Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Christie McElroy – UBS
Christie McElroy – UBS
Just following up on that comment about your recurring FFO guidance, you’ve got it going from $0.69 in Q3 to let’s call it $0.56 at the mid point in Q4. I know $0.06 of that are the severance charges, but can you just help me reconcile that difference as it relates to which transaction profits you’re considering recurring versus non-recurring and is some of that downside in core given that your occupancy guidance suggests that you see a potential for declines in the quarter.
Bruce Johnson
First of all, no transaction profits would be in recurring, or severance charges.
Christie McElroy – UBS
No transaction profits at all.
Bruce Johnson
Or severance charges.
Christie McElroy – UBS
Okay so how, its going from $0.69 down to call it $0.56, can you just reconcile that difference.
Bruce Johnson
Just roughly I think NOI is going to be about $6 million, $3.5 million of that relates to one-time related to our insurance cap that we recognized in the third quarter. And then you’ve got primarily term fees that we’re getting that amount to almost another $2 million, from term fees in the development as well as the same store portfolio, which accounts for the majority of that $6 million.
Much of its in a seasonality basis and then if you look at the asset management fees and from our JV’s that amounts to another $2 million effectively.
Christie McElroy – UBS
So none of that is core, kind of your occupancy—
Bruce Johnson
Its all core, it’s the difference between the two in terms of reduced fees that relate to our asset management fee reductions as well as, Chris was there a [promote] in there as well.
Chris Leavitt
No promote. What we had was we’ve experienced a decline in the over portfolio values that are the basis of the asset management fee calculations. In the third quarter there was a recalculation in the asset management fee through a negotiation with Macquarie that it caught up the fee based on the values prior to the GRI acquisition and revaluation of that portfolio.
And that added about $900,000 of asset management fees to the third quarter that don’t reoccur in the fourth quarter. On top of that we have significantly higher leasing commissions that are recurring on a quarter to quarter basis and we’ve reduced those expectedly some commissions by about $700,000 in the fourth quarter.
- To read the full transcript on Seeking Alpha, click here »
