While same store occupancy in the company's portfolio increased in 2004, an overall 4.8% decline in rental rates offset the gain. Occupancy is continuing to rise in the first quarter of 2005, Robert Fenza, EVP and COO, reported, as sublease space becomes "insignificant" and some markets show substantial improvement. He cited the Lehigh Valley and Minneapolis area as especially improved, but said the Detroit area faces challenges by the Kmart, Sears merger and relocation of some General Motors facilities. Kmart, based in Troy, MI, could "put an additional 1.1 million sf of office space into play," he says, making "rough sailing" for the office/flex properties there.

Wall Street analysts' questions focused primarily on Comcast Center. In response to questions, Hankowsky said there is no agreement with Comcast to take more than the 44% of the tower it has pre-leased. "That would be wonderful, but no. They have not indicated any specific expansion plan, but the reason they stayed interested in the building was that it created an extremely high degree of flexibility, including the option of a second building. They are a growing company."

"We're encouraged by interest from our marketing efforts," Hankowsky added. There's some interest from vendors of Comcast and new people to the market who couldn't find something similar in Philadelphia before."

Regarding its building under construction at the Philadelphia Navy Yard, he said, "interest is healthy, not as far as robust, but healthy. Of the build-to-suit prospects in our pipeline, three are Navy Yard prospects," he said. "Also, as construction of our spec building on Crescent Drive gains visibility, interest in that property is increasing."