Transcript of
Winthrop Realty Trust (FUR)
Fourth
Quarter 2008 Earnings Conference Call
March 5, 2009
Beverly Bergman, Vice President &
Director of Investor Relations
Michael Ashner, Chairman & Chief
Executive Officer.
Carolyn Tiffany, President
Tom Staples, Chief Financial Officer
Operator
Greetings and welcome to the Winthrop Realty
Trust fourth quarter 2008 earnings conference call. At this time, all
participants are in a listen-only mode. A brief question and answer session
will follow the formal presentation. If anyone should require operator
assistance during the call, please press *0 on your telephone keypad. As a
reminder, this conference is being recorded. It is now my pleasure to
introduce your host, Ms. Beverly Bergman, Vice President and Director of IR for
Winthrop Realty Trust.
Beverly Bergman – Winthrop Realty Trust – VP & Director of Investor Relations
Thank you Ryan and good afternoon everyone. Welcome
to the Winthrop Realty Trust conference call to discuss Winthrop Realty Trust’s
fourth quarter and full year 2008 financial results. With us today from senior
management are Michael Ashner, Chairman and Chief Executive Officer; Carolyn
Tiffany, President; Tom Staples, Chief Financial Officer and other members of
the management team. A press release was issued this morning, March 5, and
will be furnished on a Form 8K with the SEC. These documents are available on Winthrop’s website at www.winthropreit.com in
the Investor Relations section. Additionally, we are hosting a live webcast of
today’s call, which you can access in the site's News and Events section.
At this time, management would like me to
inform you that certain statements made during this conference call which are
not historical, may constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Although Winthrop believes the expectations reflected in any forward-looking statements are based
on reasonable assumptions, Winthrop can give no assurance that its expectations
will be attained. Factors and risks that could cause actual results to differ
materially from those expressed or implied by forward-looking statements are
detailed in the press release, and from time to time in Winthrop’s filings with
the SEC. Winthrop does not undertake a duty to update any forward-looking
statements. Please note that in the press release, Winthrop has reconciled all
non-GAAP financial measures to the most directly comparable GAAP measure in
accordance with the Reg G requirements. This can be found on page six of the
press release. I’d now like to turn the call over to Michael Ashner for his
opening remarks. Please go ahead Michael.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
Thank you Beverly, before I turn the call
over to Tom Staples, our Chief Financial Officer who will review both our
fourth quarter and annual financial results for 2008, I want to take this
opportunity to introduce and welcome back a returning member of our team,
Carolyn Tiffany, our new President and newest trustee. I believe with a
certainty that Carolyn will make a significant and vital contribution to our
company’s growth and I look forward to a long and successful collaboration. Briefly,
as to our outlook for the real estate, the company and its future, if anything
the last three months have reinforced the views we expressed in our third
quarter conference call, the continued absence of credit and capital when
combined with deteriorating operating fundamentals, have served to accelerate
the erosion of commercial real estate values nationwide. While pricing for
individual assets has given the appearance of resiliency due to a diminished
level of transaction activity, pricing of real estate equity and debt securities
in the public markets more than confirms this trend.
With respect to publicly traded REITs such as
our own, the foremost question in the minds of shareholders today is the
strength of each company’s balance sheet. In this regard we believe that Winthrop has one of the strongest balance sheets of any publicly traded REIT. Our assets
include approximately $96 million of cash, cash equivalents, and publicly
traded equities and debt securities. As of today we have an untapped line of
credit of $35 million. We have reduced our aggregate long-term recourse debt,
that is our Series B1 preferred shares to approximately $37.4 million from $100
million or approximately 28.5% of liquidity in line availability. Substantially
all of the company’s remaining liabilities are non-recourse to its assets. For
all of these reasons we view Winthrop as uniquely positioned both to weather
the current economic environment and to pursue emerging opportunities that
arise.
As to the second most prevalent question
confronting REIT shareholders their dividend and sustainability, the data on
which we assume management responsibility for Winthrop, our unchanging view,
has been that the dividend should be paid from sustainable recurring cash flow
and nonrecurring net profits. Dividends should not be paid from the company’s
capital simply for the sake of appearance. We recognize that operating cash
flow and profits are your money and subject to normal and customary reserves
are to be distributed to you. To that end a quarterly dividend of $0.25
reflects the company’s present approximate recurring operating cash flow giving
no effect to either Concord’s operations or the potential returns to be
realized from investing our $40 million of uninvested cash. Consequently we
will on a quarterly basis continue to apply this policy in determining the
company’s dividend.
The next point of interest, management’s 40%
reduction in its base management fee. Both as your management team and as the
largest shareholder in the company no one is more disappointed in the decline
in our share price than we are. Our base management fee is calculated
essentially at 1.5% of the blended issuance price of our common and preferred
stock outstanding, approximately $20 and $25 per share respectively. In view
of the plunge in our share price we felt that a corresponding fee reduction was
the right thing to do as a demonstration of our concern for the losses
sustained by our shareholders and our ongoing alignment with them. Now, even
the strongest of companies in times such as these spend considerable effort
managing and working through their legacy investments. For us Concord, our joint venture debt platform commands considerable portion of our time and
attention. Essentially all of Concord’s loans and bonds are secured by income
reducing office, multifamily, warehouse, retail, and hospitality assets. Concord has essentially no development residential or transformational loans. As a result
less then 5% of Concord’s loan and bond portfolio is currently nonperforming. Nevertheless
we are extremely concerned that protracted credit contraction, a repricing of
credit when credit becomes available and declining loan to value ratios due to
a deteriorating borrower performance in the near and mid term, could combine to
significantly increase loan losses thereby materially reducing our equity in the
venture. This real concern has caused Concord to shift its efforts away from
originating any new loans to instead focus on further de-leveraging the
platform and recovering our capital as expeditiously as possible.
Moreover as we want our balance sheet to
closely reflect our view of the net asset value of our investment in this joint
venture consistent with GAAP requirements, we have elected to supplement our
50% of the $39.7 million asset impairment taken by Concord in the fourth
quarter of 2008 with an additional $36.5 million impairment to the company’s
equity interest in the venture. While it is likely the current economic
environment will create future unforeseeable issues effecting one or more of
our other holdings, I do not expect any to rise to the level of those now
effecting Concord.
As stated before, we do not believe that real
estate assets have re-priced to the levels that make sense on a risk-adjusted
basis. Frankly, we think the performance is more likely to deteriorate in
near-term then stabilize. We believe that public equity and debt securities
markets reflect this outlook and have re-priced and perhaps in some cases over-re-priced.
Accordingly since the beginning of December we’ve required in excess of $32
million of publicly traded REIT securities, primarily bonds and selected
preferreds. To date we have been pleased with their performance and intend to
expand our investment in the securities as well as to include senior CMBS and
distressed debt in the future. Apart from the favorable risk adjusted returns
realized their liquidity permits us to reallocate into real estate assets when
they become more reasonably priced. With that I will now turn the call over to
our Chief Financial Officer Tom Staples to review Winthrop’s financial results.
Tom Staples – Winthrop Realty Trust – CFO
Thank you Michael, good afternoon everyone.
In addition to an overview of Winthrop’s financial results I will briefly
review highlights from each of our business segments. Please note that all our
share amounts are on a fully diluted basis unless otherwise stated and reflect
the one for five reverse stock split. For the quarter ended December 31, 2008, the company incurred a net loss of $52.7 million or $3.34 per share
compared with a net loss of $24.4 million or $1.84 per share for the quarter
ended December 31, 2007. For the year ended December 31, 2008 the company incurred a net loss of $68.2 million or $4.59 per share compared with net income
of $2.5 million or $0.19 per share for 2007.
Net income was negatively impacted by a
number of non-cash items, the majority of which are related to the Concord debt portfolio. As Michael alluded to, the staying uncertainty in the commercial
bond and real estate debt markets compelled management to reassess all of its
loan securities in the Concord debt platform. As a result, Concord recognized
in 2008 other then temporary impairment charges in loan loss reserves totaling
$104.9 million, 50% of which or $52.4 million is our allocable share. Additionally,
as a result of current market conditions, including the changes in interest
rate spreads and lack of available financing, we determined that the fair value
of the company’s investment in Concord was below the carrying value even after
taking into account the $52.4 million other then temporary impairments in loan
loss reserves. And that decline in value is other than temporary. Accordingly
we recognized an additional other than temporary impairment loss of $36.5
million in the fourth quarter reducing our carrying value of our investment in Concord to $73.1 million.
The company had three additional impairments
during 2008. A $2.1 million impairment with respect to its Andover, Massachusetts property as a result of a tenant informing the company that it would not be
renewing its lease. An impairment of $7.5 million relating to four Marc Realty
suburban office mezzanine loans and a $207,000 mark-to-market loss on available
for sale securities. Additionally the company had loan loss reserves of $1.2
million in 2008. These non-cash charges created a negative swing in earnings
of approximately $99.9 million for the year ended December 31, 2008 compared with $25 million of non-cash charges for the year ended December 31, 2007. Excluding these non-cash items, net income was $31.7 million or $2.13 per share
for the year ended December 31, 2008 compared with $27.5 million or $2.09 per
share for the year ended December 31, 2007. Partially offsetting these non-cash
charges in 2008 was a $9.7 million decrease in corporate expenses. This
decrease was primarily due to a $6.3 million gain on the early extinguishment
of debt from our preferred stock repurchase and a $3.5 million decrease in
interest expense. Overall gross revenue was $12 million for the quarter ended December 31, 2008, an increase of $1.7 million over the quarter ended December 31, 2007. For the year ended December 31, 2008 total gross revenues decreased to $45.8
million from $51.3 million for the prior year. Total cash generated from
operating activities amounted to $25.9 million for the year ended December 31, 2008, an increase of $3.7 million from 2007’s operating cash flow of $22.2
million.
Total FFO for the fourth quarter of 2008 was
a negative $51.2 million or a loss of $3.25 per common share compared with a
negative FFO of $20.7 million or a loss of $1.50 per common share for the
fourth quarter of 2007. The decreases in FFO are primarily due to the same
factors which negatively impacted net earnings noted earlier. The company
reported negative FFO for the year ended December 31, 2008 of $57.7 million or a loss of $3.88 per common share compared with FFO of $14.5 million or a
$1.10 per common share for the year ended December 31, 2007. Excluding the aforementioned non-cash charges FFO for the fourth quarter of 2008 would
have been $14 million or $0.89 per common share as compared with FFO of $3
million or $0.23 per common share for the fourth quarter of 2007. Similarly,
excluding the aforementioned non-cash items FFO for the year ended December 31, 2008 would have been $42.2 million or $2.84 per common share as compared with
$39.5 million or $3.00 per common share for the year ended December 31, 2007.
With respect to Winthrop’s operating
properties business segment net operating income was $6.1 million for the three
months ended December 31, 2008 compared with approximately $6.9 million for the
three months ended December 31, 2007. For the year ended December 31, 2008 net operating income was approximately $29.6 million compared with approximately
$30.7 million for the year ended December 31, 2007. This decrease is primarily attributed to the $2.1 million impairment of our Andover Massachusetts
property previously mentioned. With respect to Winthrop’s loan assets and loan
securities business segments, net operating income decreased by $93.1 million
from income of $25.5 million in 2007 to a net loss of $67.6 million for the
year ended December 31, 2008. This decrease in net operating income was
primarily due to previously mentioned impairments and loan loss reserves taken
by Concord and the additional impairment taken by us on our investment in Concord. In addition we recognized an $8.6 million decrease in earnings from Winthrop’s preferred equity investment in Marc Realty due to the $7.5 million other than
temporary impairment recognized in 2008. Further contributing to the decreases
in this segment is a $6.3 million decrease in interest income and a $2 million
decrease in gain on sale due to the 2007 sale of Winthrop’s investment in a
venture which held a limited partnership interest in a Chicago office tower
known as One Financial Place.
With respect to our REIT securities business
segment net operating income was $1.4 million for the year ended December 31, 2008 compared to a net loss of approximately $5.1 million during the prior
year period. The $6.5 million increase was due primarily to an $18 million decrease
in impairment losses on available for sale securities recognized in 2007
partially offset by an $8.6 million decrease in gains on sale due to the 2007
sale of the America First Apartment Investors stock and a $2.1 million decrease
in dividend income due primarily to dividends received in 2007 on Lexington
Realty Trust common shares which were sold in March of 2008. At December 31, 2008 Winthrop held REIT securities with an aggregate value of $36.7 million
compared to $51.8 million at December 31, 2007. At December 31, 2008 Winthrop had cash, cash equivalents and restricted cash of $73.6 million. In
addition the company had $35 million available on its line of credit facility
with KeyBank. The credit facility was amended December 16 of 2008 to reduce
the maximum draw to $35 million subject to an increase of up to $75 million
while extending the facility to December 16, 2010.
Lastly a quick review of Winthrop’s
dividends. We paid a regular quarterly cash dividend of $0.32 ½ per common
share and a special dividend of $0.05 per common share for the fourth quarter
of 2008, both of which were paid on January 15, 2009. Now I’ll turn the call over to Carolyn Tiffany. Carolyn?
Carolyn Tiffany – Winthrop Realty Trust – President
Thank you Tom. Good afternoon. I’d like to
talk about the key operational issues. At December 31, 2008 the company’s real estate portfolio encompassed approximately 9.7 million square feet of
space including properties within the Marc Reality and Sealy portfolios and a
230-rental unit multifamily asset. The Marc Realty portfolio consisted of two
participating second mortgage loans and 19 participating convertible mezzanine
loans together with an equity investment in each mezzanine borrower for a total
aggregate investment amount at par of approximately $57 million. In addition,
as contemplated at the time of our initial investment we have made tenant and
capital improvement loans to the mezzanine borrowers that totaled $17.4 million
at December 31, 2008. With respect to the properties in the Marc Realty
venture the blended lease rate at December 31, 2008 was 80% compared with 83% at December 31, 2007. While the suburban properties have experienced a
softening in the leasing market downtown Chicago remains strong. The mezzanine
loans securing three suburban office buildings experienced a substantial
increase in vacancies since June 30, 2008 owing in large measure to a loss of
its mortgage brokerage and banking tenancy. Although Marc Realty is current on
its payments on Winthrop’s mezzanine loans and has indicated its intention to
continue to remain current in the near-term as it seeks a modification from its
mortgage lender with respect to these properties, in view of the uncertainty
surrounding the future of these properties as Tom mentioned earlier, we opted
to take an other then temporary impairment in the fourth quarter.
While the first mortgage loans encumbering
the Marc Realty portfolio which were to mature in 2009 have been refinanced
except for one loan which is guaranteed by the partners of Marc Realty and will
likely be extended. The remainder of the first mortgage loans mature from 2010
to 2017, the majority maturing after 2011. Because GAAP requires us to look at
each loan individually we recognized the impairment on our investment for
financial statement purposes. However, from a business perspective we evaluate
the equity investment in this portfolio in the aggregate. Taken as a whole we
believe the investment in the Marc platform will ultimately yield proceeds in
excess of our balance sheet carrying value. We are pleased with the overall
performance of this investment and its ability thus far to weather the current
downturn in the economy.
Winthrop’s Sealy venture properties had a
blended occupancy rate of 86.6% at December 31, 2008 compared with 88.7% at
December 31, 2007 reflecting the acquisition of an additional property
comprising approximately 470,000 square feet of space located in Atlanta. The
mortgage debt encumbering these properties is not scheduled to mature until
after January 2012 with the last maturity in November 2016. Winthrop’s
consolidated portfolio had a blended occupancy rate of 96.1% at December 31, 2008 which was consistent with the 96.6% occupancy rate at December 31, 2007. We are in negotiations to refinance the $9.5 million loan secured by
our jointly owned Marc Realty River City property that is scheduled to mature
on March 28, 2009 and we expect that a one-year extension with a 6% rate will
be executed shortly. Additionally, we have notified our lender that we will
exercise our first of two one-year extensions of the loans scheduled to mature
in June, 2009 which is secured by the 14 net-leased properties comprising what
we commonly refer to as the Sonova portfolio.
Turning to the Concord portfolio as of
December 31, 2008 Winthrop and Lexington had each contributed $162.5 million to
Concord. As Michael mentioned earlier the disruption in the capital and
credit markets, increased margins calls on Concord’s repurchase agreement and
an inability to issue to CDOs has prompted Concord to reevaluate its strategy
from growth to de-levering. Concord will focus on the recovery of its members
equity by maximizing the value of its existing assets increasing its liquidity
and reducing exposure to maturing debt. In an effort to reduce its exposure to
margin calls and improve its overall liquidity, Concord obtained a $100 million
credit facility from KeyBank in January 2008 which had a drawn balance of $80
million as of December 31, 2008. Also a subsidiary of Inland American Real
Estate Trust was admitted as a member in Concord agreeing to contribute up to
$100 million. To reduce its leverage exposure Concord acquired loan securities
issued by its CDO with a face value of approximately $29 million for a total
purchase price of $13 million.
As Michael indicated we view ourselves to be
opportunistic investors always seeking higher risk adjusted returns on our
investments. Consequently when evaluating the market value of our joint
ventures as required under GAAP we base our evaluation on returns we and other
market investors would expect to earn on investments with similar
characteristics and we recognize impairment losses when necessary including the
impairment loss taken in the fourth quarter of 2008 which has reduced our
carrying value of this investment to $73 million. I would to stress that in
our Concord portfolio as with all our joint venture platforms no debt is
recoursed to Winthrop and our loss is limited to our equity investment. With
that, let’s open it up to questions. Operator?
Operator
Thank you ladies and gentlemen. At this
time, we will be conducting a question and answer session. If you would like
to ask a question, please press *1 on your touchtone phone. A confirmation
tone will indicate that your line is in the question queue. For participants
using speaker equipment, it may be necessary to pick up the handset before
pressing the * keys. We will take a moment to poll for questions. Our first
question comes from the line of David Fick with Stifel Nicolaus
<Q>: A
couple of questions. Your current carrying value on Concord can you sort of
relate that to your decision on the dividend and you’re assuming no Concord
contribution going forward how do you reconcile those two?
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
I don’t know that I quite understand your
question David. I think there are two questions, how do we?
<Q>: Yeah, they’re not necessarily
direct, correct.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
Alright, break them up into two and I’ll do
my best.
<Q>: First of all what is
the current carrying value of Concord.
Tom Staples – Winthrop Realty Trust – CFO
$73 million.
<Q>: Okay, you’re assuming
going forward and resetting your dividend no Concord contribution.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
We are but not that we expect there to be no Concord contribution but we’re, this is an investment in which we’re looking at very, very
sharply with lots of concern. While there probably will be some level of
income, we can’t anticipate it as well as we would like. So it’s easier to set
a dividend without taking that into consideration.
<Q>: Alright,
you
discussed the Marc impairment can you just walk us through in a clear layman
fashion where you stand with that and what additional write-down exposure we
might have there.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
We don’t know of any additional write-down
exposure in Marc. They had three building which were highly tenanted by
mortgage bankers and the buildings went to 60% occupancy on a blended basis. Marc
has elected to contact the first mortgagee and to see if they can do a work
out. We have our equity in the Marc ventures generally characterized as
mezzanine loans, participating convertible mezzanine loans. While we await the
outcome of what it is they determined to do and how this plays itself out it
seems most prudent for us to take an impairment to the value of our mezzanine loans.
As a whole however, as Carolyn stated we look markets as one big investment. We
are very happy with that investment overall. If they came to us with new, and
as they come to us with new investors we will make new investments with them. So
from the standpoint, if we accounted for this on the equity method of
accounting as if it was just a platform like we do Concord, I don’t believe we
would have taken an impairment.
<Q>: Okay. Can you talk about
the status of the potential [INAUDIBLE] claw back.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
No, other then to tell you what you already
know. I believe 1540 Broadway is going to be sold to CB Richard Ellis. I
suspect that Deutsche Bank, GE, KeyBank and ourselves will come to an agreement
to sit with for a period of time the other building which is Worldwide Plaza while we deal with the tenanting issues in that building so that claw back
could be deferred for a substantial period of time.
<Q>: But there is a
possibility for some sort of reserve there at some point.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
Absolutely.
<Q>: And your maximum actual
claw back exposure remains
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
2.75% of the difference between I believe
$1.2 billion less the proceeds realized on the sale of 1540 and the proceeds
realized on the sale of Worldwide Plaza.
<Q>: Okay. Can you talk a bit
more about the detail in your securities portfolio, the $36 million carrying
value, we’re assuming that roughly half of that is LXP
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
No, no, no, that’s not LXP. That’s net of
LXP. What I was alluding to were bonds and preferreds that we had bought,
started buying in December. The bonds are up, preferreds are a little bit
down, but I think they probably pretty closely offset one another right now. The
REIT bonds, primarily unsecured REIT bonds, some secured REIT bonds at deep
discounts during December, so spreads have narrowed considerably pushing the
value of those bonds up, preferreds were way up, now they’re a bit down, but
the preferreds we bought, just a few companies primarily those companies with
very little unsecured debt outstanding.
<Q>: Alright,
well we
obviously commend you on the management fee adjustment, I’m just wondering how
scalable can you be in the management company, be able to absorb this kind of
an adjustment or are you having to re-staff?
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
No, the advisor is a very well capitalized
company and while we’re able to weather it for a substantial period of time,
more then one year if we had to. But it’s the right thing to do.
<Q>: Yes, and you’re
basically saying that your not tremendously stressed over there.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
No, well hold, don’t tell my employees that
when Christmas comes.
<Q>: Accounting details, Cap-Ex, TIs,
this quarter and straight-line rents for the fourth quarter, that might be
something you might want to start putting in your supplemental disclosures
also.
Tom Staples – Winthrop Realty Trust – CFO
Those numbers for your information, Cap-Ex
for Q4 $949,000, the FAS 13 adjustment straight line rent adjustment increased
receivables and rent by $1,076,000 in the fourth quarter.
<Q>: And that Cap-Ex
number is the combination of TIs, leasing commissions,
Tom Staples – Winthrop Realty Trust – CFO
Yes.
<Q>: Okay. Thanks.
Operator
Our next question comes from the line of
Charles Fisher with LF Partners
<Q>: Good
afternoon Michael. The Lexington share purchase that you did with Vornado not
that long ago, I guess the Lexington shares are down about 50% since that date
and the preferred at Lexington are yielding 25% is there something that the
market knows that we don’t or is this just another sign in your opinion of
market over-reaction.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
I only know what you know; I only have access
to public information. We also own the Lexington preferred in our portfolio. I
believe that Lexington has been impacted based on all of the things that are affecting
REIT stocks in general right now perhaps over-affected by it. We’ve got a lot
of confidence in Will Egland, Robert Rusk and we believe that they’re well
focused on the issues that face their company and once those issues are
addressed primarily their balance sheet issues, that the stock will do well. The
company has given guidance that it has FFO of like $1.35 a share for 2009.
That’s how we look at the stock, probably not much differently then you do.
<Q>: The main reason I
asked is obviously you used to run the company so this is one that
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
No, I was one of three people who oversaw the
company. Will Egland I commend him, runs that company and did a good job
then and I believe he’s doing a good job now.
<Q>: Okay, thanks Michael.
Operator
Once again, if you would like to ask a
question, please press *1 on your telephone keypad. Our next question comes
from the line of William Hal with Comprehensive Financial
<Q>: Tom, a
quick question for your. Can you tell me the $17 million deposit that
was on the balance sheet, what does that relate to?
Tom Staples – Winthrop Realty Trust – CFO
That relates to in January of this year 2009,
we closed on a second acquisition of our preferred shares and that money had
been moved over but we hadn’t finished the transaction until January so we show
it as a deposit.
<Q>: Okay.
Michael, can
you break down the $36 million in marketable securities between how much bonds,
how much preferred.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
We have about $18, $19 million in bonds, and
the balance in preferreds.
<Q>: Okay
and the,
I know you said Verizon on the Massachusetts property has chosen not to renew,
have they let you know about the Vermont property.
Tom Staples – Winthrop Realty Trust – CFO
They have and my understanding is that they
are planning on extending the lease there.
<Q>: Okay, have you heard
anything on the Bell South property.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
We’re in lease negotiations with Bell South
for a long-term lease on that property. Negotiations, its not done until its
done in this world.
<Q>: Have you bought back
any of the CDO debt in Concord since the third quarter?
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
No I don’t believe so, we’re looking at some
purchases right now.
<Q>: Okay. With regard to Concord would you describe that in run off or hibernation?
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
Run off, we’re going to wind it down.
<Q>: Okay
and lastly with the
Marc Realty, help my memory, I know 2012 is a bell goes off, is that
mandatorily convertible then?
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
I don’t know the answer to that. It’s not an
issue that we see as a gun at their head or our heads, if it is convertible
we’re delighted to own our 55%, 60% equity interest on all these properties. It’s
not really an issue.
<Q>: Okay, gotcha. Thank you very
much.
Operator
Once again, if you would like to ask a
question, please press *1 on your touchtone phone. Seeing as there are no
further questions, I would like to turn the call back to Michael Ashner.
Michael Ashner – Winthrop Realty Trust – Chairman & CEO
Again we thank you all for joining us this
afternoon. I would have liked a lot more questions with Carolyn’s been
practicing all week long, but apparently not getting any. As I mentioned
earlier we believe that our balance sheet and liquidity positions Winthrop,
that it will not only survive this economic crisis that we all are in but allow
it to take advantage of the dislocation in the markets and to make lucrative
investments in the future. As always we appreciate your continued support and
we welcome your input and questions concerning the company’s business. If you’d
like to receive additional information about us, please contact Beverly Bergman
at our offices. You can also find additional information about us on our
website at www.winthropreit.com. Further
please feel free for any of you to contact myself or any member of management
with any questions you may have at your convenience. I thank you all and have
a good afternoon.
Operator
Well ladies and gentlemen, this concludes the
teleconference. Thank you for your participation.
