Kelly Shiflett - Director, Finance Skip McKenzie - President and CEO Bill Camp - Executive Vice President and CFO Laura Franklin - EVP and Chief Accounting and Administrative Officer Mike Paukstitus - Senior Vice President, Real Estate

Michael Knott - Green Street Advisors John Guinee - Stifel Nicolaus Brendan Maiorana - Wells Fargo Dave Rodgers - Robert W. Baird Mitch Germain - JMP Securities

Thank you, and good morning, everyone. After the market closed yesterday, we issued our earnings press release.

If there is anyone on the call who would like a copy of the release, please contact me at 301-984-9400 or you may access the document from our website at www.writ.com. Our second quarter supplementary financial information is also available on our website.

Our conference call today will contain financial measures such as core FFO and NOI that are non-GAAP measures, and in accordance with Reg G, we’ve provided reconciliation to those measures in the supplemental. The per share information being discussed on today’s call is reported on a fully diluted share basis.

Please bear in mind that certain statements during this call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially.

We provide a detailed discussion of these risks from time to time in our filings with the SEC. Please refer to page eight to 15 of our Form 10-K for our complete risk factor disclosures.

Participating in today’s call with me will be Skip McKenzie, President and Chief Executive Officer; Bill Camp, Executive Vice President and Chief Financial Officer; Laura Franklin, Executive Vice President and Chief Accounting and Administrative Officer; and Mike Paukstitus, Senior Vice President, Real Estate. Now, I’d like to turn the call over to Skip.

Thanks, Kelly, and thank you for joining us on our call today. Although, the Washington region the third quarter was a quarter of limited market activity in terms of both recent investments, overall the WRIT portfolio held up well with steady quarter-over-quarter occupancy trends.

We finished the quarter 89% occupied same as the second quarter and we achieved good positive rent spreads in the leases executed this quarter in all three commercial sectors. Our multifamily portfolio continued a solid performance with 95% occupancy and same-store NOI growth of 3.6%.

Consistent with our previously announced plan to focus our dispositions on our suburban Maryland office building, we sold 1700 Research Boulevard, a suburban office building in Rockville to a long time tenant for $14.25 million. This is a property we have owned for 13 years and we generated a gain on sale of $3.7 million.

We currently have the 80,000 square foot Atrium office building in Rockville under contract for sale to user and we are marketing Jefferson Plaza, a 113,000 square foot office building also in Rockville both of which we expect to close on or about year end. Following these projected sales of our suburban office buildings we estimate that only 8.8% of our total NOI will be generated from suburban Maryland office buildings going into 2013.

In fact, we believe our total suburban office NOI contribution will reduce to approximately 19%. This number becomes 12.5% when we exclude Tysons Corner, which we believe will be a strong market going forward with the completion of metro in 2013.

We plan to continue to reduce our exposure to suburban office over the next several years. Finally, we have Plumtree Medical office building under firm contract which will close in December.

We expect property fundamentals to continue to be relatively slow in our region in the fourth quarter as our nation awaited election results. But we are confident that our portfolio’s positioned well to continue its steady performance in these uncertain times.

As we roll into 2013, we believe it is in times like this which our diversified strategy serves us best and that more attractive investment opportunities will present themselves for well-capitalized investors like WRIT in the years ahead. Now, I’d like to turn the call over to Bill Camp, who will discuss financial results, guidance and capital market activity, and then, Mike Paukstitus who will discuss our Real Estate operations.

Thanks, Skip. Good morning, everyone.

Last night, we reported third quarter FFO of $0.48 per share in line with the second quarter. Core FAD was $0.37, a $0.02 decline from the second quarter, due to higher tenant improvement costs at some of the more expensive jobs to fill our significant proportion of our downtown vacancy move through the system.

We issued $300 million of 3.5% 10-year bonds in September, a transaction that was upsized from $250 million to meet strong investor demand. We used the proportion of the proceeds from these transaction to pay down our line of credit -- our line balance from $221 million down to zero.

We also prepaid without penalty two mortgages totaling $29 million and are planning to prepay another $50 million in mortgages before the end of the year. We are well-positioned to refinance our only other 2013 maturities, a $30 million mortgage due in February and a $60 million 508 bond coming due in March.

The most important part of this refinancing activity is we are fully loaded and ready for any acquisition opportunity that come to market. Our $500 million of line capacity is fully available as is our $250 million ATM equity program, plus the proceeds from our planned depositions over the next couple of months.

So where does this all lead? We continue to reposition the real estate portfolio by selling up assets and realizing significant gain that will be redeveloped into assets that are better position to grow in the future.

We continue to position the balance sheet to be ready to take advantage of acquisition and development opportunities in our markets. As we look forward, we realize that we are going to end the year with less net acquisition volume and we originally forecasting our guidance.

We also know there will be higher interest expenses compared to our original guidance due to the size and the timing of our recent bond deal. Therefore, we are narrowing our 2012 core FFO guidance to $1.87 to $1.90, which is lower, is it -- which is at the lower end of our original range of $1.87 to $1.97.

We expect the fourth quarter core FFO to be in the range of $0.44 to $0.47. Although, we will announce formal 2013 guidance, when we announce fourth quarter results, we believe the range outline for the fourth quarter is a reasonable quarterly run rate until the acquisition market begins to pick up.

I’m happy to answer your questions about guidance during the Q&A. Now I’ll turn the call over to Mike to discuss operations.

Thanks, Bill, and good morning, everyone. Our overall portfolio occupancy remains steady at 89% unchanged from second quarter.

Demonstrating the advantage of the diversified portfolio in the challenging market. Total commercial leasing volume was 221,000 square feet and office leasing was 145,000, our highest quarter this year.

At our multifamily portfolio, NOI growth was 3.6% over third quarter 2011, with revenue growth of 3.4%. Occupancy was a healthy 95%, the fourth consecutive quarter.

This sector continues to be our best and we expect this trend to continue given the still limited supply in our markets. Our unit renovation program is ongoing with 155 total units upgraded for an average return on cost to 14%.

We’re on track to complete the total of approximately 170 units by the end of this year. The office sector while challenged also has some bright spot, occupancy improved this quarter as some of tenants have signed leases in our downtown spaces begin to move in.

This will continue over the next several quarters and will offset some of our known move outs like GSA at our Braddock property. Rental rates on office leases signed in the quarter have positive spread due to expiring rents.

At the same time, leasing packages attract to those tenants in this quarter were less than the last quarter. The office market is one we believe is bouncing along the bottom and we expect those conditions to continue for awhile, but despite this, our portfolio continues to generate stable performance.

In terms of our downtown office buildings, we’re proud to announce that two of our buildings have recently been certified LEED Gold by the U.S. Green Building Council.

1901 Pennsylvania Avenue and 1220 19th Street, meet the sustainability and energy efficiency requirements for the certification. In our retail portfolio, NOI grew 5.9% year-over-year to a 0.9% rent increase and occupancy gains of 110 basis points.

This sector continues to be one of our best performers with the strong occupancy level and rental rate growth. Our medical office sector on average is steady, although occupancy is down, rental rates continue to grow.

NOI growth was negative year-over-year, primarily due to higher real estate taxes. The past give quarters have shown us that this is a business of declining cash trends and increasing debt trends and coupled with the competition from nearby suburban office buildings for tenants.

This sector is slow compared to its historical growth. But we’ve executed several significant leases for vacancy subsequent to quarter end and good activity on other vacancy.

So we expect occupancy to pick up in the quarters ahead. Long-term, we think with the aging population and longer life expectancy, there is embedded growth in this property type.

And I’ll turn the call back over to Skip.

Thanks, Mike. Our portfolio of real estate expanding multiple distinct -- distinctly different products types, continues to produce very stable results and reduces the volatility to our investors for the challenging economic and real estate market conditions that prevail in the Washington DC market.

It is important to note that these challenging market conditions, primarily relate to one of our sectors, office buildings. When we look at the other 50% of our portfolio, we see significant better activity and more stable results.

Our multi-family portfolio continues its strong occupancy at 95%, retail is at 93% and almost 6% year-over-year NOI growth. The medical office occupancy is in the high 80s with 1.4% rental rate growth.

So this other half of the portfolio was working well, providing the diversification benefit that was designed to do in these challenging times. With that, we’ll open the call to your questions.

Hey, guys. Good morning.

Skip, just curious, I know you guys weren’t finding a lot to acquire right now. But just wondering few things, one, if you can just talk about the overall investment market, is it really kind of very slow as it sounds like you said?

And then two, could you just maybe give yourself a short report card on some of the acquisitions you guys have done over the past year and a half and maybe in particular how the DC leasing is going on some of the Vornado office properties that you acquired?

Sure. Okay.

Starting with the first part of your question, DC market is I would say in extremely slow mode right now. There is not a whole lot of product on the market.

I think it’s indicative of sellers seeing that pricing has changed, and buyers reluctant to jump into assets that have any significant amount of leasing risk. So there is a reasonable bid-ask spread that needs to be adjusted in the months ahead.

So what’s resulting is not a lot of transactions occurring, but there are some. So while, it certainly has slowed down, there is activity out there.

We’ve looked at a number of things. We passed on a good majority of them based on pricing.

But they are some things we actually have some offers out on, but I can say that anything is going to close between now and year end, there are acquisition opportunities that I think will materialize certainly maybe in the next six months. That was the first part.

Second part to your question was report card, downtown office specifically and how we did on Vornado acquisitions, specifically. I mean the general rule I mean I think they’ve done well with respect to the Vornado ones, specifically.

The 1140 Connecticut acquisition that we bought, it had some choppy leasing in the first 12 months, which we anticipated. That’s why the cap rate was in the low 6s.

But we’ve had excellent -- as you know in our prior calls, we reported a decent amount of leasing activity downtown and that was reflected in that building among some of the others and 1140 Connecticut is about 8.4% vacant. So, maybe, we are slightly behind where we had hoped to be, but lot of that has to do with just the activity in DC.

But we are very pleased by that. We think it’s a long -- great long-term asset and building is 92% leased, is not so bad.

On the 1227 25th Street, that was the property, which we didn’t project to do any leasing because there was a tenant, there was one floor vacant in that building. Fifth floor of that building was vacant.

We didn’t project leasing, although we were hopeful to lease it in the interim because a tenant in the building had a call on space through year end this year. We actually have tenants to lease that space.

We are just having our problems to breakthrough the gridlock. And also I don’t know, if you recall that the primary reason we bought that building is because we don’t need adjacent building and we have a tenant in there, the advisory board is growing rapidly and we need expansion space for that tenant.

And we feel very optimistic, that was a wise decision to buy that building, not only for the near term but for the long-term because we need to accommodate the growth needs of that tenant going forward. So we are pleased with it.

Although we do not have that space leased as we talk right now. I think that answers all your questions unless there is something else I missed.

I guess just one other aspect would be sort of the Alexandria area, office properties that you guys have acquired, what sort of the earlier report card on some of those like Braddock and some of the other ones?

Well, Braddock was the only one we acquired recently and Alexandria. Braddock was one where we announced when we bought the building that we knew upon acquisition that the GSA was moving out of there in November.

So they haven’t even moved out yet. We actually, I’m hopeful that what we projected to vacate is not going to vacate, some of it.

We were projecting 63,000 square feet, was going to vacate. We think it maybe slightly less than that, but it’s still going to be a substantial move out.

So we do have activity on that building. But as you know, there is a little bit of adjacent cancer from the Crystal City area that spills over into Alexandria.

It is a distinctly different market, but still you get a little bit of that overflow, because Crystal City is really difficult right now. But I’d say it’s going well, we have leasing activity.

But we do have that hole that’s going to occur in November.

And last question for me would be, can you talk about what you think are your biggest risks next year and maybe with the fiscal cliff, maybe defense contractors or..

Broadly market or specific to our portfolio?

Before the Washington REIT portfolio.

We are concerned about -- other than to give you anything specific we are certainly worried just about the continued ability to lease space in Washington in general. I mean leasing volume and activity has fallen dramatically in our region.

I don’t know if I’ve ever seen consecutive quarters of overall negative absorption marketwise that we’ve seen this year. I mean, we’ve seen -- we obviously, we have negative absorption in every jurisdiction, year-to-date Washington on a broad basis.

I’m not sure I’ve ever seen that before in the 25 years or so that I’ve been in this market. So that’s the -- risk number one is are we going to continue to have this thinking curve ball in terms of leasing activity occur for extended period of time.

Certainly, with respect to the defense contractors throughout Northern Virginia particular that would sort to be subset A of that concern. We have for example, the coupled decent sized tenants.

I don’t think we’re as exposed to them as some people are but we have SAIC in Arlington at least 60,000 feet that we have to be keeping our eye on. We have General Dynamics out in Herndon for 50,000 feet and we’re keeping our eye on.

So while we don’t have a huge exposure to GFA, we do have some of these other defense contractors particularly Northern Virginia, you got to keep your eye on. But the biggest risk is just the overall leasing malaise that will affect virtually everything.

Okay. Thanks.

John Guinee here. Thank you.

Hey, couple of questions, Skip, you know, obviously there is a lot of headline news on the apartment world in the DC market. Do you have any statistic on the average price point of your apartment either on a per unit or on a per square foot basis because my sense is you’re at lower price point and not as affected by new product delivering with a pro forma lease up of three bucks a square foot?

Yeah. I grew with what you just said.

As you know, we have 2,500 units approximately little over 2,500 units in our apartment portfolio. And certainly we have two assets that would be in Class A neighborhood which is the Bennett Park and Clayborne which is about 300 of those 2,500 units.

So those compete with Class A product. They compete with new buildings, so 300 of the 2,500.

But all the other units as you correctly summarize are infill older assets that are well positioned at much lower price points. So for example, in the assets, we have Northern Virginia such as Munson, Country Club, Roosevelt Towers.

Those are in that. They are less than $2 a foot on average, generally in the high 180s, 190s per square foot.

In Montgomery County, Walker House is in about $1.70 a foot range, Bethesda Hill, $1.70 that neighborhood and the buildings on Connecticut Avenue that we own the older 3801 Connecticut, The Kenmore building. Those rents tends to be a little bit higher in the mid $2 but lot of those units are constrained by rent control.

So you probably have in place rents a little bit less than that. So they are not really threatened by new construction.

So certainly those guys are going to take advantage. So I do agree with your premise.

We probably have 300 units out of the 2,500 that are exposed. But other than that we are at least $1 a foot below what new product would be delivering yet.

Great. Okay.

And then second, maybe this is too much to educate people on this call is when the GSA gets back end of market assuming they do. Do you have a sense for what locations they’ll focus on?

Where the tenants want to be on the next cycle? What the true reduction in square foot per employee will be and how price sensitive they will be when they send out their RFPs?

Well, that’s a tough question to call. But certainly GSA has indicated that they are going to much more efficient footprints.

They are focusing much more on transportation-oriented locations. It’s hard to give you any answer on all those because there is still lot of smoke out there but certainly they are not downsizing 25 percent-ish sort of neighborhood and focusing on transportation-oriented locations.

I mean that’s sort of broadly all I can tell you on that.

Okay. Great.

Thank you.

Thanks. Good morning.

Hey, Skip, just a follow up on the apartment discussion, is there any -- are you guys still comfortable with the initial yield that you put out for the two JV projects, multi-family projects, the one with channel in old town and the one with crimson in Arlington?

Yeah. In fact, we recently looked at all those and we still feel they are in the neighborhood that we broadcast when we ran out of those.

Okay. That’s helpful.

Is it -- hearing your comments about the concerns over leasing that are out there? Is it fair to say that from an office perspective, on an acquisition standpoint, you’d be reluctant to look at lease-up projects now?

I think it depends on the location but I think on a very broad basis, you have to be very conservative in underwriting lease exposure. You have to be extremely conservative.

So to say, we would never look at it, I think is the long stretch. But certainly, if you see significant roll over, certainly outside the Beltway, you have to be extremely conservative and the issue is dollars probably aren’t quite varied unless they are being forced by bank to sell something which hasn’t occurred in great supply yet.

But I think perhaps for well located CBD downtown office building should be a little more accommodative to take in some leasing risk. But the issue now is that the buyers including us are being a little more reluctant to use aggressive underwriting turns to underwrite some of these things and sellers haven’t quite start religion on lot of that many cases unless perhaps they have done to your head which is out there.

There are some buildings that are being sold under the pressure of vendors. So I think there are some scenarios where buildings can be bought but they are certainly a little bit of a disconnect that I think will be closed hopefully 2013 but the answer -- the activity speak for itself.

They are just not significantly less activity in the last several quarters in the investment front and we’ve seen a lot.

So is it your view that -- do you think there is price -- transaction pricing, investment pricing is likely to go down over the next six to 12 months?

Yeah.

Okay. So you guys are -- and it sounded like you were reasonably confident that you’ll get some acquisitions completed over the next couple of quarters.

What sort of the flavor of what you guys are looking at now? Is it more stabilized assets that you’re getting at a reasonable yield?

Is it -- are you taking something separated outside of office and that has brought stable retailer more down there, what have you?

So I think for example we’ve seen a couple of -- couple multi family properties we’ve seen that had some value added components on this some office buildings that have some good leasing in place that might have a little bit of vacancy. For a particular reason, you think you might be able to lease over the next two years but even if you can’t, you have a reasonable yield.

So a few downtown properties that look interesting from a long-term perspective where you may have just grind and bear it for couple of years. I mean that’s generally what we’re seeing but again we’ve not seen a tremendous amount, now with couple of MOBs out there but not many.

No retail at all. There is essentially no retail out there.

Okay.

They are pretty much the general landscape.

Okay. That’s helpful.

And then just last one for Bill, I appreciate the comments on for the run rate going into next year. As far as the capital plan is concerned and how we think about it, is it fair to say that the unsecured rates that you did was to pre-fund the debt repayment that you are doing, now you did thus far in the fourth quarter and the ones that you will do early into next year?

And then if we take that, are you comfortable just wondering kind of where you are comfortable running the line balance up to given exact $500 million of capacity book to cash on balance sheet?

Yeah. I mean I will take the first part first.

I think that the deal that we did was certainly mostly to term out the line, screen that up and then obviously provide new liquidity to do whatever I need to do. That was goal number one.

It’s probably gone little -- we thought it would be. When I initially modeled it, I thought it is going to be a first quarter or second quarter next year transaction.

So, we were up three or four quarters from where we initially expected that transaction to happen. In terms of how much on the line will I be willing to do?

I will tell you. I have no problems taking that line up to $250 million or right around $250 million, but once I get upstairs and then I am starting to look for the next bond deal or taking out with some kind of form of financing -- permanent financing.

Maybe its like a mid cycle line balance $150 million somewhere around that?

Yeah.

Okay.

Probably reasonable, between $100 million and $200 million.

Okay. That’s great.

Okay. Thank you.

Hey, Skip, I wanted to follow-up on one your initial comment in your prepared remarks about kind of office being laggard, you talked about maybe medical office looking better you loss 250 basis point of occupancy in the last six months in MOB’s.

Yeah.

Is there something there that looking to you better than what it shows to us?

Yeah. I mean part of the problem is, we loss children’s hospital in our prosperity buildings and that was good intend it was growing.

We couldn’t accommodate the growth. It wasn’t a downsizing or bad story.

We had them in 19,000 feet and engineered almost 50. So, well that was certainly a loss in our portfolio, that was fairly significant loss to couple of other small tenants.

But subsequent to that, we’ve -- subsequent to this quarter, we signed a 14,700 square foot tenant per vacancy up in our pipes build, medical office building. I just signed another almost 5,000 square foot tenant per vacancy for lands down.

And we have a couple of others in the pipelines. So I still want to say it’s an avalanche of new leasing for medical office buildings.

I expect steady progress over the next couple quarters as not only we begin to fill our Prosperity that’s 20,000 square feet and you just talked about the children’s -- get some others here and there. But I think it’s going to moderately get better.

It’s not going to be dramatic, but yes, I do things it’s going to moderate we get there.

Hey, Dave. One think on that just on the side of the packet 250 basis points in occupancy and medical office is only around 30,000 feet that a huge number.

Sure, true. That’s a good point.

And thank you for that color. I guess you given a lot of color on the acquisition market that you are looking at, but again time back from your original comments in the longer term strategy of spinning out of some of the suburban office.

How do you tie together the disposition strategy with the acquisitions, now that you have some rooms with the dividends? I cannot be interested to think you have this longer term view that cap rate should rise or the pricing should come back to you with the buyer.

How do you think about that today and as you go into '13 about maybe accelerating some of the assets sales to take care of that.

We are looking at -- I think it’s a good point. We are looking at lot of those thing.

One of the things either we’ve been good or lucky or strategic on, I mean we had a number of sales that we have been able to sell to users, which we’ve gotten premium pricing on. So, we sold the building out in Gaithersburg last year to (inaudible), which is adjacent to the campus and we had a huge number for that.

We sold 1700 research which was our most recent sell to the major user to building less that was in a partnership to buy that The building, atrium building we have for sell or we actually have -- are selling it who is not in the building, user who is not in the building. So, we are employing those strategies where we can.

It’s harder to do in buildings that you have significant leasing in such as Jefferson Plaza, which we have on the market now. But yeah, I concur with your observation that we might need to accelerate the process a little bit.

And we’re evaluating all of those tactics as we go into the end of the year and going into 2013.

Okay. Thank you.

Good morning, guys. Just curious about Braddock, is that going to go to another government user in your view, or you are going to market that to private sector?

Well, we’re marketing it to everybody. Today, all hands on deck, you don’t get too specifics.

So could it go to another government user. Yes, nobody is looking at it right now.

The GSA leasing is awful right now. So I don’t see the GSA leasing that anytime soon, but could it -- I mean it has lot of the things that government users want it on a Metro.

It’s in close. It has Metro proximity both to Pentagon and all of the BRAC activities that are going down to Springfield.

But I would say right now, we don’t have any GSA’s prospects that are looking at. But in the long-term basis, I think that will always be attractive to GSA users.

But other activity we are looking at currently, they are all private users.

And the key there, it’s directly across the Metro and its well below the price points for the government with maximum requirements.

Great. And when you look at your leasing pipeline, whether would be the proposals or showings, how would you characterize the levels today versus where they were maybe three, six months ago?

On rental rate levels.

No. The leasing pipeline, the actual discussions you’re having with tenants?

Leasing velocity, I would say its about equal. I mean I don’t see it significantly less or more than it’s been over the last six months.

I mean some buildings we have in fact I was just talking to one of our agents today. And 51 Monroe Street, for example, in Rockville, he has got a lot of activity on for whatever reason, I can’t speak exactly why and another building it seems to slowdown.

So, it’s very -- we're in this weird period where it just very choppy. I think its indicative over the uncertainty out there.

I mean we still have -- there were fairly reasonable robust economy in terms of -- we’ve got a lot of folks, here still work as a big economy, but and people still have to run their businesses. So, tenants sign leases particularly in the private sector from time-to-time.

But then we seen to go through swoons, where everybody is concern and so I think that’s going to continue until we get some of this fiscal -- national fiscal issues off the table. So, it just seems like we have good periods for few months and then you scratch your head and wonder why all of a sudden at least for two months very weird.

But I would say especially in DC we really geared up our revelation efforts. And for example, two buildings alone I mean its 2000 M Street and 1140 Connecticut Street, we’ve done over 100,000 square feet of deals down there this year.

So, we are seeing good reactions to some of the amenities that we are putting in the products down there.

And we have been very aggressive quite honestly. I mean we are spending a lot of CapEx in our buildings as Mike indicated, I mean, in 2000 M Street, we put health -- fitness center in there.

It looks is that Hollywood and then the conference room -- these things have we spend a lot of CapEx in these buildings. We have increased commission plans that we are spending.

We are spending a lot on TIs and you’ve seen. You look at our numbers over the last several quarters to generate good activity.

There is a cost to do it. So, we are going after these deals and we are doing, we have do but.

It’s tough to generate activity right now.

Thanks, guys.

Okay. Thank you everybody.

Have a great weekend and great holiday. We will look forward to catching back up with you at the end of fourth quarter.

Thank you everyone.