Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Realty Income Second Quarter 2008 Earnings Call. During today's presentation all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions). This conference is being recorded today, July 31st, 2008. Now I'd like to turn the conference over to Mr. Tom Lewis, CEO of Realty Income. Please go ahead, Sir.

Thank you very much and good afternoon, everyone. Welcome to our conference call, where we'll talk about the second quarter and a little bit about what's going in the balance of the year. In the room with me today is Gary Malino, our President and Chief Operating Officer, and Paul Meurer, our Executive Vice President and Chief Financial Officer, Mike Pfeiffer, our Executive Vice President, General Counsel; and as always, Tere Miller, our Vice President of Corporate Communication. And as I am obligated to do on each call, during this conference call we'll 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 the forward-looking statements and we'll disclose in greater detail on the company's quarterly 10-Q, the factors that may cause such differences. And, Paul, if you want to go ahead and walk through the quarter, well do that.

Thanks, Tom. As usual I am going to comment on our financial statements and provide a few key highlights of the financial results for the past quarter and start with the income statement. Total revenue increased 17.2% for the second quarter as compared to the second quarter of 2007. Rental revenue increased to approximately $82.4 million in the quarter, as a result, of course, of new property acquisitions. Same store rental revenue increased 1.4% for the quarterly period. And other income was only $80,000 for the quarter. On the expense side, interest expense increased by $10.9 million, during the second quarter, as compared to the second quarter of last year. And this increase, of course, due to more bonds outstanding as compared to a year ago, specifically the $550 million of 2019 notes that we issued in September of 2007. We had zero borrowings on our credit facility throughout the second quarter. On a related note, our interest coverage ratio continues to be strong at 3.2 times, while our fixed charge coverage ratio was 2.5 times. Depreciation and amortization expense increased by about $4.5 million in the comparative quarterly period, as depreciation expense has increased, of course, as the portfolio continues to grow. General and administrative expenses for the second quarter were about $5.9 million, representing only 7.2% of total revenues for the quarter. We continued to expect G&A expenses in 2008 to remain at or below 2007 levels. Property expenses increased slightly on a comparative basis by $135,000 for the quarter. These expenses are primarily associated with the taxes, maintenance and insurance expenses, which we are responsible for on properties available for lease. Income taxes consist of income taxes paid to various states by the company; and these taxes totaled $218,000 for the quarterly period. Income from discontinued operations…

Thank you, Paul. Let me start with the portfolio. As you saw in the release, we ended the quarter with 96.8% occupancy and 75 properties available for lease out of the 2,367, we own. That's off about 60 basis points from last quarter on occupancy. 13 of the new vacancies were from credit default from a couple of small tenants this quarter. That is not a large number, given we have almost 2400 properties. But its an increase nevertheless, but is consistent with what we expected and actually what we included in the guidance that we gave last quarter. And then the balance was just normal leased rollover, that's going on in the portfolio and ebbs and flows. Our sense is occupancy should rise a bit from this level, the balance of the year. We see good activity in the portfolio management department and releasing space, and don't have anything pending relative to additional vacancy that's not reflected in our guidance. So, things look just about what we thought they would, a few months ago and I would be a bit surprised if occupancy wasn't in the 96% to 97% range, the balance of the year absent anything material from what we see today. You'll notice, we announced in a press release a couple of weeks ago, an agreement with Buffets to continue to lease all of the 104 properties, we currently have leased to them in our core portfolio. And that the rent would be adjusted from $22.4 million to $19.4 million or about 87% of previous rents. That announcement was generated by a filing at the court that, we had reached an agreement with Buffets. And in response to a number of calls we got after that, we thought it was appropriate to put out that information of…

(Operator Instructions) Our first question comes from the line Anthony Paolone with JPMorgan. Please go ahead.

Well, thanks Good afternoon.

Hi Tony.

Hi Tony.

With respect to the deal pipeline in any of your acquisition targets for the full year. Just what's the visibility for what's remaining on the $250 million, since, it sounds you all are going to be pretty patient with the cap rates to move up.

Yeah it'll interesting, I don't think we are going to buy much of anything here in the third quarter. We continue to underwrite transactions. It was really absent something coming in, where I think cap rates might be as we get in the next year. We'll probably remain very patient and then it is a question of, whether later in the year not cap rates really rise. So, my sense if we miss anything here this year, its really on the acquisitions, but those would have been later in the third quarter or fourth quarter, I think from a model perspective and really have very little of any impact on '08 and then we'll update that relative to its impact on '09 as we do guidance for next year, which we think will be positive. So, it's really hard to say at this point, it'd be very easy to pull the trigger. We had a number of transactions come through in the mid to high 8s. In the second quarter and I think that'll happen in the third and again unless something comes in the mid 9's or so, given, effectively the nominal cost of capital is up around eight unless you can get into the mid 9's. I have bit of trouble trying to allocate that capital at an inadequate spread. So, my sense is if we do it'll be towards at the end of the year, Tony. And it wouldn't surprise me at all to do it or exceed it, but wouldn't surprise me all to be a little under it.

Okay. So, is mid 9s kind of the spot that you think things should go to at this point or would reflect kind of a fair pricing in your minds, where you people are more interested?

Yeah I think that's where it would be and maybe even a little higher. Obviously, every transaction is specific relative to the bump that you are getting on the leases but that's probably into the range.

Okay. Is there any particular industry type that you are seeing more deal for in at the moment or not?

It's pretty wide ranging. There is not a big theme, which normally, I think, if you go back about four, five years, I should say we are seeing a seen a lot of restaurants or C stores. But we are really seeing diverse group of things coming off and typically it's somebody who's got a decent size piece on the balance sheet. They're becoming a little more rationalized relative to where the capital markets are and looking at where spreads have gone, the credit spreads and they are saying, I am going to need to do something for my balance sheet in late '08 or in '09 and have decided that the market may not get better and they are coming to the market. And I think because of that, it's less of a industry theme than it overall is a balance sheet theme and now I wouldn't be surprised if that continues.

Okay. And then, with respect to you C store exposure. Can you talk to how those properties are performing in light of just considerably relative to gas and the other sort of business?

Yeah. We have been watching C store and obviously that's a big story with gas prices. I know one of the public C store chains we know well, reported and I think kind of 4, 5 takeaways from listening to their conference call. Say what we are hearing from pretty much everybody which is gallons are up probably about 4% or 5% over a year ago. Gas margins have come down $0.03 or $0.04 and are probably around $0.09 to $0.12, first being $0.03 to $0.04 higher from that a year ago. I think where most of them are getting pinched which is something you normally wouldn't look for as credit card piece because even if you maintain the number of fence, you are maintaining your margin yet. Credit card fees obviously are a function of prices, and with higher gas prices they are getting pinched a little bit there. It's really been hitting their middle line. And so that I think has been almost as hard on them as the reduction in gallon is. Where they make their money inside? Most of them were saying they're off maybe 2%, 3%, 4% inside sales which is not as bad and in this particular one today, the merchandised margin was relatively flat. And then if you look at net income, it was off probably about 20% quarter-over-quarter a year. But you can take that other way off 20 or maintaining 80% of it. So while there is some stress and a slowdown, which I can see, I think you can see in a lot of retail today, that one is another one of the postal charges a function of gas prices but still not as bad as you might anticipate, just more talked about.

Okay. And last question. do you have any sense as to maybe what percentage of your tenants or revenue base have a parent that's bankrupt at the moment, that kind of say even though your stores are worked out, the parent is still bankrupt, is there any way to gauge that?

You know I haven't run that number but if I had to do that I'd say 7. If I have to guess, the phase is 59 you know.

Yeah. If you take away the phase', your looking at less than 1%?

Yeah.

How much of that?

There is really not much else in there at the moment.

Okay, thank you.

Thank you. Our next question is from the line of Michael Bilerman with Citigroup. Please go ahead.

Hi, this is [Andy] here with Michael. Could you give some color on the 13 credit default assets that you had with those tenants in any specific industries than who are you really seeing those assets to?

Yeah. Well they've just come offline and again they were only 13 and few of them are restaurant and one was the general merchandise. But again you are looking 13 properties out of 2367. So, it's a very small number and we knew those were coming last quarter and we also put them in the guidance and then really its obviously, its going to be restaurant and the other, I think its 12 restaurants, small restaurants and one box and the box is near a mall and can be released to just about anybody.

And have you found it more challenging to release spaces given softer restaurant operation?

I really want to say yes, but I can tell you also that we've had a pretty good flurry of activity recently through those, so I'm not sure that's the case. But I would certainly expect if it hasn't been in the last four or five weeks and its been fairly strong, it will turn around and be worse because as I said in the last call, we have really, we normally use six months to really space and we widened that to nine and I'd still stick with that.

Okay, great. And then on the reset of the rents for the phase I, when does that hit?

That has not hit as of yet, but again I'm going to demeanor from anything else beyond that, that's pending but I just wanted to get out there, the agreement. From a modeling standpoint, I think we're late enough in the year and it's a small enough part of our rents which won't be material.

Okay. And then on, I'm not sure what you can say on this, but some of the lease terms were changed though they were cut down the lease term. When are we going to be able to get color on the changes in the lease structure [purposes]?

At some future date, when they are through with the reorganization.

Okay, great. And then on the change in the coverage that you mentioned is the drop off on the bottom end, is that related to any specific industry or sector or any trends that you are seeing in your cash flow coverage's?

No. that was with one particular tenant, and I looked at that and again, its one out of I think 15, and that tenant was I think 1.2% of rent. They had a rent coverage during the quarter ago from 188 to [17], so it wasn't huge. There was, I think, in the previous quarter, the top end was 488 and it came down to about 452. So, funny enough, thankfully, most of the reduction we saw was at the upper end of the strata of the change of the really strong stores.

Okay. Great, thank you.

Thank you. Our next question is from the line of Jeff Donnelly, Wachovia Securities. Please go ahead

Good afternoon, guys.

Hi Jeff

Paul, I was just picking up on earlier question, I get the sense that you guys never mind, that we are nearly, anything I guess, whose appear to have continued to stress in retailing, can you share those, I guess, the two or three factors that you think are going to bear the brunt of may be, future chapter 7/11 filings and conversely those that you might think come clean and avoid that?

I don't know who comes clean, I think restaurants, but I think they've already seen a lot of the stress. And so, that's an obvious one, people are talking about. The convenient store chains, while we've seen their numbers come up, it's a basic human needs business and unless there is really they are heavily levered. I think there are on a okay shape for now and when you get beyond that. I think the poster child is kind of the traditional hard and soft good retailers that you see out there. And I think one of the reasons we feel little bit better about what we're doing is that's a very small part of our business. I think about 19% of our revenue comes from traditional hard and soft good retailers. And I think that's where you're going to see some of the stress out there. But as you know pretty broad based out there right now and I think its going to be more balance sheet related than its going to be industry specific. I think, to date, it has been industry specific, looking at restaurant and seeing kind of casual dining get hit, as people traded down in fast food benefit, while the upper sit down dinner house, did just fine and I think now the more aspirational shopper, the guy out on the credit card that has the good job, just starting to step back a bit and then I think it goes pretty broad-based and maybe moves a little bit more into the upper tier that it has been where its been kind of the really low end Wal-Mart consumer.

And I think Jeff, this is Tom saying. When you are seeing the hard/soft good retailers it's more the discretionary spending which you know is not kind of a the new spin we are creating in this environment talk about our portfolio, but it's always how we talked about the stuff we are trying to buy where you have the consumer who really needs or enjoys the service that they otherwise can't get easily or can't make a discretionary decision on. So electronics stores, things that are a little bit more difficult to imagine in this environment, people maybe not waiting a bit, taking a year to buy the new refrigerator what have you and those are the kind of retailers we have always tried to avoid significantly in the portfolio and that's what's given us a pretty good comfort at the moment.

Let me Jeff, I was talking through this evidence, pulled something out my book here that I have where we kind of went through. I miss spoke, it's about 15.5% typical hard and soft good and I have a little thing in here that we talk about which who is doing great, who is doing okay, and who is weak? I'll just run through them in the typical hard and soft goods. I have this great nobody. I have this okay drug craft and novelty and then I really have is kind of a weak general merchandise apparel, books, consumer, grocery anything home related home furnishing, office, supply, supporting goods and that's a small part of our portfolio. Relative to kind of hard and soft goods with services, who is doing? Auto parts, is actually doing very well. Who is doing okay? Tyre stores kind of the business services at the low end. The weaker obviously are restaurants, motor vehicles, travel plazas, video, home improvement and that's there is really nothing imminent I see there but that said. And then up in services, I'd say great financial services to small position we have there, those guys are doing really well. Health and fitness continues to do really well. Okay and theaters there is slightly up in box-office this year, childcare, auto service and collision. And then the only thing I have got weak in services is equipment rental. So, that's kind of our laundry list.

Actually you are drilling there for a second, auto just generally half of the category has been suddenly declining across, I think in all categories last few years. Is there anything specific driving that and then I noticed that I think in the last quarter you guys entered into an area called distribution/office. And I was just curious exactly what that was?

Yeah, I'll do the first one second, second one third and the fourth one eight. The first part is relative to and I forgot all three parts of the question.

Distribution office is the first one.

Yeah. Distribution in office as we've done larger transactions. Occasionally they've had a distribution facility or two with it and in almost all most cases what we've done is going out and reached out to somebody else who wants to own distribution in office and we own a couple distribution facilities that were part of a couple transactions that we thought were very well located and that they had to have and then I think we own one office building which is the office of a retail tenant, that we did a larger transaction with but it's a fairly small part of revenue.

And then auto Jeff, I think is driven by obviously new auto sales, it's obvious why people maybe slowing down the purchases there. Secondly, maybe little bit less driving to try to conserve on gas, but most of the stuff we are involved in is the auto parts, auto service, auto collision repair, potentially you have to do if you got to get it from your job. And they would prefer to put a few dollars in to keep the old car running rather than to go buy a new one. So, that's kind of where our focus has been.

Yeah. Parts is doing very well and I would just have to guess, if you look to tire and you looked at service and you looked at collision and if miles driven in May was off 3.7%, which I think is what the NTSP said. Then maybe and I don't know, you could assume that they'd see a little bit of softness on the top-line. But those are pretty steady businesses and the decline in autos, obviously been kind of a dealership business.

The response from most of you guys, have been selling out of those, as it is you've been just growing elsewhere in the lost chair of your portfolio?

Yeah, exactly.

And nothing (inaudible) the call, but if I could just ask a few questions about your cap rate assumptions, 8 to 9, throughout. Was that on single asset deals or both portfolios?

That's both portfolios. You know as I said the ones transactions we've done this year, we've been watching and we watched them go from the mid 8's to the high 8's and then we're actually having some people say, we could into the long 9's, but either through cap rate. But also underwriting they didn't get there. So my sense, they are creeping up there. If you look at the individual one off, as I think I talked about last quarter, if you got a good brand, small price point, million bucks and you are in a good market, you can probably creep in around 7 today, up from the high 6s but that's even migrating up from there. I think those are 60 day ago comps and those are moving up into the mid 7s. But when you get into the secondary market, secondary brands and when your price point gets up around $2 million, $3 million, $4 million, I think you are starting to see low cap rates move. Price point, it's really has to do with financing, but I just think the market spending out and there is less buyers.

And I guess can you tell us, I guess my last question, what metrics are you look for to know that we've hit a bottom and it's safe for you guys to start treading into the market again or acquisitions and I guess maybe related to that is, why 8 to 9, I guess what are you looking at to derive that?

You know I don't think for us to step back in it's 8 to 9. That's just where I have been seeing the high 8's to low 9's as the stuff that's coming through but there is kind of two things going on. If it's in the high 8's, the low 9's and I think it's going to decline, which I do because I think we live in Escondido here and you know where that is and its kind of one of the ground zeros, for what happened in the housing marketing. And when housing started to decline here obviously, what happened is transaction volume just went away, as the sellers didn't want to sell at a lower price and the buyers were demanding a lower. And so you want through this period of six, eight months where all of a sudden inventory started going up pretty dramatically and then very slowly people who had the sales started selling and you saw prices go down and then over the next six to eight months, that just cascaded. And we saw that clearly during the housing market, but I could a draw parallel, kind of in the net lease business because I really think there are lot of people out there generically in the capital markets who have balance sheets that are going to be need to be refinanced and they are going to need to be refinanced substantially higher rate and then there are some people who I don't think are going to be able to get the financing they want and real estates one of their alternatives. But I also think they are all, there is a lot of people that are really just don't believe what's going on are hoping it'll get better and they are sitting around and not moving and waiting till they have to. And so my sense is, if that happens and its an if, but I think a reasonable possibility towards the end of the year and in the next, you just, at that point cap rates are really moved because the guys that can step in with the large amount of capital, I think are more limited and I think there'll be larger transactions charter underwrite and I don't think there'll be a lot of players. So, I think cap rates will move, if not if I'm wrong on that, my sense is, we retained a very high degree of liquidity in an interesting credit market. We missed a couple of quarters of acquisitions and life won't end.

Great. Thank you, guys.

Thank you. Our next question is from the line of David Fick with Stifel Nicolaus. Please go ahead.

Paul, first of all congratulations on the financings, most of my questions have been asked. One general question following up on your assumption that you are going to see better deals, or you hope to see better deals as people don't have financing alternatives. I don't want to imply that you are saying that you're a financier of last resort, but you're taking corporate credit in a declining economy. And I'm just wondering how separate from the cap rate conversation, what are the disciplines you're using in credit committee to make these kind of calls?

That's a million dollar question. It's a great question. I think the first thing is obviously, what we've been really eyeing is cash flow coverage during this, as we talk to our tenants. On our portfolio, to gauge how quickly they are moving and while our numbers that I quote every quarter which is the top 15 as we are looking backward number. What we've tried to do lately, as we're doing underwriting, may be in the past, we would have said, at this point in a year show me your '07 numbers, show me your '06 numbers and see if you can get me an update, to underwrite that. We are now saying, show me your last 12 months trailing and quite frankly, I don't really care about and what's these big seasonal adjustments, the 6 months from the back end to that, I want to see your last 8 weeks, and what you're hearing from your stores. I think we're really tightening up the number we're trying to use for cash flow coverage's and then if we were looking for a 2.5 in the past, I'd say, we'd be looking for 2 and 3 quarters and a 3 today, because as always, it's margin of safety. And then it'd be really trying to focus in, on the real estate side of the risk and not get too far away from replacement cost and then just be mindful of their industry. We're not doing any restaurants, but an example, might be if we were doing upper end restaurants and you look at their trailing 12 months and the numbers look just fantastic which some of them do. I think if you look at the last 6 to 8 weeks and their numbers, you'd be looking at, it really declining and I would say that you may see it decline quite a bit more. So industry specifically, I think we'd be careful. So in this, we're going to have a higher cash flow coverage. We don't want to get away too far from replacement cost and then we just want to think too carefully where they are going. But at this point not buying anything, we haven't had to do that.

You know, David I would add that on the credit analysis piece of it. Just as we mentioned that people needing to refinance things coming due on a liability side of their balance sheet might be a driver for us of opportunities to invest as a financier or choice within that might be one of the last remaining choices form. Similar to that, as we are looking at the balance sheet and underwriting the credit of these retailers, we're looking out over the next handful of years to see what other refinancing is going to happen in there, because as there will be in Corporate America, in general there's going to be a refinancing issue that's going to happen, that's really going to strip a lot of earnings power out of lot of balance sheet and that's true for all of us if you will relative to how much low price that is sitting in those balance sheets. I assume you guys do the same kind of work yourselves if you are looking at the read. So that part of our analysis this is a kind of new and interesting one as well if you are looking at a retailer today. We actually kind of look at that 2010, 2011 maturity that sitting there at 5.5%. We know it's not going to be 5.5% when it gets refinanced. So we do a little re-jiggering and pro forma work just to kind of understand earnings. We've got 20 or investments here. So it's something we take of kind of longer term approach.

Okay. We look forward to hearing more about lets say next quarter. Thanks guys.

Okay. Thank you. Our next question is from the line of [Eric Rothman] with Danske Securities. Please go ahead.

Yeah. Good afternoon. I was curious given that most of your leases are tighter CPI for [bonds]. And given the dramatic increase in the CPI over the last several quarters, why have your central rents kind of not followed a similar trajectory. Basically, kind of where has been forever, should we expect to see higher same-store NOI growth or same-store rent growth , given dramatically higher CPI.

I think down the line maybe a little, but I'll backup in this, and try to give a history of leases and you go back years and years and years ago, let me start with the 70's quickly, is basically you had a base rent of percentage of sales, when you had a ton of inflation in the percentage of sales went through the roof, I can remember couple of [taco] bells we had and unit up with a 100%, the rent equally what you originally bought the thing for and the retailers all woke up and said wait a minute, I want to put that breakpoint really high and the lease is written for the next five years had a percentage sales or something at them they went flat. So, what happened is people started doing 1% to 2% increases, but normally they even did 8% to 10% increases every five years. What we've always done is put in there, that the rent will go up at a couple of times CPI not to exceed than every five. And we did that for a lot of years and then about three, four years ago, we went to a thing that said, it'll go up at two times CPI not to exceed 2% every year. So, we're starting to see more annual increases in the portfolio for same store rent, I think we'll rise a bit maybe not the balance of this year, but in the next year and the year after. But I don't think its just going to be CPI because we do not have unrestricted CPI, we just have a CPI calculation and how we do the getting to the 2%.

Alright great, thank you very much that's very helpful.

Thank you. Our next question is from the line of Philip Martin, with Cantor Fitzgerald. Please go ahead.

Good afternoon, everybody.

Hey, Philip.

Just a couple of quick questions, first of all to what extent are you having discussions with your tenants and probably the stronger tenants in the portfolio, and so [adenizing] over the next 12 to 18 months as an increasing number hopefully of opportunities come up. Our tenants company, you don't wanted to talk about that strategy, are your going to them or is there no discussion taking place?

That's a great question. You would think we'd be out talking to everybody and they'd actively talking to us about how they're going to handle those, but I still and I am amazed at I think generically the people in denial about the credit situation we're in. I think most people are saying, "My gosh! Look at this. When will it get back to the way it was?" And we really view that obviously there has been an end to an era out here and credit is not going to be democratized as it has been in the past. There is likely to be have and have not and generically without securitization out there and with people being more mindful the rates are likely to be higher. But I don't think most people out there are really seeing it that way. I know talking yeah, there is. A lot of, we see the world that way, a few don't but that's the function I think of least being companies that are very active in the capital markets. And if you have companies that are in it all the time there is still either, I think most people are some what aware but in denial. So, there is not as many of those high level discussions going on as you think that there might be in that would be rational if you had.

Okay. And lastly and I know you've touched upon it in some of the answers and your upfront comments, but are you seeing a higher percentage of late pays in the portfolio?

We are not seeing a higher percentage of late pays in the portfolio.

Okay, thank you

Thank you. And our next question is from the line of [Suneet Parikh] with Banc of America Securities. Please go ahead.

Hi, I'm here with Dustin Pizzo as well. Tom, even though you have close to $400 million of liquidity between cash in the line, how are you thinking about the equity markets as the source of funding here, given the probably 8 percentage to imply cap rate at which your stock is trading and the 99.5% cap rates you're targeting in acquisition especially as opportunities increased over the next few quarters?

Yeah. For the moment, we're not thinking of doing anything. I think relative to the price of the stock you want a decent price. But we really focused in and will continue to focus in on getting an adequate spread up ever, whatever capital that we issue because it increases our earnings. So if you are sitting out there and your equity cost you rate on a nominal basis which is taking a forward FFO yield and divided by the inverse of the cost to raise the capital and you take that. And if you can get a 100, 30, 40, 50 basis points above that relative to yield, then it's going to be accretive to earnings to the parties involved. We are less oriented to NAV discussion but we are mindful of equity shareholders and that we don't want to get anywhere near earnings dilution and that's why we focus on spread and also try to be mindful of what points people have entered the stock past in offerings.

All right, thanks.

Thank you. Our next question is from the line of David Wellington with Merrill Lynch. Please go ahead.

Hey guys, how are you doing?

Good, David.

Sort of quick question. I think you though typically don't miss the individual franchise properties. Just curious if you have seen a difference in the performance say of the franchise portfolio the 2 versus say some of the larger regional national chains?

If we ran something, we might even say at this point franchise is doing better. But that's only because of the franchise we have in here have 600 or 800 or 1000 units and they are very big and those few that we have are generally doing pretty well. It was interesting that I was in a major restaurant chain the other night, that's not in our portfolio and then there is a guy I know, who opens new stores for and then sees their numbers and they both have corporate and franchise. And it was interesting to note from his perspective, he's just been to a meeting in the franchise stores, was substantially outperforming the corporate. And I thought it really interesting and he said that he had heard that in a couple of other chains and he felt it was a function of a fair amount of management chains and stress, put on the corporate side to move people around to get performance, first a franchisee that have stable management and that's anecdotal in nature. But within our portfolio, I don't think there is really much of a differential because we don't have much in franchise, but it was an interesting comment from this guy.

Okay. Thank you very much.

Thank you. And at this time, we have no further questions. Mr. Lewis, please continue with any closing remark.

All right, thank you very much everybody. I appreciate the participation and I know it's a busy season and it's an interesting world and we look forward to talking to you in the future. Take care.

Thank you. Ladies and gentlemen, this concludes the Realty Income second quarter 2008 earnings conference call. We thank you for your participation and you may now disconnect.