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TWST: Chris, what is standard today in new construction for offices and apartments? Do landlords have to make provisions for tenants’ communications and technology needs?

Mr. Haley: Colonial Properties Trust (NYSE:CLP) attempted such a build-out in one of its new Orlando developments; they spent roughly 6% more on this specific project than they would otherwise have done. What I am trying to illustrate is that some companies are going to take that additional risk and see if it works. Now, as an investor do I penalize them for trying if it’s only one project in 65 projects in the portfolio? Absolutely not! They can also apply that data and experience to other assets. The issue is that CLP is a real estate company taking some (albeit minor) technological risk, versus some REITs using an alliance or a venture or a partnership to assist them in getting data (experience) and being “along the curve rather than in front of it.” Companies such as Brandywine Realty Trust (NYSE:BDN) are developing a tenant procurement business using a newly created, separate Website called e-Tenants.com. This effort cost shareholders 0.02 per share in earnings in 1999, and will likely cost another 0.02 this year.

TWST: What does it provide?

Mr. Haley: Through e-Tenants.com, BDN is providing a marketplace for office supplies, telecommunications, toilet paper supplies, furniture, etc., to its tenants. All these providers advertise on the Website, and all Brandywine tenants have access to the site in their own building space (the service is an Internet-based service, not affiliated/tied to BDN’s own site). Brandywine receives a fee for each transaction that occurs as well as advertising fees. They view it as a potentially revenue-generating or value-generating opportunity. For now, we view it as a cost of doing business. First, as a shareholder of Brandywine, I would have to accept the build-up of this process and somewhere down the road I’m hoping for some type of return. And second, in the near term, Brandywine is betting that the tenants who are in their building and have access to this site (and use it) are going to stay in their building. So there are fewer turnover costs for BDN and higher tenant retention ratios, as an economic example. It’s still too early to determine if that’s ever going to work out. And some other companies are entering into joint ventures, alliances or conglomerates, committing real dollars, in an effort to figure out the best way to integrate technology into the businesses, rather than expensing continuous dollars on the balance sheet, with their own capital.