Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Amika Goel – Citigroup.
Amika Goel – Citigroup
Could you review for the in-process redevelopment projects, how pre-leased you are for those projects, just so that we can understand the potential risks associated with them?
Michael Nelsen
On the retail component of the New York Urban, we’re just over 75% pre-leased, which is where we want to be with respect to developments that are in place and under construction. There is actually an ideally balance where if you do too much pre-leasing we’re often fearful that we’re leaving money on the table, but conversely just as you said in terms of risks associated with it, the pre-leasing certainly helps both from a financing perspective and risk perspective. We feel 75% is a good position and we’re comfortable with that.
Amika Goel – Citigroup
If we think about that 75% preleasing, what yield does that get you to?
Michael Nelsen
We don’t have the calculation right now. For instance, in Fordham Road which is fairly far along we’re 95% leased. In general, these projects will lease up to north of 90%, so 75% is probably not a great number to look at other than in terms of cash flow coverage.
Amika Goel – Citigroup
And then on the development fees that you received in the quarter from Albee and Sheepshead, could you go over what exactly the fees are related to and what color could that give us on the potential timing of the projects launching?
Michael Nelsen
In terms of the fees, as you mentioned, it’s about $1 million from Fund III related to the Sheepshead Bay development and then another million recognized from realty development. Our agreement with Fund III is that along with our construction and leasing and legal fees and asset management, we also get a development fee, so we will be earning that fee on all of our Fund III redevelopments, and the timing of that fee is basically from the point of conception of the project to till construction commences. In both of those cases, as Ken mentioned, we expect that construction will commence at some point in 2009, which at that point obviously the development fee will cease, and then Sheepshead Bay is also, I think, a 2009 construction commencement.
Amika Goel – Citigroup
So, can you just go over the calculation of the fees so that what part is recurring and what part is not?
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