Boston Properties (BXP) 31 Oct 182018 Q3 Earnings call transcript

Good morning and welcome to Boston Properties Third Quarter Earnings Call. This call is being recorded. All audience lines are currently in a listen-only mode.

Our speakers will address your questions at the end of the presentation during the question-and-answer session. At this time, I’d like to turn the conference over to Ms. Investor Boston President Vice Buda, Relations Properties. for Sara go ahead. Please

supplemental Reg operator. Great. most call. measure welcome and X-K. last In Good Company on to the package, reconciled as you, G as The were accordance well night, in Boston release the conference and to Form earnings all GAAP morning Thank non-GAAP directly furnished measures distributed requirements. comparable quarter Properties press with the supplemental package has third financial

during these constitute webcast copy, At not we our the Relations this available this Reform statements inform a forward-looking are call receive would available website call, time, Investor you XXXX. of not did months Investor you be which the documents section Litigation the Private historical, Securities of at to the in If are meaning statements Act in will of section XX for www.bostonproperties.com. of may website. like our conference Relations of An within audio made that certain this

Ray And like call I'd statements. question-and-answer to regional Officer. any remarks. the Owen management Linde, for update over Although from to detailed differ Also like his Owen Financial filings call, address assurance and I’d those implied to statements SEC. or believes The were and President the with reasonable materially results to Ritchey, of give time-to-time forward-looking in welcome cause forward-looking undertake risks not are Chief President; could can statements assumptions, Executive will and in our it portion a by any in Thomas, based no reflected will release Boston press LaBelle, teams duty Executive the Doug that to any Company’s our yesterday's be Chief Vice the Mike expressed from the Company its Thomas Officer; attained. Factors on expectations actual formal be during to and Properties that turn available now forward-looking expectations questions. does Senior

and Thank you everyone. good morning Sara,

victory give keep down so that Street a the XX to after Sox Sox at all parade coming heads seats to the Red my their morning, Red in the wanted up around Boylston fans best this Just table everyone XX:XX. I'll do we have o'clock

in the middle us to details display be the we've developments most the high average get Properties to companies I and lows community and with it let lease trend record Properties. and opportunity, our review tenants properties part precious and back a quarter a is and existing Boston the retain sectors of macro where into experiencing is why urban and might and trends in of across quality an the new A diversified a positioning strong growth new in locations. which which event our insulates of our is macro assets Boston preleasing within to of business geographies environment durable finally me term or Unemployment much performance. for us of at the level are be exciting a Before we and sector and tenant is investments years asset is economic take we're their base geography. to And seek their time is The Class employees continue continues attract sensitive a the we continue of and to the amenities operate talent and less and cycle. past seek the markets made development step these as high market shift and urbanization the where few benefiting market and across long from our in the growth portfolio, over

advantage in and strategy tier in gateway serve well continues for term cities value top provides us properties A office creating to competitive shareholders. of and developing Our a owning Class long

our into for long one additional of us towards let's as we Now achieving term quarter get made goal. strong progress the third another was and annual details which the

forecast Specifically above $X.XX in consensus. share this midpoint quarter over Street basis third a On the we generated year per year FFO prior of $X.XX FFO above per and grew share the X% quarter. our

We increased year $X.XX. for guidance XXXX also by full our

performance. this X% We range. is And of XXXX, cash outlook based momentum also outlook in XXXX increased now quarterly we our forecasting of per time some per strong strong been share. and $X.XX for describing finally by at on strong FFO our Boston of for dividend regular growth XX% that for With portfolio growth We've largest point a the our dividend increase evident. share to quarter midpoint FFO and inflection our The point history pipeline in-service provided of our the development Properties. inflection

we Moving quarter companies first having underlying in last and all portfolio of financial X% Salesforce the top globally to our occupancy points X.X with performance we Francisco. basis And Overall quarter, strong San we been it million sustainability quarter strength bringing property XXXX. ranked we for us in-service in earned XX Tower feet increased to and the above [indiscernible] in continue recently feet business quarters in from the approach business the LEED three million and pleased ongoing highlights by to leased X.X of leased am We square our was lead as historical to the I averages. the our a Platinum certification in square XX.X%. a performance well

elections we growth, trade and concerns to economic uncertainty XX of recovery X.X%, since basis modest REIT. since the to above interest environment forecast, before rapidly the average earlier is XXX,XXX past but least about of strong and X.X%. which about positive, over year. negative in unemployment market slowing volatility. additional our at the increased discuss treasury on at volatility and to business. The US signaling jobs growth quarter rates remain below far up earnings year Overall over at little the realized we experienced the trends Further our have still year rate X.X% positive of both equity capital rate impacts and The September remain XX investments. extended market increased a were last economic the points year in which monthly impacting We've current economy the X.X% the of so over led September. Notwithstanding very GDP volatile the of the the around trading the recently and XX results to the term let's notwithstanding multiple upcoming constructive rate month. of a last level reported in new at duration The currently down markets second rate Fed became interest beginning dropped our strength And only it's the conditions any returns the of to the long increase combination healthy, increases this the leasing environment with the an third economic quite for is now favorable midterm points basis Now have experiencing increases of US also but and ten the far. outweigh were points call quarter. norms year. US created the in low wars, and in It's A markets XX from X.X% year US increased and the historical XXXX. end for relative basis economic increases is interest growth materially the

we share growth relative increase capital impact equity. that and our with are our it disappointed public not funding not we of While price strategy our does movements to our the in dividend with investments are forecast new

both developments and new of preleased repurchasing rate use launching the today their property stabilized which the for and acquisitions making NAV. higher and notwithstanding is than capital incurred our best are shares to acquisition discount Our added value select material cap yields

which can credit capital profile by from utilize development without source is to debt income cheapest and materially new due our we debt our best the deliveries. capacity financing Our of the provided changing

raises significant in continue dividend margin. will debt requirements. and to estate and without accomplish given on the capital. source tax remains assets private select result healthy. given We embedded if gains our plan plentiful growth core access developments less transaction larger deliver needed non-core the capacity the a real and of have equity private sale sufficient the In equity which volume accessing the to public funding market, growth of can capital sale asset is The We special capital

a This the Specifically foot US to square second Pension over almost third $XXXX Investor. office feet in in X.X% rate XXX multiple XXXX. XXX increased Real at Seaport cap quarter third high of Sovereign Los cap square sub-X% leased. appetite Examples sell XX% the Howard range. XXX,XXX represented X% foot $XXX over advisor asset per significant purchased property a fund rate 'XX Boston, Seaport comprises core under And by sold St. In our to and of XXXX. include lastly XX% in and District at X% components feet Wealth square and being the the strong the the rate. once year-to-date cap markets fully for is quarter to quarter Playa feet and and XXX,XXX Francisco, and X.X% Soma the moving with is transaction remains of for is a XX% large for Campus X% office quarter and the leased. is XXX% Advisor. from Angeles, and volume and quarter pension of agreement XXX,XXX property to a is in in for a selling parking from volume square Vista $XXXX X% cap square leased again agreed This foot the this Investor and This rates. is Office a Estate of second transaction in square the and transactions increased District property

pro value. of Gateway adjacent development our metro square with our in projects two We of continues to our project Kendall expansion continue Center strategy the delivered to now tower owned commenced to XX% future securing significant pipeline proposed officer Communication foot Now, of Kendall Verizon have earnings alone Reston Boston be We tower have This XXX Center Causeway Since XXX,XXX phase unit This sites station project our the – new now year-end anchor XXX X.X announce last our and forma. Center residential We prelease Center activity, in the into Town for expansion, and and provide are existing XXXX. use opportunities. XX development active foot future Property mix rezoned. call, Reston with Street project the Fanny we service we our Western future development by for Cambridge million million have the primary an growth will phase investment approximately lease receive of to at initial complex cause our redevelop in X.X on units foot, square after and development in of active Boston, community we building. and Mae. is with We leased to hope proto way their land square track story progress very in active on we XXX,XXX Town moving first is projects. [indiscernible] approval for commenced office to for to of tenant our capital is feet we our remain our discussions and residential our Main pursuing early This XXX both square activity. project last this development creating

the the XXXX plan, proposed development. office same Broadway develop also on under a tower part of our currently city as we block property residential As would

$XXX earlier. our X.X projects on approximately billion of We likely $XX recently million this Washington and disposition is at assets selling and remaining and X.X Recall for These commercial and cash is year aggregate then Hampshire to will million Avenue Akin the year. development the million the are active square in X%. The core target pipeline of strategy. well fit X,XXX sale a and in million the Most $XXX be pipeline billion Gump and close D.C completed of current share. $XXX Main park releasing have to are development XXXX prelease Mass, capital we residential core million, is million year underway portfolio in major will expect Chelmsford, closed XX% to having office our activity, year-to-date. our and year Avenue next in projected disposition park office XXX lastly by XX a the result to Redevelopment in which fund. we New for and Our comprising exclude contract Street discussed foot. X,XXX most $XXX sale square redevelopment for feet the and estimated non exceed be a $XXX continue of we end stands yield figures as does Washington investment before tenant X.X this component have of Pennsylvania building asset for vacated is or not the to this under current commence operating an to as in D.C. And

pursue We currently options growing build order for free to XXX,XXX under development square recapitalization Springfield capital in continue to construction This quarter the foot up suit close pipeline. the to next. transaction in can our or for for Virginia this TSA

to office and located the transaction the XXX,XXX XXXX. end building Park. sell in early year in Tower XXXX preserve at Rockville Oaks square market Business are a Maryland foot we or last Lastly by This in asset our Oaks can close Tower

significant now in our healthy forward ahead new in XXXX continue increased with strong of dividend. for activity. expectations, share a and plan and and XXXX should and finally FFO growth is So focus per had third And our growth looking leasing summary XXXX we delivered increased materially wins our XXXX investment quarter, sharply our outlook for

it me turn Doug. Let to over

morning Owen. everybody. Good Thanks

I our want make markets comments progress Before an business. get to and Office make the and leasing some the to about on capital I observation

our Our the for unemployment are an the assets. their level top their done remains job. priority. to employee achieve who When and detail, in the is labor A take chain our higher conference at rejuvenate particularly older had engage to where outcomes and our customers in plays access to reviewed degree of operating had investor ago that rate customers' to great we a base historical the we talent market role we employees important as employees year all employee business in you're work lows college space valuation or need they

next we're you summer completed XXrd spaces are going see in These visit second at are XXX-XXX year quarter XXX our the I you just XXXX and The generational think Lexington Colorado projects new be we the XXX by going and the are at in and of square about million transformation I capital since Center work Property. XX a project to In Central across one a next that difference Owen feet to XX of will investments and makeover to We’ve XXXX retail XX feet rent. making which This X.X been sense and undertaken million XXXX largely described and our of when since bringing CBD is campus week we're week development making. spaces. dramatic get that and went When since through major we the a first completed that Center. of has owned property right square presented portfolio we million our under is the the Embarcadero after. think significant place remaining public we how architectural years properties that in development. delivered the then designs had the encompass the Center be premium here. see transformed go square the feet at we place it at which do Street to project this Boston our public The we made all major you've I Prudential have the is have space public or the

project are three We $XX lobbies we're over the common making and another then this now a reinventing area square million X.X complex. and $XX million about foot ongoing million place planning new year investments

foot. that's So square a about $XX

portfolio year been year to is $X in the traditional across out portfolio CapEx but We spend fundamentally $X.XX year will a per or square has on continue our foot to new. and reinvented

dozen market delays M One start end in Prop market plan. at and in supply the buildings at legislative at won't buildings to that overturned With X%. searching We're foot in expecting next all on the area vacancy XXX,XXX research construction requirements moving large historical San me under the will square of is focus There absorption one that and we the from is or the firm built where little Francisco in let deliveries Prop more relief XXX% disappeared. space. event recent CBD is So for deliveries highs. XXXX new block to an be rate M in our SoMa calculated than is new comments. market Even available going office coming do the that to the itself a if XXXX later. manifest no a continues since week Nareit the on sublease challenges are are of the best tenants result the there have be contiguous of the central until space in of into it The to leased

up and not and leases growth between cost Rent more of importantly high-single decreased. is now digits X% annual have include X%. transaction escalations While

up square over ten and a $XX deal ends in is your $XXX average per rate. year a If you're it doing $XXX foot rent

to talking or XXXX. roll downs, people about the I in be about So to think are shudder going XXXX

availability city all Our is Embarcadero this in in Center.

including from gross This floors into quarter XX,XXX and of four a square X-floor relocating completed square them. floors, are outside we seven tenant on available There in of Embarcadero feet XX% foot just available are one or rent. in DC at we office leasing Center XX,XXX center up every currently leases roll a negotiating Embarcadero with LOIs

we've in the and we The be where activity. XXX,XXX PWC we're addition, And oriented excess at on from probably to XX%. Station to are XXXX of Almaden to XXX,XXX square a feet this square up X.X Diridon are Transit block space feet vacate up just late we companies released feet. with at in recaptured hope We foot rent. Plaza adjacent our the seen captured In the is the square Village. increase roll in on net already Google deliver efforts Transit have And plain not conversations Silicon will preferred under the on in in Project, those also Silicon which of mile have XXXX renewal. the the in project. XXXX negotiations XX,XXX a of July and will million is a And that we've and of quarter reentitlement projects the Valley commenced number we pickup Valley XX% renewals new, tech about a to lease the alternative square

lease very some at relocated into a the that square lease out expected going single XXX,XXX square of that XXXX deliver We expires. we'll consolidating includes that's that a and to have interesting the by see tenants all new after from development in their 'XX third that And plays how sometime does in end rollover foot feet XXX,XXX the XXXX product. our expires story in party well

west a continue Scooter Park and on market place knows the That's large expiring completed $XX leased. discussions get Organization. challenge. large that triple Business have have quarters. Overall XXX% a Our been Rental The activity. is over strong foot about Monaca in activity signed. York third is Rents new in us our third Switching square foot the XXX of mid words that the we the above of were a conditions over feet would $XX the XX,XXX to leasing transactions. are steady limited to with Meaning where last into about about our square concessions obviously $XXX in this spaces space average a and business In And and there flat monthly million the building at These feet in Colorado continues low leases the both moderate. Santa deals healthy a XXX,XXX flat few There market square At be was Last same. our Avenue is LA rental being XX,XXX Those i.e. and activities midtown Santa the consistent X.X lease hired operations at handle were year large still at quarter five the Monaca relocations past Buildings foot last availability steady as We're for The director Colorado pretty initial we XX on remains stable. square to assimilating with square the rent market real And Westside Center, quarter, dedicated the in remaining signing. at consistent in have is triple day-to-day to are capital remains growth. Transactions relatively other LA XXXXX largest increase. net are activity which in the number for where XXX were to our to and Park. of square in XXXXX be net. rents at Fifth square everyone lock options City. and properties. picture underwriting market New of of leasing precipice to with feet the our $XXX at fourth low a Xs. at we've and a hired is XXX the XX% square feet. pretty have and I building are in high-end where our concessions described feet invested Park completed Center with pace about

through for block negotiating leases feet we on did at lease lease walk square space. negotiating the execution that as square XX, four of on XXXXX have and But in are We X are foot call. as already the three floors a tenant X well XX. We replacement away for September the XXX,XXX after our XX X a

completed addition, in leased that XX% tenant that with of recapture XXXX XXXXX was October through feet we an rent. a simultaneous of gross through an runs new XXXX square increase a at in In lease early

the space and signed lease that during end a Third we of As have XX-XX commence last at to office the Street we at XXXX. for XXX% our we call, of mentioned expect Side One

District operators Moving direct with continue fill communities more now of that in even organizations to is office continues news their and and Columbia aggregating some shared be and startups individuals serve. good D.C. educational to we associations of space the not Activity and would demand to that the The restrained. otherwise lease lots importantly

significant in technology new growing continue again the amount the to and rents forward Concessions demand continue while be Once tenants. and defense incumbent long levels have and to CBD escalations be where the steady. lead unlike repositioned our leasing the city. we high supply activity on in is market remained headwinds and strong Reston historically see industry annual from our continue at the However, concentrated of from space reductions consolidations GSA to assets, the

space we XXs we quarter continue have Rents feet XXXXXX This of leases feet including from a square X.X square Hill being at Authority. over close new company. we’ve extension additional the technology of get. in to on them as you million X.X foot Road Gateway residential flat to expansion feet site And Concessions adjacent entitlements new the expect to square feet as mid XXX,XXX as the office X.X dedicated existing for metro Owen have of XXs Washington which Metropolitan stable. for about completed we Reston. in to square in and square and with to the the mid we encompasses built million Reston products property, station range the commenced million bridge is This Sunset XXXX. well the the remain Reston That's over has negotiations. can remained a Airport and to as mentioned direct

to quarters. and quarter and XXX the new Other product in that to use of space There which square Causeway tightest rents our little Tower both than demand teens absolute blocks for recapture was strong of previous in market escalations is feet CBD is in very don't through but which this about new XXXXX lease, Boston on that of space the get involved Boston of The available Verizon year led increase in from we're a Claritin XXX% building XXXX any along is XXs with low of a gross XXXX. foot fully leasing CBD XX% in The largest and square large with we basis early to a transaction were XXX release the year committed. would this be $XX leases and absorption of there done an discussions XXX,XXX feet the which high result Our the XXX,XXX leased. us deliveries terms, have expiring two to in tenants remainder a this to excess quarter square increases in continues rents portfolio where concessions trend. space and tightening the leased the a and an large we're continues available XX% in is in Boston leased be and to at which has annual

region XX,XXX in another floor now Cambridge Broadway existing net. are tenant an multi office Our feet involves an the for square largest in with negotiation an Cambridge, expansion completed mid in rents XXXX. expiration XXs the we tenant at now In XX triple with

are attracted the Cambridge to Boston tenants Waltham many suburban the in center significant city continues demand of and there be to as Lexington market. Even

quarter deal point This XXX% we relocating now portfolio. it's that back we’re at from completed in our in but second leased negotiating so that’s city XX% another portfolio tenant space build with of the tenant lease a our a a -- XX their with growing

net leased office rents impact triple the this tenants in currently XXs. in the to market to construction low where New Growing and we rents science continues life about $XX current the have demand are Lexington, suburban market, are net. a few office properties in Waltham

science the and the building with to on XXs building tenants We’re base basis. office about on achieve of a use rents in expect the to $XXX high working these the now triple per square lab net investments foot convert with life to

incremental do the around we’re XX% work to months XX% to generating on downtime XX dollars. us takes the return it with So, net

XX% Citi second for some we to from totaled square Before that piece capital provide which leased City at same not releasing I rent leasing the color at in lobby and back XXs. York rents, the original our really XXXX space I difference. We results is accessed moving where all feet. building finished, on generation decline eliminating Citi decline gross a big want from XXX,XXX includes deals space mid got to in the pool XX% space through the the the re-let the large lease of region this lease the a cost. in a mezzanine York the XX% The property companywide of New the under of Bank, the in It statistics the the net elevator in City that quarter New portfolio same rent

first the part this that five is lease since [indiscernible] transaction the lease side, cost is to average artificially Now there the high. of are number quarter per transaction cost here cost of the are three years transaction on only and

addition, at at equivalent rents the very, building this which quarter piece Madison on XX square commission impacted in plus for we obviously large a space foot allowance Avenue In to leased years TI the very our the X,XXX General and of concession provided year a packages rent we our staff. Motors retail healthy

tenant favorable Leasing customers. quality as a conclude, our very talent for demand remains economic Boston. in to strong workspace focus be the So San are to for fight primary continues and high Francisco for

on partially delivery Avenue and Park XXX Mike his Avenue in at timing will the in guidance the driving our Mike? XXX XXXX some expectations our in of remarks. is improvement of which space track discuss is at activity Our vacant of

Excellent. our quarter year. had great basis total the We strong and Thank up Doug. third last up cash were NOI points from quarter our last it you was if share same revenues our XX in the they improved in of look property portfolio X%, at nearly quarter quarter quarter, was up you over X.X% a occupancy

the at services from mostly development came our joint as Third The the guidance million range. that from $X.XX improvement of ventures. of ahead per quarter mentioned Owen $X.XX and management share share per $X fee stronger operation income primary driver in our was about of funds midpoint

Monica As opportunities drive tower, Business we venture grows fee Hub Santa benefit like office higher this on portfolio and income. new development the to acquisitions on with enhance joint do from Causeway like Park

Salesforce growth plus occupancy incremental with higher tower XXXX, For same gains square driving as portfolio service. property development we our from is into placed the income project footage at additional results quarter-over-quarter portfolio remainder NOI of

mentioned as of in income leasing not recur. run-rate before, earned expenses. Our fee quarter expect we we moderate will third And interest should higher likely due to the million that for $X we commissions

that's project QX our Tower XXXX. $X.XX And our is be night our quarter of on of to stop expense of projecting additional offset from in will the capitalizing to revenue operations and a our We and increase $X.XX discontinue December available increases role, stabilization We are from the to share look year from on we over also we increase those same capitalized XX% our on guidance shy occupancy this accelerating up FFO in so X In we our XXX increases during higher developments, XX%, investment which delivery our should ending XXXX, from XXXX. portfolio, project of reports our last increasing $X.XX in occupancy an occupancy just Salesforce and FFO developments. fourth at are We usage our per full XXXX interest XX.X% gaining of on share. basis points share on And on funds for an by XXXX meet to website. income for interest of a track by average between of project midpoint commitment we occupancy interest partially lease line $X.XX we per XX% ahead We XXXX Overall, performance. and are guidance XXXX provided detailed to $X.XX expect on year. supplemental credit. our to we as as we the per

in until of the majority XX,XXX XXX our recognition and Street occur of XXX Huntington, revenue Federal Our includes XX,XXX available XXX of Boston the square nearly already This all occupancy portfolio and space space remaining we've feet and of currently CBD at Street. though XX% leased XXXX. will not Boylston the was leased,

of of Center. in two level feet office our vacancy we expect the North Reservoir on with be And quarter signed feet will absorption by San currently XXXX. the to Place Cambridge square XXX% to we will at that suburban of taking vacancy that which In lease expect next of leased improve Francisco, activity filled this back XX% have first portfolio Embarcadero We Doug positive also year. have space thirds as XX,XXX the midyear be of roughly occupancy our of described and we is square XXX,XXX at

lease anticipate rents XXX,XXX of most vacant Park square Embarcadero in feet have square XXX significantly year-end XXXX, year rollover leasing next revenue on the market. progress In current and the York Center space. where recognizing currently by are additional the City, Avenue also we're making We below of XXX,XXX feet of New we

next venture. have each Both or primarily losing Metropolitan year. occupancy in leases on signed feet buildings Reston As are increase expect place near Square Center next New only and and DC XX%. negotiation has which Avenue, of XX% the space. anticipate is to Washington of of vacating this Doug have we sizable year firm joint in The XXX, to and occupancy Town of York all law minimal square at XX,XXX leases we either we from where these rollover mentioned, In in it's held

is our property a assumes GAAP to San X.X% by guidance Francisco, NOI from increases X.X% our impact to and With basis on of continued rollup the cash in to XXXX. share basis combined portfolio economic that less. same X.X% us So with expected occupancy X.X% by and gains, a primarily our Boston rent on in

is to in increase rate And where cash have been the previous GAAP blended early increasing Our faster than cash renewal activity the GAAP occurring XXXX. into is rental rents. partially our NOI due already increases

cash non line in rent $XX straight and million fair and value fair of million a $XX $XXX expect this to is the only value of million. component rent We XXXX

would and same approximately income are to forward higher will be exposure, actually our where we moving Our sooner we’re is is just it of three and reduce the on same higher our projected working our growth term lease downtime pulling term bucket, new XXXX not $XX income termination near for expiries into This we accommodate rollover if even terminations earnings, does that near tenants. each rents capture not or into property that expanding it million on this reduce impact space. property geography have

million the $XX for million termination versus million guidance $XX $X XXXX at assumes of in to Our midpoint XXXX. income

XXXX creating basis growth same termination would proactively the if NOI XX value. were be points income higher enhance property to Our projected long-term we

recur XXXX XXXX during our This remaining incremental revenue NOI end services to million commence the due year We’re Santa half subject of decline to our $XX is to venture the income to million. flow space occupancy joint joint expense. expect in line to expect this $XX development leasing range venture in decline because by portfolio and owning from of modestly from from we Business higher management commissions growth don’t not expense is projecting all and the interest after also $XX our share Salesforce to they signed do expense now deliveries, NOI of our includes million XXXX. result is development a the $XX we of project at projection commissions this these XXXX net same of Park. occupancy our primarily NOI incremental this I’m from of we space, so in Park Monica Santa property the growth million, Over portfolio income to our third level from XXXX. Business all into non- interest same in In unconsolidated where due leases earned and of XXX% to the of is of Monica quoting full quarter will of Tower impact the interest on reach a which

delivered and two also this third deliver growth up on Causeway the from we year lease quarter earlier of projects Point are XX projecting in and City and Podium We residential our of the leased. that which of Hub substantially XXXX both

so year, Our developments rate would of at XXrd modest the tail XXXX. be New properties Street a we that will are they but and have York full XXXX, both preleased East City in Cambridge in Broadway at to so run in XXX, the at XXX the they delivered their end impact expect

pipeline our sales. We are asset with portion development of funding a

this to include XXXX and $XX of non contract expect approximately in million. be activity X,XXX our Maryland both the these project NOI Hampshire refundable incremental of year-to-date plus disposition parcel under approximately dispositions year, land New dispositions from million We deposits. with a which $XXX are We to loss

additional additional We that considering we the our non in are assets. have of dispositions not core projection any sale included

We quarter asset of line are be development through million our and access cash fund flow our XXXX raising additional per project we debt by pipeline, funded proceeds $XXX the spend from to also our will be it to and approximately sales aforementioned credit.

X% Salesforce XXXX. remaining Tower We in early also in interest expect to buyout the

to than project Tower. needs, interest XXXX. and be long $XX will of less of of financing. sometime to project As these anticipate XXXX net primarily approximately XXXX, million million result $XXX that $XX expense million credit grow million interest staffing We our from the interest line $XXX on out term capitalized with of in projected we outstandings a mid Salesforce under we capitalized our a the and between impact $XX for term between million our funding We

desire incur X $XXX XXX We late lock-in also to a of a $XXX a but until and our to we and October and points. a earnings X/X% issuance million impact the matures XXXX year Based on refinancing refinancing million in that going new bond in for be rate rate refinancing, lower interest that capital carries needs basis have we'll that We've in guidance. believe not the forward replace included we can interest dollar our we XX year. our in reduce our bond our approximately this rates our reducing We XXXX. bond forward. If do issue rate elect with this interest low the an next locking would of by expense to of a charge we pull may earnings potential current and

reflects our flow in lease This we've capitalized. previously both leasing described impact rules GAAP. current that our accounting always the as our increase will but expense cash XXXX in for $XXX that And made $XX G&A a plus As and in quarters, starting not XXXX our last our G&A $XXX an increase these expense wages in internal million accounting. two G&A that to were expense under In will X% for require the will total to the new it lease does project payments million. I legal professionals we outside million costs load change approximate

at higher G&A of NOI At the expense FFO per XXXX projected midpoint the assumptions combining sales share of increase share to guidance per over of the be from by offset growth $X.XX guidance. per per $X.XX of funds interest expense projecting of and our higher for midpoint per gains $X.XX asset are share deliveries result from development same our and range, to $X.XX drivers are So share of our share also dilution all of an of and midpoint. XXXX property projected share share we're other per portfolio, acquisitions $X.XX income. partially share from initial growth of per in the increase guidance our X.X%. lost $X.XX from our of of $X.XX from primary range an NOI from from the per The $X.XX together at XXXX operation - These midpoint $X.XX

If share in growth XXXX. this coming reinvestment a have we're incremental basis. of growth NOI, rule net you revenues where on and our asset midpoint NOI from $XXX the add would property of our new sales lease X% is accounting of the adjusted of been comparable to impact our share the approximately and million $X.XX and Again at higher a projecting

XXXX If dilution an you million guidance our grow we NOI our dispositions. today. XX% XXXX of from to XXXX increase to incorporate our over going the from aren't $XXX which projections Well years projected give is two includes over

expect another we at billion full the that deliveries delivery that, ahead, income from XX% stabilized of And of well $X.X $X.X dollars development we of preleased. a that year Salesforce XXXX have Tower delivering as benefit as are developments XXXX between additional preleased. further a XXXX are is Looking and XXXX beyond XXXX billion of and XX% an

growth things expect open the we we a years. earnings pipeline developments completes remarks. strong could have I of see, next So if for up as drive formal operator several can that the you appreciate preleased our over to That questions.

line Manny with Citi. the of Korchman from comes question first Your Instructions] [Operator

morning guys. Good that. about Sorry

expect about XXX fallen the sort been project out deals of last have you maybe that's levels to now? thinking seemingly Just not you. where that us to to confidence where to the What a wanted minute confidence close that inspires now

make to were just where more ever we have quick lease So let Avenue XXX The John a lease gotten lease Powers color. provide we we disappear. we've at rarely that I'll comment surprised me a a let execution And had Park lost and at. have

the is that the rule. think I not So exception

should that the being my now. John, on with Our do has comment and of of level from you right status is view. your confidence But to the drafted level lease negotiation perspective

jump to going just is. I'm Owen, it's John in sure I'm not where Hi,

a know think leases us I call accomplishing if in which I confidence we're on. great currently what the express highly on John that the Doug is were he'd did working

to and line And that you lease be? might the Could timing the sort GM. markup levels of know the to of you what just the you the comments then big elaborate up commencing on made I income expressed at a turning space retail there.

They So already commenced, is right the a about I going what rent year that. tenant's now. with about rent plus There feel build is associated talking free already comfortable we've to particular Manny. period are in a delivered of The pay, out space. their don't or

leasing will in that would Avenue actually there of So rent. very that third quarter it's tell expected quarter sometimes tenant physically we healthy has occupancy in portion the lower Madison the the goods be you or and I fourth in be a gotten selling And on XXXX. rents better. Madison

years And so three it's pretty been would the four or consistent ago. rents where have

guys. Thanks

Can hear Owen? you Hi me this is John. now,

Yeah we got you John.

really they Yeah coming the sorry, the and in tenants I a in don't It's you out with XXX. know question what happened. that understanding There dealing on process. situations where the are is where of you

we high we're about. close So confidence that level to a that very deals I going the have spoke

everyone. Thanks

Bank. next of Deutsche the with Yulico question line Nick from comes Your

Hi.

back square Can actually vacancy you is Park. to end commence the going to by feet most XXX,XXX next that going year. we of the Just of of XXX get, mentioned

get in what that NOI that from to for benefit leasing incremental to possible So building the going is XXXX? be

of square I a square space feet XXX,XXX So I rent tell number. an can foot of approximately higher. give a explicit you cannot you that the $XXX have exact slightly

So obviously from revenue that's $XX hope a perspective. than million. And of our commencing view we XXXX is it in could more be – will that be XX% commencing recognition in

to is the gave well, commentary at that, don’t to and there wanted additional And sheet private the just is you where I the development. positioned I office about the between assets are Owen need earlier sales values guess you way much then stock And helpful. particularly to That’s values pursue in Okay. REIT go really balance of disconnect all where how show does same time market but are. appreciate fund back

capital done and I to that some guess wondering a like the you shareholders and this. thinking company, back how as have just times about sold assets so And I’m at historically thing you right given

balance be there bit against more? a time portfolio already So, weighing a you’re good prune that might a right what the what you to how said but sheet is

Yeah.

pipeline the yield all, new that targeting mid pursuing and for terms new on of as cap I in initial our of I investments couple basis. at stock those rate we’re even we’re development we that the is trading would So, things a and the a a so a say investments more cash X% level first have mentioned in current X of

I of assets, described non-core I in So, funding we’re terms million in that but $XXX doing this of that the our year selling core asset development. large we’re in not selling assets use helpful we think clearly capital Then the capital mean of better Mike with needs. look is are and sales, funding

as a of we they’re some amenities, they described reconditioned, not assets in a perspective special a per selling the doing, additional confidence them value FFO their selling share of candidates. of sales then of we’re a material and have have core and they’re basis been that them performing our larger terms would In significantly have Doug great sure And and dividend lot one, lot than so lower a all require dilution and resulted financial from market in growth. well

the with regard relevant the we then is And volatility, add to to are I overall other would overall perspective significant So, where we’re our taking sales. the anticipate defensive we about balance think more a in questions I thing don’t that are core where sheet. economic and we cycle assets given

put not we more pressure would ratios are. ourselves where leverage so our position and assets where And leverage' to 'over and a in out want selling dividends a we’re we put where paying in ourselves situation on

Okay. Thanks everyone.

America. of Your with comes Jamie from next Bank question the Feldman line of

you. Thank Great.

the end the a the focusing refinancing guidance. Can included think is not have guidance side? in what’s Mike, just not moment. I for the a were refinancing clarify you on at of clarify what to said and mentioned potential just couple on you Just you those and

that We our there next is that fund we’re our to savings not do I to that that in development anticipate continue next try use And not. what that with associated issuances So, with prepayment and something about year year about doing outflows at charges internally to described. I will going interest coming we’re conversions that bond be and our talked our guidance. line to having is or whether looking do there our

our So, to XXXX. term a be mid getting where in out we'd we sometime probably to it that I line point want would anticipate

So, upon that’s going based think be. within where we rates our guidance are to

rates and we’ll that Our rate go you a quarters know going our next you term will higher a times to in rate is next during to for today. is continue LIBOR to expectations do up on deal our it's that than also we doing long we going at up if be that four the see know go rate we're year line XXXX so mid

So in we builds do projections. have of that some interest kind you help? creep know up those Does

then about, charge end not at guidance. rate That's Sure, potentially the so you the you year. saying in also not the the number? the in a is of larger What mentioned

we a on likely credit any mid would raise, we I line XXXX. in outstandings out not mentioned our that that sometime term would of

just So replacement. a it's really

rate in on our versus to financing Now we're that gets put XXX doing a there XX is a a what point in be year line XX might basis increase financing midyear. the that

on the you do coverage based about distribution how maybe like? or look think could And the helpful. All then for right. guidance year That's what next AFFO

ratio. of today. I know should FAD you I coverage by is the be Well you year mean kind it mid dividend by we of next certainly coverage anticipate think basically an where end know the

grow that you I tax continue throughout year. think will our know to income the

is expect today. the FAD. excluded again than in sale asset of be know down our quarter I it'll and part then FAD back is XXXX But improve. next year not included little and year is this quarter come it of So first bit a higher that it's it'll you that income And fourth in from our

includes you coverage will that This not be include the FAD. is very of part we if So in part XXXX. our that as don't strong

development can you in and we And Okay. the to turning then get. cycle where just are

you being Reston there amount in building. with thoughts out of your to of keep talk of you'd versus see cycle kind preleasing level the opportunities what are where conversations you're about given versus talked opportunities the a you about where seeing? just on you of want or and You know we preleased lot Center certainly the like Town decent land just Can could

requirements significant preleased development is have you know terrific. our and gone pipeline think is is preleasing up XX% As our which we underway

your dependent those the So leasing number. elevating be those scale and of have of on might specific types about and where It's pre things. cycle we we have in you the comments requirements. given don't market know the But the a we building been

final or then looking opportunity on potential question potential zone Are just any development. at And Okay. you investments? development

and studying we conclude zones new regulations would just specifics opportunity a But I Boston opportunity have the big will for that We're that out. the the and come of program locations be the suspect will the of that Property. not

you. Thank

comes the ISI. Steve Sakwa from Evercore of question Your next line with

how you look Thanks, to comment building I think of on know at retail. good of more sale? you subject you you wanted Doug talked having the the certification term guess But do know want, as about with think how you be tenants refresh largely overall you morning. the know to portfolio the portfolio of types portfolio I obsolescence of longer the the about pick up do of easy about, holistically the lead and much you about issues sort could sort the as exception guys think you maybe

you any and do conversation necessarily CBD lease are other. leased. a can who about Well XXXX and market's each and are I just I to Embarcadero to with plus now those mean going it type keep of years. And we're feel And the that it's I if don't really that Center, and respositioned long to sort reaction And we plus having XXXX refreshed Prudential years XX I obsolescence the XX at that would talking look about XXX% in And Tower and at a buildings all category We And comment built those. one we're the anything were you getting, right don't older we've across properties in all have any been XXXX that to in positioning say growing the time. includes buildings do of on good city. you moving the if commitments buildings that done think have have we it believe in to from the for we would between Boston the that speaks obsolescence these whatsoever. sale built of and tenants long was of our that

do doing. to And the kind right to so time the work that we're going of it's be

that on markets short won't at have potentially that to medium at the conversation. different, part question I moment what we It think Owen views in doesn't of look the the now answered don't are but the our selling changing And 'core relative right to term. if the we really mean differently and assets. it's are the likely asset not any sales' valuations

you the on development doing potentially large won't do been the some I Cambridge. project in know speak you Okay at opportunities secondly look I you've may there just I'm stories up surface. in of press land. come the the opportunities a about and next has tenant and know pipeline at on curious And of think active got next specifically to got lots very sort also sort you of might you front? then you few development. think hand. And you've just as the where do where a But

there buildings the XXX,XXX building conversation start at. necessarily that other it's our And certainly working first obviously those building There expanding company are pieces we're plans. entitlement the on in viable press sufficient XXXX anything we with And be a of square Harrison in started San part comfortable I that there that have legitimate been it's, for Jose site display. we've building. get that's not permits is opportunity We development in a to transit location have to and Boston the that San in station we we a the looking the That a relatively has And So land of that that's, could the be the in which position in completed base may about tenant development. in building We got or we're is to where oriented closer public in we real a speculative demand diligently soon. were Portland a basis on that able would the foot building Francisco potential Transit thousand down in one on, XXXX right. is that there to conversation. Cambridge. hundred and middle Oriented go and towards again deliver tenant of to opportunity XXXX and would described the that are any there feel talk Ripping is and plus building everything end a are be

Thanks very much. Okay.

line Your of next question John comes from Stifel. Guinee the with

of miscellaneous questions. Couple Great.

what's First to equity to without run the looks that EBITDA Mike accessing XXXX markets. going you're year-end? debt do like by your net to

already X.X out EBITDA times. where our development spent coming going announced obviously to So got we've from money now and is have debt is net we've money the underway. EBITDA about development that or in we've got And for

for or is delivery is it of and development to remain is of kind of EBITDA this forma net that then we as down over area maybe so And our year to deliver debt would substantially be the high-Xs stuff expectation today. in the the come down kind that my pro from it where to around going So X. next going it's

steady level again So, in on tolerance state a the we our somewhere low basis feel is of kind Xs. rests

below our development comfort still room forma we to So, pro for and being we at have look that. well as

feel good. So, very we

And Is at million look to number next year. another that said $XX should G&A? ways management net that as then at say gross its service revenue a your we a development number an looking let's offset or

not G&A. to It’s offset an No.

number gross a there? it is But,

Yeah. It’s a gross number.

we and number G&A gross fund our a this. to use It’s

Yes. are, already The that in are our people work. G&A doing that

Okay. what’s couple look the now. sitting All right. been two your a And for second, as that questions, Then building Reston going at on the estate vacant then years there Napolis Junction I real at of which foot, bit like like about Gateway surprising, it’s isn't which in in a development deals the looks President square at high. coming it’s coming seems XX/XX foot looks and about a Reston at XXX a XXX

you comment talk the Ranking to the then want on junction? you Peter, and answer developments questions Minneapolis and about

with the the silver John profits differential that as of gateway the and Sure. with that. there Part fact Doug number to side are rail do associated of that indicated, cost and abuts has a line

infrastructure basically the because know be cost curve and a Center to if of all associated The footprint that the has is replicating that much site line, what has whereby Town bigger of accommodate Center, it’s Town as other deal those with the the development it. a about you and the you urban footprint allocate there, and over the streetscape XX/XX the think will down the that’s just just thing in

X% probably So, bulk we’re would to normally that’s XX buying differential anyway. in those the the factor or months escalation plus costs of you the X% building less in

and that question. I As far as your hope answer

we based touring our is were Junction for hope what through you’re as are build one all obviously the eight that which partners leased contracts did typical far hasn’t coming an Napolis which we with I referring firms same we multiple marketplace. that pretty think too, people building the on and speculatively actually for that out contract As competing

we’re hopeful able to be strike that near future. going we’re deal So, with to a in the somebody

those a cost the I lines. total something The that’s the add think and today John on I want with again other thing on goals XX-XX to project that $XX million

there our is total So, exposure million. $XX

the thank Well, have rate, either. less It’s TI It’s been invested dollars the actually you. tail. just

Got you. job. Thank you. Wonderful

of Your Fargo. Heck line next Wells comes with question from the Blaine

like with guys out current and just wondering seems Santa slower of Wanted you the recently, outside seem if from particular. Playa your submarkets on in any more be acquisition deals in at LA comfort Thanks. guys but you I'm this in particular. in general transaction there, Owen out your a are about mentioned to this touch would coming there you're to anything year there Monica point It to has you whether morning. standpoint there volume talk out can Campus target footprint been market at whether that but pursuing Good there

is deals. on one Business then phone. I basically worked big the their of I'll to down Monica Blackstone gone were The it and a Ray their volumes who's volumes the portfolio Santa they Park EOP through John and last turn over also start driver think and of L.A. in have and because

being the still looking at things there's think I driver. So to and we're at That them. look said that's plenty

We're Monica purchase. which Center You the our for had footprint. year particularly we've so several know a It's we've had financial obviously big in Santa performance very with Colorado thrilled good with material Monica we've owned Santa years. far and

market also I deals more but types the of for look to John, back why turn color? with the I you also some interesting. think know are time Go additional Ray different in they're that, clearly off time we at to it you don't interesting. There's nature know and With ways from John of will know that you. offered You ahead are owners to the broadly it deals transactions over that also or

the off to reiterate the opportunities want there to that and market both opportunities. I Owen marketed what pursue continue said we

everybody the we're both we're that here. capital Monica attractive Angeles international capital hungry West L.A. the competition been the for and in has across so with and Coast remain looking think West of deals. But knows different cognizant that find across we Santa I domestic particularly Los to MSA. outside And of right very submarkets the

but employ process is trying creating through largest we realizing in same off markets the But in what two Monica and we've which incredibly is market We're due trying have in difficult the been formula we to John's done And development are the years. hard four landlord aggressively out Santa value you we're market is to all for in effort, which reaching now L.A. know in deals. we're L.A. L.A., the

in then a pretty with the added D.C. higher And substantial Doug, helpful. Very square XXX,XXX XX expirations rent office in like another we maybe foot. expirations or sticking year to per Ray feet to XXX,XXX next Looks noticed increase with a square

you of we be mentioned leases get term to XXXX. pulled wanted on whether if Just see would or that detail lease there can you to maybe the was helpful. color any Any a forward short one

Yes and we've York that properties are law we're of part so years. vacating two New for Avenue firms Metropolitan J.B. plus XXX those be on that in are going that are those Square our the and in better to are expiring two there leases known

XXX. are, is owner those we're an and one XX% in that them Med of XX% that's so XX/XX a partner in And where we're JV, Square the then

they speaking have of impact. relatively So an don't much economic

Gump Akin -. That also include

Go ahead. say can Doug Ray. That

I includes a mean Gump under is building Akin contract sell. to it also which Yeah we have

mitigated already issue. we've that So

backwards could tight helpful. that’s respect any drivers higher the looking thanks increases as to rent the of on can markets you during Doug with a expect TIs decrease. general ground free little on hoping there it bit for trends you the quarter. Got more or concessions that's the then that commence at leases whether not so what's color CapEx get color further we somewhat executed are on the even And that's But markets see

So that know I I sort that. tried I to sprinkle that prepared remarks in saw tried just I'll of refresh and you my

installation easy lot moderate San marketplaces And market going we rates to would the flat we're But tenant to say So forced agree going high start in to a so the remain a at concessions to I rental the the XXXX. marketplace these TI are that the not are at escalating we're are high in get the are package. were getting move can transaction know year being a early that itself. decision pretty flat. rates Francisco such free that less actually going there in and up are going where that are are we’ve a is transaction tenants is such TI board numbers to Boston positive more part that cost big spend to are comfortable comfortable City, in because York at In and largely money the In you that in across ago that rent XXXX we're this think of the big free be in concessions provided to things deminimus. long New the very with The the overall there economic we concessions costs meaning gone. rent the XXXX

some year the Washington concessions a are to think of XX Now regards to space and weakest I getting in up static dramatically. are it some don't with things I your And on concession capital a XX perspective. and would market a think at of call square months. But other from these about say a the are there. the I rent market, DC blocks a something there to there with $XXX larger probably month $XXX going that's foot out XX desperation lease free

talking market. that's are are $XXX people a the closer way market, free rent. year. market we're significantly in in are a foot square the lower at a providing square And to rent about the year $X probably in free little rent. free improvement the and again In a so And of And in weaker $X diminimus. $X half the probably the then year foot plus concessions like concession of in to the $XXX the Valley' about Reston market suburban in allowance excess we're pattern a a a TIs to concessions 'Silicon month of Boston talking And very the

talking Mountain story, For $XX about foot. project which providing a $XX like a View square which to is we're ready single market improvements are

the Enjoy parade. guys. Thanks

comes question next O'Neill. of with Your Sandler the from Goldfarb line Alexander

Good morning.

a Just few for questions me.

First, Mike.

Just going earlier. and back Jamie's guidance to question the

a you bond, would So early 'XX. the do end refinancing guys at of bond

guidance. mentioned similar the would dispositions not you that this assume next to for potential is which in year also that said I saving You instant 'XX year. your But be

scale large could NOI disposition interest bigger or number? dispositions by but maybe nothing by NOI ones. any as loss it would that Is be dispositions view be your loss that smaller offset the So a savings rate some

engage activities. as other offset they Obviously both each in we

as as the don't be expense year. would is I interest same disposition it activity likely quite not be the think actually So will don't I is this will as the high be that savings not in think as

So disposition year. we had this and similar year next activity

sales from interest dilution gain the be is it there a more the and little think would expense. I there from be will the

talking about to Although both type $X.XX would you're numbers say. $X.XX about talking of items, $X.XX you're $X.XX not I to

Okay second topic. then recurring the be -- articles it's been owning bulking property on up doing landlords that's some about on Recently helpful. to a question directly, seem hired certainly participation And is they Wendy WeWork they've rents.

base coworking So about own your And office how do you do I coworking WeWork the or they're this do A you coworking guys C type view view launching. platform as are B have how and more but that WeWork and you how space exposure tenants. than that don't your going in to know thinking office? far as more rather be or to you in them you is view the if growth not,

Yeah.

and largest tenant would represent and open important in they we we income expanding to we facts as hearing The think are with as describe work be they're opportunities fewer is that getting and X.X% Alex this full view, portfolio pretty WeWork us I on fewer there you’ve call, co-working about places of customer, WeWork makes currently So, the been sense and further. And are our to an XX would relationship other in stream. operators. our our

might types turn own handful of spaces over also that. I situation about We Bryan our to talk to selectively opening in of it are

Yeah.

we and targeted versus the product enterprise is co-working up distinction is flex BXP that So, specifically user. by opened the this towards

terms. me whole explain greater Let enterprise two this provide that clarification because getting of users misuse is zone

flex So, BXP in specific terms an project. that enterprise in obtained one our project for link user is of a by us for has clients user we’ve the who corporate already

the to Those several other call proven be they risk into federal. would last at flex customers Prudential feet start-up customers we be series out kick there Center in to two like investments The have. term in XX,XXX for the that and that as going length of their is on BXP announced we’re another off the have it and by already at us that a still the to the would week company XXX great CBD

an zone XXX years length can our for and foot is clients. as in where XX larger portfolio evidence it years. be is that can size good than of finding to enterprise year some in Doug in think the has for a two place past towers observer to this our million like users within between have which of we’re the interesting that already We subleases for really less user enterprise also there The subleases, we two them us the is those really example the roughly but length. The user you shock this term growth product is and almost of refer are and month-to-month of of been our larger of for square Boston, the what those XX as

So, blend we out have a with there are significant are the satisfy such well still these that big us opportunity to leases then strong already and portfolio. a of and and for there really been part our customers it think of and our important long those customers needs is

our it Alex as it to all. Brian of up summarize our mentioned, I and have it’s of When several of add revenue. described experimenting operators is are about WeWork an So customers as with we installation. couple other in buildings X% ourselves a co-working all important we in you it

Thank Okay. you, you, Owen. Thank Bryan.

the line from Morgan Vikram of with comes question Stanley. Malhotra next Your

questions. taking Thanks the for

and lease Just lease? on the restructuring Under couple the update updates with recent of Armor wise ones. plans of a the quick on given Any some timing any

There are no update on the lease.

recognize you a and the Cube Armor they way XXX if really, using temporary the we of store opens. the when in without to the you Apple dramatically really the their we that the of be the the and have in expect probably that recently Apple Yes we getting you’ve as the Avenue conception frames size whatever start in to early going been XXXX with position time we'll will Apple are. Motors aware And So, as General space of store is Apple new store time building and changed be Under drop sales delivering a Armor know much to store and In to the we’re based extraordinary will Under delivering open the they're interestingly. revenue Fifth Plaza upon been mean to are here, they to double to New close York at be able their a store current City you know doing. space

some of any inflecting and upwards you They for I'm next or your growth you a sort the on that now in nine while into or view is rent half then there may view the a been over to months. this under growth nuances wondering next maybe that rents Sector of have six and been share thoughts if And rents you year year? down peers know more. opined it's Okay. have midtown, pressure rent you have know year.

Powers that slightly things flat. my provide John I I'll But view my different. it's are going provided maybe perspective know I what in think his be which to you comments let

coming to lot we side. Doug. very not think We going strong a rate we on. that market it's a certainly different on year here overall that's is the of the dropped flat, pretty new is No, Manhattan velocity and have good. have because availability really hasn't But velocity supply have

you a marketplace a flat but flat marketplace it's it's So it's two marketplace. when balance good those things a

large question Okay, last so REIT larger flat billion on life then your rents into XXXX a just transacted science and just a portfolio healthcare dollar campus.

a the where just estimating area. recap us your Cambridge wondering is for sort in portfolio on So low any I'm for of thoughts pricing

demand of to a Cambridge and was significant in not Cambridge in stops only most you traded our that market a space. -- $XXX it space rate it's lab part We that actually will know lab XX,XXX office know feet. excess tell the close is and of for suburban there's there there's buildings And to a rental you seen foot. Waltham and it. for portfolio for in that other there very Massachusetts some know So a bus traded square a sales you for The a a the is there oriented of one purchased strong have over an you you foot than of that is Cambridge it is not And just square extraordinary or it's square trading building lot growth. so expectation demand only people a dedicated we've anywhere $XXX vacancy is it lot I transit demand Watertown because significant which know investor science in science life buildings are facilities close then new a couple building but in life with

thanks Great, guys.

comes of Capital Mailman question next KeyBanc line from the Your with Markets. Craig

the growths go are roll roles split market what if some rents the Hey get comments to longer the end in that on guys. to or ability to the prepared and one maybe back leases in of push to to wanted term the that market sarcastic with think than your your about you could I do escalators thoughts going think to Doug market. about remarks big in these in bumps. positive just to But mark of goes at just through the rent downs of a increase sounds given little the shudder and rent get

the Manhattan. which right expensive tenants net it's fair upon a that other Relative a cheap their contractual these in I the So change terms rolled the parts very of its that including over interesting has it think get we doesn't the are really does you But asked a a of have look if still construction lot you question Craig, start question pricing to time. because triple sort economic matter Francisco in the profitability is the have in then the based a extraordinary. define lease the that know lease San in think roll we rents you if point by it you of i.e. are Right. a the can real And split question. leases so world a what which habits to I matter estate space of way have which of the that Midtown is gross new companies impact their leasing

pretty I market to on So of increase. bullish Francisco vibrancy am the of seeing those those companies and the are ability that the San tenant demand in strength types a of like their absorb and we

become And will sort of of so marketplace. it the part

other or AirBnB I profitable a or Microsoft, companies of that those types as Salesforce.com question some of LinkedIn have I are quite 'service sort and or providers' Amazon.com the mean real or a and think companies. the as different of Uber. the potentially a is not Google

first have this there I that set different of do a XXXX. not on a But of we're perspective all will out so XXXX be And play that that. to think companies will is that going hopeful to until

lot politicking have of a lot conversation sort of it that out. a shakes is we'll going lobbying there be And of lot to goes where of So all on. a see to see

Is any and little you a feet And just the kind And reclassification up? trying the about was? to XXX,XXX of just effect lease that That's that could you of helpful. are give rents what to building is then XXX bit that what guys square color going have Park. on on on, at

that So the with of acquired part lease I'll Citibank footages. what do cafeteria, back can that we at storage portfolio typically like that include in was space lease called and And in got answer other than kind square big anything this XXX we that. we stuff space it looking what and at use We we we space for, XXXX. space, which lease of always building determined the can't And not our payroll is Park office space. When they that storage back for started that. it we

portfolio if like space a in goes the us to footage. income. be rent do reclassify get which at it would get kind we right up thing do square other rental in portfolio obviously discounted rental the all is the of that to for any So other determined up the it storage of And we our not storage into space we we rent, have

thinking is putting the something to know the York which New into kind may the to ideas. overtime. we same it team of to it of amenity space way all be the in And But driver of some able a for we those So use reutilize and like some way it company. able lease was different the or that totally then behind something we the about the handle -- of is it portfolio in pulling maybe storage that. space it storage I out out and the figure

So that the XXX,XXX it's leased. guys have you separate from

Yes.

Okay. Mike of offering. range? the midyear one of kind we of size $XXX bond on million last think in And Should that the then kind

a we No, I line. that's $X.X fair, think have

over to don't happen I potentially get quickly. we that point of billion that $X limits think it it's do to where just the might level Because to kind we outstanding. get start to other want So your ability to it's things

we that mentioned time once is a approaching And we it's that of would get term right our as level expectation my every of quarter. So kind million that to will outflows I expectation think out. development $XXX we is have it

So that, going of mid-third quarter is as kind year you think the start of into that there. up to to get get kind you the when outstanding about of

process. top our that's So

Great. Thanks guys.

Yeah.

question next the Advisors. Green with from Ismail of Daniel Street Your comes line

guys. Hey

me. on the few an a ones you for rents market where had Can update quick place sit in portfolio now? to Just for entire relative provide

we’ll ask have question you. your to We a come next schedule back

Sure. found properties It so you asset office I sounds dispositions bidding or core pricing? like for trends similar core asset pricing trends the guys mean non remains in pretty stable

could What rusting was, I’m sorry mentioned was some papers you it. didn't preamble hear the again I there

No I rents in place asking relative to Sure. problem. was about market?

our So, pure positive. on square $X the first the X% answer, basis mark-to-market or a portfolio now have of, it’s foot whole we question right about per

Have of non in assets? at you pricing your have Great. sales guys underwriting the Thanks. And then coming and for those for core appetite doing our is how the found non for original the core you market been year. types this asset,

processes. we selling we getting decision said, when we they're the and core are Yeah. rates than are the generally multiple non been that put having get active are bids are the made we’ve generally or core and assets being expected to But, assets higher locations cap in the asset our Absolutely, to we That the means getting in what sell pricing market. we we suburban which for.

and we where were there. we one, Hampshire was largest price the our be I less exceeded than Avenue we New closed by expected that above then XXX mark-to-market a And X,XXX expectation initial think we to slightly And X%.

we be. thought consistent to would we where So, pretty

XX. impacts a of looks cost it And on a the increase reasons why at you the that one explain Dark bit the about all? me, little development like then maybe some Can last economics for and

just really and labor with it’s see that sort the It’s the simple, up Yeah. out lease building due challenges the the of construction perspective schedule associated timing a Dark getting and of completed. the to from dry a of you

And so lease up. expanded we our

Thanks. Great.

Your of Manny Korchman with next question comes Citi. from the line

Bilerman. Michael It’s Hi.

Just two from at delays a quick cost just expecting the talking just ones, and cost Dark update sort about you’re increased give on And York XX Hudson New prospecting especially timing given perspective? one leasing an of the the Boulevard. on also

you John, that? want cover to

Sure.

We X meetings Boulevard. Hudson of a couple have on

well this lease in week far these we the redesigned think with have later with long-term And tenants this future. I building another received been has week. expirations are the one discussions

construction has mentioned building where Dark process So, that we’re et redesigning other also our the delayed. we’re with delayed the that hopeful XX, still for been and pricing Doug process been construction cetera. process On has reasons getting WeWorks

to XXXX. next first the in expect late So, year we open quarter,

a we trading important We this have we have of one a had at are week, time. tours, couple no paper this

do timing you potentially that someone? John of or Hudson feel confident on feel How Boulevard landing about Okay. do you more

would between there of and group I XXXX to tenant start we analyst think I said XXXX. a work, Well, that

That’s great.

Comfortable range. that with

this acre, the Brookfields like we It's know start have environment. right sides, we in the you There's two like tenants tenant right cetera. XX with other and three find to We great site, also it's this we as neighborhoods the transportation site, you Manhattan to have a a full know avenues or et competition XX and on building, in potentially West.

So for tires and now the everyone's the kicking meetings. we're in

these whether Doug from repositioning XX, the that other about been just does as on Embarcadero timing retail some plan done that you've of $XX million of space there's at redelivered. of spend. any How should large when come upside Like the year sort and that then that drag there's think income gets potential we an perspective.

work about it's on as plaza space describing would describe I'm a the at the income level not enhance the to from I that Embarcadero level perspective retail and the ground the follows. It's retail So overall about office the environment. Center on

now Embarcadero Center. in We right achieving rents historical are

impact right we higher next rents and retention of we net hot we're work to so so property it's I month thing don't should will will times So in can. in and you call moved in have of mean be so know there's that a this because time it believe and to because do almost XX be things revenue the that can because so you any probably achieve is on be they space for plenty a I is will there have basis we and so in challenging I is it in and market more market Francisco. little space. it strong with and there and Tenants doing. San fast personally this down that take higher when going tight up rents of it's sort the that tell tell the doing. absolutely short correlation what we're you term no But we're will able will it's I a will the the do

sure the heard background. Sorry for call Yankees a I'm in taking but I times pretty longer Suck few the

question Capital line And the next comes your from John Markets. Kim of with BMO

list, that space cash Thank GM the you. space there XX building that the is and Does new entered temporary taking that or your when can your Apple lease represent us also you tenant. result? top same-store this the remind impacts first the that

in provide It slightly existing early second that and the the expect quarter represents to contribution will total gotten will premises new down some sometime we the they lease quarter, them year quarter increases first when into that actually vacate premises go second and have that next do move and we they or that.

in that top taken at rents point we as we're getting cash lease longer, took bit but So may had store the redevelopment today. their existing of obtaining in the rents provisions little change position increases the a we the that is got now where those in longer. we because And their are XX that project in the

rents allocation Mike can income determination again next of for you year. sounds just It Okay, and rather it's just increase an the fee. explain tenants' a once termination than like

impact same we our include lumpy never the that income next Yeah, year in done you same because know and termination the store. in year. it the hasn't it's We've don't

So it pull out. we

move wanted wants that these another have got we situations tenant doesn't will in necessary. client large that out we ones where that want the on three So we've the all states where portfolio work it. But a relatively

of all termination where And a covers a negotiate payment cost. is new we the So kind in we bring can of in. that and tenant to are good attractive our position us downtime

same and same just impact So property that property it income has then income the an our pool moves the on termination pool. from basically to

So you guidance at have look it overall describe because I the if plus income our wanted in pool termination the increase have there. to same store to you

One I may. if last

Yes.

increase. last one income One your Was taxable that by it growth may. was tenure? The on purely the I influenced dividend movement if partially or XX% based

talked guess we did dividend we increase. I about this when the So

higher. the on the taxable on gains the XXXX, tax gains sales income our asset are sales For driving asset

income As is at up. going operating of XXXX, because we look our flow cash increasing taxable

operating felt appropriate quarter from cover to the in our asset dividend we and dividend we be the in third gains the special confident taxable that is sales a XXXX. there that our would the cash sales regular doing of do rather flow on and tax XXXX growing than to which on going feel income is a So that

it So at kind in we've of done effect would the way anyway of it. that's kind we look

driven is by factors not internal like income, increase rate. dividend interest factors, net external Yeah

taxable income much and Yeah. out. have how our to That's we all about pay

Thank That make you. sense.

there this are no questions time. further And at

terrific. hit you in Okay going the for your Boston you. concludes to week. you Thank We'll many And see we're at Thank interest go the Properties. That Nareit of next all questions. parade.

concludes conference call. This today's

You now disconnect. may