Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Michael Bilerman - Citi.
Irwin Guzman - Citigroup
Its Irwin Guzman here, Michael’s on the phone also. Dean, you mentioned in prior calls that the original capital plan was to spend about $100 million a quarter in 2009 and you just said that you are going to be reducing that by about 40%. I was wondering if you could give a little bit more detail about where that reduction would come out of and in particular, I’m curious as to how you can reduce CapEx by so much without abandoning certain projects that are in your existing pipeline.
Dean Shigenaga
Yes, that’s a good question; some of which we are actually not prepared at the moment to get into a lot of details of our plan, as quite a bit of it is working through our strategy right now, but as we sit here today, we feel fairly comfortable in being able to reduce our capital plan significantly.
Part of it honestly had to do with the fact that within our capital plan, we had assumed certain type of projects going forward and a recurring amount of capital needs in certain areas of our construction business. Some of which we have been able to challenge very significantly over the last couple months and most recently the last few weeks and we found some great opportunities where we were conservatively forecasting construction spending for obvious reasons, but as we got through the details we felt very comfortable scaling that.
Irwin Guzman - Citigroup
So would it be safe to assume that the reduction is driven by efficiency and at the expense of new starts as opposed to taking things that are in your under construction pipeline and effectively pushing them off or abandoning them?
Dean Shigenaga
Yes, by-and-large, that’s correct.
Irwin Guzman - Citigroup
One other question; in terms of the lower TIs, is that on developments as well as the operating portfolio and what does that imply for asking rents and yields?
Joel Marcus
Yes, Irwin that does apply to both and I think it’s very much a case-by-case basis. The example I cited was an example where in dealing with a major big pharma client, it was much easier to offer the opportunity for that client to add a certain amount of the generic infrastructure into the facility at its own cost and they were very willing to do that.
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