Question-and-Answer Session
Operator
(Operator Instructions) Our first question is from Kristin O’Connor with Morgan Stanley. Your question please.
Kristin O’Connor – Morgan Stanley
Simon, hat level of job growth are you expecting in your 2008 forecasts and how does that compare to 2007?
Albert M. Campbell
We’re basing our forecast primarily on REITs and www.Economy.com and other providers like that and generally what they’re calling for, for 2008 that we can see is GDP growth around 2 to 2.5% and with job production I think a total of about 1 million jobs adding in 2008. In our markets we think that most of our markets have favorable job growth and we expect that and we put that in our revenue performance and in general a modest growth period is what it’s based on.
Kristin O’Connor – Morgan Stanley
Can you comment on the price and the cap rate that you paid on the Cascade at Fall Creek asset during the quarter?
Albert M. Campbell
I can. We paid about a 5.6 cap rate which is a little 6 to 6.4 NOI yield on that. We paid about $3.5 million for that deal at Cascade.
Thomas L. Grimes, Jr.
And of course that property was just beginning lease-up.
Albert M. Campbell
It was.
Thomas L. Grimes, Jr.
So that’s a stabilized cap. So we will have some dilution from that for the six or nine months.
Albert M. Campbell
We will and we expect to have 2.5 to $0.03 over the full year dilution from that. But once it’s stabilized those are the cap rates that you should see.
Kristin O’Connor – Morgan Stanley
And then can you just comment on the overall trends you’re seeing in cap rates in your markets? Any change since last quarter?
H. Eric Bolton, Jr.
I would tell you that it’s still a little fuzzy out there right now. Clearly there’s a lot of capital still lining up for good transactions and good deals that we’re looking at, both new deals as well as some of the repositioned value add-plays. It appears to be still pretty competitive obviously the high leverage buyers are out of the equation now but for modest leverage buyers, and of course with Fannie and Freddie there, there’s still plenty of capital. But based on the deals that we’re looking at and all the things that we’ve studied it does appear that probably kind of a 50 basis point shift has taken place over the last four to five months, sort of holding all the other assumptions stable. That’s where we see pricing at this point.
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