Question-and-Answer Session
(Operator Instructions)Your first question comes from Dave AuBuchon - R.W. Baird.
Dave AuBuchon - R.W. Baird
Can you provide any more perspective about how much base the credit is willing to give back, any sort of framework there?
Jeff Hawken
Dave, this is Jeff. They currently occupy three buildings, 182,000 square feet and our understanding is they had a clean sheet of paper; they could reduce into one building, approximately 40,000 square feet.
Dave AuBuchon - R.W. Baird
Your desire is to help them work out a new deal going forward?
Jeff Hawken
Well, we’re in negotiations right now and more to come. I think it’s a little premature at this point to make further comments, but we are talking with them and reviewing their financial position, etc. Based on those negotiation discussions, we’ll have a game plan from there.
Dave AuBuchon - R.W. Baird
Dick, your guidance doesn’t assume any sort of lease termination, I’m assuming from accredited?
Richard Moran
I beg your pardon?
Dave AuBuchon - R.W. Baird
Your guidance for this year does not include any sort of lease termination from Accredited Home Lenders?
Jeff Hawken
Yes, I mean we again don’t want to get into the details of what our assumptions are in terms of that negotiation, but we’ve made some conservative assumptions on that lease.
Dave AuBuchon - R.W. Baird
I mean in your supplemental you have a top 15 tenant list. What is the nearest maturity outside of Epicor and maybe while you look that up, did the Boeing lease Jeff that you mentioned was leaving in Q2, is that industrial or office space?
Jeff Hawken
That’s the industrial property in Anaheim.
Richard Moran
I think that the nearest maturity is the Boeing space in El Segundo next year.
Dave AuBuchon - R.W. Baird
What’s the square footage, Tyler?
Tyler Rose
It’s like 290,000 square feet.
Dave AuBuchon - R.W. Baird
Can you talk about the weakness in the industrial portfolio? It looks like that’s where the most of the occupancy decline came from, at least over the last couple quarters. Do you anticipate any sort of quicker than average turnaround if you assume that economic activity starts to rebound and inventories start to rebuild in the industrial world?
Jeff Hawken
Dave, I think if you look at the overall industrial vacancy, it’s 5% so that’s obviously very strong. Well we just got back 113,000 square feet from Boeing that’s industrial. We actually have activity on it already. We did have another building; the tenant moved out, it moved into its own space. So, we have a little bit of space obviously that’s come back.
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