Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Jay Habermann – Goldman Sachs.
Jay Habermann – Goldman Sachs
Good morning everyone with [Johann] as well. I guess starting with development you mentioned obvious yields around 7%. And I guess as you look out to 2011, 2012, I means does it make sense to further scale back your future investments?
I know in some cases you have limited investments at this point but it sounds like you're waiting for better returns from acquisitions and I am assuming there you're looking at returns closer to double digits. So, I guess how do you think about 7% returns on your capital today?
Drew Alexander
It's something we feel that we get a very thorough job and very much right size things, so our best guess is we will go ahead with the 13 projects because the return on the margin, given that a lot of the land and the site work is already spent, is quite acceptable to us.
As Robert mentioned, we think the land held for future development are good properties and I think they are definitely an asset at this point that I don't think is factored into the markets thinking too much so it is certainly a little bit of icing.
So as we look forward, we do think there will be some growth opportunities but in acquisitions but our main focus will be on core properties where personally I don't think you will see double digit returns.
Jay Habermann – Goldman Sachs
Ok, and then also just sticking with development, I know you stabilized early the projects in the most recent quarter. You referenced a 90% plus occupancy, but on a net basis you're closer to 80%, 81%. Can you give us a sense for the timing I guess to close the gap there as you look at the part that pertains to you?
Drew Alexander
We would think over the next several quarters but obviously that is a real tough crystal ball in terms of how much the economy stabilizes, how quickly.
Jay Habermann – Goldman Sachs
And then what sort of impact on your development returns are you seeing, either from reducing rates or the phasing of the projects?
Drew Alexander
Well, those two things of course move in opposite directions that we elect to phase a property when we do not feel comfortable that the demand is there. The 7.3% that we have for the 13 projects that are left to be done we feel pretty good about. Obviously as to next year's properties we have very good clarity and we are pretty close to that 7% number as we sit today.
- To read the full transcript on Seeking Alpha, click here »
