Stuart McElhinney - VP of IR Jordan Kaplan - President and CEO Kevin Crummy - CIO Mona Gisler - CFO

Blaine Heck - Wells Fargo Manny Korchman - Citi Craig Mailman - KeyBanc Capital Markets Jamie Feldman - Bank of America Merrill Lynch John Guinee - Stifel Jed Reagan - Green Street Advisors Barry Oxford - D.A. Davidson Steve Sakwa - Evercore ISI Rich Anderson - Mizuho Securities Daniel Santos - Sandler O'Neill

Thank you. Joining us today on the call today are Jordan Kaplan, our President and CEO; Kevin Crummy, our CIO; and Mona Gisler, our CFO.

This call is being webcast live from our website and will be available for replay during the next 90 days. You can also find our earnings package at the Investor Relations section of our website.

You can find reconciliations of non-GAAP financial measures discussed during today’s call in the earnings package. During the course of this call, we will make forward-looking statements.

These forward-looking statements are based on the beliefs of, assumptions made by and information currently available to us. Our actual results will be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control or ability to predict.

Although, we believe that our assumptions are reasonable, they are not guarantees of future performance and some will prove to be incorrect. Therefore, our actual future results can be expected to differ from our expectations, and those differences may be material.

For a more detailed description of some potential risks, please refer to our SEC filings, which can be found in the Investor Relations section of our website. When we reach the question-and-answer portion, in consideration of others, please limit yourself to one question and one follow-up.

Thank you. I will now turn the call over to Jordan.

Good morning everyone. Thank you for joining us.

Last week, we celebrated our tenth anniversary as a public company. I'm proud of our team and our success.

During the last ten years, we've grown our total office portfolio by more than 50% while increasing our FFO per share by more than 65% and our AFFO per share by over 100%. We've achieved this growth using a low risk strategy of owning and operating the highest quality properties in the best supply constrained markets of Los Angeles and Hollywood.

The labor market in Los Angeles continues to improve. During the last 12 months, the Los Angeles unemployment rate fell 100 basis points to 5.1%, notably driven by growth from office employment.

Our Westside sub-markets continued to outpace Los Angeles County with unemployment at only 4.5%. Bolstered by this economic backdrop, our office portfolio had another very good quarter.

We signed leases with cash starting rents 15% higher than the ending rents for the same space. The straight line comparison for those same leases was up 31.3%.

Management is doing an incredible job controlling operating expenses, actually reducing our same property expenses by almost 3% from last year. We continue to have a busy year in the capital markets.

During the third quarter, we completed the acquisition of multi-tenant office properties in Brentwood and Santa Monica. We purchased these buildings in a new consolidated joint venture in which we retained a 20% equity interest.

We also completed the previously announced sale of an office building in Sherman Oaks. Our balance sheet remains strong.

We have over $150 million of cash on hand, $400 million of availability on our credit line, and no material debt maturities until August 2018. I will now turn the call over to Kevin to provide more color on our recent activity.

Thanks Jordan, and good morning everyone. Our third quarter was another active one on the transaction front.

In July, we purchased 12100 Wilshire for $225 million. At approximately 80% leased, this property represents a great lease-up opportunity in a highly occupied core sub-market.

In September, we acquired 233 Wilshire, a 129,000 square foot multi-tenant office property in Downtown Santa Monica for $139.5 million. The property is 95% leased and is located at the entrance to the Third Street Promenade.

The building is two blocks from the ocean and has panoramic views of the coastline. In-place rents are significantly below market.

So as our shorter-term leases roll, we can capture the upside in rents. The $365 million of acquisitions were financed using $146 million secured non-recourse, interest-only loan that matures in July 2019.

We intend to leave the interest rate floating at LIBOR plus 155. As Jordan mentioned, both of these acquisitions were completed in a new consolidated joint venture, where we retained a 20% equity interest.

We continue to hold a 30% interest in the venture that owns the Westwood portfolio that we purchased earlier this year. In September, we closed the sale of 168,000 square foot office property located in Sherman Oaks for $56.7 million.

With that I will now turn the call over to Stuart.

Thanks Kevin, hi everyone. During the quarter, we signed 163 office leases covering 571,000 square feet, including 236,000 square feet of new leases.

Our same property leased rate increased by 10 basis points to 92.5%. The lease rate for our total portfolio, which includes 80% lease to acquisition in Brentwood declined 20 basis points to 91.9%.

As Jordan mentioned, our leasing spreads were strong this quarter. Cash rent roll up was a positive 15% and straight line rent roll up was 31.3%.

On a mark-to-market basis, our office asking rents exceeded our in-place rents by 14. 9%.

In addition, a large majority of leases we signed in Los Angeles had fixed annual rent bumps greater than 3%. On the multifamily side, our 3,300 units were again fully least at quarter end.

Our multi-family asking rents rose by more than 4% year-over-year. At quarter-end, the annualized asking rents for our multi-family portfolio exceeded our in-place rents by $20 million per year, about half of which related to our 227 remaining pre-1999 units in Santa Monica.

I’ll now turn the call over to Mona to discuss our results.

Thanks Stuart, good morning everyone. We are pleased with our Q3 results.

Compared to a year ago in the third quarter of 2016, revenues increased by 20%, FFO increased 19.2% to $83.9 million or $0.47 per share. AFFO increased 17.1% to $68.7 million or $0.38 per share.

Comparing our same property cash results in the third quarter of 2016 to the third quarter of 2015, revenues increased by 3.8% reflecting better core operations and the timing of prior year CAM reconciliation. We actually reduced same property operating expenses by 2.8%.

A large portion of that reduction was utility savings from new software and systems that we’ve implemented as part of our ongoing sustainability efforts. Overall, same property cash NOI increased by 7.4%, and core same property cash NOI rose by 6.1%.

G&A for the third quarter was $8.1 million on a 4.2% of revenues and well below that of our benchmark group. Finally turning to guidance.

We are increasing the midpoint of FFO guidance by $0.02 and now expect FFO to be between $1.79 per share and $1.81 per share. We are increasing the midpoint of AFFO guidance by $0.03 to be between $1.44 per share and $1.46 per share.

For more information on the assumptions underlying our guidance, please refer to the schedule and the earnings package. I will now turn the call over to the operator so we can take your questions.

Jordan, I think it was in the first quarter that you talked about targeting around $400 million of equity investment, now you have the Westwood portfolio investment, the 12100 investment and 233 Wilshire along with the disposition. So I guess can you just give us an update on whether that $400 million equity amount still stands and kind of where you stand relative to that target or limit given all the ins and outs?

Sure. So, originally we organize ourselves, because we were looking at that Blackstone portfolio thinking, okay, we're going to take 20% of this and we thought it would be about $2 billion of equity, so we thought all right that's $400 million.

Now, in fact what's happened is it's come out sort of piecemeal building by building, and we wanted a few and we have not wanted a few, right. And then of course, the one at 12100 wasn’t even in that pool, and as you mentioned, we sold one.

If you take - even if you ignore the one that we sold, we're still probably going to underperform that $400 million which is you know just because we didn't get all the buildings. So we're still actually under $300 million in terms of equity we’ve put out, and I hadn't even - and that's without even thinking about counting the one we sold that would bring us down even further.

So I guess given that math, does that give you an opportunity to continue on the acquisitions given what you're seeing right now, and get up to that $400 million or are you happy with kind of where you are now?

Well, no, I mean, we have - as I said in the prepared remarks, I mean we have a lot of room to continue buying, and actually I think there's great buildings still coming out that we want to buy. So I'm optimistic that we're going to get much closer to that number, I mean my hope is we would have been at that number this year.

Being that -- another factor in that is being that we're kind of transitioning across more than one year. Even that number is even more of a moving target because of course we have excess cash flow and a lot of other things change during the year.

So we have plenty of dry powder to continue buying, and the good news is, and I’ll let Kevin talk to you more about it, but there's good buildings I think coming in the pipeline that we will be able to buy.

And then just second question. Looks like Sherman Oaks and Encino make around 30% of your forward 12 months explorations.

If I'm not mistaken that's been one of the sub-markets that’s taking a little bit longer to recover. So, you know, do you think we could see some depressed rent spreads in the near future given that higher proportion of expires in that market or do you maybe see it as kind of an opportunity given that you guys have quite a high market share there?

Hey Blaine, this is Stuart. That was one of the markets, that’s actually one of our strongest sub-market's coming out of the recession.

It was performing really well early on and we were moving rates up there quite well and continue to, but we have had as you have seen a little bit of a dip in lease rate there over the last couple quarters, one of the things affecting that this quarter is we sold that very highly leased building, the building we sold was 97% leased. So that brought the average down this quarter, and we've had some small lease percentage decreases in some of the other buildings in that sub-market.

But I think we do like the opportunity there, I think we're still seeing good rent growth there, good activity from tenants. So that's something we're overly concerned about the lease roll coming up.

Can you guys help me figure out why the two cash same-store NOI numbers that you guys give are going in different directions with sort of the headline number going up but the core number coming down?

Hi Manny, it’s Mona. So it’ related primarily to occupancy that's on the residential and on the commercial side.

So on residential last quarter, we had mentioned that we were experiencing some temporary softness at one of our properties in Hawaii. We think we're past that, but it did have an impact on our core results.

On the commercial side, we're using this opportunity provided by the strong markets to replace some of our struggling tenants with stronger tenants at current market rate. So, we'll consider an early termination if it means we can backfill the space and at current market rates.

That’s going to be great for us in the longer term, it does mean a temporary increase or loss of occupancy while we just work through that transition.

Was there lease term…?

What happens is, historically if someone comes to you where they want to sublease or they have another reason why they want to get out of their space, we probably would hold them to their lease, right. But because the spread and rents is good and the flow of tenants is good, we can trade today, we could literally say to them, hey, don't sub-lease, we'll just take the space back.

We'll lease it for a higher rate which obviously has a good impact going forward for future periods, right. But that trade creates vacancy this year, puts that cash into the cash NOI bucket because they make a payment to get out of their lease, but takes cash away from the core bucket.

So it causes them – it is sort of self-inflicted in terms of this year but better for the years going forward.

So is there any lease term income either in 3Q or expected in 4Q that wasn't expected in your previous guidance?

Yeah, in our previous guidance, we didn't expect which - in this weird case it was an opportunity to terminate some leases which created more vacancy, so we didn’t expect that opportunity, which we took but it created some vacancy, so it hurt the core number wall and kind of putting income into the number that's all cash number which includes lease cancellation fees.

So how much of lease cancellation fees that we should be modeling for 4Q?

Yeah. That's hard for us.

I don't think we can provide inside on it anyway.

Your FFO guidance does not include those fees or does?

Our annual, we don't give it to the quarter to give you what we think in a quarter. So our annual FFO guide, it’s our expectations are annually, FFO guidance includes it and by the way our guidance on same-store core and otherwise includes it but all those are for the year.

But with only one quarter left, you're not going to share what that number is?

Correct.

Maybe just to follow-up on Manny’s question, how much of the guidance increase at the midpoint for ‘16 is related to lease term fees?

If you look at the range, I mean it was a small amount of a change to our core NOI this quarter. I don’t know if we nailed down the exact amount to provide to you, it’s a component of what we're seeing in the core.

Okay, it’s just not material.

No. And for us, to think about, but we're still within the range and even if you look at the range that we've provided previously it’s not a big change.

And maybe follow-up on the earlier question, Kevin, can you maybe just run through what you guys are seeing in the acquisition pipeline?

As Jordan said, pardon me, I'm speaking through a weak voice here. It's been a pretty robust year and activity is be getting more activities, so we expect over the next couple of quarters that we're going to see a number of opportunities that we want to chase aggressively.

Then just one quick one, you mentioned significantly below market rents on 233 Wilshire. Just curious, if you could give us kind of time frame to get to those and maybe where that asset could stabilize once you kind of roll everything up?

There's a pretty decent rollover in the first three years. So, we should have a pretty good opportunity to mark those leases to market over the next couple of years.

Any just color on the magnitude of upsides on that?

We're probably going to stabilize this asset somewhere in the mid-size.

So I guess looking at page 14 of the supplemental, unit percent lease, can you talk through some of the sub markets that are caught less than 91%. I know some of those have to do with new acquisitions but just as we are thinking through the next year or so, where do you think you could get some juice to pick up those lease percent numbers, which sub-markets?

Hey Jamie, it’s Stuart. So you said less than 91%?

Well, I mean looks like Sherman Oaks is 90.7%, so…

Talked about Sherman Oaks already a little bit there, so we’ve had a little bit of noise there but we took back a larger space earlier this year that we discussed and we've had some smaller decreases across that sub-market but typically a very strong sub-market for us there. And also as I mentioned we sold a very highly leased asset there that brought the average down.

Westwood, we're sitting at 89 and that was brought down by the portfolio we purchased earlier this year, but we're feeling very good about activity there, certainly expect to make progress across all the courses of markets really if you want to throw any of -- I don’t think any of the others are below 91% but - and then of course we have kind of our Sherman Oaks, sorry Warner Center and Honolulu sub-markets, where we've been making some progress, happy to see that, still a lot of work to do but pleased to see activity in those markets.

And I guess Warner Center or I guess generally for next year, can you talk about known moveouts that are sizable, if there are any?

No moveouts that are sizable that we're thinking about at this point.

And then finally from me, can you talk to your Time Warner exposure and any risk you think there might be on a merger?

First of all, we haven’t an indication that it has any impact on us but of course that would be surprising if we did get an indication like that. The tenant that we have there is related to the big tenant that there is related to the studio.

So it's part of that whole entertainment division, I would be surprised if they plan to move the whole studio somewhere else but that's pretty much as much as we know about it.

And which building is that?

It’s Studio Plaza, 3400 Riverside Drive.

It’s our one asset in Burbank.

That’s the one asset in Burbank.

And that lease expires when?

2019.

This is a very, very impressive print, congratulations. Just a total curiosity, why do you have consolidated JVs when you only have a 20% interest?

Usually, you would think that more control would run in your 80% partner?

We manage the joint ventures John, and on top of that, we do have control over the decisions that are most critical to the operations of the properties and that allows us under US GAAP to consolidate.

John, you’re 100%. I don't want to go off on a tangent because everyone knows here what I think of some of the stuff but as odd as it is percentage ownership doesn't tell you whether it’s consolidated or not, we do have tremendous control like decisions control in the JVs and for that reason, there were little differences as opposed to what we have when we own 70% of [indiscernible] consolidated even though that one is 20% or 30%, the other one is 70% and beyond that you have to check into the mysteries of accounting.

It looks like leasing volumes slowed down a little bit versus recent quarters and you’re taking out the language in the disclosure talking about double digit office rent growth in your markets. Are you seeing any signs of office rent growth cooling down, and then maybe if there any comments on just the concession environment as well?

So in terms of office rent growth, you're right, we took that out, because it was slightly under 10%. So we couldn’t say the double digit anymore, but I don't -- I still feel like it's very strong, rental growth market.

And when I talk to our brokers, I'm still feeling a lot of optimism about where things are going. So only when you compare the quarter this year to the quarter last year, same quarter last year, do you get that, going slightly below.

But I still think it's extremely strong rental growth. And your other question –

[indiscernible], on the leasing volume, if you look at kind of our new activity, it’s pretty normal in line for us. We’re really a little light on the renewal side, which is just kind of timing of renewals that came up during the quarter.

So that was just a timing issue as our renewal rates were still kind of actually above average.

Okay. That’s helpful.

And as far as concessions?

TIs were a little higher this quarter and that was really skewed by two large outlier deals that had higher than average TIs. So those two deals really skewed higher.

One of those was a restaurant stage, where we made the decision to convert that into office and that was a long-term deal that just came with a very high TI.

Okay. That’s helpful.

And just kind of looking by submarkets, are there and then may I just take in to kind of the core West LA submarkets, which areas did you say you're seeing the strongest rent growth still versus maybe areas that are lagging a little bit?

I think the core market kind of acts as one. I mean we're seeing really strong activity across all the core market.

It is at the moment. I mean, when we just were kind of coming out of the recession, you probably remember, we said, hey, we're seeing the fastest growth out of like downtown Santa Monica, Beverly Hills triangle and it was in that -- in Sherman Oaks market.

But to a great extent, everything has leveled up and it's moving together.

Okay. And then just a little more on Warner Center, I mean, what are the overall leasing trends in activity you're seeing out there and as you sort of think ahead, if you were to stabilize that over the next few years, would you think of that as a potential non-core candidate or what are your latest thoughts there?

Well, look, that’s going way out. So for a lot of the reasons as I’ve said before, I actually think Warner Center is a good bet and I like what we have there and what's happening there.

It's certainly in comparison to the other markets we’re in, recovering slower. But when you look at the fundamentals that drive recovery and occupancy and rental rates and then -- and I'm talking about population moving in, amenities and what's going on, I think Warner Center has got a very bright future.

So I feel good about being there. Now if you're talking on a very long-term and because we're talking about through a cycle literally, Warner Center is a place where you can still build.

So the next time and I don't know when that time will be, when rents have gotten very high and you can build again, it's likely that we would look at that market as a market we could trade out of, which I've said that in the past, simply because we don't like being in a situation where we're competing against a lot of new supply coming in. But nothing like that's happening now.

I think over a very -- over the kind of period that we can view over the next two years, what I mostly see is a lot of good amenity based stuff coming online, a lot of good residential coming online, a lot of population moving in there, a lot of businesses moving into the area, so I feel good about that, the properties that we have there for the sort of foreseeable future.

Great. Thanks, guys.

Quick question, just following up on, the 400 million in equity investments that you guys kind of wanted to get to, and then I look at the 30% JV interest you took [Technical Difficulty] but then you did 20% at 12/01 in 233, why not at least keep that at 30%, so you could get more money invested or were those the terms that the partner wanted or were you guys just trying to keep as much powder dry seemingly possible?

It was the terms that the partners wanted, right. So you have deals that are going quite well and partners obviously want to have as good a piece of that as they can and we want them to be happy and so you end up in a situation where in each of these, there might be three of us.

And we could draw the line at a certain point, but they also have what they want, we've said to all of them we're not going to go below 20% for sure, but then beyond that, it's a matter of making everybody happy.

Right, along with shareholders?

Well, I mean I want the shareholders to be happy. We're big shareholders, we want to be happy, every one of our private equity investors to be happy and we want everyone to feel they got the benefit of their bargain when they committed to go after this whole portfolio with us.

And so, we want everybody to be happy.

Right. Okay, guys.

Thanks. I was just trying to get a little bit of thought process behind the 20%.

Thanks.

Thanks. Good morning.

I was just wondering if you could talk a little bit more about the Westwood and kind of the Blackstone assets that you bought and kind of the progression maybe that you’ve made in trying to get those assets leased off. My sense was that they're still kind of about flat from where you bought them and just curious as to what you think the timing is to get those kind of up and to the maybe mid-90s.

So, I feel very good about all the assets we bought, because they were in market -- they’re in markets where we already have other assets that are in the high-90s, right. Now, when we took on, in particular, Westwood, there was a lot of noise there just going into it, right.

So we actually had to deal with some known move-outs and some down before we could start heading up. Now, I think we're having very good activity there and we feel good about our pipeline there.

So I'm optimistic -- I'm not going to give you any timelines, I’m not good at timelines, right. But I think we feel very good about bringing Westwood up to kind of cruising altitude on a reasonable schedule.

It’s easy to say the same thing about the building we bought in Brentwood, because all of our surrounding buildings are very highly leased. That one was very lowly leased and that happens to be one of the best buildings in that little submarket.

The one we bought down in Santa Monica was pretty fully leased already. We have I think one or two small spaces left there we're actually working on.

So I like what's happening. I like the way the purchase went and I feel very good about us being able to realize our expectations in terms of lease-up over a reasonable period of time.

And I know one of those buildings, Jordan, was going to go through kind of a big lobby repositioning, when do you think you'll sort of finalize those plans in the, I guess, the economics behind that lobby renovation and kind of, I don't know, if you want to call it the patioscape at the front of the building?

I can’t even believe you know that. I don't even know what to say, but that is correct.

We haven’t had that conversation and I don't want to go too much into our redevelopment plans, but you're right, that's impressive that you even know that, that it's a building at 10880. So on the corner of Westwood Boulevard, on Wilshire.

It's a fantastic building, but we weren't -- we felt like we could dramatically improve its kind of phase 2. Wilshire is really one of the prime corner going down that Wilshire office corridor, and we have with our partners and I think we have made a decision to do that, but that's the amount I’m going to tell you.

That’s it.

Okay. And then do you have any update for us on the Brentwood, I guess, residential project and kind of the community and sort of what the timing looks like to get approvals and if those approvals, I guess, do come later this year or early next year, how do you feel about the timing and kind of where we are in the cycle to start that project?

Well, to whatever extent a project where we’re going into it, we certainly had a 20% shot of success and now we're deeply into it. So to whatever extent you can predict timing, I think our timing looks okay.

We've met with all the homeowner groups multiple times, I think we've got pretty good support out of all of them. We've met with the city councilmen’s office and they’ve actually -- in this one, I don't want to say this wrong, but in this situation, they've had a lot of good comments, which have actually even made the project better.

And we've made those changes, so that slowed us down a little bit. Now I don't know if they're fully embracing the project at this point, but there's been a lot of changes that even we agree with were good comments.

So I'm feeling more optimistic about that project than I have at any time in the past and I feel like we're -- if there were some very tough points that would have stopped us, at least the majority of those tough points that would have stopped us were already beyond them, although we still have serious, I think, three pretty major approvals we have to go through that happened on in a relatively rapid succession over the next three or four months.

Hey, thanks. Just a couple of follow-ups.

Jordan or Kevin, there's recently been a little bit more talk about the Arts District downtown and its viability, given kind of a big lease recently to Warner Music and some other activity. Do you think you guys would consider expansion there or I guess anywhere else downtown for that matter?

So that lease was a pretty big news for the Arts District. There's a lot of development, some pretty cool spaces being put up down there, but it's just not what we do.

It tends to be larger tenants and creative space and we kind of stick to our knitting with the small guys in more traditional office buildings.

It's also a -- it's beyond an unlimited supply area. I mean, every corner has another building that you can probably purchase and extensively convert.

Okay. That’s helpful.

And just a quick modeling question, I noticed in your AFFO reconciliation, it looks like you broke out a couple of lines for adjustments attributable to unconsolidated funds versus adjustments for consolidated JVs. Can you just talk about the reason for the split and what we should expect for those going forward?

Sure, Brian. So those related -- those adjustments relate to depreciation for talking about the FFO adjustments and does relate to a depreciation from our partners.

And you’re used to seeing the unconsolidated funds, always broken them out that you can see the impact of consolidating joint ventures as well. So unconsolidated funds, we've had to add back, but you’re used to the things, we are adding back our share.

But the consolidated joint venture is in the opposite situation and that we have to remove or subtract our partner's share of depreciation. And so if you're looking at this, the one thing I’d point out there is that the Q3 run rate is not a good run rate looking forward, if you're trying to model because of the timing of our selldown of our interest.

Going forward, we’d expect that the subtractive amounts of the consolidated joint ventures is probably going to run between 8 million and 9 million a quarter.

Thanks. I'll be real quick.

Jordan, is there anything that you see that's possibly like coming through the system from Blackstone that would make you tempted to stretch beyond your $400 million equity ceiling?

Well. I think it's a little stronger to call it an equity ceiling.

I mean that's what I thought we were going to have to lay out originally and that's what we planned for. As I said, our world has changed and time has progressed, but with that said, now, I think of what they have left that we have a strong interest in, it seems like we are probably going to be within our -- within that number, somewhere within that number and then there's some other stuff that could come out, not Blackstone related that -- I think what's out there, we're likely to be somewhere in 100 -- of what’s coming, I don’t if we’ll get it, $100 million to $200 million range, of all that’s available, of our equity that could go into stuff.

100 to 200 of your equity?

Yeah. It's probably what we have left that we could of what we know that’s out there.

Now, we won't get everything, but that's probably that -- of the pipeline that we know that’s coming, that’s probably what our position would be somewhere in there.

Okay. And then beyond Blackstone, how much smaller or larger is the kind of the non-Blackstone market of stuff that you're interested in?

Well. You could even go to broader of what the other stuff coming out is.

There are a couple of buildings that I think are on the ramp way, runway, whatever. But it could be a little ways out.

I’ll let Kevin answer that.

Yeah. I would say that Blackstone is not the sole provider of products in our market, although that's a portfolio that we've talked about more than other properties, 12100 is a good example that that was a non-Blackstone acquisition.

They came up. We liked that acquisition thought, it felt well, so we chased it.

So we're not exclusively chasing only Blackstone, we’re evaluating each opportunity as they come up and there are other opportunities coming up in the market that are non-Blackstone.

Hey, everyone. Just a quick question on 100 Wilshire and if you say specifically, it seems that it should probably be getting higher rents since it’s getting around half of what it would in New York City, where the difference between regular Class A space and Class A base of the view is probably 2x.

There is something about the market that prevents you from getting the sort of higher rents for the Class A space of the view?

No. I mean just saying that, for so long, why here where we have no new supply coming on with the cost of occupancy perfectively a lot of the same tenants, you're talking about hedge funds guys.

They all want to be in that building, right. Why would we think our rental rate would be capped at all as compared to what I already see them paying right now in New York and I've been saying, I mean, this is kind of such an old story and we’ll forget to say it every call, but I feel like we have so much room in where our rents can go in terms of looking our tenants, the profitability of our tenants and their cost of occupancy.

And you said it again and I couldn't agree more, I could not agree more.

Thanks. I guess sticking with that same topic, I mean how do you feel about your ability to push rents today as you did this time last year.

Are you coming up against limits where tenants are pushing back, like what do you think we could see in terms of --?

I mean, tenants are always pushing back, but I mean -- and it's not just us, but I mean obviously landlords are generally willing -- winning that push fight, because the number is definitely moving up, I mean, and it's moving up even still year-over-year at a good clip. Look, you can look at tons of, we're giving you actual financial metrics that show you a lot about what's going on and roll and all of that other stuff, but you can look at more subjective stuff kind of the way tenants act and their brokers act in terms of space it works, coming early and trying to renew them, making sure they get their space, worried about getting expansion space where they're located.

All of those things are signs of tenant’s expectation that rents are still moving in the upward direction and that's all going on. And I actually think there's -- to a great extent, that attitude is being transmitted in them by their brokers who are experiencing not getting deals when they thought they were going to get them and they were betting and someone else got it.

Okay. And then going back to the question on the 400 million, when you think about it, it sounds like 400 million is not the number that you're holding yourself to, like what are you holding yourself, is it a leverage number, is it, I think what's the actual metric that you guys are thinking about when you think about putting capital to work in more acquisitions?

Well, I don't, when we think about more acquisitions, the only thing we're really thinking about first is, are there good deals which we can buy, and if there are, then, we're going to make it our job to figure out a way to take control of those properties, right. And we have a lot of different ways to do that, right that -- you know how we were -- last time when we thought, a lot was coming at once that would have been hard on our balance sheet.

We went and Kevin and many people here put together this private equity platform. So we were sure that we would have plenty of equity to take control of those buildings.

I mean these are great buildings to get control of in these markets and add to our portfolio. And if a lot of stuff was coming up, we'd sit down again, the way we did last time and say, okay, how are we going to address this where we don't stress our balance sheet, but we also aren't limited by what we can buy.

So really when you -- when I think about acquisitions, I'm only thinking what do I see coming, which I think we have a shot at buying and then how should we, as a company, because I think we should control those buildings, how should we do it? Should we stock, should we do with debt, should we do a joint venture equity?

Should we do a fund, I mean, there's just a lot of ways to do it, but I would try and find that way to do it that's best for the company and best for shareholders and on a per share basis, for the share price.

Okay. Do you see ramping up dispositions more aggressively then to prepare?

Well, dispositions is even another way, I mean, but I don't -- I mean, it is true that we just did a disposition of a property, which is the Sherman Oaks one, but as you've seen us buying down Ventura Boulevard, so let's call it the more exclusive or expensive end of Ventura Boulevard, we peeled off the one at the opposite end that was kind of at the tail. But I don't think you should take that as a sign that we're looking at dispositions as a primary way to finance new acquisitions.

I feel confident we have more alternatives in that.

Well, thank you, everybody for joining us this quarter and I'm sure we'll be speaking with you again in three months. Bye-bye.