Good morning, my name is Tamara, and I will be your conference facilitator today’s. I would like to welcome everyone to the ProLogis’ second quarter 2008 financial results conference call. Today’s call is being recorded. All lines are currently in a listen-only mode to prevent background noise. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. At this time, I would like to turn the conference over to miss Melissa Marsden, Senior Vice President of Investor Relations and Corporate Communications with ProLogis. Please go ahead, ma’am.

Thank you, Tamara. Good morning, everyone, welcome to our second quarter 2008 conference call. By now you should have all received an e-mail with a link to our supplemental press release, but if not the documents are available on our website at prologis.com under Investor Relations. This morning, we’re going to first hear from Jeffrey Schwartz, CEO to comment on key accomplishments and our sustainability initiative, Walt Rakowich, President and COO, will cover overall market conditions. Diane Paddison, Executive Director of Global Operations will discuss ProLogis’s operating property performance and global customer activity. Ted Antenucci, Chief Investment Officer will discuss investment activity and Bill Sullivan, CFO will cover financial performance and guidance. Before we get underway, I would like to quickly state that this conference call will contain forward-looking statements under Federal securities laws. These are based on current expectations, estimates, and projections about the market and the industry in which ProLogis operates as well as management’s beliefs and assumptions. Forward-looking statements are not guarantees of performance and actual operating results maybe affected by a variety of factors. For a list of those factors, please refer to the forward-looking statement notice in our 10-K. I’d also like to add our second quarter results press release and supplemental do contain financial measures such as FFO and EBITDA that are non-GAAP measures. And in accordance with Reg G, we’ve provided a reconciliation to those measures in the supplemental. And as we’ve done in the past to give a broader range of investors and analysts and opportunities to ask their questions, we ask you to please limit your questions to one at a time. Jeff, would you please begin?

Thank you, Melissa. Good morning, everyone. The Chinese have a very old saying, which literally translates to learn knowledge from thousands of books and accumulate experience by traveling thousands of miles. We’re doing our call from Tokyo this evening. Bill Sullivan and I have been in Asia for three weeks already, and we and will be headquartered through early August. We were joined by the rest of our senior management team this week. While the Anglo countries of the US and UK is suffering from financial sector driven ills, the rest of the world does look a whole lot better. Fortunately, we have built our business around concept of risk management and mitigation through geographic diversification, with our global real estate platform and through financial diversification by building the leading investment management platform within a public real estate company. These differentiating factors are proving powerful in today’s economic environment. During the second quarter, we achieved solid operating property performance with positive same-store NOI growth for the 16th consecutive quarter. We remain disciplined in our investment process prudently expending our plows through acquisitions and development in select key logistics markets in Asia and Europe. In fact, this year 90% of our investment is expected to be outside of the US, as we noted last call, where we can focus our capital on the highest risk adjusted returns, thus our current focus on Asia. Our stabilized occupancies were fairly consistent with first quarter levels at our mid-90s expectations. Leasing activity was brisk with continued growth in rent and occupancies in our same-store pool. While we closely monitor US market conditions, our portfolio continues to hold up relatively well. The diversity of our platform permits us to offset softness in the US and UK with strong demand and significant opportunities in Asia and…

Thanks, Jeff. Before I talk about market conditions, I just would like to add some color to Jeff’s point on inflation. It’s important to understand that in our business, in most areas of the world only 25 to 35% of our total development costs are related to labor and land. Therefore, when commodity prices rises they’re doing, it has a major impact on our overall development cost. In just the last 12 months, our all in development costs are up 7 to 20%, depending on the geographic area. The US is at the lower end of the range and China at the upper end of the range, where raw materials constitute a higher percentage of overall costs due to the lower labor rates and over the last four years, our all in development costs are up 40 to 60%. Few people will argue that rapid inflation is good, however, as Jeff mentioned, we believe this significant rise in the replacement costs of industrial facilities will bolster capital values and will lead to commensurate rental growth over time and this is exactly what we are experiencing in China, where year-over-year market rents have risen 11% and 18% in Beijing and Shanghai respectively. We now have a stabilized portfolio of 11 million square feet in China, which is 97.2% occupied, including nearly 1 million square feet of new inventory space leased during the quarter. And in South Korea our first inventory building was completed and fully leased also during the quarter. And in Japan our business continues to be driven primarily by outsourcing and replacement of obsolete stock. In the pace of leasing remained steady in Japan with our stabilized occupancy over 95% at quarter end. In Europe, our investment focus has shifted more towards the continent given softer market conditions in…

Thanks, Walt. It’s a pleasure to be a part of the ProLogis team. I look forward to getting to know you better and bringing you highlights of our operating performance in future quarters. Overall, the results of ProLogis’ property operations remain solid. Our stabilized portfolios leased at 94.2%, slightly down from the first quarter occupancy of 94.6%, with Asia at 95.8% Europe at 93.1% and North America at 94.4%. Leasing activities for the quarter was 34 million square feet. Same-store NOI increased 1.6% for the quarter. A positive note to mention is our retention rate of 76% for the quarter, reflecting strong customer loyalty and the tendency for our customers to stay put during uncertain economic times. Also tied to our higher retention rates are lower capital expenses for TIs and commissions, which for the quarter came in at $0.88 cents per square foot. This is especially note worthy given the increasing construction costs that Walt referred to earlier. We continue to see solid early renewal activity on leases scheduled to expire this year. An area I would like to highlight that is a perfect fit from our core strength is our ability to serve global customers. Currently 19% of our occupied square footage is leased to customers that we serve on more than one continent. For example, during the quarter, we signed five new leases with Kuehne & Nagel totaling almost 1 million square feet. They’re located in the UK, Indianapolis, Reno and two in Tracy, California. We expanded our relationship with intermodal transport who previously only leased from us in Japan and now leases from us in Columbus. And with a lease in Tingen Volkswagen has become our newest three continent customer, as we already served VW in Central Germany, California and Florida. In addition to our focus on global customers, our global services team plans to continue to strengthen relationships with our 250 largest customers that occupy roughly 50% of our portfolio. Our retention rate amongst these customers is 83.5%, even better than the high retention rate on our overall portfolio. Our continued efforts will help contain capital costs tied to TIs and commissions, even with rising construction costs. In addition to a concentration on our customers on multiple continents and our largest 250, we will continue to drive service to all of our customers, and now let me turn the call over to Ted who will have more on our development and investment highlights.

Thanks, Diane. During the quarter, we began new developments with the total expected investment of $1 billion including those in our CDFS joint-ventures. Roughly 46% of this amount was in Europe, 37% in Asia, and 17% in North America. The year-to-date mix of starts is similar with 87% of our starts outside of the US and UK. As far as starts for the remainder of the year, we continue to anticipate starts of 4.4 to 4.8 billion, as we allocate our investments to high demand areas like Asia and central Europe. Our pipeline of properties under development at the end of the quarter represented about 4.4 billion of total expected investment. Combined with completed developments and reposition acquisitions of 4.2 billion, we have a CDFS pipeline of just over $8.6 billion, that was 42.4% leased at quarter end. When looking at just the CDFS completed development and repositioned acquisition portion of the pipeline, we are 55.1% leased, consistent with the leased percentage in the first quarter, which is a healthy level and supports growth in our investment management platform. Given further softening of overall market conditions in the US and UK, we have continued to focus our development in those markets on Build-to-Suit projects. Over 65% of the quarter starts in North America were begun on a pre-committed basis. In addition, approximately 30% of Europe starts in the quarter were Build-to-Suit, driven by new business in Germany and France. We also started two pre-committed buildings in South Korea and one in Japan, bringing global, second quarter starts to 31% Build-to-Suit. Well, sometimes characterized by lower margins, Build-to-Suit projects permit us to more quickly recycle our development capital and provide attractive risk adjusted return. And on the topic of margins as you will note in supplemental, margins are still in excess…

Thanks Ted. FFO for the second quarter was $1.06 per share compared to $1.16 in Q2 2007, while FFO per share for the first six months of 2008 was $2.44, up from $2.41 in the first half of last year. Quarter-over-quarter comparisons will vary, at times substantially, based upon the timing, level and margins associated with CDFS contributions. In the second quarter 2008, we generated lower CDFS gains than Q2 2007 and we experienced a decrease in NOI from our direct owned assets. These decreases were partially offset by substantial increases in fund-related FFO from property operations and assets management fees due to our contributions and growth in our investment management business. Earnings per share of $0.80 for Q2 2008, compared to $1.50 in Q2 2007, reflecting more than $0.56 in gains from the non-CDFS asset contributions and dispositions that were recognized in the EPS during the second quarter of 2007, compared to just $0.02 of similar gains in Q2 2008. Looking at property operations, FFO from our direct owned portfolio was $176 million for the second quarter of 2008. Approximately $22 million lower than 2007. This is principally due to the contribution of 66 non-CDFS properties to the North American Industrial Fund at the end of second quarter 2007. Lower occupancy in our direct owned stabilized portfolio, and increased property management expenses associated with the increase in managed properties in our funds. Turning to our CDFS business, proceeds from dispositions and contributions of nearly $1.3 billion for the quarter put us at $2.7 billion for the year-to-date, still on track with our revised expectations of $5.6 billion to $5.8 billion for the full year. FFO from CDFS dispositions was $200 million in Q2 and approximately $479 million for the year-to-date, running ahead of our midpoint expectations of $835 million…

Thank you, Walt. Before we open the call to questions, leave you with three key takeaways. One, through turbulent times in US and UK, our global platform with excess of capital through our investment management business allowing us to continue operating at a high level. Two, we have grown our assets under management in the first six months of the year by 11%, while currently accessing the debt market successfully for substantially all of our 2008 requirements. This, along with the $14 billion of remaining capacity in our investment management business, gives us liquidity to take advantage of opportunities. And three, rising cost of construction has substantially increased replacement costs of our product and in our opinion, will provide a safety net for capital values as well as an impetus to rental growth. Operator, we’ll take questions now? QUESTION AND ANSWER

[Operator Instructions] And we will go first to Michael Mueller with JPMorgan.

Yes, Hi. With respect to the CDFS gains or not the CDFS gains, but the pipeline, the 4.2 billion that completed and 55% leased. Can you give us a sense as to what portion of that pipeline is expected to stabilize either in the second half of ‘08 or beginning of ‘09 by hitting the 90% threshold?

Michael, I apologize. Operator, if you’re listening in, either Michael has a bad connection or we do. It was very tough for us to hear the question.

Is this any better?

That’s much better.

Okay, sorry. Not sure what happened there, but for the $4.2 billion of completed developments that’s 55% leased, can you give us a sense as to what portion of that will hit at 90% occupancy and to stabilize either in the second half of ‘08 or by the beginning of ‘09?

Michael, this is Walt. I can just tell you that roughly 2.7 billion is 93% occupied

or greater.

Or greater at this point in time.

Let me just clarify, 93% leased or greater. We have a couple of those buildings in Build-to-Suit that will be completed by the end of the year.

Right.

We will go next to Michael Bilerman with Citi.

Good morning, Irwin Guzman on the phone with Michael. When I look at your CDFS the growth in the pipeline over the last couple of years it looks like sort of the growth in the rate of growth in completions and starts has been a bit faster than the rate of growth in leasing. And I’m wondering whether you expect leasing to accelerate over the next 12 months or whether you outlook for 2009, would require the volume of leasing in CDFS accelerate?

Irwin?

Yes.

This is Walt. Let me just point out one thing to you because I think if you go to page 18-A, which is probably, where you’re focused, if you look at the completions, if you look at the completions part of the pipeline, actually the leasing has gone up. That number last quarter was I think 53% or 54% and now it’s gone up to closer to 55%. So, we’re developing, we have developed certainly in the last 12 months at a more rapid pace than we’ve been developing prior to that, but as those properties are completed, they’re actually getting leased in technically.

A higher leased percentage.

Yes, you could argue actually the higher leased percentage the completion then we were a quarter ago. We are very comfortable with those properties as we get completed in where we are.

We’ll take our next question from Lou Taylor with Deutsche Bank.

Thanks, good evening, guys. For Walt and Ted, Walt, given your comments about construction costs in with more economies starting to slow down, I mean what is that mean for your second half development starts and maybe if you could give a little peak in ‘09 given that mix of higher cost and potentially flat rents?

Lou, this is Ted. As long as there’s demand for the space, as costs goes up, rents will increase. We’ve seen that in many markets throughout the world. China is a great recent example of that. Costs are going up significantly, but so are rents. As we look forward, we’re building to demand and our assumption is that if there’s net new demand, we’ll be able to develop with reasonable profit margins in the markets, where there’s significant activity. In markets like the UK and the US right now, we’re concerned about demand and we have slowed down our development starts on a speculative basis and focused primarily on Build-to-Suits.

And Lou, to add to that, however, the one thing I will say that the build-to-suits that we have done in the United States clearly our costs are higher, but we’re getting commence certainly higher rental rate to compensate for those higher costs, such that we believe that we’ll have a fair development margin at the end of the day. So yes, to the extent that there is demand to Ted’s point we’re clearly getting high rates in those build-to-suit.

We will take the next question from Steve Sakwa with Merrill Lynch.

Good afternoon or good evening. Maybe going back to an earlier question, Walt, if look… you said you leased about 60 million square feet of space in the first half of the year. If I look at your rollover schedule, and you take kind of your wholly-owned as well as your JVs, you have about 60 million feet sort of the aggregately rolling each year. Can you help put it in prospective, how much just aggregate leasing activities do you need to do sort of on an annual basis to keep sort of keep occupancy relatively flat and also to meet your kind of CDF goals for this year and may be next year?

Steve, I don’t have the exact number, but I can tell you that 60 million for us for the first two quarters is a record number. Having said that, we also have a record size of the overall pipeline, and as well we have more leases turning than we ever have had in the past. So, I can only say that yes, I think we’ve got… if you add up the weighted average, I think we’ve got 7.9% still to renew this year. So if you will, we’re on track and we’re seeing a pretty high level of renewals. The one thing we’re seeing a lot of is, companies that are coming to us now and just wanting to early renew, because they don’t see themselves expanding. And so we’re actually entering into renewal discussions earlier on than I think historically we have in the past

Particularly in the US?

Particularly in the US, that’s a good point, Jeff. So I don’t have the exact numbers in terms of the square footage, Steve. But I will say that we’ve been pleasantly surprised on the renewal side of the business.

We’ll go next on Jamie Feldman with UBS.

Thank you. I would like to turn a little bit here to the fund business. Just in terms of demand, some new investors, and then risk of redemptions. I think Jeff you had commented that there are no funds open to redemption. So I guess Can you clarify that comment and give more color, what you guys are seeing?

There are no funds. Clarification is that we have no funds open for redemptions, so we’ve had no redemptions. We’re seeing continued demand on an investor base as we explore new opportunities throughout the world. We have a little static in the line, but we’re seeing no shortage of investor demand. I think we’re looking at today. Again, it’s and we said almost a year ago, there’s been a true… like the quality; people are looking for less leveraged fund, less opportunistic funds in as noted in the Forbes article there’s a dark side to leverage. We’ve been very conservative; we had to stabilized property funds with low levels of risk, but high-risk adjusted returns on a multi basis that’s going to be very compelling in the investment market today. Operator?

Yes.

Any more questions.

We’ll take our next question from Jay Haberman with Goldman Sachs.

Hey, guys. Here with slowness as well. Can you remind us of the higher CDFS contributions this year when you upped last quarter. Can you just mention geographically where those contributions are expected to come from and just a second question as well? Can you just comment on sort of the deterioration in same-store NOI and we are concerned are you expecting that trends are getting worse than originally anticipated, I guess more quickly than expected?

Let me touch on both. First of all, our contributions in large part are going to follow with the exception of China, our development activity, and so you’re going to see a sizeable portion of the contributions out of Europe, Mexico and Japan for the remainder of this year and into the early part of 2009. And so as we have a high-level of development starts in the second half of 2007, and so you are going to start seeing those contributions come to fruition. So if you just sort of match up the development pipeline, that will attract pretty well with the contributions. And again, we’ve started about $220 million of starts in the US this year that are predominantly build-to-suit and those as we said repeatedly over the last year and a half or so. Those build-to-suits are nice, because short construction cycle. And as soon as they’re completed, they’re ready for contribution. So you will see further contributions in the US this year as well. On the property NOI, there’s really a couple of factors leading to the decline. One is because of our contribution year-over-year, our contribution of the large portfolio of CDFS pipeline. Probably impacting revenues in the $6 million range on what is about a $9 million or $10 million year-over-year hit, and that’s sort of a permanent takeaway from that level of property NOI. The other piece that’s impacting revenues as well as expenses is slightly lower occupancy within that stabilized portfolio of direct owned properties, and so that is negatively impacting revenue again prior to the tune of $4 million and because of that lower occupancy, we paid higher expenses associated with CAM, etcetera and so that’s probably another $2 million on the expense side. But other than that, as we grow we incurred the cost associated with property management activities for our funds inside that line item and so you’ll see that line item of expenses grow, somewhat disproportionately as our investment management activity grows. It’s more than offset obviously by the investment and our fund return. The other thing that’s worth noting is particularly given the high percentages of our income that comes from Europe today, if you look size of our European platform, it’s took $12 billion in assets. That number is not adjusted again in the Euro, so 1.6% does not have the FX effect of the Euro. We didn’t want to run that number I mean suffice it to say it would be well north of 3% to include that, but the impact of currency is not due to our operational expertise. Clearly due to the change in currency rates, but we’re the beneficiary that clearly, but we don’t show it that way because we don’t think that’s the true operating metric to show.

We will take our next question from Cedrik Lachance with Green Street Advisors.

Thank you. Can you give us a rundown of changes and cap rates in the various regions over the past 90 days and in addition can you also discuss changes in land values, perhaps a little bit of a longer-term view. We’ll see land values today in your major regions versus about a year ago.

Cedrik, this is Jeff. Why don’t I start with the non-US markets and let Ted comment on North American markets. That way everyone isn’t hearing me talk for too longer period. If you look at Europe, we just finished valuation four plus European properties for the entire portfolio in Europe. So there’s a…the continent is almost just completely flat from a cap rate standpoint and in this movement to have 1% here up and down. In Netherlands cap rates have actually declined or values have increased in the Netherlands, in Spain and in Poland. In other countries they have declined slightly, but on the balance it almost a wash. So, and we’re talking about very, very, very small movement. So, you would call it flat for me, cap rate or value standpoint of the continent. UK is a different story. It’s…with the entire agency type regime there, cap rates moved very rapidly. You’ve seen further diminution in the first six month of this year prior order to that 90% [ph] of the picked and dropped and hopefully it is in drop right now and we will start to work its way out of it, the pricing decreases and valuations of 15 to 20% total. That is clearly the worst market in the world from a cap rate value standpoint by a wide margin. As you move to Asia, you see no movement whatsoever upward in cap rates by any measure and in China, if anything with continued downward pressure in cap rates we call those flat for the most part. Same in Japan, relatively flat cap rate environment, few changes in land values although I will say major changes land values in China with the government cutback on the aluminum plant. We’ve seen land appreciate in the last 12 months. I can’t give you last 90 days, but it’s continued to appreciate in the last 90 days. But in the last 12 months we’ve seen land appreciate in Shanghai by 30 to 35% and Beijing 20 to 25%. In smaller markets is unchanged moderately [ph] by million people. We’ve seen 15 to 20% type appreciation there. So, we’ve seen pretty rapid appreciation in land values there back in land impairment [ph] by the government. Ted?

Yes, in the US it’s kind of a tale of two different product types. The A product type in good market held its value much better than the B product type in Billion markets. I’d say that in the A product it’s moved about 30 to 80 basis points with less movement in higher entry markets. In terms of land values, overall land values throughout the US are flat and maybe slightly down, but that’s more of a gut feel than true comps. There’s not a whole lot of land that’s traded recently, so it’s hard to know exactly where that is, but I’d say it’s flat or slightly down.

Operator, next question.

We will take a follow-up question from Lou Taylor with Deutsche Bank

Lou, are you there?

Yes, I’m here. You guys about $4 billion under construction in Europe right now. Can you give us a rough sense of the country breakdown of your development pipeline there?

I will tell you that we’ve had no starts in the UK this year. So, that the new construction is heavily weighted Towards Central Europe, Northern Europe, really Germany and that is the significant weighting.

And Lou, we’ll get you the exact numbers. I don’t believe we have those in front of us.

It’s disproportionately weighted towards central Europe and Germany.

We’ll take our next question from Mitch Germain with Banc of America.

Hey, Walt, or Ted, have you guys seen a shift in any of your customer distribution needs as a result of the rising fuel costs?

Go ahead, Ted you want to take that?

Mitch, we’ve actually gone out and talked to a lot of our customers about this, and we’re not seeing a significant shift. A few customers have noted that they may add a distribution center in certain locations, but we don’t see a major movement in terms of how people are looking at their distribution networks at this point. We’ve kind of anticipated, we’ve talked to people talked about it, but we’re not seeing much.

We’ll go next to [Garrett Bower] with Merrill Lynch.

Hi, it’s actually Chris here. I guess Walt, I just wanted to follow-up to Steve’s question earlier and your response, I believe you said that you had record leasing in the quarter and if I look back historically on page 18, and maybe I’m not looking at the right data here. But if you’re saying you lease call at 7 million square feet over a base of 112 in the total CDFS pipeline that’s roughly 7% and then we go back in time, let’s say June last year, it was 6 million or 6.7 million square feet off of a lower base call it 90 million square feet. So maybe it’s not even right way to look at, I guess what we are just trying to tell is the leasing velocity in the CDFS pipeline commence rate with burning that off, and given the level of growth in that pipeline, are you going to be able to sustain that leasing and keep the machine running?

Chris, I wasn’t exactly following the math, so my apologies. But maybe a better way of looking at it and I can spend a little time if you want offline sort of going through your numbers. But, if you look at page 19A, I think it really tells the story if you want to focus on the leasing velocity in the development pipeline, and it also exposes areas we are going to chop; it could be balanced on both sides. I mean if you look at our development completions, of course we break it down by tranche, right? So if you look at March 31 tranche, which was last quarter, right? As a company, when we ended quarter one quarter ago, we were 41% leased now we’re 76%. And two quarters ago, we were 58 when we ended the quarter now we’re 62. If you look at the composition of where we are in each of the areas of the world, Asia, in the last three quarters we’re at 70, 86, 86 respectively. Europe or 83, 83 respectively and that’s all good stuff, because you expect five to four quarters out you’ll be at roughly 90%. So we’re pretty much on track there. Where we’re not on track is in North America. No surprise and if you looked at North America it would be predominantly the United States where we’re at 62, 34 and 41% respectively. And so we realized, we have some wood to chop in the United States which is why we’re really focused on build-to-suit at this point and time, and exist in leasing existing products. But I think that gives you a good idea of the leasing velocity and why we feel we are on track in the two continents.

We’ll take our next question from Wilkes Graham with FBR.

Hey, guys. You guys have talked a lot recently about weak in the US and UK and how you stripped out most your development starts for this year. Are there other markets internationally of material size to you that you’re seeing challenges? We know Germany and Japan and Asia are strong, but are there other markets apart from the US and UK where you’re seeing challenging environments?

Wilkes, this is Jeff. I’d have expected you would see some stress in Spain given the state of the housing market there residential developers are clearly having problems, but we’re 100% leased in Spain. We are leasing space, we’re signing build-to-suits very, very rapidly actually looking for additional land there, so it’s been surprisingly, although we’re being careful in Spain. But that would have been an area that was expected to be softer, but maybe it’s performance by our team, maybe it’s customer relationships, maybe the industrial sectors there in wrap of older building, which I think it clearly has difficult to find the sights in the country that’s one that’s quiet frankly surprised me. Italy, we have had a little bit slowness there, but that’s been consistent for a few years and we haven’t had much in the way of development starts in Italy. We’ve put a new team in place there that has done a tremendous amount of transaction volume in the last 60 days, so we think we are turning that around. That’s a 36-month old story and back. When everything else in the world was good, Italy was a little weak for us, so we haven’t built much there at all, and we’re now gaining some momentum. So it’s on the uptrend, but that hasn’t been that strong. Germany has been great. Central Europe has been great. All of our Asian markets have been nothing short of phenomenal. So we are pretty pleased with our business outside of US and UK.

We’ll go next to Dan.

Operator two more questions.

Two more? Okay, we’ll go next to Dan Sundheim with Viking global investors.

Hi. Can you talk about the development margins and Build-to-Suit versus speculative as you shift more of the business to Build-to-Suit? And the second question is analogue [ph]. I guess recently reported a dramatic slowdown in Asia and Europe trade volumes in June and I guess in terms of trade lands you’re more exposed to the European market. Is the Europe volume or is it Transatlantic and just give us a sense of where your exposures are?

When you get exposure on trade volumes.

The trade land. Like what trade lanes you’re most exposed to? Is the Europe trade lane, that would be kind of the biggest area of exposure or more Transatlantic?

Well, it’s very little Transatlantic if you’re talking about Europe, North American trade there less so that more Asian trade, but quite frankly what we’ve really focused on in our China business is the growth of domestic consumption. So our business continues to grow there. If China’s export slows slightly that is I think the domestic consumption offsets that in a five times ratio. In Europe, Europe is actually as you know, our larger trading partner with China and is seeing better trade growth the North America given the weakness in the North American economy. So, I don’t know that if we have one area of exposure in that regard. We are very, very well diversified and we also focused on tremendous amount of domestic consumption as opposed to focusing purely on trade and we think that’s real important that balance is serving us very, very well today. Ted, you want to comment on relative cap rate, the relative margins, I’m sorry.

Sure, Build-to-Suit margins are typically lower than that on inventory projects. We’ve talked about this in the past and I think we’ve got it toward 8, 14% on Build-to-Suit, probably 16 to 20% on inventory buildings. Both of those exclude profit on land, which can bring those numbers up. So, we often times had Build-to-Suit at higher margins because of having a struggling low land basis. We don’t cap interest on the majority of our land, which creates effectively some built in gains over time and those often captured, when we do Build-to-Suit.

Operator, one more question.

We take our final question from Chris Haley with Wachovia.

Good evening. Jeff and Bill, I appreciate your views on the higher share count and I know you guys alluded to this last month regarding your continuous equity offering and executive options. Give us rationale yield program in light of what you historically viewed as or as you been in a capital, an excess capital position. Why would you be have this program opened, given where the share have been over the last one to two quarters?

Chris we heard 35% and the word you said, can you pick up or operator is there way to get that line with clear.

We just increased his volume.

Yes, much better.

Right, sorry about that. Leading back to your continuous equity offering program and the higher share count that recognizes it’s a relatively small percentage change in your denominator yet from a tactical perspective of the opened position of your CEO program, at these equity values both for raising new capital as well as for equity for options for insiders, to give us your view that the pluses and minuses on your decision to keep this program open and issuing equity at where current stock prices are?

Hey, I mean hey Chris I think, first of all, it is a relative modest dip into the equity offering program and I think we could probably about 100 million in Q1, another 100 million in Q2, all at an average share price of about $60 a share and in what I think everybody on this phone would agree is probably the most uncertain capital market environment that I’ve ever faced in my business career and certainly at least in the last 18 years. And so from that standpoint, showing up a balance sheet to a certain degree, in the same fashion that we sort of took the maturities for 2008 off the table at an appropriate time. I think should be applauded candidly and so I think it’s a good thing that we get. We’ll constantly reevaluate whether we dip back into that market and we always focus on keeping a relatively strong balance sheet.

And Chris, we think it’s absolutely paramount to have exceptionally strong and exceptionally pristine balance sheet in all times, but clearly in uncertainty if the financial markets with distress and the financial sector, we thought it was very critical to do so which is again why we did more financing at the beginning of the year for the year taken all that risk off of the table. Strengthening our balance sheet slightly through that continuous equity offering program, not de minimis amount of shares, but nonetheless, we think it’s important to keep a strong balance sheet. And when you look at the opportunities within the market we are in today and the opportunities that we see out there for growth on the platform, customer-driven growth, we think it’s real very important to have the opportunity to take advantage of those to have those growth opportunities and to grow the company on a continual basis.

And there are no further questions at this time.

I would like to thank everyone for their time today. We really appreciate it and we look forward to seeing all of you very soon.

If you would like to access a replay of today’s call, you may do so by dialing 1-888-203-1112 or 719-457-0820, and entering the password 431-5556. The replay will begin today July 24th at 12 o’clock Central Standard Time. That does conclude today’s conference. We appreciate your participation. You may disconnect at this time