Denny OklakThank you Randy, good afternoon everyone and welcome to Duke Reality's first quarter earnings call. Today, I will address our view on the state of business and some of the drivers affecting real estate demand, I will also highlight some of our key accomplishments during the quarter in both our assets and operations strategies. Christie will address our first quarter financial performance and progress on our capital strategy. The first quarter was solid from an operation prospective and in the execution on our asset repositioning strategy. The end of 2010 provided significant moment for us with the announcement of both the acquisition of the premier portfolio in South Florida and the transaction with CBRE Realty Trust. I am pleased to announce that both transactions are now fully complete. The first quarter of 2011 started somewhat slow with continued concerns over the pace of the economic recovery and whether any near-term meaningful traction to be sustained. A combination of the political events taking place in the Middle Eastern country and concerns over weak growth estimates for the US and other key countries also affected leasing activity. Another key factor during the first two months of the quarter was the severe winter weather conditions we experienced in many of our markets. At various times during the quarter our Dallas, Atlanta, St Louis, Indianapolis and Columbus offices were closed because of inclement weather. We know now that the combination of all these factors led to a slowdown in growth in GDP to 1.8% in the first quarter. We certainly can feel the slowdown. The good news is that now we are beginning to see somewhat of a pickup in activity as companies review their business forecasts and their plans for potential space needs. We said in January that our outlook remained somewhat conservative on the industrial sector. We are seeing more visits to view available space, the timing of these users, making a commitment to lease additional space is still unclear but at least it is encouraging to see people back in the market.
As I also noted on our fourth quarter call, that we were aware of a few potential significant terminations in our industrial portfolio or during the first part of 2011. I am pleased to report that we were able to execute a renewal for 800,000 square feet expirations we mentioned in Savannah. That was one of the key vacancies that we needed to address in 2011. We still have some challenges ahead but we're off to a good start nonetheless.The office leasing environment remains slow but there are pockets of solid activity. We signed 125,000 square feet lease with Alcatel-Lucent over in Columbus Ohio. We also are pleased to report that our 3630 Peachtree project in Buckhead is now 44% leased with solid momentum and a backlog of prospects to push that occupancy even higher. On the medical office front leasing activity and development opportunities are picking up. In March we placed into service the Baylor Cancer Center in Dallas. Our building is spectacular and is 95% leased to Baylor and US Oncology. The overall occupancy in our portfolio was 88.9% at March 31, down slightly from 89.1% at year-end 2010. This is a little better than we expected because of some key renewals and some continued short-term leases. We signed over 5.3 million sq ft of leases during the quarter which is a very solid number. Our industrial portfolio maintained occupancy at 90.2% at the end of the quarter in addition to the two-year renewal we signed in Savannah, other key industrial transactions included a 646,000 square feet lease extension in our Hebron Building 1 in Cincinnati and three renewal extension deals totaling nearly 370,000 square feet in our Freeport buildings in Dallas. Our office portfolio maintained occupancy at 85.6% as of the end of the first quarter which was basically flat with year-end. And as I mentioned there are pockets of activity but the leasing environment is still slow. One positive note is that we're beginning to see some of our customers looking to hire again which we believe is a good sign. Consistent with our expectations, same-property NOI for the three and 12 months ended March 31 was flat at a positive 0.9% respectively. Read the rest of this transcript for free on seekingalpha.com