Bringing them up to market "won't happen overnight," heacknowledged, but the situation demonstrates significant upsidepotential. He estimated that net operating income could increase by$50 million as rents are lifted to market rates.

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When a Wall Street analyst questioned the timeline on existingleases, Olson said some anchor options are in place for as long as15 to 20 years, "but the probability of all going to full term isunlikely," which is why the 2007 guidance calls for 3% to 4% netoperating income property growth.

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New and renewed leases during the first quarter numbered 180 foran aggregate of 604,000 sf at an average increase of 9.4% on a cashbasis. The average base rent of the full portfolio is $11.14 persf, according to Jeffrey Stauffer, COO, which is 4.5% more than thefirst prior-year quarter.

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The company plans to dispose of $250million in non-core properties during the next two years,with $150 million up for sale in 2007, as GlobeSt.com previouslyreported. It has also identified 28 properties for futureredevelopment activity. Redevelopment is currently taking place atfour properties, including Mandarin Landing in Jacksonville, wherea new Whole Foods is under construction, and Chapel Trail inPembroke Pines, where an LA Fitness is under contract.

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Olson came to Equity One from Kimco as president and director inSeptember and was named CEO in December to replace Chiam Katzman,who resigned. Stauffer came from Pan Pacific in November, followingDoron Valero's resignation. Both Katzman and Valero remain on theboard of directors.

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Shares of EQY were at $28.09 in early trading on the NYSE afterrelease of the first-quarter financials. This compares with a52-week high of $28.84 a share on Feb. 9, and a 52-week low of$20.25 a share on June 28, 2006.

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