Heidi Gillette – Director of IR Marc Holliday – CEO Greg Hughes – CFO and COO Andrew Mathias – President and Chief Investment Officer Steve Durels – EVP, Director of Leasing and Real Property

John Guinee – Steifel Nicolaus Steve Sakwa – ISI Group Rob Stevenson – Macquarie Capital Brendan Maiorana – Wells Fargo Securities Tony Paolone – JP Morgan Jay Habermann – Goldman Sachs Vincent Chu – Deutsche Bank Jamie Feldman – Bank of America/Merrill Lynch Rob Stevenson – Macquarie Capital Ross Nussbaum - UBS Jordan Sadler-KeyBanc Capital Market Steve Bennett – Jefferies Tom Truxillo – Bank of America/Merrill Lynch Susanne Kim – Credit Suisse Michael Bilerman – Citi Josh Attie – Citi Michael Knott – Green Street Advisors.

Good afternoon, and thank you for joining us. Welcome to the SL Green Realty Corp’s, Fourth Quarter and Year-End 2010 Earnings Results Conference Call. This conference call is being recorded. I would now turn it over to Heidi Gillette, of SL Green.

Good afternoon, all. At this time the company would like to remind the listeners that during the call, management may make forward-looking statements. Actual results may differ from predictions that management may make today. Additional information regarding the factors that could cause such differences appear in the MD&A section of the company’s Form 10-K and the other reports filed with the SEC. Also, during today’s call, the company may discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company’s current report on Form 8-K filed with the SEC today. And the press release and supplemental materials regarding the company’s fourth quarter and year-end earnings included therein, all of which are available in the investor section of our website, www.slgreen.com. In December, executive management provided substantial commentary at its investor conference addressing both past performance as well as detailing the estimates for 2011. Therefore, for today’s call we will be utilizing an abbreviated format from that of other quarters past. Initial commentary will come only from Chief Executive Officer, Marc Holliday, then we turn the call over immediately to Q&A. As a reminder, for the Q&A section, please limit your questions to two per person. Thank you, I will now the call over to Marc Holliday. Please go ahead Marc.

Thank you, Heidi. Good afternoon, and thank you all for joining us today. We were pleased to close out the year with a solid fourth quarter in which occupancy was up sequentially, same-store NOI was up year over year, and earnings came in slightly higher than we had forecasted. SLG portfolio leasing volume in Manhattan topped out at over 800,000 square feet for the quarter, which is reflective of the continued strengthening of the Manhattan leasing market. In December and January alone, we signed major new and renewal leases with Acom at 100 Park Avenue, Greater New York at 555 West 57th, New York State at 100 Church Street, Wells Fargo at 100 Park, and CUNY, the City University of New York, also at 555 West 57th Street. That’s all essentially within under 60 days. Looking at the broader Midtown market, there was 5 ½ million square feet of net absorption in 2010 driving the vacancy rate below 11% in Midtown to right around 10 1/2 % as we stand today. Of that amount, less than 3% is sublet space and a smaller proportion of that is what we would term competitive. As detailed in our December investor conference, there are only about a half dozen continuous blocks in Midtown in excess of 250,000 square feet, and the large block requirements in the market right now far exceed that inventory. Tenants known or rumored to be looking at the space 200,000 square feet and above includes such firms as Nomura, UBS, Bank of America, Morgan Stanley, Hobbis Advertising, J.Crew, Credit Agricola, Oppenhimer & Co., Coach, Wells Fargo, WilmerHale, Morrison Foerster, in addition to many, many others. Anecdotally, I would say this activity is at the highest level I’ve seen in the market in any January, a traditionally slow month, exceeding anything I’ve seen and recalled since 2006. The reason driving this activity in large part can be attributed to the private sector job growth in Manhattan, which amounted for about 50,000 private sector jobs added in New York City in 2010. Of that, about half or 25,000 were office-sector using jobs. The prediction for 2011 by city forecast was for less than that amount, and if you recall, in December I had given a range of 10,000 to 20,000 office-using job growth for the year, which exceeded the cities estimates. I fully expect the city is going to come out and revise its estimates sometime in February to reflect the effects of the extension of the Bush-era tax cuts, the lowering of FICA payroll deductions by 2 percentage points, and the effects – the positive effects of [inaudible] which I think will be most positively felt and effected here in New York City. All of which, I believe will result in about another 50,000 private sector jobs being added to the payrolls in ’11, about 25,000 of which will be or should be office-using jobs. Which means that with another 5 million square feet of absorption in 2011, I think we may inch our way closer to that equilibrium number of around 9% which is the point at which I think that pricing power will be at least neutral, or at least going back to an economically rational market for net effective rents and start to put the market favorable nature back into the hands of the landlords. In addition to an improving leasing market, external growth drove earnings in 2010. Much of this activity was reviewed last month at the investor conference, but since that date there has been additional activity including the buyout of City Investment Fund’s interest in 521 5th Avenue, the closing of the purchase of three fee interest in Midtown Manhattan office buildings in the GKK transaction, and additional investments in debt and preferred equity securities bringing total structured finance investments for the year to almost $500 million. As Heidi mentioned earlier, we’re going to curtail the prepared remarks and we’re going to jump right into Q&A. I would urge all of you who haven’t either reviewed the transcript or done the playback for our investor conference just a month and half ago, I think if you do that you’ll find an extraordinary amount of information. I think it was about 2 ½ hours plus of strategic insight for 2011; our views on the market, inventory, how current trends related to historic trends, and a lot of data and strategic rationale for the structure finance portfolio. Much more than we can cover and should cover on an earnings call, but all of which was covered in great detail in December. We set out goals and objectives and guidance in December. We maintained all of that today. It was an ambitious set of goals and objectives but it’s one we feel we’re off to a very good start in 2011, and should be well on track to meeting our objectives. The market momentum, generally I would characterize as one of declining vacancy, obviously declining sublet availabilities, tenants with real requirements for big blocks as I mentioned earlier, little to no new inventory being added, and very low interest rate environment and private sector and office-using job growth. That’s a great confluence of factors that I think will put us well on track to meeting or exceeding our estimates which were given very early on. In fact, over a year ago when we talked about 25% rental growth from trough rents back in 2009. I think you’ve seen at 5 to 10% growth in our portfolio and in the market already. You’ve seen shrinking concessions, and I know that over that three-year period we should be well in hand to achieve that 25% target or more. I wouldn’t over analyze or be confused by the fact that the mark-to-market today doesn’t reflect those numbers because you’re not – those numbers are comparing not the trough rents, and therefore not reflective of growth. They’re comparing to rents that are expiring. And rents that are expiring today, by and large were rents done in 2000 and 2001 which was almost on par with the 067 peak rents. And in fact, those ’00 and ’01 rents had been escalating for 10 years, and also had base-rent increases compounding that. So when you take near-peak rents 10 years ago, factor in base-rent increases and escalation increases, you’re going to get into some very high rents that are rolling off in the years ’10 and ’11, which is why our guidance for those years was minus 5 to plus 5 for last year and for 2011. For last year, we were right on target; this year we feel confident as well. We’ll be right within guidance. And then the rents that start rolling off in ’12 and beyond are more reflective of the ’02, ‘03, and ‘04 rents which was a much worse leasing environment where I think we’ll achieve much higher mark-to-markets. But most importantly, today rents to trough rents are much more favorable. And we are seeing not just – not just predicting, but seeing tangible evidence of those increases. So that is why we set that bar high for ourselves in December. That’s why we reaffirm guidance today. And with that, I would like to open it up for Q&A. Just to confirm for people who is here today, we’re joined by a slightly different cast. As usual, Andrew Mathias, Steve Green, Steve Durels, Andy Levine, and Matt DiLiberto are with me for the Q&A portion. Jim Mead is here for his inaugural run at an investor earnings call and we welcome Jim. And we also welcome David Schonbraun and Isaac Zion who were both promoted to co-CIO, taking the mantle from Andrew Mathias, are here today and will also give some input on some of your questions regarding the investment fronts. So with that, Heidi, let’s start the Q&A.

(Operator instructions). Our first question will come from the line of John Guinee with Steifel Nicolaus, please proceed with your question. John Guinee – Steifel Nicolaus: Oh, hi. Thank you very much. This is regarding 885 3rd, 2 Herald Square and 292 Madison. It appears to me, and Marc or Jim, correct me if I’m wrong that you went from a JV ground lessor investment wholly owned ground lessor investment. And for example, on the balance sheet it looks like your other assets went up by 525 million, your land and land interest went up by 290 million, total consolidated debt went up by 633 while at the same time investments and unconsolidated JVs went down by 146 and portion of the JV debt went down by 215. Can you walk through the sort of the accounting overall, the balance sheet changes, how these three investment use to run through the income statement, how they run through the income statement now, the risk profile on the investments, the leverage philosophy on the investments, and then the cash and GAAP income returns and the per square foot investment basis?

I think John, we’re going to give you all of it and we’re only going to penalize you for the two questions. But let’s start with the accounting, and income side of it. Jim and Matt, why don’t you take that then we’ll flip it on over to us.

Let me do the simple one, the asset treatment on the balance sheet. We bought the fee interest and if we had bought the buildings we would have allocated the buildings between land and building. In this case, because the buildings are under lease, we can’t put that part of it in our balance sheet of the building. We put it into other assets. So basically, take the purchase price allocated between land and building, but in this case we’re calling the building the other assets, and that’s why you see the other assets going up by so much. And yes, effectively we’re converting an investment in joint venture into a wholly-owned investment and we’re booking 100% of the asset, 100% of the debt. And I think that generally speaking, you’ve got the right accounting there. I’ll let Matt touch on the income side.

The income statement is actually, I mean it’s simpler to understand what was recognized in the income from unconsolidated joint ventures. Just for 885 and 2, we’re speaking about, will now be consolidated through our rental revenues and consolidated expense line items. As we move forward, 292 is obviously a new acquisition so that will also be included if not, consolidated revenues consolidated [inaudible].

All right, and on the asset side, Andrew, do you want to check off? David, you can certainly chime in on the – I think John, your question’s related to what’s the risk profile of the investment and the leverage strategy.

I think these were intended to be and are extraordinarily low-risk investments. They represented between 40 and 50% or so of purchase price of the assets when these assets traded at the peak. And I would say the leveraged strategy sort of mirrors that in that you have a very secure investment that has a long time period to run and you – therefore we put long-term fixed rate leverage on the assets at a time when we could get very efficient financing that mature between 2016 and 2017. I think a good example of that is on the lipstick building where you just saw the lease hold of the building essentially go through a restructuring, go through a prepackaged bankruptcy, and ownership of the leasehold mortgage change hands with some debt forgiveness given by Royal Bank of Canada. But you still have somebody investing new capital into that deal at a basis of over $110 million in the leasehold. So therefore, we take a lot of comfort at the feet position that whoever’s investing new cash into that situation is intending to make their rental payments under the fee, and ultimately extend or purchase the fee based on the options that are embedded in those leases. John Guinee – Steifel Nicolaus: And your leases run through how long? You know the master lease with the…

They were approximately 99 year leases with initial terms of around 15 to 20 years with the resets every 10 to 20 years thereafter depending on the lease. John Guinee – Steifel Nicolaus: And they have the right to purchase the fee at points in time?

Correct. They were designed so usually within 20 years of the initial date they would have a purchase option and each reset they have a purchase option at a higher price that ratchets up. They were kind of designed to give them an incentive to hit them, otherwise the payments get exceedingly higher. John Guinee – Steifel Nicolaus: Difference between GAAP and cash on this?

It’s around a 4% cash as we sit today and the GAAP yield is going to be north of 10%. John Guinee – Steifel Nicolaus: Got you, thank you.

Our next question comes from the line of Steve Sakwa with ISI Group, please proceed with your question. Steve Sakwa – ISI Group: Hi, good afternoon. Just a couple of questions. First, for Steve Durels. Can you just go back through some of the larger blocks of space that Mark had mentioned, and just give us an idea of whether those tenants are just looking at spaces of similar size that they currently occupy, are these expansions, downsizings, and just kind of what is the landscape for these tenants today. I guess start with that.

It’s a void, it’s a combination of everything. Maybe rather than be specific to the list of those tenants that he spoke to because I think the intention was to really demonstrate how much activity there is in the marketplace right now. Let me make a couple of points. One is, you noticed off that list there was a good number of financial service tenants. There were a good number of big center banks and there were a good number of very, very large transactions. Many of those tenants are either doing consolidations from multiple locations or their doing just pure relocations because their moving out of space that’s where it would be too expensive to really rebuild the space around them. But to go through a couple of them specifically, you know Nomura started in the market with a search for 400,000 square feet, maybe a year and a half ago. And I’m going to go off just basically sort of general market rumor anyway. There’s a 400,000-foot search. While the search was going on, they leased 200,000 square feet through a variety of different transactions. It was originally going to be a downtown location. They’ve now moved their search to Midtown and the requirement has grown to 800,000 square feet. I think that’s a pretty big statement as to where the markets come from a year ago, if I’ve been answering the same question in January of 2010. UBS, unclear as to what their requirement is for 800,000 square feet. They just renewed for 700,000 square feet in New Jersey, they’re now believed to be searching the market for a front office requirement of somewhere in the neighborhood of 800,000 square feet. B of A, you know, rumor is they’ll leave downtown and come to Midtown, but they still keep a small footprint, or a relatively small footprint downtown. Morgan Stanley’s in the market for a couple of requirements of 5 to 700,000 feet apiece. One is probably a Midtown requirement, one is probably downtown requirement at the end of the day. But they haven’t made any decisions yet. It’s been a search that’s been ongoing for the past year. Coach is out there for 500,000 square feet and all the headlines in the papers have been that they’re [inaudible] talking to them about new development on the west side. Rail yards, Hobbis has been searching the market for 400,000 feet. Interestingly enough, this is a service – an advertising services business that is finding it very challenging to put all of their requirements under one roof at the price point that they seek, which says two things. One if you’re looking for sort of that value office rental rate, that supply is tightening up very quickly. And they may find themselves having to split the operation. Wells Fargo, rumored to be negotiating a lease right now on a block of space that’s been vacant for and been marketed for the past year and a half. And then there’s a couple of law firms out there in the market for a couple of hundred thousand square feet a pop. So you know, a couple of conclusions. One there’s diversity of the tenant base, two there’s a lot of demand for financial services that we didn’t see a year, year and a half ago, three not everybody’s going to land the kind of space that they would have thought they could land a year and a half ago, and four the net result of this is concessions. Concessions are timing and the net affects are slowly creeping up. Steve Sakwa – ISI Group: Okay, thanks, that’s helpful. And then secondly, Marc, could you or Isaac, or somebody else just talk a little bit about the investment opportunities that you’re seeing in the marketplace today?

Well, I would say that having just come off of a big year which carried through to a – one of the reframes in December, I think it was December 7, our investor meeting, was hey that’s great, but isn’t it going to be challenging in the future. And then we went out and we did 521, closed up [inaudible] fee consolidations where the 3 Columbus deal is relatively new and we made some new structured investments in debt and equity securities that I think will yield, or could yield some future pipeline 2011. So I just have always found for over a decade now good mortgage, bad mortgage, tight, not tight, or platform. And our approach to the business seems to attract deal flow. We have a lot – we have a very big pipeline deals right now that we’re evaluating for both debt and equity investment. We gave a goal at the December meeting of greater than $400 million of new investments, and I think with GKK and 521 were probably at or maybe in excess of that already. So that doesn’t mean we don’t intend to do anything for the balance of the year but I think you’ll see our future investments balance with some divestitures. And we’re probably going to increase the pace of some of those divestitures to prune profits which we love to do. I think we’re one of the few [inaudible] that sequentially and serially roll out mature properties, take gains, reinvest in some new buildings. We’ve done it throughout. I think we’re close to – or in excess of $4 billion of that kind of activity, and you’ll see more of that clearly this year with the first being a deal that should hit the market with the next forecast.

Yeah, basically within the next couple of days we’re bringing 28 plus 44th to the marketplace, and as Marc said, this is a mature asset that’s 93% leased. We’ve created a lot of value in the asset by upgrading the lobby and doing certain things in tenant spaces. But we feel now is the time to bring that asset to market and feel we’ll get a lot of traction in the marketplace.

So Steve, I would say, full pipeline, pretty confident in our ability to execute and we’ll probably necessitate and increase in divestitures.

Our next question will come from the line of Rob Stevenson with Macquarie. Please proceed with your question. Rob Stevenson – Macquarie Capital: Thanks guys, maybe a question for Matt or Jim. Can you guys talk about what drove the increase of reserves in the structure finance side, and whether or not, what your expectations are as we move throughout 2011?

Sure, so about half of the reserves we took in the fourth quarter were on the structure finance book. It’s actually taken down to a zero position we had outside of New York that we had previously taken a reserve on in the prior quarter. The other component that’s in there is we live closely and the accounting rules are a little intricate for off balance sheet joint ventures, but there was a very small venture out in New Jersey that when we did the analysis we took right around a $3 million market on that position. It’s an equity in real estate, it’s not in the structured finance portfolio. But you know, we discussed in pretty significant depth in December about where we sat with reserves and how we felt about the existing portfolio and I think we’ve taken a lot of marks and we feel pretty good where we stand now. We haven’t layered in – you know, expected additional reserves into 2011, and I think we have adequately marked book as to where it stands today. Rob Stevenson – Macquarie Capital: Okay, and then as a follow up, can you tell me a little bit about G&A? Is this just the normal fourth quarter bonus in there or is there any material charge for the CFO change in there? Is there anything else that would not be in a regular run rate going as we move throughout the rest of the year?

I’m going to let Jim and Matt handle this, but one piece which I think is the majority when you get down to some granular detail on the difference. We finished up towards the end of the year either signing or negotiating management contracts with approximately 8 to 10 or so of the senior-level employees department heads in essence, whose contracts either had or where expiring throughout ’10. So at this point, estimates were done throughout the year. I think the good news/bad news, depending, I look at it most as good news, the stock price having ticked up towards the end of the year drove the cost of the stock component of some of those new contracts up I think only about a million or so beyond what we had forecasted at lower stock price. But I know at least a million of the million in change of increase is attributable to that. You guys can…

I guess I’ll only point out that there’s always a seasonality in G&A. And year over year, I think that the 2010 number in aggregate grew only 2.6% from the prior year. So I think it’s well within sort of the inflationary kind of game, or increase. Rob Stevenson – Macquarie Capital: Okay, was there any CFO stuff in there that’s not going to be recurring?

Well, certainly not nearly enough. I don’t think that was really a big issue with regard to the year-end number.

Well, with looking out to ‘11, we must have given the forecast in December, so why don’t we just that?

Rob, it’s Matt. The guidance that we provided for in December for 2011 is unaffected by any charges that we took in 2010. At the March point, we saw a little bit of seasonality but the execution of executive contracts in December, and awards that go along with those at a higher stock price ticked up the fourth quarter G&A but does not change how we look ahead to 2011.

Yeah, this is showing from our December investor meeting, $0.95.

Right, which is actually $76 million.

Of G&A, which is $76 million, which is sort of right on top of this? Rob Stevenson – Macquarie Capital: Okay, thanks guys.

Our next question comes from the line of Tony Paolone with JP Morgan, please proceed with your question. Tony Paolone – JP Morgan: Thanks. I know you guys signed some longer leases in the quarter and that helped drive up some of the concession packages but they seemed fairly high nonetheless. And so I was wondering if you could talk about Tis, leasing commissions, free rent going forward, if the environment tightens further as you talked about. Unidentified Company Representative : Yeah, there’s a couple – looking back first off, there were a couple of deals that hit in the quarter that one were negotiated. In the case of one deal, was as much as a year and a half ago where the terms were negotiated, the deal was papered and it was a forward commitment. So it was sort of at the bottom of a dark day, it just happened that it came online in the fourth quarter. A couple of the other deals that really drove the concession package numbers; the 170,000-foot deal done downtown, and obviously there’s a different concession package that one receives when negotiating downtown and in that case it was for HeathFirst versus the Midtown deals. That was 170/2000 square feet so it influenced the overall average. Going forward, in the deals that we’re negotiating today, it’s worth noting, we’ve got a couple of hundred thousand square feet of leases that have already been signed since the investor conference with a significantly improved mark-to-market over what we saw in the fourth quarter. Concessions have started to tighten. And as a rule of thumb I would say where typically you would have seen 12 to 14 months of free rent on space that was raw and where the tenant was building up the space, now it’s more typical the concessions are 10 to maybe 12, but I’d say 10 months is more on target. The Acom deal that we just signed at 100 Park Avenue for 90,000 square feet, that was a 10-month deal and that’s probably the most recent deal inked that was for vacant space, that was done early the last two weeks in December. TIs, where you would said last year, almost every deal irrespective of size, we would have had to either build the space or give it up cash to fully fund the construction of this space for a tenant, which meant TIs were on many spaces, going into the $75 to $80 range, even though – and remember these all get averaged out because the combination of renewal deals, and some deals where we retrofit space. But for raw space you saw a lot of deals that influenced our averages that went into that kind of TI package. Now they’re more into the 60 to $65 range when the deals being negotiated today. So concessions have tightened, and we’re seeing the pace ramp – inch up as well. And I think that’s pretty consistent of what we were feeling at the end of last year and we’re seeing it roll right into first part of ’11. Rob Stevenson – Macquarie Capital: Okay, and that 10 to 12 month of free rent, that’s something for a 10-year deal?

That’s a 10-year deal on raw space where the tenant is building the space themselves as compared to a 10 or 15-year deal where the landlord may be building the space, in which case the construction time falls on our clock. Rob Stevenson – Macquarie Capital: Okay, got it. My second question, just on 521 5th, and just what is the – what do the economics look like really just from an earnings point of view with that debt coming due I guess in a few months and bringing in that interest? And then I guess then you also had a new retail tenant in the bottom there, just how does it shake out in terms of the economics of buying the rest of that in?

Well, Andrew, do you want to just go through some of the baseline economics of the deal and how we’re doing the debt, and I think Matt or Jim can give the earnings impact. Andrew Mathias : Sure. Our going in tap rate is right around 5%, and that’s with about 15% vacancy in the building. We historically have run that building closer to 97-98%, and definitely anticipate as the market tightens up, that we’ll be able to lease up the balance of that vacancy. So our stabilized cash on cost in the very near term, we expect to be in excess of 6%, with some below-market rents in place to continue rolling over the coming 5 to 6 years. In terms of financing, it does roll in April. We are talking to our existing lenders, and sort of deciding corporately how we wanted to handle our financing strategy there; whether we want to unlever the asset is one possibility, or continue with the existing financing, or go out and get new financing. The financing’s at a level that’s extremely comfortable in the market today, and we’ve already had quite a number of unsolicited reverse inquiries from lenders looking to finance our purchase.

I think from just commenting on what we had put out in the investors conference in terms of our guidance, this acquisition is sort of right on top of the economics that we begged in to our guidance for the year, so there would be no change to our guidance this year as a result of this deal. Rob Stevenson – Macquarie Capital: Okay, thanks.

Our next question comes from the line of Jay Habermann, with Goldman Sachs. You may proceed with your question. Jay Habermann-Goldman Sachs : Good afternoon. You know, just following on that last question, as you look at your 2011 debt roles, do you have a preference toward fixed rate at this point in the cycle, or will you continue with floating rate? And I guess just as interest rates are at very low levels today, are you looking forward and expecting NOI to pick up before you put more current financing with fixed rate in place?

Well, you know, I’ve said in the past, Jay, we tend not to like to prognosticate on interest rates. Over the years that’s proven to be a bit treacherous, and we just try and match the form of financing to the investments. So long-term net-lease deals like the ones we own, or the ones we just acquired from [inaudible], those either have fixed rate or if those debts were coming up, we would fix them. Then we have transitional assets like 521 5th where Andrew said we have some significant lease up there. Clearly 3 Columbus Circle when that litigation sort of resolves itself there will be a building there to reposition and lease up, which would warrant, we think floating rate debt and we pretty much like to group things in to buckets of transitional assets; have a floating rate that warrants more mature-fixed assets, and fixed rate debt. And then a whole basket of properties that carry no debt to support the line in our unsecured financing. So, I don’t think – we don’t have a corporate view at the moment that rates are going to stay where they are, or are going to go up significantly so we’ve got to rush out and fix rates. We will swap on occasion when we think there is an asset-level reason to do so. If we’re carrying floating-rate debt on a JV that we think we should be fixed, but our partner doesn’t want to fix, we’ll float, and then swap. That’s not a directional view, that’s an asset-level view. Occasionally in the past, we have made some bets; some worked for us, some worked against us. We tend not to do that. So I don’t know if that fully answers your question, but I’d say we’re a little view neutral on the issue of rate. We carry a slightly higher proportion of floating to fixed and other rates because we carry a slightly higher proportion of transitional assets to mature assets, and we think that’s appropriate. Jay Habermann-Goldman Sachs: That’s helpful. And I guess, just given your progress so far, at 100 Church, can you talk about the competition from downtown at this point in the cycle, you know, given the rent differential? And does that potentially change your rent growth outlook for Midtown, just given the growing vacancy in lower Manhattan?

Well, you know, listen, the growing vacancy in lower Manhattan is all sort of relative, right? I mean, at the beginning of last year everybody expected the downtown to be a whole lot worse than where it seems to be going. And although the vacancy is slowly inching up, you can argue that it’s actually been rather successful about it not being as bad as what was projected. We are left now at 100 Church Street with two blocks of roughly over a little over a hundred thousand square feet each. When we started the project, we were half a million square feet that needed to be leased. And our major competitors, which to date have been 125 Broad, and 77 Water, both of those buildings have had some leasing success as well. So for the primary buildings that we’re negotiating against, the supply has been tightening. Now that we’re going in to smaller blocks of space, rather than the unique 500,000 square foot space that we had to offer, it sort of opens up the field a little bit as far as broader audience of competitive buildings. So that will change things, and I don’t think it really invites an opportunity to raise rents materially, although we had anticipated that we would continue to see some modest increase versus the first deal that we did. And by comparison, the deal that we signed with the State for 90,000 square feet, which was just a couple of weeks ago, that is a ten-year deal, $65 in TI, and 6 months of free rent after the construction, which is a big improvement over the first anchor tenant that we signed with a lease that we saw with no firsts. So I think we’re going to continue to see good success; the building continues to get better every single day because of all of the activities down at the World Trade Center, particularly with [inaudible] coming in the neighborhood half a block away. Jay Habermann-Goldman Sachs : Great, thank you.

Our next question comes from the line of Michael Bilerman with Citi. Please proceed with your question. Michael Bilerman – Citi [Josh Attie]: Thanks, it’s Josh Attie with Michael. Can you talk about some of the larger loan-book investments, like 280 Park, London, and maybe the new investment that was made in the quarter; if you’re in active discussions, or considering taking equity positions in any of those buildings?

Well, Josh, you know we’ve given a lot more disclosure in December on that book. Really as much as we think we can give, and we think anything greater would unnecessarily put us in a position of not being aligned with the interest of the borrower which is paramount here as a lender. It’s really not appropriate to talk about live investments, which are strictly debt investments and talking about what the long-term expectations or strategies are. These are all, for the most part, we can talk about some exceptions, but for the most part these are all well-covered, performing debt investments that every one of which we expect will be paid off if the borrower so chooses. The borrower doesn’t always choose to pay off, so I wouldn’t limit that commentary to the investments you’ve made. If anything, on that book, you saw in December where we detailed the [inaudible]. These are for the most part high-quality assets, predominantly located in Manhattan, predominantly or almost exclusively office and retail, and in all cases where I think the bar could and should support the investments, and where booking for the most part yield to maturity kinds of returns in these investments. With that said, there may be time to time where we’ll have the opportunity for pipeline, typically consensually, very rarely non-consensually, as evidence by the fact that over fourteen years of this business we’ve only had one foreclosure to this program. The other buildings that we’ve acquired out of this program have been done consensually. So I would say it’s likely of the 10-million square feet plus or minus that we have loan interest in, in and around Manhattan, that some of those could result in portfolio assets in the future. And again, I would reiterate, if they do, more likely they’re not consensually. And to give any specific color on any specific asset, we can’t unfortunately do on this call. Jay Habermann-Goldman Sachs : Okay, and separately, can you give us an update on 600 Lex? It looks like the occupancy has declined a little bit sequentially, and I know it’s early, but how is that property performing versus your underwriting in terms of being able to roll up the rent?

It’s pretty much on target. When we bought the building, we put it under a modest but a capital improvement program that’s wrapping up now. We should be completing our lobby work, hallway work, a model office in the next 10 days to 2 weeks. Remember that this is a small-space building, so very rarely do these types of tenants make forward commitments with a great deal of time. So generally, it’s the type of tenant that comes in and says, “What’s available? I want it tomorrow.” Because the floors are 12,000 feet at the largest, and more typically 6 to 7,000 square feet. Unlike other buildings where you have very large tenants, they make lease commitments 10 months to 2 years in advance. So it’s not surprising that until we have the capital program completed, that there be some slow lease up. We knew the majority of tenants who had leases that were rolling were not planning to stay in the building, irrespective of anything we did, or the pricing, or the market. Many of these spaces have already been sublet, some of the tenants already moved out. So, we have very good color going in to it as to where the vacancy would grow to. And quite frankly we intentionally priced the building a little ahead of where the market was at the time of acquisition and it’s been, as anticipated, it’s been an effort on our part to educate the brokerage community as to what we’re doing with the building, educate them as to why we think there is logic in our pricing, and I think we’re getting support on that. I believe that this year we’ll see a decent amount of leases signed in the building, at numbers that were materially higher than where that building was transacting before we bought it. But the proof will be in the pudding when I post the leases. Jay Habermann-Goldman Sachs : Could you remind us of what level of space rent you underwrote on the building for the new leases?

Well, our asking rent today is anywhere from between 65 to $80 a foot in the base, and normally there is always a little bit of room off the asking rent. Jay Habermann-Goldman Sachs : Okay, thank you.

You’re welcome.

Our next question comes from the line of Vincent Chu with Deutsche Bank. Please proceed with your question. Vincent Chu – Deutsche Bank: Hey, good afternoon everybody. Just wondering if you have any update on the dividend? It’s probably too soon after the analyst day, but just wondering if you have any color there.

No, I would say we discussed that at that at length, all the reasons why we thought where we are now is appropriate. Long-term desires see that increase, but it’s really tied mostly to the taxable earnings of the company for this year with expectations certainly for next year, towards increasing. This year I think we’ll just have to wait and see how things shape up from a taxable earnings perspective. But I think that most of the shareholders, we seem to support the use of the retained cash, not only from not paying dividends higher than what they currently are, but also other strides we’ve made on reducing our capital to increase our cash flow and using all that for either – to fund new investments, debt reduction. We think it’s the right time for that in this market where we’re reacquiring assets that we look at as kind of seeds of growth for the future. So we’ll re-evaluate that probably towards the end of the year, but it’s a little too early now. Vincent Chu – Deutsche Bank: Okay, and the second question, just going back to 100 Church, I think it’s 60% occupied at the end of the quarter, and it sounds like you have another 90,000 square foot lease that’s coming in. And I think last quarter you talked about maybe an 80 to 85% sometime in the, it sounded like first half of ’11; does that still seem like a reasonable target for you guys?

Yeah, well we’re now at a 70% occupancy with the signing of the lease that we just completed with the state for 90,000 square feet. We’ve 275,000 square feet of vacancy. I think the building stabilizes in that sort of 80 to 85% range, which means we’ve got a little bit of road still to go to it, but we’ve got good activity, good tenant demand, we’ve had a lot of good showings that are ongoing. So I think we’ll hit our target for this year. Vincent Chu – Deutsche Bank: Okay, thank you.

Our next question comes from the line of Jamie Feldman, with Bank of America/Merrill Lynch . Please proceed with your question. Jamie Feldman - Bank of America/Merrill Lynch: Thank you. I was hoping you could talk about some of your largest expirations this year, and kind of where are you in the process. And also what your thoughts are on TI’s and concessions for those deals.

Well, the biggest one – the reality is, we don’t have that many real large expirations this year. We knocked off a bunch of them last year with the new renewals, but the more significant ones would be the Meredith role at 125 Park Avenue. To remind you, when we bought that building, we knew Meredith would not be staying. They occupy about 150,000 square feet that expires on 12/31. We’re already in the market with that space. It’s a continuous block, it’s sort of the upper half of the building. I am not really too worried about it. I believe actually that the rents will be north of where we underwrote the building, ultimately. But we do not expect to land a tenant until at the very best, until the end of this year. Beyond that, we have some role, you know, not a lot. Tower 45 we have DE Shaw is going to downsize about 30 or 40,000 square feet. We’ve got more role next year in that building, which is why we put the building under a renovation program where we’re doing a new lobby, elevator caps, turn styles, and renovating the atrium in the property. Those are small floors that are 13,000 square feet a pop. DE Shaw essentially outgrew the building; they started as a small tenant and ended up needing a whole lot of floors. Now we’ll have to go back and retenant on a floor-by-floor basis, so that will be a little bit of work. Other than that, my biggest role is at 800 3rd. I’ve got a lease that expires at the end of the year that’s another 50,000 square feet, and that’s it. I don’t have any huge blocks of space. We have vacancy in the portfolio that we’re working on. You know, we’ve got 600 Lexington and 100 Church and 3 Columbus when that building comes in house. So that will be – the majority of our attention this year will be filling the vacancies. Jamie Feldman - Bank of America/Merrill Lynch: Okay, and then given the ramp up in TIs in the fourth quarter, what’s your latest guidance for AFFO in ’11?

Let me jump in on this while I remember before Matt answers that. The ramp up in TI was a result of deals, many of which were negotiated anywhere between the first quarter of 2010, going all the way back to early 2009. So it would be wrong for us to conclude that that increase in TI is a reflection of where the margin is or where we would expect TI’s to be on deals that we’re going to start to negotiate today.

Yeah, Jamie, it’s Matt. You know, as far as how that flows through AFFO or TAD as we refer to it, we provided guidance in December that took our mid-range of FFO 413 down to $2.02 a share of TAD, which factors in capital that you saw flow through here in the fourth quarter. Jamie Feldman - Bank of America/Merrill Lynch: Okay, so that’s unchanged, the AFFO or TAD estimate?

Correct, yes. Jamie Feldman - Bank of America/Merrill Lynch: Okay. And then just finally, given signing market conditions and your success in 180 Broadway, are you guys changing your stance at all on the appetite for developing in Midtown?

No. Our view is you can make much, much better risk-adjusted returns with the strategy we employ of buying existing products that’s often but not always under managed, under positioned and then repositioning, remarketing, rebranding and ultimately leasing up and obviously get into that, you’ve got to buy in at the right basis. That approach yields returns we believe that are traditionally much more attractive for much less time, much less risk, much less effort. You know, you’ve heard me say before, it’s as much about, you have to look not just only IRR, but eternal effort. We do a lot of volume here, and a project that would take senior-level capacity, often taking your eye off the ball for three to five years to develop a major project, or longer, generally doesn’t fit in with our design except for an exceptional property or an exceptional location. So there are always exceptions to the rule, but as a rule our approach is the approach we think is best suited for us in the public markets. With that said, there’s always going to be outlier kind of situations like American Eagle, [inaudible] our site at 317 Madison, where the basis is good enough, and the economics are compelling enough that we make a decision to move forward, but that will be the exception of the rule. Jamie Feldman - Bank of America/Merrill Lynch: Okay, thank you.

Our next question comes from the line of Michael Knott, with Green Street Advisors. Please proceed with your question. Michael Knott – Green Street Advisors: Hey guys, I just wanted to touch back on CapEx real quick, on leasing costs. Steve, which deal did you refer to that was done a year and a half ago? Because there were a couple of eye-popping packages in the lease detail at a couple of Midtown Avenue properties?

Well, the one that jumped off the page at me, I actually had to go remind myself of the deal, was the Lloyd deal, at 919 3rd Avenue. They had forward commitments to extend into a piece of space where the entire block was going to be vacating. We got the deal back in ’09 and in fact, part of the TI there was there was a reduction in commissions paid that shifted over to an increased TI package, so that’s why that number jumped up. The other ones that were big, or the other one that was biggest, which was HealthFirst downtown. Again, it’s important to differentiate the downtown market, where we have a pretty small foot print, versus the Midtown market where the vast majority of our real estate, and the vast majority of our current vacancy is currently located. So downtown trades of bigger concession packages. That one had an $80 TI, plus a $7.50 redecorating allowance to tenant guests ten years from now, but still we had to post the $87.50 as TI allowance. And then we gave them 15 months of free rent, which included their construction time. That was, I will tell you, a lower concession package than the building that we were competing against what they were offering, though. Still, at least from our perspective, and inconsistent with the concession packages that we’ve experienced in Midtown. Michael Knott – Green Street Advisors: And then my second question is about small tenant demand. It sounds like big-block demand is coming back, especially from finance. But it looks like some of your smaller tenant properties, namely Graybar, looks like it continues to lose a meaningful amount of occupancy. Do you feel like the small tenant demand picture is not yet firmed up, and not part of the Midtown recovery story?

Michael, Graybar is one that we’re treating a little bit uniquely internally. We think that when you look at the peak, the trough rents in Graybar, it was a higher-than-average drop that is just starting to make its way back, and we think will firm substantially in 2011, and this is one of the few areas we’ve chosen to warehouse some space. We did it at 100 Park when we weren’t prepared to lease at the trough and you see the results there; that worked out extremely well. We’re doing it here, at Graybar, and we think that will work to our advantage because we see those small-to-medium sized tenants showing up in size and we think that we can make up enough rent by waiting 6, 9, 12 months relative to the capital that you have to put in to pre-build or build for the smaller tenants. We think that we should be waiting for rents that are back in the 50’s, Steve. In the 40’s, it’s not attractive enough of metric. So while the building itself has higher-than-historical vacancy, our portfolio is almost 95% leased. So at 95% lease, you start to be able to get to pick your shots at where you want to spend your capital. Right now we’re looking to spend that capital in the spaces that we think we can get a highest nominal and net effective rents. And right now, that’s not Graybar, that was 100 Park, 461 5th, Tower 45, and 600 Lex, and soon to be 3 CC. You know, the capital dollars are close to the same, the only difference is the rents. We’re targeting that capital for the higher rent buildings, and that’s not to say we’re not actively reaching Graybar, but there’s a couple of blocks of space we’ve kind of said we’ll deal with at the end of the year, and we’ve modeled it as such in our 2011 budget. Michael Knott – Green Street Advisors: Okay, thank you.

Our next question comes from the line of Ross Nussbaum with UBS. Please proceed with your question. Ross Nussbaum - UBS: Hi, everyone. Good afternoon. Folks, a couple of balance sheet questions. What did you do with the unsecured note that matured in January? And then, I know you addressed some of the specific assets that are up for refinancing this year, but in particular what’s the game plan for 919 3rd, 717 5th, and then 1551 Broadway?

Let’s do 919 first. What were the others you mentioned?

First of all, we paid the note that was due in January, just out of cash. Ross Nussbaum - UBS: Okay, and then you have the two assets in addition to 919 were – I’m just looking at some of your JV’s; 717 5th, and 1551 Broadway.

Andrew? Andrew Mathias : Yes. I mean, 919, we have a book in the market now soliciting proposals for refinancing. That’s something we expect to close late first quarter or early second quarter of ‘11. I think, as you know, Ross, we have a very significant cash NOI there versus the financing that’s in place, and we’re anticipating having the option to upsize the financing if we choose to do so in the market today. That’ll be a long-term fixed-rate financing. 717 5th, we have an extension option on, which we’ll likely avail ourselves of. That financing in place is pretty efficient. 1551 is in the process of being refinanced now. You know, we’re down to a very small interest on that property, 10% or so, but it’s in the process of being refinanced now. Ross Nussbaum - UBS: And then I guess the other question I have is, you guys started off the call talking about all the big blocks of space and demand that’s clearly out there, as time goes on here, how much more of a factor is all the available space downtown? Obviously, those requirements aren’t getting filled overnight. Are a quarter, a half, a third of those folks just going to say, you know what, let’s wait a couple years and just take brand new, fresh space down town, especially if it’s not necessarily for our front line people? Andrew Mathias : Well, it hasn’t traditionally been our experience. The almost exclusive motivating factor is rental spread, and when we see those spreads get upwards of 35-$40 a foot, that’s where we see the spill-over in to what would be described as being new, freshly-built space downtown. But I don’t think Midtown has diminished in any way from its attractiveness and allure to people who live, whether they live downtown, Midtown, uptown, New Jersey, Long Island or Grenache, this is still the area of convenience, the area closest to where the heads of these businesses tend to locate. And it’s usually first choice until the bottom line impact makes it compelling enough. But when we see that occur, that’s usually when a Midtown vacancy level well below 9%, which clearly we’re not at now; we’re at around 10.5%. So I wouldn’t characterize that as a 2011 phenomenon, but eventually, certainly, and you know, that’s healthy for New York to have a more moderately priced alternative for companies, and tenants to avail themselves of who can’t pay – don’t want to pay the Midtown rents when they back to that point of neutrality or higher, in the 60’s to well over $100 a foot. Downtown offers an outlet for that rental price point in the 30s, 40s and 50s, but I would say at the moment that is not a factor, but eventually and certainly will become a spillover. Ross Nussbaum - UBS: Thanks, appreciate it.

Our next question comes from the line of with Jordan Sadler, with KeyBanc Capital Market. Please proceed with your question. Jordan Sadler-KeyBanc Capital Market: :

Yeah, I want to make this – I think there’s a slight confusing here between – the 25% or better comment, relates purely to trough rents. It doesn’t relate in any way to the in-place escalated rents of the company. That’s rents that had peaked in ’07, and had kind of hit bottom in ’09, early ‘10, in sort of middle of ‘10, or maybe it was third quarter ‘10 there was a belief that rents would come at least 25% off the bottom. And that we’ve seen building momentum in ’10 and we believe will continue in ’11. But that is unrelated in a certain respect to where those rents are relative to what’s coming off our book. What’s coming off our book now are rents that were largely put in place in 2000, 2001 when rent levels were very high. We’d typically make about 10% increases in to those leases off of those peak rents, and then you’d have ten years of operating and tax escalations on top of that compounding situations. Jordan Sadler-KeyBanc Capital Market: And that’s clear. I wasn’t trying to relate. It sounded, just at the margin in January, you said this was the best January you’ve seen since 2006, and maybe incrementally since 45 days ago when we last talked, that you’re seeing greater demand.

Yeah. That may push it more towards the higher half of the range and the lower half. It certainly – it takes a lot to move our mark-to-market on over a million square feet of rollover. And if we were minus 5, plus 5, I would say if anything you may think more towards the positive territory than negative territory, but I wouldn’t advise the guidance at this point because we could just have an anomaly where one or two, or three very big high-rent leases are rolling off the books in ’11 and we’re just going to get tagged with a 10, or 12, or 15% downtick. The modal of leases, we may have, by number of leases, many more up and down but if you get tagged with two or three big roll downs it’s very hard to overcome that. I think what you’ll see is there are nothing of a monumental [inaudible], but there’s enough done in that ’00-’01 era that’s going to be below, you know, in the negative category that even with a good-tight improving market it’s going to make it tough to exceed our estimate. But I would say to you, if we could – there’s a big range between minus 5 and plus 5. And if we’re in that top half of that guidance, our same-store will be at least that or more. That will make for a very good year and you know, set us up well going forward. Those would be very good metrics. So I think the guidance is consistent with an expectation of some absorption and big job growth which I did set out in December for office-using jobs, close to 20,000 office-using jobs efficient, which is where I think things will – where the projections will ultimately get to in another month or two. Jordan Sadler-KeyBanc Capital Market: That’s helpful. My follow up is just on your comments regarding maybe increasing the sales activity that this sort of coincided with the increased investment activity. I think in the past when we’ve talked about increased sales, it sounded like you were happy with sort of the collection of assets that you had whittled the portfolio down to over time. I’m just curious, what would sort of be potentially on the block or have a higher likelihood of being put on the block for you guys? At what type of volume it could potentially be, and at what point – what’s sort of the assessment in terms of relative growth; what you’re selling versus what you’re buying, where you’re opting to sell some of these assets as opposed to maybe issuing equity.

All right. I’m going to turn this over to Isaac, who put up the slide. Actually, Page 47 from December which is potential JV positions and lists there about six assets as a pool which, whether or not we’re going to sell them – this is no indication that we’re going to sell them. They’re also potential JVs, but they do have a characteristic and a common theme that I think Isaac can explain.

Right. Just – on Page 47, that list of assets, just so you know was 28 West 44th, which is currently in the market; 100 Church; 220 East 42nd Street; 711 3rd Avenue; 379 West Broadway and 520 [Inaudible] Plains Road up in West Chester. And I think I indicated at that point in time that we were looking at these assets and it’s clear that we’re not going to sell all of them. Obviously we have one on the market and might pick one or two others, but the point that we made with respect to each of these assets is actually a slide I have on Page 43 which basically said that, you know, we actually bought – we feel we bought these assets right and as the capital expenditures in these assets continues to rise and the current NOI growth isn’t quite there, it’s clearly time to prune those assets and deploy that capital into more accretive investments. Jordan Sadler-KeyBanc Capital Market: Okay. That’s helpful. Thank you.

Our next question comes from the line of Brendan Maiorana with Wells Fargo Securities. Please proceed with your question. Brendan Maiorana – Wells Fargo Securities: Thanks. Good afternoon. I just wanted to follow up on Jordan’s question a little bit there. And Marc, just going back to some comments you made earlier in the call, is it fair to say – it sounds like from where we sit today that new investment activity is probably likely to be offset by net sales activity given that there could be some increasing dispositions in given how active you’ve been early in the year on the investment side?

I think that since we’ve done as much as we’ve done in the past 60 days, which wasn’t all, you know, certainly not certain when we set our goals for the year. I think that’s generally a fair statement. You know, the way we go about looking to try and arbitrage the market to find the assets where we can get the best bid, realize the highest amount of gain relative to what we perceive as future NOI growth and then put that money back into accretive activities, I think even if the dollars are the same that’s accretive activity onto itself because we do believe we are subscribing to the theory of buy low, sell high. And unto itself, over the long term you’ll end up with a growth portfolio by doing that even if the dollars deployed are the same. If that makes sense because that is an accretive activity. So I wouldn’t – I would say the dollars might be the same but the earnings potential of that activity is still quite high. I mean, that’s what we do, we create significant, significant value and we grow this portfolio predominately through embedded gains and not by repeated equity lists. Brendan Maiorana – Wells Fargo Securities: That’s helpful. I’m just trying to understand the investment side of it with the balance sheet side as well. And then just a quick follow up for Steve Durels. I think you guys mentioned on a couple of past calls that you started moving asking rents up. Has any of that been reflected in the Q4 leasing activity that you guys have given us? And maybe, can you give us any kind of early commentary into how successful you’ve been capturing some of the increased asking rent ultimately materializing into higher signing deals?

We’ll start with the estimates. On the asking rent, we have raised asking rents across the entire portfolio right at the end of 2010. Depending on the building, you know, even at 100 Church Street, I actually raised the rent by increasing the loss factor. So effectively raising the rent by raising the measurement, which I think probably caught some people off guard but I think the market is there to support it. In other buildings, we raised it as much as $10 a foot. In some spaces, it was just a couple bucks a foot. And then I think also we’ve already seen in the second half of 2010 space rents have increased by comparison to where our expectation was for many of those transactions at the beginning of the year. You can almost pick any single building. Deals that we’re doing today in Graybar I think are a couple bucks higher than they were six or eight months ago. 100 Park Avenue is usually a couple bucks higher than where we were expecting on the base floors. I just did a deal for one of mid-rise floors over there where we actually recaptured space. First time we’ve seen that in a couple years where we took space back, subleased it back from a tenant with seven years left on the lease at $39 a foot. We rented the space at $52 a foot. So the face rents are definitely growing, and the asking rents have popped. The first part of the question, which was, you’ll have to remind me, was related to what? Brendan Maiorana – Wells Fargo Securities: Just whether or not has any of that been reflected in the Q4 activity that you guys have disclosed, or maybe see that kind of going forward.

No, because remember, some of the deals that we’re inking today, almost none of them quite frankly have any meaningful size, have a lease commencement of immediately. So a lease that I sign in the fourth quarter of 2010, at best probably doesn’t start until the first quarter of ’11. And more typically would be anywhere from 6 to 12 months forward by the time – if we’re building the space, then we don’t book the deal until we’ve actually completed the work and turned the space over to the tenant. And even where the tenant is building the space, we actually don’t recognize that lease until they’ve completed their work. So there is naturally a significant lead time even if the space is turned over to the tenant for their construction. So I don’t think you’ve seen anything material.

I think what Steve is saying is don’t necessarily expect to see this in the first quarter. This is something that takes time to ripple through the financials, but that’s why we’re on the phone trying to give you a 6-to-12 month lead time into the dynamics of the market that may not be outwardly evident in the way things get reported or commenced in the market. There’s just a natural lead time. But what I said in my remarks earlier is I wouldn’t get confused by Q4 markdown to market and come away with the assumption that the metrics are not as robust as we see them. We could be wrong. It’s a separate issue, but at least that’s how we see them. And what we’re just trying to do is convey that to you guys early on no different than, you know, the 25% time back in ’09. And no different than 2007 when we said rents were going to fall dramatically, and about 12 months later they did. And that was controversial to the other side at that time. So just be a little patient here in waiting to see these results come through. But I think what you’re hearing from us is the sort of real-time experiences we’re seeing in tenant negotiations in a market that is certainly nowhere near what it was in ’06 and ’07, but is something that’s returning to an equilibrium market, and a healthy market, and a market where our net effective rents will be proved measurable. Brendan Maiorana – Wells Fargo Securities: That’s great. Thanks for the color.

Our next question comes from the line of Steve Bennett with Jefferies. Please proceed with your question. Steve Bennett – Jefferies: Hey guys, thanks very much. We’re just curious if you guys could provide some further color on the 3.6 million of higher lease buyout income in the quarter, and how much additional buyout income is currently imbedded in the 2011 numbers.

Let me just start. I noticed in a couple commentaries. It’s Jim Mead by the way, that the lease termination income was excluded from some of the numbers from some of you folks on the annual side. You know it’s a number that is in all of our years. I’m just looking back at lease termination income from this year, or 2010 was 8 million. 2009 was 8 million. Sorry, 2008 was 6 million. 2007 was 11 million. So it’s a number that is consistently in the results of the company. And the reason is that it’s just a normal course of business for the number of tenants that a company like this has. You’re going to have some that want to leave early for a variety of reasons. And so there’s going to be that number in every year, so it is a recurring number. We have some [inaudible] who are guidance on that view. I think it’s a few million dollars based on the guidance books.

Yeah, and probably, you know, half of what has been the average over the last five years is based to 2011 guidance. But because it’s been so recurring, we took a step of lease layering in a nominal amount. Steve Bennett – Jefferies: Okay, and then just one more conceptual one. In the scenario where the ten year goes closer to 5% say by the end of the year, what do you think that does to the New York City office CAP rates in terms of the risk premium that property buyers are going to require. And also, how would that essentially change your approach to investment or balance sheet management?

The question of where treasuries go to has to be coupled with a view as to what’s happening in the rental market. When CAP rates have been very low in the city, and I define that as under 5% or 5% and under, I’ve seen that in low rate and higher rate treasury environments because the CAP rate’s a function of cost of funds, but it’s also a function of expected growth. And if treasuries go from 3.5 to 5, but people’s expectations for rental growth rates go from 3% a year to 25% over the next three years, the CAP rate could be unchanged or down because the expected growth could dwarf the 150 basis point pickup in CAP rates. So traditionally, CAP rates will trade at a spread to treasuries. You know, if a ten year goes to five, it would be reasonable to think that CAP rates could be 6% or 6% plus. But CAP rates could be 5% and CAP rates have traded through treasuries. So it was only three or four years ago, maybe five years ago, where CAP rates were around 3.5% to 4%, and they were traded through treasuries. So they can trade through treasuries. They can trade on top of treasuries. And historically, they’ll trade at premium to treasuries for Class A, up maybe 100, 150 basis points plus. But again, if we’re at the mindset that there’s going to be sort of above-average rental growth in the next three years, that may overwhelm what’s happening with treasury. That’s not to say treasury explodes. That’s not going to have a funding impact, but I would say to you right now, it’s not a leveraged market. People aren’t pricing these assets to the last dollar borrowed. If you look at the profile of people buying today, it’s largely equity-oriented investors who are looking for good, safe, risk adjusted, and tax sheltered yields for the most part. And for that, I think New York office and New York real estate in general is a mecca for that kind of investment. And it could have an impact, or it may not. And like I said, I think you have to just couple that with a view of rental growth. Steve Bennett – Jefferies: Okay, and then just in terms of your balance sheet and investment outlook in that higher rate environment? Unidentified Male Representative.: Your investment outlook in the higher rate environment, where does – we’re going to play capital.

Well, I think – I mean, you know, we were active buyers of real estate in treasury environment that was 5 to 7.5. So it’s all just a pricing exercise for us at the end of the day. If the treasury goes to 5 and borrowing costs go to 6.5 let’s say, that isn’t going to curtail our appetite for investment. It might curtail the price we’re willing to pay. Or if we think the rental increases will mitigate that, it might not have an extraordinary effect. That is basically what comes out of the analysis we do. But I would say in a 5% treasury environment, we have been traditionally, and I would still expect to be an avid buyer of real estate where we see vacancy rates declining from 10.5% today to single digits. If you ask me if we were at 10.5% today and somebody projected vacancy rates increasing to 13%, that would have a chilling effect and a measurable effect on our investment appetite. But as long as the vacancy rate and all the market dynamics are trending in the right direction, the treasury cost is just – the borrowing cost is another factor that we’re going to put into the model, and we’ll price it as such. But I don’t think it would dampen our enthusiasm in this current market to be in that acquire. If that rate increase somehow put a damper on job growth, private sector growth, and office-using growth, that would certainly have to get factored in, but I don’t see – we’ve lived through multiple 5% treasury rate environments. And I think you could have a good healthy business environment there as you do at 6.5% and 3.5%.

I think we showed a slide in December as well where the spread of CAP rates to 10-year treasuries is at a pretty historic high right now for the cycle. And a lot of times, you’ll see rising rates, but CAP rates stay the same or actually tighten a bit because typically rising rates will come in a rising rent environment. Steve Bennett – Jefferies: All right, thanks very much.

Operator, we’ll take last two questions. We’re well beyond the time we traditionally allow for the call, but we’ll take these last two.

Okay, not a problem. Our next question will come from the line of Tom Truxillo with Bank of America/Merrill Lynch. Please proceed with your question. Tom Truxillo – Bank of America/Merrill Lynch: Hi guys, this is Tom Truxillo. Speaking of that borrowing cost and how that’s just another part of the input in the model, Jim, you had said during the analyst call that you needed a little bit more time to kind of look at the balance sheet and see what you needed to do to get investment gradings, or whether or not that’s still goal to the company. Now that you’ve had a little bit more time in the seat, can you give any thoughts on whether or not that’s still a goal, and if it is, what do you think you need to do to get there?

I think the goal is to continue the improvement in the credit metrics of the companies have made progress on. I think that the company just got an increase it it’s rating from Moody’s to BA1 from BA2. So my sense is that we’ve moved in the right direction and the rating agencies like what they’ve seen. Our creditors like what they’ve seen. I don’t think that I’m yet in a position to fully quantify what has, or articulate specifically what has to be done. But look, we’re going to keep moving in this direction and I don’t think we’re very far from investment grade other than through time and relationship with the rating agencies, which I think probably is something that can’t be predicted. We’re a large rate. We’ve got great momentum in our credit metrics. We’ve got great availability. And I think we’ve made some very thoughtful investments, so I think there’s really good traction on progress in those things. Tom Truxillo – Bank of America/Merrill Lynch: Okay, but no formal plans for balance sheet kind of management items. It’s more of leveraging through EBITDA growth, improved operations, kind of continuing the track you’ve been on for the last call it year, year and a half rather than …

I think we’ve touched on a lot of the items. I think we touched on a view of fixed and floating rate for example. I think a pretty good approach there. I think that we talked about recycling, and the relative value of recycling versus markets and raising equity. I think all these things get tweaked over time, And we continue to look at them based on our investment appetite, and based on where we see rents going and the leasing going. So I think we’re making good progress. I think we’re still on the same track we were before. Tom Truxillo – Bank of America/Merrill Lynch: Okay, thanks for letting me in the queue guys.

No problem. Thank you for your question.

Our final question comes from the line of Susanne Kim with Credit Suisse. You may proceed with your question. Susanne Kim – Credit Suisse: Hi, I want to ask you a couple questions about your structured finance book. First of all, what is driving the loan in the ergonomics rule of status? Is it the larger book, or is this is a forward indicator of loan reserves? And is there a history of those loans going back and forth from non-accruals back to accrual?

Susanne, it’s Matt. We have to evaluate accrual, non-accrual status every quarter. Actually, we touched on this two investor conferences ago that non-accrual status is not necessarily indicative of those positions that have reserves, or require reserves, or could have reserves in the future. It’s a separate analysis of income stream. Historically, those don’t go back and forth. Can they, yes. Historically, they’re on non-accrual they stay on non-accrual. And in the current book, we have one position that’s the vast majority of the positions that are on non-accrual right now. It’s a performing loan, but it was an independent evaluation and determination made by us to turn off the income stream. And in all the cases, if we recognize income, or if it does perform even though we have it on non-accrual status, we will recognize the income. So it’s an independent evaluation done in every quarter, and not necessarily something you should read into. Susanne Kim – Credit Suisse: Sure, the second question is your largest investment I think is $202 million in New York City. The yield sort of picked up from 737 to now I think it’s recorded at 984. Could you provide some color behind that and sort of what we should expect on that yield?

Yeah, it’s pretty simple. We have OID discount amortization that was started in Q4. That picked up the yield, then that is how it will be recorded on a go for basis. Susanne Kim – Credit Suisse: Okay, and is this Columbus Circle?

It is not. Susanne Kim – Credit Suisse: Okay, and finally, what sort of level of earnings coming from the structured finance are you sort of comfortable at and going forward?

We would like these positions to be as high as possible relative to the capital we devote there, but we only devoted about no more than 10% of assets to the sector. Right now, we’re probably at about 7% or so. We’ve love those yields to be as high as possible, so you know they traditionally have been around 10%. I guess right now, Matt said that yield on that book is how much?

It’s around 8%.

Let me just comment. Also it’s about, I don’t know the exact number, but around that 8% of EBITDA comes from that portfolio, but I think that activity itself has value as it reaches way beyond just the investments in the portfolio into our ability to create value across the whole company. And we’re showing that I think historically that this business has been a good business for the company, so I think if what you’re asking is how much, how important this business is to the company, it’s going to continue to be important, but I think that we are also irrational in measuring the exposure to risk. And taking into consideration credit metrics and other things, but we’re going to continue to have a big focus on this business. Susanne Kim – Credit Suisse: Okay, great, thank you so much.

Okay, thank you for whoever is still with us at the end. We appreciate your questions and interest and patience in getting through a long list of what were very good questions and we look forward to speaking to you in three months’ time.

Thank you for attending today’s conference. This concludes the presentation, you may now disconnect and have a great day.