Thank you, everybody, for joining us and welcome to the SL Green Realty, Corp. first quarter 2008 earnings results conference call. This conference call is being recorded. At this time, the company would like to remind the listeners that during the call management may make forward-looking statements. Actual results may differ from predictions that management may make today. Actual results may differ from predictions that management may make today. Additional information regarding the factors that could cause such differences appear in the MD&A section of the company's Form 10-Q and other reports filed with the Securities and Exchange Commission. Also during today's conference call, the company may discuss non-GAAP financial measures as defined by the SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure discussed in the reconciliation of the differences between the non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at www.slgreen.com by selecting the press release regarding the company's first quarter earnings. Before turning the call over to Marc Holliday, Chief Executive Officer of SL Green Realty Corp, we would like to ask those of you participating in the Q&A portion of the call to please limit your questions to two per person. Thank you. You can go ahead, Marc.

Thank you and good afternoon, everyone. As is our custom, we would like to take the next hour or so and review with you the quarter's activities and results and provide some market commentary, after which we'll take some questions at the end. Our earnings results released last night followed by the announcement of the signing of a significant lease at 1185 Sixth Avenue are indicators that the company's performance is proceeding in a manner that we anticipated in December at our Investment Conference and have reiterated several times since then. The company's performance was very good in the first quarter, especially when viewed against the backdrop of challenging economic environment and continuing illiquidity in the credit markets. Back in December, we said that 2008 was going to be largely an internal growth story. And in fact, that is what is proving to be the case with over 0.5 million square feet of leasing completed by SL Green in the first quarter alone of 44% mark to market achieved on that leasing while concessions on those leases held relatively steady. These rental increases in turn helped drive double-digit same-store growth and drove FFO ahead of where we have forecasted for the quarter. While interest rate declined helped, we had forecasted lower rates of interest in the first quarter and the bulk of the upside for the quarter was stronger than anticipated revenues. Our focus continues to be the on the leasing market in the New York City economy in general where we are tracking current demand and sublet availabilities in order to project how we will be able to realize the embedded growth within our portfolio throughout the remainder of the year. In the face of mounting layoffs in the financial services firms, leasing activity is slowing but continuing at…

Thank you, Marc. The transaction volume have been slowed significantly this quarter as a standoff developed between buyers and sellers and a lack of financing continued to make getting deals done difficult. Exacerbating the standoff now is the overhang of the entire Macklowe portfolio being in play, including the entire ELP portfolio, which has now been deeded back to the lenders and GM and the balance of the Macklowe organization assets. There are several assets being offered for sale generally being quietly marketed, but there has been little contracted volume. Notable exceptions were our sale of 1250 Broadway, which we announced in March, and the sale of 650 Madison Avenue by Hiro, which demonstrated the continued willingness of buyers to still pay sub 5% going in cap rates for quality assets that still have a strong mark to market story. In each of those cases, buyers invested significant equity checks and there were several lenders bidding on the senior financing, as with strong sponsorship and fresh equity the appetite for financing prime Manhattan buildings is still fairly strong albeit considerably more expensive than before the credit crunch. We will look for the Macklowe situation to resolve itself over the next several months as it appears Deutsche Bank will be providing seller financing on the majority of the ELP assets and the balance of the Macklowe restructuring seems to be running its course. We've been cautious in approaching this market, as Marc said, sticking to our investment philosophy we have elaborated to you at Investor Day namely that at this point in the cycle structured finance and credit lease-type investments are where we want to focus. To this end, we expect to start to take advantage of some new opportunities on the structured finance front and have completely rescrubbed our existing portfolio in light of current market condition. We remain very pleased with our underwriting and the credit performance of our portfolio, approximately 30 assets and $800 million of outstanding principal balance strong, with the exception of two small assets, which we discussed on the last conference call which we acquired as part of the Reckson acquisition and which we expected to be problematic when we purchased that portfolio. We may choose to exit a couple of other positions where we don't think the risk-reward ratio is in balance in this market. But on the whole, the portfolio is performing quite nicely. We intentionally avoided any Macklowe paper having seen first hand their "underwriting" when the Macklowe led team jumped blindly into the Reckson fray. We believe we're starting to see hints of market dislocation, which should give rise to opportunistic structure opportunities in the balance of the year, and with our aggressive sales program, we've positioned our balance sheet to take advantage of these situations. For more on our balance sheet and earnings, here is Greg Hughes.

Great. Thanks very much, Andrew. For those of you that felt that the investment activity and capital raising efforts during 2007 made our financial information too difficult to follow or too difficult to model, the first quarter of 2008 provides a very transparent view of the company, now that the dust has settled, and I'm pleased to report that the results are very compelling. Our balance sheet for the quarter reflects only modest changes from where it stood at yearend. Our net real estate assets increased just $37 million, principally as a result of our acquisition of 182 Broadway, a joint venture with Jeff Sutton, which is consolidated on our books. Our restricted cash was up approximately $50 million, reflecting the escrowed moneys for the loan participation that Green made to Gramercy to help fund the AFR transaction, which closed on April 1. Treasury stock was up by approximately $50 million, reflecting our continued buyback program, repurchases during the quarter averaging $83.89 per share. Capitalized interest continued to decline with just $840,000 worth of interest being capitalized for the quarter and assets held for sale declined with the successful closing of 449th Avenue. We continue to remain very liquid with $742 million of full availability under our credit facility at quarter end, which will increase by an additional $160 million with the closing of 1250 Broadway scheduled for the second quarter. This will leave us with $858 million of available liquidity in addition to the substantial cash flow generated from our portfolio as the current quarter's FFO payout ratio was just 55%. In addition to our strong liquidity position, we have limited near-term maturates and our coverage ratios have improved significantly during the quarter as a result of our strong operating performance, coupled with declines in LIBOR during the quarter.…

Well, why don't we just go right to the questions, because I see by the queue there are several or many. So to try and get through it as quickly as possible, we'll go right to it. Operator? QUESTION AND ANSWER

[Operator Instructions] And your first question comes from the line of Jordan Sadler of KeyBanc Capital Markets. You may proceed.

Thank you. Good afternoon. I guess this first one probably for Andrew. Regarding the 650 Madison transaction, did you say the cap rate was about 5% and maybe if you could just give us some context in terms of where you think that transaction was relative to where it would have been, maybe at the height of things?

Both of the deals fields I mentioned were soft 5%. 650 Madison actually was very low 4% or on 4.1% going in. That transaction maybe was off 10% in terms of value from the peak. It was still a very aggressive price, and obviously, very aggressive cap rate in the very low floors. There was some immediately available vacant space. There were a couple of floors of vacancy. And it did have a retail component, which was very attractive to the buyers, but that was purchased by Carlisle, big opportunity fund there. They think that they will be able to redo, mark some of the leases to market in relatively short orders, three to five-year holding period, bring the rent roll up enough to make the kind of returns that Carlisle looks for.

Okay. It's helpful. And then just moving over toward the Macklowe portfolio or the ELP portfolio, you mentioned Deutsche potentially providing seller financing. If Deutsche is providing seller financing, I am not sure what the terms are, if it's I/O or what the term is or rate. But with the pricing on those assets, would you expect to be representative of market in the financing market and then with the pricing B market?

I think pricing will likely be market. I think the scale would be difficult to place in today's market. In other words, to come up with whatever aligned to being $3.5 billion to $4 billion of financing for the entire ELP portfolio in the aggregate would be very difficult to source, and you probably have to go to many different lenders. I don't think there is another single lender out there today that would provide that amount of fresh financing. But the terms that they've been talking about are pretty much market terms. They haven't formalized anything on any of the offerings. To-date, they've just softly indicated what they consider.

Is interest-only money available?

Yes. 10-year interest-only money, difficult to impossible, five-year floating rate interest-only money definitely available.

Okay, thanks. I'll get back in the queue.

And your next question comes from the line of Mitch Germain of Banc of America. You may proceed.

Good afternoon. Andrew, its seems like foreign investor's appetite for office products appears to be kicking up, but it doesn't seem to be the level that was originally anticipated. Are they still kind of thinking that the assets are someone overvalued?

Tough to speculate. I think the trade that were done, I mean our trade 1250 is actually going to wind up being purchased by a US operator with actually a German partner on the equity side. So that's a quasi foreign investment. The Carlisle trade was a pure domestic trade on 650 Madison. There are still a wide variety of people looking at every building that's for sale; pension funds, foreigners, opportunity funds and still private individuals. We had never really espoused the philosophy of this tidal wave of foreign demand, which was going to sop up buildings sort of indiscriminately. I think they look, and I think if a building meets their particular risk return parameters, they'll bid aggressively as they always do. I'm not sure the cheap dollars necessarily, the category killer, the "be all, end all" in terms of the investment sales market.

Great, thanks.

And the next question comes from the line of Michael Bilerman. You may proceed.

Michael, are you there… Mike Bilerman. Operator, why don't you go to the next question?

And the next question from the line of Ian Wiseman of Merrill Lynch. You may proceed.

Yes. Good afternoon. Not to beat a dead horse on this Macklowe issue, but it seems like there is a lot of product being forced on to the market obviously by Macklowe. I mean, what are the implications for pricing in your opinion? I mean, is there enough capital to soak up all that demand, or at least all that product rather?

I think depending on the pricing level, there is absolutely easily enough capital, Ian. And I think that as, I mentioned, the Deutsche seller financing will certainly help. It depends on where the pricing level shakes on. I mean, these assets were bought at a value that's turned out to be dramatically over their market value. So, looking at the bases versus the value, it's going to be a precipitous drop, but I think there is still healthy demand for these assets and there is a lot of people looking at them.

Do you care to throw out a number there where you think the price per pound will come out on these deals?

Depending on the asset, we'd except it to average between $800 and $1000 a foot.

Okay. And second question, Marc, you just touched on briefly on the redevelopment afford of 1515, you want to maybe expand a little bit more on what Viacom's plans are and what your idea is of a redevelopment of that property?

We've got a pretty aggressive redevelopment plan for the property. It has not been redeveloped almost since its initial construction back in the '70s. So, this is a pretty full façade, lobbies infrastructure completely changed out and a sprucing up of non-tenanted spaces, the non-Viacom tenanted spaces. The thought behind it is simply it's the appropriate time to do it in order to capture rents in the Time Square area that are dramatically higher than our average employee's escalated rent is currently. And we would likely expect that the taker of that space will be Viacom. That's our expectation, just given the timing of when the lease exploration is and given the size of their presence in the building, but there is no formal commitment on their part yet to do so. And we've structured the redevelopment and programmed it in a way that it's got utility to Viacom or a replacement tenant. So, the bulk of their lease does not expire until sometime in 2010, and there is lots of early notice provisions and we feel that with a 50ish, 51ish escalated in place rent, it's continued to be a win-win situation and it's just enhanced by the development. So we'll be able to get higher rents as a result either on a renewal in the market or in arbitration.

Okay. Thank you for that update.

And your next question comes from the line of Michael Bilerman of Citi. You May Proceed.

Hi, it's Irwin Guzman. Sorry for that before. I noticed you did a lot more early renewal this quarter than you've been averaging over the last year. How much more aggressively are you being in terms of approaching tenants that expire over the next couple of years to try to shore up your lease role?

I don't think we've really changed our approach. I'd have to look back at the statistics. I mean, a 0.5 million feet per quarter, I guess sometimes it's as low as 3, and change, it's been as high as 5, 6. If it's ahead, it's ahead by a couple, and I think if anything you will see in a market like this tenants who may have wanted to move around a bit more may think twice about incurring the disruption and the moving cost in this kind of market. We've seen some tenants who initially wanted to look at other spaces in our portfolio, as well as outside the portfolio, have then made a decision to stay put. So, I think it's too early to say there is a direct relationship there. We'll have to look and see. But clearly, we did have several tenants, several big renewals and early renewals. But the approach that we take is pretty consistent. We're out in front of these tenants 12, 18, 24 months ahead of a renewal aggressively trying to either relocate them within the portfolio where we up them. And we have the advantage of the time remaining on the lease that one to two-year period is kind of a magic period where it's too early for them to go to another building. So there is that value to play with as part of a renewal. So Steve, I don't know if you want… Steve Durels is here… want to add anything to that?

No, I think that's on point. The only other worthy comment is such that as time gets closer to what is a large role in the overall markets true of our portfolio and a lot of other owners, 2010 in particular, 2011 everybody is focused. We've been focused for the past several years trying to lock down as many of those tenants as early as possible. And I think time will work in our side and you'll see more renewals come through the door because we're getting closer to the expiration date of those leases.

And how much of your current vacancy is already leased, but hasn't been occupied yet?

Current vacancy that's leased but not occupied, Matt, would you have a stab at that?

It's probably less than 1%.

Yes.

But we'll come back to you with that.

There is a good amount of square footage that's been pre-leased, but would still be occupied by another tenant. So whether that's an early renewal or a replacement deal starting at the expiration of the lease in place, the perfect example of that is the lease we signed at 333 West 34 Street with Segal Company that was a 160,000 square foot, lease starts in 2009, Citibank's in place until the new Segal lease commences. So, there are plenty of examples like that.

Okay. Just one last question, you mentioned the 10% to 15% dip in rents over the next 12 months. Sort of the implied impact to your mark to market is that it would go from 40% to 20% to 25%, is that--?

Well, it's really 10 to 15 of net effectives. So I don't know if you're going to see that in nominal rents. But everything we look at, we look at it on a net effective basis. So, if you've giving up free rent or you're adding another $10 of TI concession, we look at it, it's all dollars, it's all fungible.

Are you seeing more of that come in already because it looked like in the first quarter your concessions and everything were actually lower than last year?

No, as I tried to layout, the first quarter I think was a very strong quarter. I'm really just projecting forward what I think the impact will be from 2 million, 2.5 million square feet of financial service from sublet space is that creeps into the market, that's an extra point of vacancy, not enough to knock it out of the landlord favorable side of the line of the intersection. About 9% we think is equilibrium. So right now about 6%, so if 6 goes to 7, you'll see a slight softening, but still you would consider it a very, very good market. I think you just have to watch layoffs and sublets. And what I've said in the past, if you see that number get to 6 million, 8 million square feet that's where you'd start to see a real impact in rents. But, if it stays in kind of the 2.5 million, 3 million square feet level… that's downtown to midtown by the way, that's combined… that we don't think is going to have a material decline in our mark to market.

Okay. Thank you.

And your next question comes from the line of Anthony Paolone of JP Morgan. You may proceed.

Thank you. Do you have a sense as to how much sublease space is up in your portfolio at the moment, and to the extent your tenants do put some of their space into the sublease market, would you all participate in any higher rents that they get?

There is not a lot of sublease space in out portfolio on the market. There is couple of pockets of 5,000 or 10,000 or 15,000 foot pockets, nothing really big. And absolutely, we participate in a variety of different ways, not only whether it's as simple as a profit share with the sublease that comes through out door, but more frequently than not you're seeing us convert those deals over to direct deals, and the building that's really paid off in space for us over the last couple of months and keeps paying off with deals that we're working on today is 461 Fifth Avenue. Its perfect example where we've taken tenants who have wanted to either downsize, that no longer had a use for the space, wanted to outgrow the space for a variety of different reasons, came through a door. They were paying us $50, $55 dollar a foot. We've converted each and every one of those deals over to new direct deals generally in the $90 plus price points. So, you're seeing massive mark to market opportunities and we're capitalizing on a lot of them.

Okay. And I have a question on GKK fee income for Greg. I think in your Investor Day… so I get $20 million for 2008 of other fee income outside of the base management fee. And it seem like, I think it was $4.2 million in the first quarter, and it would seem like that would ramp up given the AFR deal, just wondering if that $20 million is still valid or does that go up in your guidance or what?

I think we had talked about promotes of $15 million to $20 million. And so the 1250 transaction with the incentive fee that we would get there would kind of cover that for the year.

I think this is just on the GKK slide, I think it was $20 million for just the GKK stuff.

$20 million being the…

The other fee income outside off the base management.

Yes. That was outsourced in servicing as well.

That's still a good number.

Okay, thanks.

And your next question comes from the line of David Toti of Lehman Brothers. You may proceed.

Good afternoon, everyone. A quick question. Can you just provide some color and some numbers around your total budgeted capital expenditures for '08 and '09 relative to repositioning and redevelopment projects?

I think the right way to think about it is we'll probably spend $60 million to $75 million of capital away from, what I'll call, separate projects being the completion of a 100 Park, the completion or the redevelopment of 1551, and the redevelopment of 1515. So, $60 million to $75 million away from those three projects. Those three projects, that means 1551 is kind of a $160 million development, but you're going to see a fraction of that this year.

We're 70% of that JV as well.

A, it's a JV, and B, you're not going to see all of that this year. 100 Park probably has around $10 million to $15 million left for the overall completion of that deal that we had originally talked about. And 1551, we'd want to come back to you with that number because we're finalizing exactly the structure that's being built there based upon the signage that's actually going in place. And again, that's a joint venture, so it'll be a piece of that.

Great, thank you. And then, my second question and I might have missed this, did you provide any color on the tenant concession packages in the suburban portfolio? They were sort of aberrationally high this quarter?

Yes, I think I had mention there were two deals. So, the average suburban deals in 2007 were five years roughly in duration. We had two big deals, one 16-year deal in one of the New Jersey properties and a 10-year deal in one of the Stamford properties. And so, those two deals garner excess TI packages because of the duration. If you took those out, it would be comparable to kind of what you saw last year.

Great, thank you.

And your next question comes from the line of Chris Haley of Wachovia. You may proceed.

Good afternoon.

Hi, Chris.

Mark, Andrew, and Greg, maybe you could help me out as an outsider. Understand kind of that time allocation and considerations about how much human capital is being spent with regard to Gramercy and the closing of AFR relative to SL Green parent, I wanted to call it that, just give us some color as to whether or not this is… whether the last couple of months have been tolling, and given the management change at Gramercy and the closing of the AFR transaction, congratulations. What can we expect over the next three to six months?

Yes. We will talk about our prospects.

Sure.

Our pat answer on this is generally from like 7 in the morning till around 7 in the evening, its Green, and then 7 in the evening till 7 in morning, its Gramercy, and then we switch off and reverse it. So, it was an avalanche of work in the first quarter to produce the results at Green and Gramercy, and I think in large part that was because of the AFR closing. So that's behind us, which is good, and we're kind of getting back to business as usual within Gramercy now that the sheer effort of getting that deal closed in behind us and we used that as the opportunity to bring in a lot of full-time dedicated staffers into Gramercy. Some we brought along from AFR, some we hired from the outside, notably a new Chief Financial Officer named John Roche who joined us last week, which enabled Bob Foley to move over to COO. And we've complimented those folks with two dedicated General Counsels, one for Gramercy Realty, one for Gramercy Finance. We are hiring a Head of Investments on the realty side. We have hired a Head of Real Estate on the leasing and operations side. On the desk side, guys like Sean Townsend, Mike Kavourias and Joe Romano are full-time and really carrying a lot of weight on the asset management new origination side. Andrew Falk is full-time along with Bob Wirth on the servicing side. And I'm positive I'm leaving out a few more folks who are full-time dedicated when you compare that to what we've had over the past several years, it dwarfs the amount of resources that we've had in the past. So there was a lot of senior management heavy lifting on the part of myself, Andrew, Greg, Andy Levine, Dave Schonbraun in getting the deal closed. But I'm happy to say it did close. It was a Herculean feat in this market. With the additional staffing, new procedures in place, bigger platform, Gramercy is very energized, and I think over the next six to nine months it's going to act a lot more autonomously and independently than it has just given that Gramercy no longer has 25 employees, now has 125 employees, and there's lots of people to do work on the IR side. Laura Godfrey was just promoted to head up an Investor Relations position over at Gramercy on a full time basis. And now we have HR, technology and a finance function. So it's pretty complete right now.

Okay. Thank you for that. Is there any change or do you expect any change between the delineation of investments probably that GKK will target versus SL Green will target on their structured portfolio?

Well, I mean Gramercy's origination efforts right now are really… whatever optimizes the existing CDOs that it has and its $3.1 billion of CDOs, keeping those full is a prime objective of Gramercy. And we've been doing that with a lot of first mortgage business and a lot of high grade AAA supported AAA CMBS business. So there is not a lot of overlap there with Green's very Manhattan-centric mezzanine/pref equity/convertible equity orientation. Where the deals warrant it, we'll share in those types of deals. But I would say at this point there is not in the pipeline nor in the first quarter, where there was a lot of overlap. I don't think there were any co-originations in the first quarter, were there?

No.

No. So there were none in the first quarter and I don't think there is any in the pipe right now. So, there is always the opportunity in the future, and where we've done it, it's worked out. It's been a win-win for both companies. But at this point, there seems to be just two different investment objectives.

And your next question comes from the line of Michael Knott. You may proceed.

Hi, guys. I'm wondering if you can just step back and give us some color on the sales processes that you undertook on the three assets over the past several months and where that leaves you in terms of what you may look to sell going forward, just any comments you can share as you went through those processes?

You are refereeing the 1250 Broadway 449 and 470 Park South in terms of three assets or--?

Right.

We're always creative in our sales efforts, and we're generally… for assets that are out there, often times we're trying to work preempts. We're a lot of time trying to put together different capital providers, different debt providers into these situations we sell. And then, we generally retain the services of professional… one of the major brokerage arms on each sale that we do. So I don't think we see changing that process going forward. I mean, obviously, the more help we can get, the more interested debt guys we can bring to the table, and the more pairing off of operating capital partners we can do, we think it leads to a better execution for us. And we have a history of doing that going back to our ground lease transactions, occasionally some mezz we've given on assets we sell its… we're generally doing our best to try to get the most efficient execution.

And as you went through those three that you see fewer buyers towards the end on the third sale, did you see buyers having a tougher time getting financing, say, for the 1250 Broadway, how do you finance a 4.5 cap in today's debt market?

You borrow a lot less is the short answer. They are borrowing about 60% loan to value on their first mortgage. And at that level they had lots of willing lenders, so that they were able to put together type of capital structure with a low leverage first mortgage, some mezzanine financing and the equity is a JV, as I said, a German fund and a local operator.

And so, are there any assets or any suburban portfolio assets that you're going to look to sell over the balance of '08 or is that kind of put on the shelf for now?

I would say likely no suburban assets as we're really focused on active asset management out there. And in the city where we're always evaluating new assets to put on the market and evaluating our tax decisions, so I definitely wouldn't rule out additional asset sales in that.

Then I have a last quick question for Greg. Greg, when you guys reported the fourth quarter supplemental, the cash balance then declined significantly when you filed the 10-K. Was that an unusual circumstance, have the cash balance changed that dramatically from the supplemental to the SEC filing?

I think if you looked at it, Michael, it was just a kind of a reclassification within the balance sheet. So the total assets liabilities were not being changed and you just had a top side reclassification between the two. But I would describe it as… it doesn't usually happen. It was part of closing at the final purchase price allocation with respect to the Reckson transaction. Recall that the fourth quarter of 2007 was the first time that we actually booked the initial piece of the 140 adjustment. So you're just seeing a couple of last minute re-classes there in between filing. But I would say, pretty unusual and just Reckson-specific in that instance.

Thank you

Operator, before you go on, just in response to Chris Haley's question earlier, on pipeline opportunity between Green and Gramercy, I was reminded there is one mezzanine opportunity not yet act or committed. But in the pipeline that's pretty sizeable New York mezzanine opportunity that could be or could not be a joint opportunity. So there is a potential for one, too premature at this point to go into any detail about it.

And your next question comes from the line of Kristin Brown of Deutsche Bank. You may proceed.

Hi. Good afternoon, guys. I just wanted to ask on the guidance increase. Could you clarify how much was due to sort of better core performance, how much was due to the incentive fee, and if 1250 was included in your previous guidance at all?

Yes. I would say it is principally core performance. On the incentive fee, I think, as we talked about in December, we're never sure exactly where it's going to come from, when it's going to show up. Now that we have 1250 on contract and I think you might have seen in our press release, we said we were going to record we think at least a $15 million incentive fee from 1250 that we have perfect color into what it's going to look like for this year. So, with the benefit of that and really the strong core performance, that's what kind of drove it.

And was the entire $15 million included in previous guidance?

$15 million was in previous guidance. I mentioned before, we had talked about $15 million to $20 million roughly in our December Investor Conference.

Then I just wanted to ask about… in terms of your time base, are you having more conversations with tenants looking to terminate their leases?

No, I mean we've had a number of tenants who have come to us and wanted to downsize some excess space. But nobody is of any real notice just come to us and said that I want to terminate because I'm having a difficult time of my business. And as I said earlier, we've converted many of those sublease opportunities over to direct new deals at higher rents. But we are certainly on the outlook for any trouble on horizon. There is no denying that as the economy softens, we got to be vigilant about making certain… we're ahead of the game as far as identifying any tenants that may get into trouble, knock on the door and wanting to terminate their lease, and we spend a lot of time and effort to stay on top of that.

Okay, thank you.

And your next question comes from the line of John Guinee of Stifel Nicolaus. You may proceed.

Hi, John.

Did the Pope stop by to see you guys or blessed any of your buildings?

Every one of them.

Okay. Just a real quick one. When you are looking at 40%, 45% mark to market on a gross basis, have you ever done a back of the envelope to see what that is on a net basis?

Net meaning net effective or--?

Yes, net rents and net effective. For example, if you have $21, $22 expense stop, does the math work out that the net rent increase is really more like 70%, 80%.

Well, you're measuring off of a wholly estimated rent.

Right. So if we have a $20 to $30 base rent, that's $35 escalated, and we rent that for $38.50, that's a 10% mark. So we measure it off of escalated. So that number is the number that we think is embedded.

But is it on a net rent basis, more or like a $22 net rent jumping to a $40 net rent.

Yes, right. Yes, the answer is yes. If you just look at it net to net, it's going to be… in that same example of a $35 escalated rent is… call it $15 net, so you've got $20 of expenses, versus it goes to $38.50, then you are down to $18.50. So $18.50 on $15 is a higher percentage of, I think it probably is, it has to be. It's $3.5 on a smaller number. So, it is. Okay, so the answer is yes. On a net basis, it's a larger percentage increase, not absolute increase, but it's a larger percentage increase if you look at it net to net, yes.

Got you. That's it. Thanks.

And your next question comes from the line of Sloan Bolen [ph] of Goldman Sachs. You may proceed.

Just real quick one for Greg. Have you guys repurchased any shares subsequent to the quarter, and when, if at all, would you look to expand your share repurchase program?

Yes, the answer is we have purchased some at the quarter end. My counsel is waving to me saying we can't really comment on what we will do. But I think as we've talked about before, we had a $300 million plan in place and we continue to think the stock is a good investment opportunity. So, shouldn't be surprise to see us fill out the balance of that plan.

All right. Thank you, guys.

Is that it, operator?

And your last question comes from line of James Feldman of UBS. You may proceed.

That was a quite a wait. The NOI margins…

Hang in there.

Exactly. The NOI margins seem pretty high in the quarter, is that the fact that 388 is more of a net lease or is that just seasonality or what?

I think it's a combination of a number of things. The portfolio was really transformed last year when you look at what we sold and what we bought. We're generally starting out with much more profitable buildings. The bigger buildings are operating more profitably. If you look at the expenses both first versus first and first versus fourth, there's actually a pretty favorable trend. We've historically seen the first quarter and the third quarter to be higher. We're seeing the first quarter of this year be lower than the fourth quarter. So, I would say very, very strong revenue mark to markets coming through with good expense control, and then just a higher quality, higher margin building composition portfolio.

I think last quarter you said 6% same store growth for the year, looking at your guidance you had 12% in the first quarter, and where do you think it can go?

I think if you look back at our December presentation we said 7% NOI growth for the year. So, 12% in the first quarter, as I said, is ahead of where we expected to be…..

Okay. But I'm saying for the remainder of the year you think it trails down?

I'm not sure we would say we're going to maintain 12%. But we certainly feel better than the 7% for the year that we advertised in December.

Okay. And then, finally, and then I'll talk to your guys offline, what do you think in terms of appetite for buildings like 388, those kind of deals right now?

We've haven't really seen a comparable offering. Most of the buildings that are traded have been more mark… lower cap rate, mark to market stories. But, certainly I would tell you from where I sit, I mean I think a 6.3% going in with contractual annual increases and 10-year financing in place trades at a premium to what we paid for it. So, I think that's a great asset for us right now.

Okay, fine thank you.

Okay. Thank you everyone for joining in today. For those of you that have remained on till the end, we appreciate it. Questions were good and we look forward to speaking to you again in three months time. Bye-bye.

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