and with that potentially the source for a joint venture?

Neither one, no debt no partner anytime soon, because this is an asset you don’t finance and you don’t sell a piece of an asset until it's relatively stabilized. We are only scratching the surface at Santa Monica Place. There is so much growth to come in terms of the some of the things that I’ve mentioned, but also like I said when you had a great asset, you actually have turnover, because you get people they started to paying high rents $150 a foot, and they are only doing $600 a foot which is pretty good in most places. They are not making any money. And then you got 30% to 40% of your tenants doing let's say $2000 a foot, and you got a line up of people that know they could $2000 a foot want to take that place from the guys that are doing $500 or $600 a foot. So there is way too much growth at Santa Monica Place to come with the opening of Nordstrom markets 27, with the opening of the market place November 15, we've got 50,000 pieces we've held in reserve with the rollovers and the business development sponsorship income, way too much upside in the next couple of years to even think about financing it in anyway today. Might that change? Sure, would every lender in the world love to have that loan? Yes. Would every partner in the world love to own a piece of that center? Yes. Because you don’t do that until you've got a little more stabilized, and I mean that from a growth view point not from a downside view. J. Haberman - Goldman Sachs & Co.: And then lastly for Tom, just on the floating rate debt, that matures over the next year or so. Is your anticipation to turn most of that out? And just give us a sense of where you see floating rate as a percentage of total debt moving in the near term?

Well, we’ve historically seen that between 15% and 20% in our portfolio. Obviously, that’s stuffed the future of pre paid and some of the fixed rates that have penalties involved. I can see overtime that pretty much settling out at 15% to 20%.

And from JPMorgan, Michael Mueller.

I know you think there is a lot more growth that come from Santa Monica down the road, but before we can get the initial underwriting performance you talked about, I think penciled out at about a 9%, 9.5% return, when do you hit that stabilized run rate? Is it the first part of 2011? Is it by year end ’10?

I would say it's probably the end of the first quarter of ’11 my guess. And by the way I’ve noticed lately that some people are including capitalized interest in their return on costs and some people are not. We include capitalized interest. If you took it out, then that return is more like 10%, but in any event, given that we are going to be so patiently, you heard me say that we are 92% leased, and then 97% committed. And you heard me say earlier, anybody that has a lease out for signature but hasn’t signed it, if its not signed by the end of this week that lease is going to get retracted. And we are going to be so patient, like I said, market rents in some parts of the center have just doubled, as far as I’m concerned. And stabilization I don’t know, but its clearly going to hit that number by the end of the first quarter of next year, but that again is really only scratching the surface, there's so much yet to come.

Got it okay, Tom

And this is the one center; excuse me, where you are actually going to have percentage rents that would never end our numbers, because we just don’t project percentage rents. But these kinds of volumes you actually are going to see percentage rents, and they are going to be really meaningful.

Okay, Tom going back to the leased term, how much was embedded guidance in your 260-280?

We used historical average or less four years of $16 million.

Okay.

And again just for reference we had $22 million last year.

And then last question just going back to the topic of acquisitions, and I know it seems like the focus is more on the redevelopments at this point, just think for we had gone back to the last first quarter conference call, commentary around there, it seemed to be a little more bullish about acquisitions whether it was buying out partner interest or just something that may popup from pure third parties, just curious as to what would cause the thinking to at least from where we are sitting seemingly change a little bit over the past three or four months to the point where, it seems like that's on the backburner?

Well two things, we had a number of partners that were interested in monetizing their interest towards the middle part of last year to the end of last year, and even into the first quarter of this year. And they have observed two things happen. One, the retail marketplace sales have improved. People’s view on retail have improved. The scarcity value of regional malls has come back because people realize that general growth is not going to be liquidated and broken up into pieces. And going back to 18 months ago, there was a whole camp of investors out there that were of the belief that we were going to have 200 centers hit the market all of once, and it was going to flood the marketplace and raise cap rates and lower values. That didn’t happen. The other thing that didn’t happen is that the company remained independent. Had, a certain company that was trying to buy that company, bought that company, undoubtedly they probably would have ended up maybe selling off some assets and we could have maybe been somebody that they might have wanted to have talked to, as part of maybe meeting NOI trust issues, who knows. So, each of those things that happened, and I would also say that I guess the main thing is that the people that we are thinking about maybe selling have realized that what they are sitting on is in their view that if they come to the belief that it’s more valuable than what they thought it was. It is just, at this point I just, I have to be very agnostic and I would rather surprise you on the upside. But I probably shouldn’t minimize the fact that I think a lot of people believed there more was than a 50% probability that Simon Inn was going to be successful and (inaudible) and I think a lot people believe that if we bought them that the lot of assets would have to be spread off to satisfy certain anti-trust issues and I think we believe that maybe we would have been buyer of some of those assets. And that wasn’t a small water number.

Okay. And actually last question Tom, what is the normal working cash balance where you would see yourself just carrying because you have about $600 million on hand right now? Tom O’Hern: Yeah, normally we’d probably have in $50 million to $70 million on the consolidated balance sheet and then a $50 million to $60 million on the JV’s.

And Vincent Chao from Deutsche Bank at the next question.

Hi everyone, just a couple of clean-up questions, just I’m thinking about the line of credit is now coming due in April of ’11, what are you going to think in terms of size based on what your seeing as opportunities today and given the fact that you have a fair amount of cash already on the balance sheet? Tom O’Hern: Those are conversations we are going to have in the coming weeks with our bank group. The capacity now is still available at $1.5 billion, so we could see us downsizing and obviously we got cash on the balance sheet today. So if we were to make the decision today I would have to say it would be a billion possibly last, that we’ll see, we don’t need to make that decision right away and we have got a great bank group and a lot of support from them and they are eager to recast and move forward and so that’s the conversation we’re going to have over the next three to four months. We will give you a better guidance on the next call.

And then just one value center until that gets transferred. Are you guys subject to a higher rate in interim period? Tom O’Hern: No there is no…

No default rate on that? Tom O’Hern: Not at this time.

Okay, and just one last question, just in terms of overall it sounds like tenant conversations are going pretty well, but just as you think about sort of the recent Microsoft Office and some of the regional sales have been a little bit lighter more recently, has that changed the conversation at all may be not necessary top 20 or so centers, but just a you know as look at the overall portfolio, has there anything that’s happened in the last couple of weeks changed? Tom O’Hern: No, first of all July sales, we’re have to (inaudible) especially with some of the luxury guys need them to double-digit and our senses are pretty good but tenants are not making decisions based upon a weekend of sales, they are making $1 million decisions when they take the space and with centers like we have, they know that when a space opens up it’s the generational opportunity, so those sales from the last month don’t mean anything. Look, the fact that we were able to lease Santa Monica place in the worst possible leasing environment that I can ever remember in terms of leasing to a sector that get harder than anybody which was luxurious in 2009 with testimony to the fact that tenants realize that these are scare commodities and they don’t let one month, they don’t let one year sale effective thinking especially because they are making money, sales have never been more irrelevant than they are today.

I just actually one last question, just on the Santa Monica what are the remaining capital needs you guys have there, if any? Tom O’Hern: What are the what?

What are the capital needs you have on Santa Monica at this point?

Well, our needs, we just opportunities to be identified to be identified and as we identify them like that 50,000 piece that we are holding back. We go and do it in terms of cash that finished Tom that you had already given that number up. Tom O’Hern: Yeah, at the end of June it was $70 million but a lot of that will have been spent in July and August, so my guess at this point is once we rolled all those construction costs through, there’s probably 25 remaining for final build outs and some spaces and things like that.

And then the real question is what do we do with the 50,000 square feet of space sitting on the dinning deck which is the most desirable level for people to be on because of the entertainment value. We are sitting on 50,000 feet up there. We are going to decide, that I’m sure we are going to get interest from folks that we had never even dreamed of before.

And we will take your question from David Wigginton with Macquarie.

Just (inaudible) a lot I’d say about redevelopment, just wondering if you can maybe give us an update on Northgate and the Oaks with respect to how much and left on those and maybe when you have approximate completion date and what the estimate yields are?

Well, Northgate I believe that when we started out on that construction, we said that we should see a 9% return on the incremental money that was being spent there. I mean and we are on target with that and we are still opening up kind of and ran into Northgate or are they all so we have to how open are we virtually they are all open. So we are well over 90% open there. As of today we are pretty much opened and at the old adding a restaurant or two there. Does that answer your question?

Yes, how much of those are in there the second quarter numbers at this point and how much are we de-factoring in to the remainder of the year?

The Oaks was pretty much what would have been in a second quarter numbers, but Northgate there were still several tenants opening up in the middle of the year and, Tom maybe you can give some color on that, but my guess is that was probably $2 million or $3 million of income that was not in place the first six months that will be in place the second six months down the… Tom O’Hern: That’s about right Art. We’ll probably see pick up of about $2 million to $3 million versus the first half of the year for Northgate?

Is that an annual number or is that just the actual number that's going to be coming in the second half of the year? Tom O’Hern: Yeah, actual amount.

And then with respect to your management business the operating expenses, I reckon it’s a lumpy number and it fluctuates, but I mean is there a way we should be thinking about that mall not going forward? Tom O’Hern: In terms of the shopping center expenses?

No, your actual management business, the operating expenses. Tom O’Hern: The reason the management business looks different than last year on the revenue side, expense side is because we have got four new joint ventures for ultimate the assets that we had 100% under the past we are not impacting on management company revenues into there they are. So, if you check the second quarter and us that that as a run rate that would be clearly indicative of what you'll see going forward.

And then just my last question with respect to the same-store and wide growth, I recognize the majority of it was a result of occupancy increases, by what percentage of it can be attributed to these favorable bad debts comparison. Tom O’Hern: You can tell by going back to one of the schedules on the press release this morning. We reconcile to same center growth and the same center NOI for the quarter was a $146 million and the decrease in bad debt expense for the quarter was approximately $2 million. So, $2 million on a base of $146 million is about 1.3%

And next from Sandler O'Neill, Alexander Goldfarb.

As photos in the LA times are impressive with the crowd. Valley View in your numbers, is there anything in there for either impairment or debt gain on that asset either for the year and then also is there anything in your guidance for that? Tom O’Hern: [Notable]

Okay. And then as far as Art on the redevelopment, that’s pretty consistent. What are your thoughts on the outlet side, obviously (inaudible) spoke about that on their call. They are really trying to get some bogs down to launching theirs. What do you think about outlet versus your talents in redevelopment? Do you think there’s a chance to do both or you think just the opportunity set on redevelopment is much more that there could possibly be on the outlet side

Maybe to a shortfall but I’ve chosen to guide this company with a very tight focus and so we've chosen to stay in the continental Unites States, we have chosen to do what we do best and we found no limit to opportunities to deploy our talent. We don’t want to be the biggest; we just want to be the best. And you know to jump into the outlet business could be interesting, may be I could imagine why retailers would love to see the more players enter that business. You know there is one location that we own, where I can see us doing something that would be in that arena but I don’t see us jumping into that system now.

Okay. And then as far as all the people who are coming to you to have a dual redevelopment in their area, I am assuming that for the most part you would look to own assets or have an interest in them, rather then just do it on a fee basis, is that correct?

Yes, the only times we do third party fee business is that we believe that we are going to (inaudible) in-depth with an ownership position period and over the one, there’s a couple but they have just reached there, they are very fresh conversations. We would definitely be making, we would have either a venture investment or we would essentially have a 100% ownership. But in the early days but, and that’s not in our pipeline but its fresh conversation as of Saturday morning.

Okay and just on a final question, on the disclosure front when do you think that we’ll see their the redevelopment table come back, and then also perhaps it will be helpful in the opening on the press release just to get the overall portfolio releasing spreads, that would be useful.

Yes, Alexander the stat we did give was the overall stat.

Right now, I am saying that having that in the press release would be helpful.

It was in the comments section for the press release, the 4.6% I believe. That’s combined number and then in terms of the pipeline page, I guess maybe we have a volume that we warrant that we'd re-consider it.

And Ben Yang from Keefe, Bruyette & Woods. Ben Yang - Keefe, Bruyette & Woods: I recall you downscale the luxury focus of Santa Monica from what you had originally planned. And now that the center appears to a big success, is there an opportunity for you get some space back in a few years. And I guess more than the natural turnover that you had previously mentioned? Basically I am curious of any early tenants did any type of short term deals that give you some type of kick out options?

Well we have kick outs on a number of leases from a performance view point in a center like that. We clearly were forced than we’ve set up before to cut back on the square footage that we devoted to luxury because of the luxury environment in early 2009 when we were leasing up the center. On the other hand I also have to say though, that we do live in a community where one of the early questions that people had is, am I going to able to afford shop there to. So finding the right mix of price points both for the tourist and the local population as well as the wealthy population is a fine balance. And it’s like a restaurant, it takes a while to get to your menu perfect, even after you are open so the good news is that the quality problem we have all kinds of luxury retailers that said no, either because they just didn’t have the finances to do it or they just were skeptical, are beating our doors down now and we are merchants of every category jumping all over. So over the weekend and this morning all over our leasing people saying, I can’t believe I didn’t do this. Is there anyway I can do that? Look we are in a position of total strength, we are on (inaudible) and the good news for us is that, vendors like vendors, and the lot of the retailers that are there and now want to talk to us about certain other locations where they can do comparable stores with us and we think this will spread throughout, it will become infectious throughout our portfolio. So we're going to find the right mix and we got a great mix today when we…

Average the restaurants will do at least that number, the third level will do at least that number and maybe more. Ben Yang - Keefe, Bruyette & Woods: So it’s not food that necessarily bumping up or boosting that number that you are expecting, it's just the overall mix that you had mentioned earlier?

It’s definitely not food and by the way we have no Apple Stores in Santa Monica. Ben Yang - Keefe, Bruyette & Woods: And congratulations by the way. Are you still living working in that area and think that’s great add to the community (inaudible).

Have you seen it? Ben Yang - Keefe, Bruyette & Woods: I have not yet, but I’ll be there in October.

Wait till you see, you're not going to believe this.

And we’ll take our final question from Cedric Lachance with Green Street Advisors.

Just going back to the management company revenue and expense line items. When I look at the three months results, the management company revenues grew by about $2.8 million, the expenses grew about by $5.6 million. So I am just curious if you whether or not the addition of for joint ventures there is something that’s unprofitable and asset management perspective or are there other expenses that are also included in management company operating expense line item?

Yes, there is also expenses related due assets that we own 100%, so if you look back historically the expense have always been almost twice the revenues for the management company that’s because we don’t charge ourselves a fee on only on assets.

But if the difference is partially related to the joint venture, why would it grow at the same base here?

Well, when you do a joint venture it's going to be more labor intensive than if you own at a 100%. It’s not exactly proportional so there are additional costs versus a year ago and to some extent there are some lumpy costs in there depending on what happened a year before, what happened this year, some of the straight line through the year, some of its seasonal and some of it just fluctuates quarter-to-quarter.

Okay, so you mentioned some of your expenses are related to 100% owned entities. What percentage of the expenses would be related to those entity or property?

I don’t know at the top of my head, but if you're trying to see it and the management company’s breakeven, take the revenues the total revenue kind of 5%. Because that’s the kind of management fee you would charge, such as ticket consolidated revenues or at least minimum rent percentage rent recovery at 5% So if they charge themselves a 5% fee to manage those management company revenue would be higher by that amount and then you see it’s basically a breakeven business for us.

And gentlemen, I’ll turn the conference back over to you for any additional or closing comments.

Thank you very much for joining us. We look forward to seeing you, you can join us on October 5, and again can’t wait for you to see our newest, latest and greatest creation. Thank you very much.

Ladies and gentlemen that does conclude today’s conference. We thank you for your participation.