FFO Outlook 2008

The Company is forecasting FFO per diluted share of $4.00 to $4.20 for 2008. 

 

Guidance for 2008

Range

Fully diluted EPS

$0.00-$0.10

Plus:  Real estate depreciation and amortization

$4.75-$4.87

Plus:  Depreciation on unconsolidated joint ventures

$0.03-$0.04

Less:  Minority interest depreciation and amortization 

($0.78-$0.81)

Fully diluted FFO per share

$4.00-$4.20
 
2008 Core Operating Assumptions (Per November 26, 2007 Press Release)

·        An average occupancy for the first and second half of the year of 92.3% and 93.5%, respectively, with average annual occupancy of 92.9%.

·        Same store net operating income growth of 2 to 4% on a GAAP basis.  On a cash basis, annual same store net operating income is expected to increase by 3 to 5%. 

·        Average interest rate on non-hedged floating rate debt of 6.2%.  Average interest rate of 5.6% on $60 million in hedged debt through December 31, 2008, and 6.2% on $30 million in hedged debt through August 31, 2008.

·        Net general and administrative expenses are expected to be in the range of $7.4 to $7.8 million.

2008 Capital Activity Assumptions (Per November 26, 2007 Press Release)

·        No fee simple acquisitions are included in the earnings outlook for 2008.

·        Construction for The Pinnacle at Jackson Place is scheduled to be completed in December 2008.  No incremental FFO has been included in the earnings outlook from this asset.

·        No sales or joint ventures of wholly-owned properties are included in the earnings outlook for 2008.  However, the Company expects to continue to pursue the GEAR UP disposition strategy that has been outlined previously and will provide further information at such time as a sale or joint venture is closed as to the impact on the earnings outlook.

·        The sale or joint venture of One and Two Illinois Center in Chicago, Illinois, is not included in the earnings outlook for 2008. 

·         No additional purchases of Company stock are included in the earnings outlook for 2008.

·        New investments for the discretionary fund totaling $214 million to be completed by July 2008, all at an average acquisition capitalization rate of 7% on the assets and 9% to Parkway when including various recurring fees.

·        Based on the 11/23/2007 closing stock price of $39.27, the Company’s debt to total market capitalization is expected to range from 55% to 57% throughout 2008.