While Orlando-based National Retail Properties Inc. had recordoperating results for the last quarter of 2008, CEO Craig Macnabnoted during the company's Q4 conference call earlier this monththat "clearly we are operating in a different economic environmentthis year."

"As a landlord to retailers, we are clearly seeing stress in ourportfolio," Macnab added. As a result, a big part of NationalRetail Properties' strategy for 2009 is to maximize the value ofits existing assets by re-leasing and renewing tenants. But the CEOsaid he anticipates the company's overall occupancy to deterioratefurther. It is already handling vacancies such as four Circuit Citystores, and fully expects there will be other properties andtenants to contend with in 2009.

The portfolio of Realty Income Corp., based in Escondido, CA, isholding up well, with occupancy actually up 10 basis points at theend of 2008, chief executive officer Tom Lewis reported during hiscompany's Q4 conference call on February 12. Same-store rents wereup as well, albeit by less than in recent quarters. Given theeconomic environment, Lewis said he expects same-store rent growthwill be "muted," though he pointed out that at least it's stillgrowth. With all the retailer bankruptcies out there, he said,"We've dodged a lot of bullets."

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