Good morning. My name is Laurie, and I will be your conference facilitator today. This conference is being recorded. At this time, I would like to welcome everyone to the Regency Centers Corporation Fourth Quarter 2007 Conference Call. (Operator Instructions). I'd now like to turn the conference over to Ms. Lisa Palmer, Senior Vice President Capital Market. Please go ahead ma'am.

Thank you Laurie and good morning. On the call this morning are Hap Stein Chairman and Chief Executive Officer, Mary Lou Fiala, President and COO, Bruce Johnson Chief Financial Officer, Brian Smith, Chief Investor Officer, Chris Leavitt Senior Vice President and treasure and Jamie Shelton Vice President of Real Estate Accounting. Before we start I would like to address forward-looking statements that maybe address on the call. Forward-looking statements involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in these forward-looking statements. Please refer to the documents filed by Regency Centers Corporation with the SEC, specifically the most recent reports on Form 10-K and 10-Q, which identify important risk factors, which could cause actual results to differ from those contained in the forward-looking statements. I will now turn the call over to Bruce.

Thank you, Lisa, and good morning. And congratulations to the Regency's Oregon. As you will hear from me and the rest of team, although the environment and which we operate has become increasingly challenging, Regency continues to execute our strategy and deliver consistent results. FFO per share in the fourth quarter was a $1.16 and $4.20 for the year. This represents over 8% FFO per share growth. Net income for the year was $184 million, compared to nearly $199 million in 2006. This decline was due to a lower level of operating profit sales, and the resulting gain. In this environment, more than ever, balance sheet strength and flexibility is impaired. Regency's strong balance sheet and co-investment partnerships provide the company with financial, flexibility and reliable internal and external sources of capital to profit from attractive investment opportunities. We have a $1.3 billion capacity available in the open-end fund, and our other partnerships, and the capacity under currently under our balance sheet we have excess to over $1.8 billion of capital. Turning to guidance for 2008, we expect FFO per share to be in the range of $0.81 to $0.85 for the first quarter. Given that we are using most cautious assumptions, like more moderate same-store NOI growth, longer development lease times and higher cap rates. We have tightened our range of guidance to 8% to 11% growth, which equate to $4.54 to $4.66 for the year. Let me respond to several note comments regarding pushing out some of our stabilizations past 2008. You need to remember that our shopping centers are significantly leased before they are started, and aren’t moved to operating profits and so they are 93% leased. Of the $200 million of projects that were pushed to 2009, stabilization tenant profit is totaling a $140 million are 86% to 92% leased today, including agro stores. The guidance includes promotional income of $21 million to $23 million from one of Regency's co-investment partnerships, and is likely to be earned at the end of the year. We view this promote this part of our transaction income. Since our goal is to keep transaction related income as a percentage of FFO in the 20% range the promote provides the opportunity to lead and even greater inventory of stabilized developments for future sales and profits, as maintained a sustainable and fair growth rate in access of 8% is a priority for the company. And with $470 million of developments representing over a $150 million of potential gain already stabilized, we are very well positioned to achieve this. Given Regency's low payout ratio and expectation and will be at the upper end of our guidance. We have increased the dividend by 10% to $2.90 annually. This is up 13th consecutive year of dividend increases. I will now turn the call over to Mary Lou, to discuss our operating portfolio results.

Thank you, Bruce and good morning. Regency had another strong year of 2007, our operating portfolio have generated same store growth of 3.3% for the quarter and the annual growth of 3%. Rent growth was 11.3% for the quarter and 13% for the year. This is the night year of averaging over 3% growth, occupancy of over 95%, and run-away growth in excess of 10%. At the end of 2007, our tenants were 95% leased. Leasing activity remained strong as 2 million square feet of space was leased or renewed in our operating and development portfolios, bringing the total for the year to 7.2 million square feet, truly a great effort from our team. We've aggressively reviewed the portfolio in light of potential risk of a deteriorating economy, and I've spent a lot of time talking to my guys in the field, and even after incorporating many potential '08 risk factors, like an uptake in early tenant move-outs, slower replacement time, increased bankruptcies and potential store closings and rank lower than historical averages due to economic pressure on our retailers, we still expect occupancy to be pretty close to 95% and same store NOI growth to be in the range of 2.4% to 2.8% and ramp-up would be between 8% to 10%. They have clearly identified the quality and although the majority of the retailers are moderating their growth plans, there is still demand for good tenants. As Rosewell Crossing in Atlanta ,Trader Joe's approached to us for space. We have recently terminated a party supply store and re-leased to trader at a significant renting increase. At Cloppers Mill in Maryland, Hollywood Video tried to downsize our store. We immediately re-leased the space to Stabock, over 1800 square feet, and had a substantial increase of $9 per foot. Although some…

Thank you, Mary Lou. In the fourth quarter Regency started seven new developments totaling $137 million. The underwritten returns for this fourth quarter's starts, averaged near 9%. Returns really tell the whole story, particularly what kinds of quality retailer demand and risk litigation and that's particularly true this quarter. So let me discuss these starts briefly. The center place is really is the third phase to our very successful existing center, whose first two phases are anchored by Safeway, Target and Colts. Those phases totaled 273,000 square feet and are 100% leased. The third phase will total a 120,000 square feet of which only 22,000 square feet are shop spaces so pretty low risk. The lease is already signed with BestBuy, Sport Authority and we've a signed NOI Paradigm Group. Lower NOI were common. In the Northeast region is a 239,000 square foot center anchored by Target, Sports Authority and PetSmart and shadow anchored by Wegman's. Again there is very little shop space in this project, only 20,000 square feet. Demand from both anchors and shop tenants is overwhelming. So much so, that we are working on a second phase of 250,000 square feet, which is also over subscribed, with three times more quality anchor interest than we have available space. And in the Pacific region, Jefferson Square is another neighborhood grocery anchored center also with limited shop space. As with all the projects, the demographics are excellent with no need for any residential growth. The Three Mile population at Jefferson Square is approximately 87,000 people. For entire year, our development start totaled $379 million with under rate returns on costs a 9.2% net of JV buyout. As you know this level of start is below the guidance that was provided even as recently as last quarter and likely to…

Thanks Brian, Mary Lou and Bruce. I'm extremely proud when I look back at the full scope of the accomplishment that Mary Lou, Bruce and Brian described. High quality portfolio again produced reliable growth in net operating income of 3%. Development program again generated extraordinary value. Nearly $330 million of developments were completed at over 9% return, realizing an estimated $120 million of value. Substantial progress was made on the $1.1 billion of in-process developments, which are 55% funded and 80% leased and committed, and are expected to generate close to a 9% return on investment and have a 6.6% cap rate, $300 million of future value. $380 million of new developments were started that are projected to produce returns in excess of 9% and once again is at 6.6% cap rate, which is above what cap rates are today, close to $120 million of net future value. Capital recycling and co-investment partnerships continue to enable Regency profitably grow the portfolio while maintaining a strong balance sheet and reliable access to both external and internal sources of capital. We sold $400 million of 10-year bonds at an interest rate 5.875%. We raised almost $750 million of capital from dispositions of the operating portfolio, contributions from partnerships, sales of developments, partner contributions for acquisitions and have partial and pad sales. We completed the initial capital raise in the open-end fund, transparent takeout vehicle for our community center developments. And S&P upgraded Regency's investment grade rating to BBB+. Regency continues to demonstrate our position as innovative industry leader with our corporate-wide sustainability and green generating initiative. Along with FFO per share growth of 8.2%, these achievements showed off the talent, depth and engagement of Regency's differed management team. However, as Mary Lou, Bruce and Brian have explained, and as you know, the…

(Operator Instructions) Our first question is from Jonathan Litt with Citi.

Hi. This is Ambika with John. On both the property management side and development side, Regency appears to be ahead of the curve planning for what's going to happen in the future. I guess if we're talking about the future, how long do we potentially think that these economic headwinds could last? In the sense of the property management side and development side, what gives you confidence longer term that Regency growth will be able to continue, given the potential increase happening?

I will let Brian address the issues related to the sustainability of NOI growth and our development program and with the headwinds. But I think your guess is as good as mine, but my sense is the current economic dip that we're into is maybe longer rather shorter, and maybe more than a couple of quarters. I mean, who knows, it could be very shallow. But my sense is there will be a recession. This is me talking. And it may last a few quarters, but then I'm not sure if we're going to jump right back out of it with robust economic growth for a while. But that will happen. The US economy is very resilient, and we'll get on the other side of that, whether its six months from now, or one year from now, or two years from now.

Ambika, on the operations side, there are a couple of factors. One is, I think we've taken a very realistic approach as we've scrubbed our portfolio in '08 and going forward, and looking at what we believe could potentially happen. In '07, ICOC reported that there were 4,700 stores that closed and anticipate that number to go to 5,300 in '08. Regency only had 16 of those in '07. And if you use our ratios, it would be about 21. So that's really not been an issue. On one hand, we're pretty comfortable in terms of where we fit in, and all I have to do as a team. And probably equally or more importantly, is our quality real estate with strong anchors producing above average sales, high demos, high incomes. But the other thing that gives us comfort beyond the quality of the portfolio and the team in looking at historical numbers and kind of playing those going forward, is really look at the history of what's happened. And you look even in the early '90s, Regency same store growth was in the 2.5% to 3% range and our occupancy went down to 94.9%. So, even through a difficulty economic time, quality real estate sustains much better. And where you see the debt is in the BNC quality real estate. And I really believe over time, this is our time to shine.

Ambika, this is Brian. I'll just quickly comment on the development side. I don't have a crystal ball, though I will tell you that the retailers tell us, the anchored tenant, that they will just as soon get past 2008. They view 2009 pretty much as getting back to normal. The fact is they need stores. They may need fewer of them during this period, but the good retailers are going to continue to grow and they've got to have good stores. And they are doing exactly what you and I would do if we were in their shoes. They are being more selective and they are going to the safest projects. And the safest projects are the ones where they face such competition, and where they can take advantage of highest purchasing power. And those are the kinds of projects we're are focusing on.

I don't know whether our people noticed, but last week the interview with the CEO of Penney's in the Wall Street Journal indicated, yes, they are cutting back, but they are cutting back from 50 stores a year in '08 and '09 to 40 stores a year. So I think that's indicative of what's happening, and their people are still opening stores. And these retailers, I pointed out in the last call here, are making decisions, lots of them from two or three years out. Ambika Goel – Citi: Okay, great. And then just following up on JCPenney example, given that JCPenney did reduce their stores from 50 to 40, are you still seeing retailers that are reducing their store growth plans, but still growing, not really changing their growth plans that they have with Regency?

Ambika, that's very typical. I mean some more are not changing, but some are changing a little bit more dramatically. But I think that 20% cutback in Penney's probably is very indicative of what the lion share of most retailers were doing. They're being a little bit more conscious. They're keeping hold of the (inaudible)

Yeah. I think it's similar to Target. I think they had 150 stores they are planning on doing, and announced about 118, something like that. But it happened few quarters ago, as you'll recall, and we are not seeing the same kind of adjustments that we saw two, three quarters ago. Ambika Goel – Citi: Okay, great. Thank you.

Thank you, Ambika.

And we'll go to Christy McElroy with Banc of America.

Hi good morning. Your guidance for 200 to 240 million of contributions to JV's, is that all completed development contribution? Is there any operating properties fixed in there as well? And if that's all development, does that mean that you are projecting 6.6% cap rates on new delivery?

I think the answer is, yes.

Yes.

Okay. And then if that's up from 6.2% last year, does that imply roughly 40 basis points increasing class A cap rate in your view? I think you talked about 25 basis points.

Part of what's happened here is, as you may remember, there is a cumulative cap rate test that we need to make before, and in fact we have certainty of contribution into the open-end fund. And we are doing it, we are just using a little bit more conservative cap rate and using that threshold as a basis to do that. So I think that allowed us to be little bit more conservative in our projection from where cap rates are today.

So they could actually come in a bit lower?

Yes, also Christy, if you recall, first of all, clearly, especially in times like this, clearly having the fund is a huge benefit for us for certainty of the take out. And when we sell through the fund, we save on transaction cost, as potential for saving from a tax standpoint. So clearly there is a little bit of a spread there that we are willing to take. So, even though these properties maybe worth a little more in the open market to our benefit to have the fund there. And then secondly, the firm buys on in place of income. So, if we sell property that's a 100% leased on under written cap rate that cap rate could drop by 25 basis points. So although, we're projecting it 6.6 we may -- you may see us reporting at the end of the year something lower than that.

That’s helpful. Thank you.

Thank you, Christy.

We'll go to Christeen Kim with Deutsche Bank

Hey. Good morning, guys. Following up on Ambika's questions about the retailer extension plans Target, (inaudible) Wal-Mart have share down in terms of their extension plans at this point. Where do you think the retailers are? Do you think they will come back three months from now, and then further contract their growth scenarios, or are they kind of where they need to be for the rest of the year?

I'll take the inline retailers. I think that they have been very thoughtful from all of the retailers that we work with, in terms of looking at the '08 openings and, quite frankly, even in some of them into their '09, and have already taken the biggest portion of their hit. I think you have got factors that are difficult factors, that are still strong. And so I don't anticipate another big hit in terms of the inline, and I'll let Brian talk about the anchors.

I think it's (inaudible) they've already recognized where they are with the hit, and they have made the adjustments, and I don’t think its coming back.

The target is not making commitments today for 2008.

Right.

And they are not making commitments today for 2009, we are only making commitments for 2010 and out for the most part. And I think that's the thing that we need to all keep in mind here is that good level of perspective, because the biggest impact that we see is really on the projects that are in process. Once those are to be delivered, they would like to push those out as part of the candidates to get through these times. It's not [going forward] projects.

Okay. That's helpful. And just touching on the guidance, and maybe of course assumptions of rent growth and the NOI growth seems fairly conservative, is that just you getting ready for a maybe a more difficult 2008, or is any thing else driving that?

To good or bad, I think, I have always been accused of being conservative, and I think we're conservative, but I also think we are being realistic. And the biggest reason that we look at kind of a downturn in same store NOI has to do with lead time. So for instance, yesterday, Movie Gallery came up, said that they were going to close 400 stores, of that we have three locations. I have looked at the locations, and all three are strong. They are really good locations. I am very confident that we’re going to do that. We'll release it. But, because of the slowdown with the retailers, it's going to take us a little bit longer. So, part of the reason why -- the majority of the reason why occupancy is because of increased downtime. And we think that that's real, and we are conservative. So, we felt comfortable with our guidance, but we've also spent a great deal of time going through the portfolio and understanding, the different components and what we are dealing with.

From that perspective, if anybody thinks that even in better centers, that’s it’s going to take a little bit longer to reach vacant space, that we can be able to sustain levels of rent growth that we've done in the past, and we are not going to have a few more bankruptcies than we have I think you've got, perhaps they've got ahead, I understand. And I bet our operations team has – they always, once you've gone over the portfolio and dialed in assumptions that are realistic, that I am not going to say that they are overly conservative and I am not going to say, but at the same time that we're still showing a range of 2.4% to 2.8% with those more moderate assumptions, that's pretty great in what could be a pretty difficult year is pretty gratifying. Obviously, the year could get more difficult, or there could be some pleasant surprises there.

The other thing I'd say, is we keep in all redevelopments and we've got more redevelopments going on at the end of '07 and '08 than we historically have. So when you're closing down anchors and you're redoing the shopping center, you're taking the hit of NOI and you're taking a hit on occupancy. If you were to look at this past year without our redevelopments, our occupancy would have been just about 96%, and that would hold closely true for next year. So I think that half of our portfolio continues to be strong. But as Hap said, I think we just need to be very realistic and what we've said is what we believe will happen.

And I will also say where we might be being a little bit overly conservative is that we are, for planning purposes, using that 2.4% to 2.8% range as a growth rate going forward. I would like to think that once we come out of these times, we can get back up to the 3% range.

And I believe we can.

Great. Thanks for the color.

Our next question is from Paul Morgan with FBR.

Good morning. Could you really help reconcile all the different cap rates, data points we have? I mean there is a lot of chatter when you acquired the portfolio last quarter at a 7 cap in a JV with some of the other numbers in lower 6s. I mean, maybe you could just pin down for me what the Class A coastal market, [gross ranker] shopping center would be right now?

I think that Class A for most markets in the country is right around 6% to 6.25%. In California it's going to be slightly below 6%, about 5.9%. We see a lot of projects around that we look at, even if we don't buy necessarily, that are about 6%. So I think that B's has increased about 100, 150 basis points from where they were a year ago. I think the C's could be up as high as 300. There are just no buyers for those. And I think also, whereas before, Paul, there was a portfolio premium that buyers would pay to aggregate properties, today, it's a portfolio discount. So I'm a little bit more cautious with my future view of cap rates than Brian is as we continue to see individual transactions. We were selling (inaudible) the same market transaction would be closer to 6.4% -- reported as a 6.4% but it's really a 6%, because that included some prepayment penalties. But where you’ve got to raise of a lot of capital for a transaction, I think that capital is extremely cautious and it is more expensive. But we are continuing to be pleasantly surprised by what cap rates on an individual one-off transaction are trading. Some was off market.

Yeah. I was going to add that the 7% portfolio, they are probably more A minus properties, some in a few smaller markets. Had it not been off market; it was a marketed transaction, we believe that that probably was in the 6.5% to 6.7% range. But it was prior of the larger portfolios of which the buyer basically wanted to sell these fixed assets and called us, and said will you please take this? It was more concerned with uncertainty of executions and closing by yearend than necessarily getting the highest and best price.

Okay. And then on the retailers, some of them have been consistent with sort of your 20% or less. I mean, the Starbucks number of cutting back new store growth in the US was more than that. And then, a lot of the lifestyle tenants have been one after the other paring back, [bracing their family], their store growth. And I wonder that as you comment on the two of those, and with respect to the lifestyle, guys, whether that makes you a little bit less inclined to pursue new lifestyle developments, given what they've been doing in the past couple of months?

As I've gone through other retailers, and I actually listed it for our Board and for our team, and looked at it, you are right. I mean it's been anywhere from 10%, quite frankly, up to the highest, which was 27% decline, which was Starbucks, still being very aggressive, but definitely a pretty substantial number. So we're definitely seeing a cutback in the retailers. As far as the lifestyle, the inline retailers probably -- because as we talked about in the recessions, those (inaudible) is business driven and those are primarily as opposed to necessity-driven businesses that are in our gross ranker portfolio. They are much more cautious than you'll see the service retailers. And then all blows down to comp, and the grosses are comping well, the services are comping well. But when you get into the side shop, they are definitely much more cautious. And Brian can talk to our point of view on lifestyle versus neighborhood or community.

We've never been a big lifestyle developer, anyway. Highland Village is the only one that's enjoying great success. So we do them on very opportunistic basis, but I do share the concern with that category. The project I told you that we did not count as a starts, is what we would call a power comps because of the significant power component to it, the traditional community center, but also has some lifestyle. It's got a lifestyle section. And I think part of the caution led us to -- let's wait and see how that one goes before we proceed.

We want to make sure the leases are invoiced. We are not going to pull it. We are not taking to the bank LOIs and real estate committee approvals. So, there is a, and you're still only talking about that is, a 90 million out of a 1.6 billion pipelines so that -- we are very cautious as far as that category.

But there is an increased sensitivity with these retailers not only in terms of being more cautious in openings of stores, but also switching the lifestyle retailers of co-tenancy and definitely that's changed.

Okay. Thanks.

And we'll go to Jeffrey Spector with UBS.

Good morning. Can you just describe again the timeline '08 starts to completion, to stabilization. I think you said 93%, you said that some stores is happening in 2010, 2011?

Well, we would expect to close those starts, meaning closing the land in 2008. We'll start construction either some time in 2008 or 2009. So in fact, you'll have construction being completed probably say, sometime in 2009 or early 2010. And then you're figuring, we're dialing in now on a average of 24 months lease up properties. So, you are talking about in effect completing the lease up of these projections in 2011 or 2012.

How was that lease up changed? And do you feel at this point your budget, your guidance, for '08, really you are very conservative hearing that, we're not going to have, during next quarter, that change widened further and stabilizations decreasing?

I think that whatever changed is within the last six months, six months ago our average -- and we go through all of our developments rigorously every quarter. And four to six months ago, that average lease up time was 18 months and that's after completion of construction. I think that we historically have been in like 12 months, we are even conservative four to six months ago. This recent quarter review produced a 24 months average lease up time. I think the guidance that we've given is like a $115 million to $240 million and that assumes -- a few number of this projects are very, very closed and so are even already fully leased, that just got complete construction on. So we feel, I feel very confident that their range is appropriate, the part of region we have the range is some of that lease up, one center it's about 80% leased and committed very well could take a little bit longer that one [Hover] village project that Brian referred to. But within the range, so I would be very surprised and disappointed if we had to change the – you may change the upper end to the guidance the lower end to guidance that's I will be very disappointed if they have.

Great. Thank you.

We'll go next to [Thomas Feldman] with Goldman Sachs.

Good morning guys. As I look at your leasing activity over the course of 2007, lease renewals as a percentage of total leasing ramps up fairly dramatically in the fourth quarter, by my calculations, to 87% versus an average of 74% in the prior three quarters. Is it what it’s going to take to maintain the 95% occupancy level you are targeting for 2008? And if so, when can we expect a return to more normalized levels of new gross renewal leasing?

Tom, it was unusual, and I do think what's happened is not so much that we negotiated lower ramps to keep them, because as you see we had absent rent growth for fourth quarter and we really as of today we have a net back off, but what happened is that the retailers, we had planned for a lot of retailers to move out, thinking that there were other opportunities and in our centers in some cases that we felt they were little bit older and that they move out, but in reality they didn't. And I think what are you seeing in the trend is the fact that, think about it, if you are a retailer and you are producing strong sales and you are going to go out at this time and start a new center and pay higher rent, pay your [TI], lose sales because you have moved, or you are going to stay put. And they are staying put, because of the fact that we have such strong centers. I would anticipate that to occur for awhile. I just think people aren't going to be so anxious to move. So I think when I made the comments about tempering our Rev growth, that you haven't seen that yet and that has nothing to do with first quarter, that's hoping that we anticipate doing a little bit more in '08, based on, if you look at our results.

Okay. Thanks a lot Mary Lou. I appreciate that. And then follow-up is, in terms of your development sales program, in 2007 about half of your sales were to third-parties versus to your co-investment programs. I know you've guided to $200 million to $240 million in contributions to your co-investment program in 2008. But, what are your expectations regarding development sales to third-parties? Is there still demand in the open market for you community center product?

Before, I let Brian answer that I'll just step in. We are obligated that the fund has exclusive rights to our community center development. So anything compared to 250,000 square feet including anchor own stores is a must offer to open-end funds. So it would be highly unlikely for us. If so, any of those properties is on the third to the unrelated party, would only be the case that if for some reason something happens from the time we started the project to when we completed, that we determine that it's an asset we don't want to maintain our ownership in. I'll let Brian talk to the third-party demands.

Yeah. Again, if you have an A property in an A market, there's plenty of demand. Where you don't want to be is a B product or in a tertiary market, or sell hundred million dollars of properties in portfolio, right.

I think if you look at some of our in-process project, and I'm not sure if they're exactly stabilizing this year, I'm doing this off the top of my head, but we have some underway that were more opportunistic in a single tenant developments where we took a dark anchor and putting in JCPenney or Jim, those are the types of properties that we would sell to a third-party.

Okay, that's very helpful. Thanks a lot guys.

Thanks

We'll go to Michael Miller with JP Morgan.

Good morning guys, Joe Dazzio on the phone with Mike. A question about the size of the promote, relative to three months ago when you first laid out '08, is that what you expected to be or greater or smaller?

Its right where we expected to be, I mean the ranges basically. I think last quarter we made the contingent on exceeding the [Necri's] index. This is basically our partnership that's been in place since the year 2000, it's on an eight-year promote cycle. And we performed extremely well with seven years behind us from well in excess of Necri returns. So it's exactly where we thought it would be. The only range is really at yearend, we're going to have to value the portfolio. We've always dialed in a modest increase in cap rates. So, if they increase a little bit further, then that's kind of where the range is.

One of the things that we're also being a little bit tempered by is the prices are being very cautious today also.

So that is then safe to say that the top end of the range was pulling a little bit for just a more conservative core growth assumptions?

It had something to do with the NOI growth that we're using for 2.4% and 2.8% for '08, but also as you look out to, I think as Bruce mentioned and I mentioned, to 9% and 10%. And dialing in and assuming a little bit more conservative assumption for cap rates, and we just wanted to have what we consider to be a reasonable and sustainable level of development sales and we incorporate in a little bit lower growth rate for NOI growth. As far as sustaining in effect that 10% or 11% in '08, 8% seem like a more comfortable number on top of 10% to 11% rather than on top of 11% and 12% for '09 and '10.

Great. Thanks a lot.

We'll go to Matt Ostrower with Morgan Stanley.

Good morning. I guess just one last question. I think it’s, Mary Lou, for you. Could you just contrast a little bit, is there anything that you're seeing in this cycle so far that looks operationally different materially from the last economic downturn. I guess a couple of things that come to my mind would be local tenants, and are there any issues with credit quality there, given what's happened in the credit markets, and then not to mention the home markets? And then, secondly, I guess a lot of the grocers have gotten into much higher end food, prepared foods and whatnot, is there any evidence even anecdotal at this point that any of those things point to more difficulties this time around?

There is a difference this time to some extent than last time, and a lot of it has to do with the slowdown in home. Definitely, as I've mentioned before, the real estate offices and in line mortgage, we're seeing greater move outs in those than we have historically. Mom-and-pops, that's pretty typical of what you've seen in the downtime. Certainly, as far as the move outs, it's greater than it has been, but not greater than other difficult times. I think it's pretty normal. The video category is where we've seen a great deal of move outs, anticipated, some directed by us. And that is definitely a sector issue and not an economic issue. It's really supply/demand and where you can buy videos as well as technology. And the only thing to your point that we have seen, is that for the first time in the fourth quarter is greater move outs in restaurants. And even though their sales, if you look, overall, are still fairly strong softer than they were in the previous quarter in terms of growth and softer than in '06 in terms of growth. We're starting to see just somewhat of a slowdown in the restaurant. I don't necessarily believe that that is prepared food versus that because that's been out for a while. I think it really has to do with people just hunkering down and making their own food and being more cautious in what they spend and making that dollar go a little bit further, especially with gas prices. So that's kind of the color on that.

Okay. And then, lastly, I guess I didn't hear you address this specifically, Hap, is there anything obvious (inaudible) you're looking out the next couple of years where you think there is really going to be a compelling investment opportunity that wasn't there before for reasons. Everything that we're hearing is that the higher quality stuff which is what you guys want to own is pretty stable and price in fundamental. I mean maybe a little bit on the margin I'm hearing you say there could be some development opportunities I guess. Anything else that you can think of that might end up presenting opportunity for your company?

There are obviously some interesting opportunities outside of the US that we're looking at carefully. And there's been a lot of market this location in the Australian market. But we haven't yet figured out how to take advantage of that in a way that makes sense for our shareholders. And we're evaluating as far as moving other markets beyond the US borders, can we profitably utilized our core competency of assets management, operation systems and development, take advantage of the right opportunity there without taking our focus off the current opportunities we have in the US, so.

What's your instinct about that?

We've have got some intriguing opportunities there, whether that any of those can come to fruition or not we'll see. It's not something that we feel that we have the kind of right opportunity and the right circumstance as we take advantage of it.

Okay great. Thank you.

Thank you.

Thanks Matt.

We'll go next to [David Willington] with Merrill Lynch.

Hi. Its Craig Schmidt of Merrill Lynch. I just wanted to touch on the minimum developmental requirements. I am looking at Jefferson Square, which was newly added to your in part fiscal developments. And have NOI yield after participant -- participation is 786. I just want to wondered, at what point is the NOI yield too low, and what makes you take lower yield on certain projects in the geography anchors or anything else? - Merrill Lynch: Hi. Its Craig Schmidt of Merrill Lynch. I just wanted to touch on the minimum developmental requirements. I am looking at Jefferson Square, which was newly added to your in part fiscal developments. And have NOI yield after participant -- participation is 786. I just want to wondered, at what point is the NOI yield too low, and what makes you take lower yield on certain projects in the geography anchors or anything else?

That was too low. Jefferson Square normally, I think we gave up a 145 basis points on that one between the project level return and the return as we after we buyout the partner. That was one of those JVs that was done at a period of time when you required a trendiest in order to get that deal we had to do that. The way we think, which returns we can go to, we do have a band that we've to stay within, for those like the project up in Pacific Northwest where we had no development risk, it was just a redevelopment or retenanting. We would have done that at a pretty lower return, as it turned out that it was one of our highest returns. But truly it’s the function of risk and risk adjusted returns. So, the more self space got the more difficulty area, the worst demographics, neither wouldn’t do it or going to do it at a return that compensates this force.

And in fact, in most cases still Brian can speak specifically Jefferson Square, but the partner participation, its often times based on what market cap rates are, when you are buying your partner out. So if cap rates rise between now and then these after partner participation yields will rise with the cap rates.

Jefferson Square particular, if cap rates increase 50 basis points for example, the net return to us on the Jefferson after the buyout would increase 35 basis points.

What is the going in return on that before partner buyout? - Merrill Lynch: What is the going in return on that before partner buyout?

9.31%.

And so, right, this thing, keep in mind as you got a risk adjusted return on that project 9.3.1 under which we have a preference zone. And as Brian and Lisa indicated the lower the cap rate the lower our ultimate return, then in fact the higher the margin the higher the cap rate or higher return, but at the higher margins. But four key points is what protected there, you got 9.3% going in return. Having said all that and given the fact some of the projects are already in pipeline, have already been approved, about the either capital allocation committee, the investment committee, we did raise our minimum return threshold from 8% to 8.25% compare to the last quarter. There may be some stuff, it's already been improved and may come pretty later but.

That's helpful. And another question just for my benefit if I take a look at development starts from '05 through a mid-point '08 estimate, and compare them to development stabilizations, I am getting a development starts of above $1.7 billion, but that development stabilization of $981 million, just overtime wouldn't those numbers be similar? - Merrill Lynch: That's helpful. And another question just for my benefit if I take a look at development starts from '05 through a mid-point '08 estimate, and compare them to development stabilizations, I am getting a development starts of above $1.7 billion, but that development stabilization of $981 million, just overtime wouldn't those numbers be similar?

Yeah. What we expect – if you remember we've got 1.1 billion or 1.0 billion or 1.1 billion in process. So, we have to add that to when we stabilize to get to the start. And overtime what you expect is, as long as we maintain the same level of starts, you are going to have the same number of starts as stabilization each year, if all things being equal. But as you heard us saying, we've extended our lease-up times on those that are in process. So, for this year, you are going to see a slightly lower level of stabilizations, which would say that in future years we are going to have a greater number of stabilizations then we'll start, but based on average the same over period of time.

It may extend a little bit into '09, at a lower level, but starting at 10 etcetera should be at higher levels.

No some of this year's push out and stabilization had to do with the slower lease up, and also some of it had to do with the entitlement delays that we faced in the entire barrier market.

And from a stabilization standpoint, as Bruce pointed out and I did, there were $140 million of projects that were expected to be stabilized, previously expected to be stabilized in '08, that are now 86% to 92% leased that we pushed into '09.

So, just looking at the developments starts at $503 million in '06. Could you still have some of those that are yet to stabilize? - Merrill Lynch: So, just looking at the developments starts at $503 million in '06. Could you still have some of those that are yet to stabilize?

Right, some of those been yet to stabilize.

Actually some of these may not as part of construction still it done.

Okay, thanks a lot. Hap Stein Thank you, Craig. - Merrill Lynch: Okay, thanks a lot. Hap Stein Thank you, Craig.

And at this time there are no further questions in our queue. I will turn the conference back over to our presenters for any additional or closing comments.

We appreciate you taking the time to join us on the call, and your interest in Regency, and hope that everybody enjoys the rest of week and have a very good weekend. Thank you very much.

That does conclude today's conference. Thank you for your participation. You may disconnect.