Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jordan Sadler with KeyBanc Capital.
Jordan Sadler - KeyBanc Capital
Hi there. Just following up Ron, on your commentary on the investment market, could you may be give us a little bit more color on some of the cap rates you are seeing is, you said that they’re not at market clearing levels, but they are up. What so you think you need to see to get excited?
Ron Havner
Well Jordan, it depends. It is a kind of property-by-property, market-by-market determination. Where does the property worth its location and as I touched on, we are not really focusing on the traditional equity sellers, people putting properties on the market, we are really zeroing in on the financial institutions and some portfolios where there really isn’t net equity in the property, the property is overleveraged.
Jordan Sadler - KeyBanc Capital
Has there been a significant amount of foreclosure activity where the banks own some of theses or are you thinking just buying the debt?
Ron Havner
We haven’t seen a lot of foreclosures, but as the debt comes due whether its this year or next year, or the next to three years some of the stuff that we are looking at it is pretty clear, it’s under water and so it’s really waiting for the banks to do something.
Jordan Sadler - KeyBanc Capital
Just lastly, if all things being equal, if NOI is let’s say flowing 3% to 5% this year, I see that you purchased your preferred this year and obviously tendered the debt. Would you rather buy back more of your preferred at a 9% strip yield or would you buy storage properties at a 9% go on a cap rate?
Ron Havner
It depends on the property. I don’t think you would see us buying a lot of preferred at 9%.
Operator
Your next question comes from David Toti - Citi.
Michael Bilerman - Citi
Good morning. Its Michael Bilerman, David’s with me as well. Ron you talked a little about not being immune to the economic downturn, but clearly the results have held up reasonably well even given a downward movement.
Can you just sort of reconcile some of the trending during the quarter and during the beginning of the year related to the deterioration in the economy and how that’s playing out, and how you see it playing over the course of the year?
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