The board expects CapLease's 2009 common stock dividend rate--to be at least $0.20 per share--to be paid quarterly at a rate of $0.05 per share quarterly. The quarterly dividend payment for the first three quarters of 2008 had been $0.20 per share. According to the release, CapLease will not pay a common stock dividend for Q4 '08. These dividend changes will allow the REIT to retain $9.5 million of free cash flow in January '09 and $28.4 million of additional free cash flow annually.

"Our portfolio continues to perform as expected and will provide us with a predictable source of cash flows in 2009 and beyond," says Paul McDowell, chairman and CEO of CapLease, in a statement. "The credit quality of our primarily investment grade tenant base is very high, with an average tenant rating of A- and lease maturity of nine years."

He adds that CapLease has "no near-term refinance risk on our debt; our first debt maturity does not occur until 2010 and may be extended to 2011. The dividend actions will enable us to reduce leverage and strengthen the company's financial and liquidity positions while retaining a conservative payout ratio. Based on current market conditions, we are confident that we can redeploy the cash savings we will generate into highly accretive debt repurchases, as a number of our debt obligations are trading at significant discounts."