Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Christine McElroy with Banc of America. Please proceed.
Christine McElroy - Banc of America
Hey, good afternoon.
Michael Nelsen
Hi.
Christine McElroy - Banc of America
Your same-store NOI growth forecast of 1% to 3% seems like a pretty wide range. Can you talk about what kind of drivers would result in the low end of the range versus the high end? And what are the biggest uncertainties there?
Michael Nelsen
It's great question. One, I think everyone has to keep in mind as I referenced before the law of small numbers and as we sell more assets, it becomes even more relevant, so that some of the repositionings that I mentioned at our Crossroads center, 25,000 square feet or in Smithtown Long Island, they actually have a meaningful impact to NOI.
As long as we're disposing of the right asset and holding onto the right asset, I am less concerned about that movement other than making sure everybody understands is that a few minor changes could have that impact.
The other thing is, I pointed out our collections have been rock solid. So far so good but there are a lot of headlines out there, because everyone or should cause everyone to be cautious, I am not seeing any data internally. But that doesn't necessarily mean that our portfolio is a leading indicator. And I think we ought to be prepared for certain tenants having collection issues, bankruptcies, anything like that could cause it to go to the lower end.
Jon Grisham
To quantify that Christine, I mean our bad debt expense for '07 in total was less than $0.5 million which represents less than one-half of 1% of tenant revenues for the year. So our experience has been extremely positive for '07 facing some economic headwinds potentially in '08 and beyond that number if it increases obviously can mention would have an impact on that same-store growth.
Christine McElroy - Banc of America
So as you have been gradually selling non-core assets and investing more in infill areas, what do you see as the long-term same-store NOI growth potential of the portfolio?
Kenneth Bernstein
Great question. Our hope would be that on a relative basis a 100 basis points higher than the national average. And so far we see that in the infill locations of Westchester, Long Island, certainly New York City where you are able to because of supply constraint really demand stronger rent growth, both contractually and then as the tenants roll. That's the relative answer.
- To read the full transcript on Seeking Alpha, click here »
