Good morning, my name is Whitney and I will be your conference facilitator today. At this time, I would like to welcome everyone to the ProLogis Third Quarter 2009 Financial Results Conference Call. Today's call is being recorded. All lines are currently in on a listen-only mode to prevent any background noise. (Operator Instructions). At this time, I would like to turn the conference over to Ms. Melissa Marsden, Managing Director of Investor Relations and Corporate Communications with ProLogis. Please go ahead, ma'am.

Thank you, Whitney. Good morning everyone and welcome to our third quarter 2009 conference call. By now you should all have received an e-mail with the link to our supplemental, but if not the documents are available on our website at prologis.com under Investor Relations. This morning, we will first hear from Walt Rakowich, CEO, to comment on progress relative to current initiatives and the overall environment, and then Bill Sullivan, CFO, will cover results, guidance and refinancing activity. Additionally, we are joined today by Ted Antenucci, President and Chief Investment Officer; Chuck Sullivan, Head of Global Operations; and Gary Anderson, Head of Global Investment Management. Before we begin our prepared remarks, I would like to state that this conference call will contain forward-looking statements under Federal Securities laws. These statements 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 expectations. Forward-looking statements are not guarantees of performance, and actual operating results may be affected by a variety of factors. For a list of those factors, please refer to the forward-looking statement notice in our SEC filings. I would also like to add that our third 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 have provided reconciliation to those measures. And as we've done in the past, to give a broader range of investors and analysts an opportunity to ask their questions, we will ask you to please limit your questions to one at a time. Walt, would you please begin?

Today, I'm going to cover some of the trends and opportunities that we're seeing in the industrial market. But first, I would like to take a moment to reflect on the actions that we’ve taken to stabilize the company and position ourselves for future growth. It's been about a year since we presented our plan to investors in New York. What a difference a year makes. Looking back over the last 12 months, we acted quickly and decisively through a series of sequential steps, each of which enhance the execution of the next. In the aggregate, we completed more than $3.8 billion of asset sales and contributions. We raised almost $1.5 billion of equity, tapped the unsecured and secured debt markets to refinance debt, and bought back over $1.4 billion of bonds at a $320 million discount. With these actions, we reduced direct debt by more than $3 billion, and substantially funded the remainder of our development portfolio. At the same time, we refinanced and extended over $2.2 billion of fund-related debt, cut G&A by over one-third, and brought our development portfolio leasing to nearly 62%. During the quarter, we completed two of the remaining major items on our list. We successfully amended and extended our global line of credit and completed our bond holder consent solicitation. The list goes on and I won't [deliver] the point any further. Those of you who have been following us understand what was at stake, and what it took to get done. ProLogis associates around the globe have worked diligently through arguably the most difficult conditions on record, to improve our financial condition and maintain high levels of leasing, and I'm incredibly proud of what we, as a team have accomplished. Now, it’s time to move forward. Looking ahead, we see a global…

I would like to cover three topics today. First is Q3 results and guidance for the remainder of the year. Second, recent initiatives and the third is progress on financing activities related to our property funds. We generated FFO excluding significant non-cash items of $0.21 per share in Q3. The significant non-cash items totaled $29.3 million or $0.07 per share, and consisted of roughly $17 million to the upside from gains on early repayment of debt and $46 million to the downside from impairments of properties. Additionally, we incurred $11.6 million or $0.03 per share in non-recurring charges associated with the write-down of certain corporate assets, as well as costs associated with the company's G&A reduction program. Unfortunately, the noise associated with gain on early extinguishment of debt, impairments and changing share counts will continue throughout the year making it challenging to present core results. However, let me give it a try. On a year-to-date basis, we have generated $405 million of FFO excluding significant non-cash items. The non-recurring charges incurred through September totaled $56 million, resulting in core FFO for the first nine months of approximately $461 million. Based on our expected weighted average share count for 2009 of 409 million shares, this represents $1.14 per share relative to our earlier full-year 2009 guidance of $1.31 to $1.48 per share, which we now have narrowed to $1.39 to $1.43 per share. In terms of future guidance, there are a few items to note. First is the successful execution of our at-the-market equity offering program, through which we generated $325 million of net proceeds during the third quarter at an average price of $11.15 per share. In total, we issued 29.8 million shares, bringing our outstanding shares to approximately 473 million at September 30. The issuance increased our expected full-year…

Before we open it up for questions, let me just leave you with three final points. First, we're immensely pleased that we’ve completed the actions that we identified to stabilize the company and, really, a little less than a year; and we were highly motivated to act quickly, and I think that we did. Second, we are not done. As we shift our emphasis from the stabilization stage, we are keenly aware that market conditions are likely to remain challenging for the foreseeable future, and we will remain highly focused on maintaining strong occupancies and identifying opportunities to monetize our land. Third, we believe the actions we are taking today are positioning us to take advantage of opportunities tomorrow when the time's right. We know that we have to be focused on earnings and cash flow growth and we certainly have and will be, but make no mistake about it, our long-term focus will be growth in NAV and we will stay focused on this objective, even if it means sacrificing short-term earnings to accomplish it. Operator, we're prepared to open it up for questions.

(Operator Instructions). Your first question comes from Steve Sakwa with ISI Group.

Bill, can you just maybe talk about your targeted leverage ratio. You’ve obviously done a lot, but as you think about the possibility of continuing the issue equity, how should we think about where you want the balance sheet to be versus where it is today?

Steve, let me sort of reiterate some of what we’ve talked about in the past, which is at this point and we have been for a while focused. I think we want to get back to that BBB plus rating, and right now we got the split rating at effectively BBB flat and BBB minus, and so from that, we want to bring down get debt to a reasonable level. It is there today from a book basis, but there is disconnect today between book and NAV. So I think that there are opportunities and we're seeing it already in terms of stabilizing, if not declining cap rates that will improve our NAV and bring it closer to book. So in the sort of the near-term being in the next 18 months or so, I would love to see that debt ratio get down into the low to mid 50s versus what is perceived on a NAV basis today to be 60% plus. As importantly, we want to focus on monetizing the land and leasing up the pipeline, because the other key measure is our interest coverage ratios, which we want to get well-north of two times and get back to that BBB plus rating.

Steve, this is Walt. I’m going to just add a little bit more teeth to what Bill was saying. Our stated objective really has been to bring down the debt, but I think we want to do it over time and do it in a rationale way at this point in time, and we kind of see doing it through a number of different things. Obviously, we did do the CEO program this quarter, but, I think longer-term, really, we're focused on asset sales. We'll be focused on increasing the value of our land from an NAV perspective, in terms of the way the market thinks about it in their mind. We’ll be focused on increasing value of our non-income producing assets, meaning primarily our development through leasing, and frankly what we're beginning to see is a settle out, as Bill said, a more reasonable valuations to our assets just with some cap rate declines and I think you’re going to see some rental increases overtime. So, I do think in a rationale way, long-term, we will get there by blocking and tackling and doing the right things from an operational perspective.

Your next question comes from Sloan Bohlen with Goldman Sachs.

Maybe a question for Ted; just on the leasing and the development pipeline; it still looks like you're well ahead of schedule for the 2010 stabilization. Could you give us just a little bit of color on the rates that you're seeing and whether you still kind of in that targeted 7% to 8% yield range. Also, if you could touch on lease term as well, thanks

Yes, I think we're still in that 7% to 8% target range. We're a little surprised and pleased with the amount of activity there is in the market in general. It's certainly not robust, but it's better than we had expected. We feel like we're getting more than our market share, based on being aggressive and having good quality product and having good customer relations. Lease terms, we're trying to keep to five years or less, that’s not always the case, but we view this downturn in rent as something relatively short-term, and we don't want to commit to longer-term leases right now. I think I hit all the points.

I would also add, Sloan there, I think we clearly are still leasing the development pipeline at less than what we preformed a year ago, given what market rents are today, but instead said if you can keep it somewhat short-term and I think our average lease term right now is in the neighborhood of 39 to 40 months, the situation will reverse itself. We're pretty confident that will happen and ultimately will be able to capture that upside over time.

Let me add to that. We have stated and will continue to be aggressive in getting our occupancy levels up. It is interesting to note in the top 31 markets that we’ve been tracking this quarter almost one-third of them have had an increase in occupancy, with no new supply coming online is giving us some level of comfort and stabilizing of the occupancy, and as we see, occupancy levels increase, we will certainly push [around], we're not at that point yet, but we do see that out there on the horizon and we didn't last quarter. So, I think there has been definitely a positive turn over the last three months.

Your next question comes from Ki Bin Kim with Macquarie.

In regards to the 15% roll down this quarter, if you could break that down between lease renewals and new leases, and if you have any expectations going forward?

Ki Bin, this is Ted I will answer at least part of the question and then Chuck can get the balance. We looked at the roll down and there were 436 transactions that took place, and interestingly enough, if you take three of those transactions out of the equation, two of which were short-term deals, one was two months, one was six months, the negative rent growth went from 14.69 to 12.19, which was commensurate with last quarter. So, it's interesting that one or two short-term deals generally impacting a number of debts. The one other deal that was in there that was in short-term was in Dallas, is relatively large building it’s a very aggressive market in Dallas right now for a large space and we met the market on that. Overall, you know, when you pull those three out, I think we feel like there is a level of stabilization and the downward pressure on rents also, and really, with those three out of there it [compares] last quarter and this quarter pretty much on top of each other in terms of negative rent growth.

And Ki Bin, the second part of your question was with regard to renewals, and specifically if you just look at renewals versus new transactions you're looking at somewhat above say a half of that in terms of negative rent roll down. So for example, if you're looking at a 12% or 13% negative rent growth on the aggregate portfolio, the percentage of renewals might be, say, 5% to 7% to 6% negative rent growth on renewal transactions.

Our next question comes from Michael Bilerman with Citi.

Bill, I am wondering if you could spend time just talking about your capital contributions into the funds. Last quarter you obviously had the (inaudible) in terms of the restructuring and putting in $85 million of cash. You also when you’ve been contributing some assets, been taking back equity interests, but effectively having some cash contributions. I think in some of your prepared commentary, you talked about a little bit of a debt coming due and maybe having to put some new equity in. So I'm just wondering if you step back from it, how much of that do you think is going to occur going forward in terms of both your assets that you're contemplating, selling for the rest of the year. In terms of the funds really how much cash are you taking back or are you just taking back equity and then how much more capital do you think you’re going to need to inject into the funds when the debt comes due.

Michael let me try to touch on just a couple of those that we sort of highlighted today. If you think about what we talked about in my remarks, we're planning on calling capital in NAFE and we have a 20% ownership in NAFE. So, if we call it $186 million or $180 million of capital, that’s about $36 million from our perspective and we're prepared to do. Inside PEP II, we talked about to the extent that one or more of financing transactions that we got underway were to fall out of bed or get delayed, that we would be prepared to call capital for that. I’d put that sort of at the outside, maybe €50 million to €100 million of capital in total and again, we would probably contribute 20% of that. But having said that, let me tell you, we have a lot of activity going in Europe and so, I view that as sort of the last resort from that perspective, and so I'm highlighting it but not, but hopefully not expecting them. Inside PEPR, we’ve talked about and PEPR had their conference call earlier today, we’ve talked about a variety of initiatives we have going in PEPR, one of which will be to raise some equity, we hope, inside PEPR in a rights offering of sorts. We're targeting a couple of different things, we have to sit down with the Board of PEPR later next week and talk through all the various alternatives, but I could see us committing, anywhere from - we would be willing to underwrite, the first tranche of an offering, which would be about €60 million, but we would intend to offer that on a very positive basis which we think would be an attractive instrument. So again our piece of that maybe 25%, so call it €15 million, but we would gladly be prepared to underwrite the whole thing. So, it’s pieces here and there, but I would say you're probably looking at something on the order of $100 million to $200 million all in, and we have substantial liquidity inside the company today and candidly these are opportunities and we view them as opportunities, to de-lever and to increase NAV is part of the reason we raised the equity that we did.

Your next question comes from Jamie Feldman with Bank of America.

Walt I was hoping you could elaborate a little bit more on your discussions with your tenants, just in terms of, facing businesses improving in 2010, if they were to do more supply-chain redesign, kind of what the timing would be just in terms of what year, and then also, what markets. I mean do you think when we come out of this cycle we’ll see a different footprint for our supply-chain globally?

I will start and then I’ll probably turn it little bit over to Chuck on this, Jamie. I think that I would say, if you had to characterize the discussions that we had in general, I would say that they were cautiously optimistic. But I say cautiously because, none of us know at this point in time if this is going to be a head fake, candidly. I think it's moving in the right direction, we certainly feel good about occupancies, we’ve seen two quarters of either stabilization or increased for us and the market occupancies [declines] have slowed down. So it maybe a head fake, I don't think so but it maybe, and so that’s why our customers are looking at it as cautiously optimistic. When we talked to a majority of them, they're saying, hey, expansion, 2010 maybe late, but 2010, and that means expansion in their business, it may or may not translate into translation in their distribution needs, but that’s a kind of a precursor, we think. So that’s good news, but the interesting thing was like you said, the amount of reconfiguration discussion there was. You know it’s really interesting, you see that in good times and bad times, but you see an acceleration in bad times typically, because people aren’t looking to save costs. One of the first things they look at is their logistics system and how they can save on transportation costs mainly, and that discussion really, really is good for us because when you own, if you will Class A buildings, almost negatively this reconfiguration either means new development or it means a movement into a building that is state-of-the-art, Class A and can be more efficient and typically is well located relative to what they have. So that all really good for us. What market? I don't know. I would say our focus really has been on markets with very, very strong and large GDP, and where we think GDP will grow, and I think that bodes well for the very, very large markets where it’s huge population and ultimately people need to serve that population. That said let me turn it over to Chuck, and Chuck you want to have some comments as well?

Yes, Jamie, I will add a little color to that. With regard to how they're actually approaching their supply chain, they're still looking at kind of a last mile, if you will, which has historically been the most the most traditional high-cost part of their supply chain. So with regard to how they're reconfiguring that, our customers are telling us that they want to get closer to their end customer. Back to Walt's comment regarding large population centers and GDP, that doesn't necessarily change their overall supply chain, but it might reconfigure it within those large population centers.

Your next question comes from Mark Biffert with Oppenheimer.

Walt, I was wondering if you could expand upon your comments on the cap rate compression you're seeing. Obviously, some of that’s probably related to the debt spreads coming in. I am just wondering in terms of the contributions that you are making to the funds, how has that impacted the pricing on those, and given the incremental spread that you put on top of that when you submitted, does that entail that you might have some gains next year once that marks the market in the fourth quarter?

That’s a great question Mark and let me kind of kick that off and I’m going to ask Ted also comment. It's really interesting. I would say that if we would had this conference call 45 days ago and maybe even as much as only 30 days ago, I am not sure that we would have had seen as much cap rate compression. We certainly would have set some, but I would not have made the comment 50 to a 100 basis points in the US. So, this is moving very rapidly, okay? And there are situations that we're seeing literally as much as, 50 in one case, a 100 confidentiality agreements that we literally had signed on a project that we put out to bid, okay? So, when you have that many copies signed, you're going to get better pricing. So, I don't think we would had that many copies signed six months, excuse me, two months ago or even three months ago. So it's moving rapidly, and that said the appraisals on our contributions into our funds are lagging. They just are and unfortunately they lag fortunate, maybe for us, they lagged while cap rates were compressing and unfortunate for us that they're lagging as cap rates are not compressing again. So, the point is that I don't think we’ve seen that pricing yet manifests itself into our contributions. Having said that let me turn it over to Ted, and maybe Ted can give a little bit more color.

Mark; I think, Walt may have used same words, we're fascinated by what’s going on with the movement in cap rates over a very short period of time, or what appears to be. We're seeing buyers on some of the projects that we're trying to sell, there are private REITs, we have actually seen some public REITs activity, we're seeing pension fund activity. It's kind of across the board. Walt was referring to a project, and I will be a little bit more specific, it's a retail project that was a Catellus project that we are trying to sell, that we put on the market back in September, October of last year, about a year ago, and by the time it got to a point where we were able to get offers, we got none. In February, there was literally no one interested in buying it brand-new, fully-leased project in a great location. We were told to get any interest we needed to be at 11 cap rate or greater and we chose not to pursue it. We're now in a situation where we got 100 confidentiality agreements signed; today actually they were getting offers. We know of 13 offers we're getting at cap rates substantially below 11, actually below 9. So, it's really moved very quickly. In Europe, where we are contributing properties, we do feel that the look back that will occur in 2000, at the end of 2010, will create some level of proceeds for us. It's hard to quantify the discount that we’ve given the fund that we feel it's been fair and appropriate. But it looks like cap rates are coming back to a point where if we were to re-evaluate it, what we would assume values would be at the end of the year or certainly at the end of 2010, there will be some level of catch up.

Your next question comes from Ross Nussbaum with UBS.

Bill, can you talk a little bit about; A, what was the FX impact on third quarter earnings, given the weak dollar? Then number two; with respect to the development pipeline, am I right in looking at, there was 12.5 million of gains on developments included in FFO and did that relate to the 174 million of properties that were contributed into the funds, and what do you expect going forward given all the cap rate commentary I have just heard. If you're building to seven to eight, is there a chance that we're going to see continued gains on contributions in FFO?

Well, let me address the second part first, which is the gains of the $12 million came in four or five or six different buckets, and so some of it was from land that we sold in Q3 and, again, maybe surprising to people but we are marketing a host of properties and including land, and believe it or not, we do have land that has gains associated with it, and so, you know, probably 25% of it was sort of land associated. There was a small gain on the contribution but that was coming off of sort of written-down values on the European contribution, and then there was a gain associated with our NA2 fund, and the reconciliation of the investment we made earlier in the quarter as well. So it was a smattering of things in the gain category. I think we'll have, some modest gains from time to time in the foreseeable future, based upon contribution and/or land sale activities, but we may also see some impairment on that. So, it's sort of too soon to tell on that aspect. As it relates to the FX, I don't think the FX had a particularly big impact on the Q3 results, largely because the FFO from Europe is to a large extent shielded from the debt that we borrow in Euros, and the same is true in the Japanese Yen. Now, given the world equation at this point, we may take a different tact on that in the future. We see a softening US dollar, and some of the discussion and debate that we have going on internally is preparing for what we believe may be a soft US dollar for the foreseeable future, in which case we may choose to undo some of the natural hedge that we have on the Euro and/or the Yen.

Your next question comes from [Chris Kanten] with Morgan Stanley.

Calling regarding the property management; I notice that picked up quite a bit, I think about $14 million. Wondering what’s driving that, if you expect it to be sustainable and how it might trend going forward?

Well, embedded in the $0.21 a share was a decent-sized chunk in the fee associated with this conclusion of the asset management and property management agreement for the Japan funds, but that was also offset by substantial non-recurring charges as well. So, I would look at it as sort of on the upside on the non-recurring charges and about I think 12 million or 13 million of non-recurring quarterly property management asset management fees. But that was the result of the ultimate cancellation of the Japan fund.

Your next question comes from Brendan Maiorana with Wells Fargo.

Question on the land bank and the development pipeline. Walt and Bill, you both mentioned that land realizing increased value from your land is one of the keys to getting your leverage metrics in line with your longer-term targets. Relative to the 7% to 8% yield that you're currently getting on your development pipeline, I have to assume that if you're putting that land into motion, you're expecting to get a yield that’s significantly above that level. Can you give us a sense of where you’d be comfortable putting land into motion from a return expectation, and once the markets return to normal, how much do you think in development starts that you can do on a normalized basis annually?

That’s a loaded question. Let me throw out, Brendan some anecdotal information which I don't want you to take and apply it to the entire $2.7 billion of land, but the interesting thing is that we did announce four build-to-suits in the last quarter effectively. Two were in Japan and two were in Europe. We are working on some others right now, but the interesting thing is that the land that we’ve put into those deals, generally, and then I'll talk non-Japan. Let's talk about [Europe], generally the yields on the full basis of land were somewhere in the 8.25% to 8.50% range. We were able to take the buildings and either contribution them into the -- or I should say have that pre-commitment at our cost with the European fund or in the case of the other building, we were actually selling it to a Canadian life insurance company and basically at our basis and included in our basis is a development fee. Okay. Now the two developments that we're doing in Japan we’re also putting our land in at development costs, excuse me, at full value, and we're getting a very, very high return on that expected capital in a joint venture type format, where there is roughly 50% leverage and we're getting a 10 plus percent return on our equity, [pair] pursue with our partners plus some fees. So we feel good about the yields that we’ve done. Having said that can we assume that we can put the entire $2.7 billion into developments? I mean if we were to do it all today, I would say that some of that land is clearly going to be impaired and some of it is not. It just depends, and so I think a more reasonable expectation overtime, unless we see value increases would be that perhaps we would get a 4% to 5% return on that $2.7 billion of land at today's value and if value is increasing hopefully we can get a higher yield overtime and that’s not going to happen in one year that’s going to happen over the course of next call it two to three years or so. So as it relates -- the properties that are under – that were already developed and completed, you're right for the most part, we're getting, call it a 7% type yield, potentially a little bit more, potentially a little bit less depending on the exact building. Ted, you want to add to that?

Yeah, Brendan, the 7% to 8% yields are using our land at book for the most part. The market today isn’t in seven to eight. If someone were to build a new building it would be, in most markets, everywhere pretty much outside of Japan, it’s likely in the nine to 10 range if someone isn’t compelled because they own the land. Because we own some of this land we're compelled to monetize it and therefore it would be more, may be more aggressive, but I think that today new development deal is probably more like nine to 10, not seven to eight. In terms of the size of what we can do from a development standpoint, I think we feel, and there’s balance sheet related issues, there’s a lot of things that we're looking at, and it’s amazing to me that we are looking at how much development can we do in the markets both from our own standpoint and what market demand will be, but we think it's somewhere between $500 million a $1billion. It's kind of a reasonable number for us to be looking at on a go-forward basis and that, I think, we would feel like could be the next 12 to 24-month timeframe and beyond that, who knows.

Right and I would just add to that. I think we’ve said in the past, we have focused a lot of time and attention on reducing our G&A, but we believe from an infrastructure standpoint, we left ourselves with the infrastructure ability to probably have a $1 billion to $1.5 billion of development starts on an annual basis.

Your next question comes from David Fick with Stifel Nicolaus.

Just following up on that last question, you’ve commented a lot on the things firming both from a cap rate and a space demand perspective, but PPR just put out a piece that looked at a major market vacancies having spiked on large properties, over 1.5 million square feet to above 19% from below 8% just a few years ago. I am wondering what your forward view is given the context of many years of supply and almost all the major US markets already on the ground. Do you really expect to see cap rates stay where they are or won't there be a lot of assets coming to the market due to distressed sellers with close to 20% vacancy out there, number one, and number two, don't you expect to see a commensurate pressure on rents from here given that we're still seeing increases in vacancy.

Well, David, this is Ted. Our statistics don’t show a 20% vacancy there, in fact it’s substantially less than that I think we're looking overall market and you're looking at I guess buildings over a certain size range. The majority of which are certainly divisible, and so I don’t know that I would necessarily focus on a certain subset. I do think there are subsets of assets, and I actually referenced to one earlier. Dallas right now, bigger buildings it’s a very challenging market, but that’s not necessarily across the board, and the amount of activity that we have on our land is surprising to all of us. We're in enough markets that there are pockets of opportunity, and we're being approached by customers to help meet their demand in those markets, with those pockets of opportunity. It's not robust but it's out there. In terms of rents continuing to decline, we're seeing at this point a decline, occupancies seem to be kind of stabilizing and flat, rents have come down quite a bit. I think there will be isolated situations where people get very competitive on rents, but there is no new supply coming on the market. I think that gives us a lot of comfort that there is a bottom to this rental decline, and that we feel like we're getting close to that. Again, in terms of values and cap rates and distressed sellers, we're just not seeing the distressed sellers in industrial at this point in time. There are a few properties that we're aware of that are vacant, non-income producing in challenging submarkets that you can buy below reconstruction costs and substantially below. But they are very few and far between. The majority of the income-producing assets that are on the market have a lot…

And David, I think you raised a really good question, too, and I would like to answer it too by saying this. Right now we believe and we're tracking the bulk industrial markets. I don't remember if PR breaks it out. We think in the 30 markets that we are in the vacancy is roughly 10.3%. Okay. So let’s say it's 89.7% occupied, we think frictional vacancy is somewhere in the neighborhood of 92 to 93. The high watermark over 25-year period of time in this market for all the 30 markets we think is somewhere in the neighborhood of 92.5. So, let's call for every percent there’s about 6 billion square feet, for every percent you're talking about, 60 million square feet, okay? There is no new supply and I don't think there will be much new supply next year. We think the third quarter in the bulk space only, the third quarter there was about negative 3 million square feet, not much, in terms of absorption, and that’s reversing itself very quickly. In the height of the market, 2006, 2007, the market was absorbing a 150 million square feet, i.e. 2.5% to 3% per year, but there was also development of 2.5% to 3%, call it 2% to 3% per year to make up for that. So, literally, if you got back to a situation where you were, you absorbed 50 million or 60 million square feet, you could suck up that vacant space in a very, very quick period of time without much supply, and you wouldn't have to get to “a frictional number” of 92.5. You get to 91, 91.5, 92, you begin to see rents really moving up at that point. That’s why, I do think this thing can reserve itself; and as Ted said, be careful on the 500,000 and up because the fact of the matter is probably 80% to 90% of those buildings can be divided and they will. We could [stretch] on one more question, operator.

Okay. Your last question comes from Michael Mueller with JPMorgan.

Bill, I know you said you were going to talk about the drivers of 2010 on the next call, but can you give us some sort of sense when we look at the dispositions, the contributions this year, ex China and Japan, it was somewhere in the vicinity of a $1.5 billion. At this point, it seems like it should be lower going forward, given what you’ve done so far in the equity side and the debt side and just any comments on that?

Well, again, I think, Michael, we are in the planning stage on 2010, we are looking at the spectrum of things that we want to accomplish in 2010. Candidly we haven't finalized our thought process on how much we will contribute to the funds. We'll still have as we go into 2010, a fair amount of undrawn capacity in PEP II somewhere north of €600 million, probably, as well as a couple 100 million in the Mexico fund, et cetera, and we’re going to be working on new funds. So, I think we will have a fair amount of capital to either pursue contributions or acquisitions inside the funds. in terms of asset sales, one of the things that we'll focus on and we’ve talked about in the past is we want a larger, wholly-owned portfolio in both Europe and Japan relative to what has largely been a US portfolio to this point. So to the extent that we see acquisition opportunities or build-to-suit opportunities or other investment opportunities, you may find us selling some of the US assets and redeploying that capital into those opportunities. Beyond, that I don't want to avoid the question, and I'm not trying to avoid the question, it's just that is all very fluid right now and we're going to take advantage of opportunities as we see them come to the forum.

Okay, thank you, everybody. And we certainly look forward to seeing most of you on the call in one way, shape or form at (inaudible) and we'll talk to you next quarter. Thank you.

Thank you for participating in today's ProLogis third quarter 2009 financial results conference call. This conference will be available for replay beginning at 1:00 pm Eastern Standard Time to 11:59 pm Eastern Standard Time on Thursday, November 5th, 2009. To access this replay, you may dial 1-800-642-1687 in the United States area or 706-645-9291 internationally. The replay pass code is 30070632. Again the replay pass code is 30070632. Thank you, you may now disconnect.