Question-and-Answer Session
[Operator Instructions]. Your first question comes from Michael Bilerman of Citi.
Unidentified Analyst
Hi, good afternoon. [Indiscernible] as well. Bill, maybe you can provide just a little bit more color, just contrasting your experience relative to the market and your markets expectations. You're talking about leasing activity remaining high, you're getting higher spreads, your CapEx costs are down so it's not like you're buying the occupancy. It seems that its real, but than you contrast that with some of your other comments of spending prospects having a slowdown in terms of decision making CEOs and Boards that are halting deals, and I'm just trying to put those two together to really understand what's really going on in your activity relative to the market.
William P. Hankowsky - Chairman, President and Chief Executive Officer
That's a good question Michael, and your commentary about our performance is in fact it's real. I mean this set of metrics this quarter and those in the first quarter are very solid, but let me try to sort of give you the flavor what's out there. This cycle is not a situation where demand has evaporated. I've often cited 2001 is an example of that phenomenon. In that phenomenon where demand just sort of goes off a cliff, then you'll have market behavior where people what make this word panic and rents get slashed, people buy deals to use that for fragile UTI [ph] etcetera. This scenario is one, where again it's very submarket-to-submarket. But, on the whole there is still demand out their. There has been much better supply constraint, so the markets are not generally over build where... and where market discipline, I think is hanging in their.
So for example people are not slashing rents in the marketplace. I think they feels impart with the fact that the industry is somewhat more mature, so there are institutional players, more REITs to control greater percentage of markets.
People aren't buying deals and... I think one reason is capital is a pretty precious commodity in this environment, so we are not seeing even entrepreneurial private guys necessarily buying the deal, which is kind of a classic phenomenon. I think there is nervous about what is going to be the capital as we all are.
So that's not really happening. I would say that the major market behavior we're seeing is people doubling commission they are creating incentives from brokers, which is generally sort of step one of trying to deal with a softer market. So a layer on that... our business model, so we've got very established people in the markets with great relationships, we've got this 2,100 tenant base that has sort of it's own natural organic growth phenomenon and it wants to stay in place, so you see the renewal percentage.
- To read the full transcript on Seeking Alpha, click here »
