Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Realty Income, fourth quarter 2007 Earnings Call. (Operator Instructions). I would now like to turn the conference over to Tom Lewis, CEO of Realty Income. Go ahead sir.

Thank you very much, Benz and good afternoon everyone. Welcome to our conference call and our purpose is, again, to go over the operations and the results of our 2007 fourth quarter and year and then we see if can offer some color for 2008, as is our custom. In the room with me today is Gary Malino our President and Chief Operating Officer; Paul Meurer, Executive Vice President and Chief Financial Officer; Mike Pfeiffer, our Executive Vice President General Counsel, and Tere Miller, our Vice President of Corporate Communications. And as always, I’ll start by saying that during this conference call we will make certain statements that may be considered to be forward-looking statements under federal securities law. The company's actual future results may differ significantly from the matters discussed in these forward-looking statements and we will disclose in greater details in the company's quarterly report and on the Form 10-K the factors that may cause such differences. And Paul Meurer, then if you could go ahead and start with an overview of the numbers in the quarter and the year, well get kicked off.

Thank you, Tom. As usual, I am going to comment on our financial statements, provide some highlights of our financial results for the fourth quarter and start by walking through the income statement. Total revenue increased 16.8% for the fourth quarter as compared to the fourth quarter of 2006. Rental revenue increased to just under $78 million in the quarter, primarily as a result of new property acquisitions. On an annualized basis, our current total rental revenues are now approximately $318 million. Same-store rental revenue increased 1.2% for the quarterly period and 1.4% for the year. Other income was unusually high at almost $2.7 million for the quarter, due to the interest income from excess cash proceeds invested from our September bond offering. On the expense side, depreciation and amortization expense increased by almost $4.6 million in the comparative quarterly period, and depreciation expenses increased as our portfolio continues to grow. Interest expense increased by about $9 million during the fourth quarter, as compared to the fourth quarter of last year and that's increased due to more bonds outstanding, as compared to a year ago, specifically to $550 million of 2,019 notes we issued in September. We had zero borrowings on our facility throughout the fourth quarter. On a related note, our interest coverage ratio continues to be very strong at 4.1 times, while our fixed charge coverage ratio also remains strong at 3.1 times. General and administrative expenses for the fourth quarter were about $5.5 million, representing only 6.8% of total revenues for the quarter. Overall for the year, G&A expenses were $22.7 million, or about 7.7% of total revenues. We expect G&A expenses in 2008 to remain at or maybe even below this ratio. Property expenses went down on a comparative basis to $872,000 for the quarter. Overall,…

Okay. Thank you, Paul. What I'm going to do is normally run through the key operating areas of the company and then I'll try and give you some color relative to the rest of 2008. Let me start with the portfolio. The portfolio is generally performing well. We ended the fourth quarter with 97.9% occupancy, which means we had only 48 properties available for lease out of the 2270 that we have on the portfolio. That's down about 40 basis points from the previous quarter, and is primarily a function of lease rollovers varying month-to-month. And that we think continues to reflect pretty good operations in the company at the 97.9% occupancy. The vacancy continues to come primarily from the normal activity of dealing with lease rollovers. And that's basically coming to the end of the 15-year to 20-year lease, which we have all the time, given the size of the portfolio, and how long the company has been around, and I think that the portfolio management department does a pretty good job of handling most of those without them coming to vacancy with some due. Eight of the new vacancies, however, did come from credit default from a couple of tenants this quarter. It's not a larger number, given almost 2,300 properties, however, it has not been the case as most of you know, over the last 6, 7, 8 quarters that any of that was coming from credit default and so it peaked my interest. I took some time to go in and take a look at each of the situations and try and get an idea what it was. And after looking at it, I really don't think it is tenant-oriented or really related to a couple of the tenants we have on just a few properties.…

(Operator Instructions) Our first call comes from Dustin Pizzo with Banc of America Securities. Go ahead please.

Hi, this is actually [Sumit Preet] for Dustin Pizzo.

Yeah. How are you Sumit?

Pretty good. I wanted to know what the… I have questions on coverage ratios. You can tell me what the coverage ratio is on Buffets portfolio, and also maybe the coverage on your top ten tenants?

Yeah. I won't comment specifically on the coverage ratios due to confidentiality agreement with FAS, but I can give you some good background that I think will get you where you need to go. As of 12/31, our largest then out of 15 tenants did about 55% of our revenue as I mentioned earlier The average cash-flow coverage in the portfolio was about 2.72 times. And if you didn’t look at the overall, then out of that at 2.72 I think the lowest coverage that we had out of the top 15 was a 19 coverage. The highest was the 419, and again a 2.72 average. I will tell you that 19 was not a restaurant company, it was in another industry, So it felt -- the coverages on our portfolio felt somewhere within that grouping, which is very strong. We've been working since right after the end of the year here updating that, and we have seen the coverages move a little bit overall in the portfolio. But still for the top 15, just getting in some numbers last week on a couple of the tenants, and we do these updating and rolling throughout the year because we get the information at different times. I think the average, when we calculated the last week, was 264, and I think the spread was 170 to about 420, and I would say again the 170, which was lowest then. It was not a restaurant company. So that will give you an idea of where we sit on coverages. For those of you that aren’t familiar with that, that is looking at the EBITDA of the stores that we own in our portfolio and the ramp about basically get how many times coverage that's a possibility that store is of rent. And to give an idea that 20 coverage, you need about a 50% decline in EBITDA to get a one-to-one coverage. And if you look at two six times coverage -- that means on average there is about a 61.5% decline in EBITDA would take on the properties in our portfolio to get to a break-even.

All right. And also do you have any retailers that are maybe in your watch list with bankruptcy risk?

Yeah, we've got a few I think the ones that we have out there fairly well known, but (inaudible) on it obviously. We also have Hollywood Video on it, which I think is movie gallery, and then there is just after that a couple of small tenants. I think there is a restaurant that had three units, rejected one, if a deal where it was a $2 million land and building, and we only bought the land under it so we get the building for free so that one we anticipate we'll get better than 100% or run out of it. And then the ones I mentioned earlier was a small convenience change were got our property back and then the movie gallery, and so there is really not a huge amount on there right now, and outside of those on the watch list, I think people are doing pretty good.

Alright, thank you.

Thank you. Our next question comes from Philip Martin with Cantor Fitzgerald. Go ahead, please.

Good afternoon, everybody.

How are you doing?

Just a bit on Crest, and Tom you made some very good comments on Crest, and I just wanted to dig a little bit deeper here. I understand that you need to be very environmental with Crest and how much inventory you have out there for sale given it's being tough for the potential buyer. But does being wary with Crest, which again I think is appropriate, does that impact or negatively impact your ability to do acquisitions?

That's a great question. We've used Crest very effectively with acquisitions. They do very large ones and remained diversified, so I say it might keep us from going out today and taking on a very, very large acquisition. But what we did during I think two or three quarters last year, and what we did during the first quarter or the fourth quarter, and we are doing the first quarter this year. Since they are not huge acquisitions, we are going in and really sitting down with the tenants and structuring them so that we can take them all on balance sheet and we have a high-comfort level because they are really don't want to put those things out there with Crest. And let me kind of walk through that again because I think it is important. Crest has worked great for us. We've I think since 2000 bought and sold 240 properties there and made a lot of money on it, and it’s been great and very, very profitable. But before we all get carried away with that kind of flip business, I think it was an environment where we all should have done very well. It's been a very easy environment. We have all been into declining cap rate environment really from 2003 to 2007. Cap rates fell about 150 to 200 plus basis points, which meant you are out there buying these things holding for 6 to 8 months then selling them, and while you are holding them, your inventory is getting marked up. Your spreads are a little wider than you thought, and so even when you make a mistake it pretty well works for you. I would also note that if you look at that period, think back on how easy financing was, versus where…

Okay. So it sounds like the retailers are loosening up a bit here and allowing you maybe the cheery pick a bit to help get at least part of a deal done, and is there a potential to work with, let’s say, the number-two bidder on a deal, or maybe you come out victorious on the bid, but the number-two or number-three bidder, maybe they take some other properties, i.e. take some of other risks that you don’t want is there that that type of negotiating and structuring potential out there?

I think there is, but then again you're down just a couple or three players that we see showing up today, and I am not sure it’s a few, but larger transactions, but I think that potential exists out there. But it really is telling over the last month or so as we've been talking to people how you probably had 5 or 6 people in the food business that were out there doing a lot of us withdrawn, and the couple of the people that were doing larger portfolios they really haven’t been out there active currently. And as you know any time you're running some type of process, and you have 5, 6 bidders, it goes really well, and when you get down the one it’s a different process, so --

That’s right.

So it’s really different today, and given the cap rates are moving. I think it’s kind of like you saw in housing, when prices started going down, people don’t like the [sticker shot], so they back off, transaction volume drops, they back off until they have to do something, and then they are kind of trying to capture price that they tend to like the market and then you see rates moving or prices moving pretty fast, and that's really been what we've seen lately. We started talking to somebody and you can see the price stock move fairly quickly as people have been exiting the market. And I don't want to say this is a fourth quarter event it's really a January event, and it's really the last three- or four-weeks event.

Okay. Well, I know it's a very fluid environment, that's for sure. Last question I had is just with respect to the first half of the year here -- well, really the first half of '08. It sounds like it's going to be a reasonably robust year in terms of acquisitions, and again a very fluid acquisition and lending environment. What's driving these acquisitions, or maybe a better way to ask that, what are the different drivers today versus a year ago driving these transactions and driving the robust growth that you're going to have in the first half?

Yeah, I think the growth in the first half was really having some low-price capital in the fourth quarter that we could put out, and that will get us off to a very good start. I think after that with us it's kind of sitting back, and I want to watch the market for a while here, and we if we did that for a couple of months, we could step back in and wouldn't have to a tremendous amount of business to hit what we've got in our guidance of $250 million, so we could have a lot of patients here. I think what's driving the market, last year there was a lot of M&A. You don't see those transactions being announced, but there is some that's still haven't been financed. Secondarily, if you look at M&A activity over the last four, five years a lot of that was done with mortgage financing and other types of financing that was not long-term. And so I think you're going to see some of that burning off and a need to refinance into a market where rates aren't as attractive, but quite frankly I think that volume will decline relative to the number of deals but participants will decline pretty substantially, and then its a question of when can you get price stock stabilized. It’s a lot like looking at the unsecured bar market out there for reach today. You can get quotes from the desk, but I think whoever is out there early on, the price discovery is going to be really interesting. And so I think there is going to be a little bit of game of chicken going on for a few months here with some price discovery, and then I think it will be just a thing people coming out and need to do something in the market place, and I think there will be enough of that really from deals done in the past or deals that need to be refinanced. It really won't take a lot of M&A activity to cause a number of transactions to happen.

Phil, you have heard it say for couple of years now that we felt like our primary competitor in the market was the debt product, maybe even as opposed to other net-lease providers, and so Tom's comments on some level of lessening competition doesn’t just include the net lease providers, but the debt product becoming more difficult for the retailer and the private equity firm involved to access on a cheap, cost-effective basis. Whether there will be a leverage-loan bid from Wall Street or CNBSS product or even a bank-financing product. So they have a near-term obligation in some nature it makes the [Telly's] backed capital an intriguing option for them to consider and perhaps will help us as the balance-year progresses.

And I would say Philip, I can have three scenarios: scenario number one, and I will give it a one third rating, which is we do a fair amount here in the first and second quarter, and then we sit back and through the balance of the year just do a little bit more and do the two fifty if the market stays very unstable. I would give a third waiting to saying that it stay really tough out there, and we are able to go out and do a little bit beyond that, but it’s a very good rate. And then I would say a third of it, who knows? Maybe things get back to normal, you come in the second half of the year, and it’s kind of like the few years. Although I am not sure I would wait that one a third.

Okay. Well, thanks for the comment, and given your strong position, you have to be pretty excited about the opportunities that maybe out there, but it’s certainly important to kind of take a step back and pause a bit actually in this environment, so thanks again.

You bet.

Thank you. Our next question comes from Anthony Paolone with J.P. Morgan. Go ahead please.

Thanks. Good afternoon. On the FAS yesterday, they had announced like 50 some odd store closures. Do you know if you all were affected by that, or were the numbers you gave out current?

I think they are current, Tony. At the filing they had all of our properties open and operating, and we've been watching, and I believe that still through of a 116 we own in the portfolio. I have not checked this morning, it’s kind of fluid. So I maybe off by one or two, but I really don’t think so, we haven’t been notified of any of our properties in the portfolio being closed. We have someone there in the court everyday, and we have some more working on this. They did put out a case for anybody else to see last night, but they called 52 stores over the last couple of days before that. They have 626 stores so in a re-organization. It doesn’t surprise me that they might take that action, but we believe the majority of 116 of our stores are good stores and profitable. I can also say that they did by the way early in the bank schedule rejected on a schedule b24 properties -- none of those were ours, but that was a few weeks ago. I will say also that they are current with their lease payment on all of our properties and that includes this month, which is February, which means the payment it’s just last week, and I think a good way to absorb it, it doesn’t make sense to pay rent one week and then close the store a few days later or they close them altogether if they are profitable stores. And again based on the analysis that we have our own, I think we're going to fairly well here with a 116 stores there will be a few things happening on a few of them.

Okay. And with respect to the 24% of your revenues coming restaurant, today's biggest can you maybe tell us Q3 and Q4 might be, or just even like how big those are?

Yeah, relative to size, I'm taking a second here. I won't if you know is our policy do the name remain, but we have another restaurant chain it's about 4.5%, and then I think the next one is 3%, then next one it 3% and then it falls below 2%, so it's pretty well diversified.

Okay. And then just from an accounting point of view, maybe Paul, give us a sense as to if retail environment gets more difficult, and you start to see some of that stuff happening? How does it work in terms taking credit reserve to stronger revenues?

We have actually on a regular kind of basis accrue essentially a bad-debt expense figure to largely account for that based on kind of historical experience. I did mention that the property expense line item for us for example, we don't expect to be increased or if it will or increase slightly. The way you play that out thinking-wise is you get something back, it's vacant, and you actually get handed the keys back let's say you then become responsible for the taxes maintenance and insurance of that property. And then you have that carrying cost for that time, and so you get another tenant in there. And so that would increase your expenses a bit, but we're already kind of budgeting for that a bit. We always do, if you will, to have a handful of the situation in any given year. And then on beyond that the only other piece you might see if you had any further firm-maintenance issue is your capital expenditures might go up a little bit? If for some reason that made sense that you needed to put a few dollars in it to get a new tenant in, to retro fit it for different type of use or something of that nature. But again we don't expect the expenses to be very large.

And there is not, Tony, there is not a lot of large accruals relative to rent. The rent comes in every month, then you get it or you don't get it. If you don't get it, you know what the situation is. If it is, the re-organization typically you will get administrative rent during the period, so when you get it back and then you just hook the current revenue on the property. So any accruals really is -- there may be some percentage rents due at the end of the year, but they are fairly small. So if there is not really a lot you have to reserve there. It is pretty much current-pay business.

Okay. But for instance, your '08 guidance and budgeting, then you would have just a normalized amount of bad debt reserves being taken out of your P&L already?

Yeah, but again it’s very, very little. What we do have in there for guidance is what we are looking at property expense you get a run rate for vacancy, you run it up a little bit, you look at taxes, maintenance, insurance, but it is not a big number.

Okay. And then last question, thinking out a little bit further: if the capital markets would remain difficult, and the time that you spend a lot of money in the first half, you start going to the back half. How do you think about your business in terms of finding out what's capital rate do you look to secured debt or just what do you do?

Yeah, our way of looking at it has always is pretty conservative. We do not look to secure debt. We have unsecured way of preferred and we have equity. I don't think we want to put any unsecured debt on the books. We have someone room with preferred that markets is open, but you would want to look at the rate see where it is, and really make sure when you are doing a transaction that you are mass funding what you are doing so that you maintain your spread, and I think that’s going to be the theme going into the late second quarter and in the balance of the year is it’s really going to be a mass spread discussion with your tenant, because putting a lot of acquisitions on the books on the credit line and then thinking that five or six months down the road you're going to go out and do your capital markets event, I think its really, really putting yourself out there and probably not a smart way to run the business. We have a lot of capital right now, but even relative to what we have on the line, I think it will come to a point where we're going to have to be having cap rates above where we see current loss to capital looking at equity or looking at preferred, and we'll just operate in that manner and only put capital out when there is a big spread. There is no sense putting capital out just to put it out if you are not going to get paid to do it.

Okay. Thank you.

Thank you. Our next question comes from [Andy Gigiowel] with Citigroup. Go ahead, please.

Hi. Can you go over - I am not sure if you have this information, but do you know the rent coverage for the Buffets that they have announced at their closing, and maybe how that compares Buffet’s overall coverage?

We only have rent coverage on our property, and because since they are not the one to closes we don’t, but you can pretty well assume that when our retailer and I will speak generically, you are also Buffet’s is in chapter 11, and they are closing stores the vast majority of them are down around one and below.

Okay. Great.

Typically why they closed them because they are generating a lot of EBITDA above rents then obviously for the creditor committee and the corporate makes sense for them to operate those properties so that they can capture that cash flow.

Okay. And then just more logistical, but how is the administrative rent-period work, and given that this is going to take about couple of quarters to sort through, how can we be comfortable with the tax rate, and in the meantime Buffet’s will continue to pay their rent, or is that something that up in the air? I know that there is a administrative rent period, but I'm not sure logistically how that works out.

Sure. The logistics is from the day they file to when they reject a property, they have to pay administrative rent, and so they do so and once they reject, they rejected it, you get the keys back, and they don't pay it anymore. So it's really the way and rather than talk about Buffet’s and bankruptcy here, chapter eleven reorganization generically is during that period they pay administrative rent, pay the rent, recurring on it, and then they either accept the lease in which case you keep getting paid, and you get paid post bankruptcy and in the future and nothing happens, or you get reject, and at that point you get your keys back and you are back to the property. Under the new bankruptcy law, it was passed a couple of years ago, I think the initial period they have to make the decision with the real state is 120 days. I don't think they can go into the court, and if they can show a good reason to the judge, he can give them another 90-day extension, but that is the period that they have to reject or accept. Obviously, I think there could be another 90-day period after that, but at that point I think it would take consent of the landlord under reorganization laws. So essentially once you are in, it's administrative rent unless it's rejected, and then you are off with it, and I'll just say once again given that we have very profitable units for the most part on the portfolio. We anticipate that we'll get paid.

Right. Is there any possibility that administrative rent is not there to cover the current rent, or is that just not an option?

Yeah. Generally that's the chapter-seven liquidation in an eleven. As soon as you file, there is some financing that usually can be arranged, and there usually is capital available, and that's really part of process that you have it available because they really need to. Eleven a lot of times, the people are going into because they need to have their vendors be able to shift the stuff so the store is remained opened, so that is the idea and in eleven they reorganize around the profitable stores, may have to be able to make their payments during their process to do so.

Okay. And then given that you feel comfortable with your current Buffet’s exposure, I guess, is there a possibility that Buffets comes back during those -- we are in chapter eleven, can we renegotiate the rent, how does that process potentially work?

I will stay away from commenting on Buffet’s, and I'll comment on 15, 16, 17 once we've done over the last 20 years, and the process. Typically what will happen is they will file, and then there is administrative rent, and then they go through a process first of all of hiring people to work with them on looking at their stores, and very quickly they will get an idea of what the profitable stores are that they know that they are going to keep, and they get administrative rent. They kind of push those off to the side. They then analyze all the other stores and they then they start going back to the landlords and talking about their situation and trying to negotiate lower rent. But in the end it really comes to the point where when you have a store that's not generating any EBITDA. They will most likely reject it because it doesn't pay them, and this our opportunity to rationalize the real estate. However, if there is a moderate amount of the EBITDA that's been generated by the store, they probably, if they can have it produced or want to keep the store open and capture that, and so there might be some negotiations going on, but it really is between the two parties as to whether they can come to than agreement. And then on those stores that are very profitable, if the landlord knows they are very profitable, then obviously the negotiations takes on a very different tenure. But that is fairly typical in all of these gone we've gone through, and we kind of going back four or five years, there will be a call made here, and the guy making the call for the real estate consultancy they hired knows I had a portfolio management [my car goes] hi Dick, how you are doing? I'm doing good. And how is the family. May I give you my speech, and he does and then we give them our speech, and then we start talking about how profitable the stores are and we get down to what's really going to happen. And it really the starts we are dealing itself is a function of how the stores look and how profitable they are and we've been through this many times.

Okay, that makes sense. And then maybe you went through this earlier and I missed it, but on guidance you do have a large cash balance, and LIBOR has come down. I guess, what's the offset to the lower LIBOR or with lower LIBOR probably assumed increase this guidance. You could just give a little color on that?

Yeah, LIBOR is what we borrow on our line, and we haven't had any borrowings on the line, and we've had a lot of cash sitting around. So, the really differential with the cash fitting around, as we issued the borrowings at a 677, and then we've had the money parked basically in short-term treasuries that have yielded early in the fourth quarter 4%, and now we're down around 2%. So, we really don't have cost relative to borrowing day, but it's the negative spread between the cash that we are holding on the balance sheet. And so we did it out and that's a couple of quarters worth, and then we'll get the benefit of actually having fixed our borrowing cost maybe 100-plus basis points below what we'd have borrowed today, and we get that benefit for the next 12 years.

So, I guess what -- had you assumed that the short-term market rates would have come down and therefore impacted your interest net income. I guess what's the offset to the lowest-interest income is it the fact that when you [refi] the $100 million later in '08 that you are going to pay that down on the line and that will be lower interest expense.

Yeah (inaudible) it's the opposite. We don't have a nickel on the line.

You have no borrowings.

No borrowings whatsoever on the line, and a $193 million of cash sitting on the balance sheet, where we got that cash from issuing bonds in September, and we're paying 6.77% on an average balance of $230 million during the fourth quarter. And then we've taken that cash average balance $230 million, put it in short term treasuries, and that has yielded us about 3%. So, there has been about a 370-basis point negative spread on the $230 million average during the fourth quarter. So, that reduced our FFO during the first quarter by a couple of cents and to the extent, we've balances during the first quarter, we'll reduce that. But then as soon as obviously we buy properties, all of a sudden now we're getting an 86-cap rate of that money and we're paying 6.77% and the spread reverses, and obviously we'll have a much lighter spread than if we had not raised all that money in September, and we're out trying to raise it today if we could.

Right. I guess just to clarify on what I'm asking is because rates have come down the interest income is less. What's offset the lower interest income?

The offset the interest income is lower so we're receiving less, but we're still paying out the 6.77 however we're buying the bunch of property.

It's investment in new properties.

Okay. So, is it higher cap basically you're saying that the cap rates on your acquisitions are increased based upon your previous expectations?

No it's just that we're putting the money out earlier than we thought…

Okay.

We're going to put it out. And generally as you know, we plan in our guidance $250 million acquisition we kind of weighted equally throughout the year at the end of each quarter. But if we put a fair amount of that out early in the year the impact, particularly when the cash would have been sitting on the balance sheet it's pretty dramatic relative to the FFO.

This may help answer your question [in details]. When we sat here on November 1, and gave you estimates we assumed that what we would earn from an interest-income standpoint, and raise investment of that money would be lower in '08 would go down from where they are kind of the 4% we were earning in the fall.

Okay, great.

Because we already assumed that at that time does that help answering you---

Yes, that answers my question. Thanks a lot.

Thank you. Our next question comes from David Fick with Stifel Nicolaus. Go ahead please.

Good afternoon.

Hi, David.

Most of my questions have been answered. I do want to go back one of our phase question, and I recognized that both you feel you've it in hand and that you're fairly well protected. But can you just review for us when you entered into that acquisition and what your underwriting thought process was at the time without the help of a base?

Yeah I - again, given the confidentiality agreements, it's going to be mindful of that David. But it was a pretty typical one for us. We started working on that in early '06 -- it was closed in late '06. It was an M&A process that was going on whereby our phase was being hold, and we had talked to several potential acquirers and looked fairly deeply at the portfolio at the company, at the possible combinations with a various buyers relative to business plan number of various financial structures and different prices for the real estate. As that process went on we did not -- one of the buyers, we worked with did not win the process another buyer won, and they had a sale-leaseback provider, and we talked to that provider, and we took part of the portfolio, and they took part of the portfolio, we had done that before with another transaction. And as we did the final due diligence coming in really through late fall, what we're looking at was the combination of the Ryan's and the Buffets. We were looking at obviously when you get an M&A combination, somebody would have hoped for cost savings. We're also looking at the restaurant industry, which we actually thought would weaken and took our position on that. Time of buying the real estate what we thought was a very attractive price. Replacement costs we figured that was $2.8 million to $3.5 million a copy, and if you just do the math on what we announced relative to buying, we were in it about $2.6 million. We thought the rents were reasonable, and we thought that the cash flow coverages on the property we'd be able to buy would be significant enough that if there was a downturn that we'd be protected or said in another way that the margin of safety was significant enough, where we'd be in good shape if adverse circumstances availed itself and they have.

But clearly if you would seen a VK coming you are going to put yourself in front of that?

No, let me stop you there, David. I'll tell you in our underwritings, we assume in every underwriting given that we're going to owned properties for 20 years that management will change, balance sheet will change and at some point there can be an event. Now, if we think the event is imminent, we do view the underwriting differently. But it was underwritten from a standpoint of seeing that happen. I'd recall for you back in 2000, we did a good size transaction with Regal Cinema, understanding that at some point that they might have a filing which they subsequently did. In this case, we did not think there would be a filing. We thought that they would be able to operate the business. But that is something that is inherent in the underwriting of these assets, when we do them.

Okay, thanks.

Ladies and gentlemen, this now concludes our question-and-answer session. And I'd like to turn the conference back over to management. Go ahead please.

Great. As I know, it's the busy earning season for everybody, and we really appreciate the time and effort that you have put in. And we look forward to talking to you at upcoming conferences and on future calls. Thank you very much. And thanks much for your help.

Ladies and gentlemen, this concludes the Realty Income fourth quarter 2007 earnings conference call. You may now disconnect. Thank you for using AT&T conferencing.