Boston Properties (BXP) 30 Oct 192019 Q3 Earnings call transcript

Good morning and welcome to Boston Properties' Third Quarter 2019 Earnings Call. This call is being recorded. All audience lines are currently in a listen-only mode.

Our speakers will address your questions after the formal remarks during the question-and-answer session.

At this time, I would like to turn the conference over to Ms. Relations Properties. Investor VP, Buda, for Boston Sara Please go ahead.

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

copy, audio these in Relations be a are this you available Web our Investor receive If XX the did will the documents section of section site Web on not months call Relations for available at webcast site. our Investor of bxp.com. An of

statements may this not Private At which are forward-looking call constitute Securities made during meaning this like Litigation that time, we'd of historical, conference within to statements the inform Act. the Reform certain you

in filings reasonable assurances statements expectations that Boston expectations forward-looking Factors and by are Properties could the to to cause implied expressed time no give or from any can risks in statements the release were on from reflected based that be detailed in company's that those results attained. differ yesterday's time the believes materially SEC. press will Although, the assumptions actual forward-looking and with

to does Linde, President; Douglas Officer; any company LaBelle to a forward-looking Financial Thomas, duty Officer. not Executive Chief welcome update and The undertake statements. Owen I'd like Chief Mike

Ray our questions. portion management question-and-answer the Executive address call, will of Senior to teams and Vice available During regional Ritchey, President be our

remarks. formal call I'd Owen like for to his now turn the over And to Thomas

everyone. you, Thank morning good Sara, and

our quarter in and and urbanization, office trends earnings strategy. markets to our results usage to on strong remain growth revenue strong Boston for marked market growth, Demand Properties. and continue successfully be of major continues execute favorable. we job QX Macro another

for terms FFO strong to we XXXX. growth our in financial our key continue quarter, In sector of the highlights outperform with

our market $X.XX our refinancing guidance $X.XX quarter, in was adjusting per at the share completed FFO when above above for the consensus. was mid-term and transaction the For third quarter the

XXXX by share refinancing guidance also our at transaction. year midpoint full We of raised the FFO the net per $X.XX

We year-over-year of FFO after in which strongest growth growth refinancing FFO even recent projecting are in the for one our history. accounting years is now XX% XXXX

Looking the positive ahead likely are to momentum we per growth of average. of at initial demonstrating the our X% XXXX, guidance well growth peer sustainability above share again midpoint the with FFO

In the long-term and to which feet terms X of period highlights, quarter. for square million leasing productive We feet a our quarterly busy average bringing total of our year-to-date. above operational well we completed million leasing had third is X.X

XXX again Street consecutive acquired once Green and performance XXX ranking We from among almost We the the XXXX for in of Waltham. two assessment worldwide Xth an participants. by leadership office buildings GRESB earning and recognition X% Star sustainability top Winter suburban recognized and

We agreement Investment on XX-year entered our interest Jose. into Board And San completed and with Canada Pension Plan attractive Platform unsecured XX a joint in venture XX% million terms. refinancing we development XXX in for

unemployment the by XXXX. we business such conditions, activity said, followed as reporting GDP leasing the leasing Now creation remains evidenced above of and we well data U.S. throughout economic been moderating have job moving most to reported our healthy being growth, average healthy volumes but condition. and that indicate

three recession. favorable the already decades China weakest growth and with reporting Economic looks its in Germany less U.S. in outside possibly numbers

trade impact do these issues the war the broader not not our such economy. are U.S.-China clearly geopolitical constructive as for business risks While directly

past rates long-term and many negative the most such in remain Federal Reserve U.S. quarter drop economies and U.S. has in yield rates the have Japan and in the developed significant and result this a as central accommodative posture. As long-term developed an world banks The Germany. on held actually

valuations. increasingly ended markets not costs down capital tech down do X% for But in from a quarter most remains new anticipate In risks demand. terms we for are lower last real we office tailwind XX% keeping our of We quarter hedged The at a life in rates with to leverage the low by near growth, worthy despite downside and science financing and a Boston volume the term. protecting keeping economic tenants private interest healthy. The U.S. real continue core in our same full from provide year credit Those market capital slower in our estate recession recession pre-leasing maintain developments driven impacts allocation and rise on assets continue of a buildings significant estate the projects leases. transaction the posture by to and and that third invest time, long-term ago. we Properties,

We are of demand investment our strong still seeing in markets. reasonably most

again, in Starting private transactions discerning X.X% This market tech leased and other and sold oriented this there property rate. past assets significant quarter. a numerous market a office The is and to advisory sold X.X Boston, for for capital a Street firm. in a cap is million, locations becoming lease Yet our foot XXX product square the million in located District in more asset $XXX XX% $XXX Financial for real Summer office estate for were preference foot with exposure markets markets. minimal

cap will office $XXX under million a and nearly West estate XXXX, a foot real agreement leased XXX,XXX firm. advisory Boulevard is This sell be building LA X.X% sold to to and is XX% a square for rate. In $XXX square Wilshire foot

$XXXX estate investment is billion and interest XX% $XXX, a a and $XXX This real a Northwest foot and leased million of XX% to square Financial building office XX% High estate XXX,XXX in or a XXX firm. and sold is foot real gross rate. XXX Washington square for the DC, District rate. advisory in the be square And X.X% nearly finally, sold manager. Street Quarter Francisco, is cap will foot Market a leased cap a to This sell building sold in foot X to Street X.X% San under square agreement valuation In a a in $X.X at

versus $XXX So delivered feet $XXX launched approximately end developments deliver million of capital with to forecast so acquisitions million million that cash three expect new comprising into gross And small by yields for of square projected could and cost deals. million in upon service we at sales. we close million $XXX our agreement are summarize, pre-leased three by $XXX year for XX% remained XXXX, initial five $XXX whole costing completed activities proceeds and two comprising our We XXX,XXX million. completed in to for feet end. far or a in goal Several transactions sold expected of assets delivery an projects have expected under part We year or X.X%. and

of strategy continues Development current our shareholders be primary and to creating future robust. and remains developments our value pipeline for for

feet, commenced will Pennsylvania quarter our square This comprise XXXX of XXX,XXX Wilmer Pennsylvania Avenue has million. we pre-leased DC. office investment Hale Avenue property development $XXX XXXX in our total an and asset Washington to located near building XX% This expected

We also in Waltham, West commenced redevelopment Mass. XXX Street our

cash are feet project laboratory space of incremental suburban office to redevelopment converting million XXX,XXX double-digit at investing We this and XX property square the anticipate yield. into life science

million current our aggregate residential investment share. and stands these With X.X and development office comprising for total redevelopment developments additions, of $X.X at our billion square XX feet and pipeline

X%. portfolio and billion capital is the fund. we well are commercial of Most equity and development of component remaining of underway aggregate this XX% projected have X.X pre-leased The is pipeline approximately to cash yields

the scheduled selective accessing the our and pipeline being Given either our forecast current or public our without development asset leverage sales, able anticipate NOI fund development from portfolio, of markets exceeding delivery current the growth targets. we pipeline in-service to equity

new investment end, a additional private this of urban future million and This a in CPPIB To our million will in capital Diridon to pursue quarter square Class downtown be entered As to opportunities to transit venture pipeline, enhance the equity our village and we the use we add that square XX is we equity planned Jose project. increasingly partners and X.X campus agreement adjacent Platform accessing hub. transit returns. with into joint to sell the A extend our foot interest station X San development XX% foot Google's office anticipated

this were arrangement. fees and return interest to through risk property shareholders enhance use joint capital to diversify extend our our able With a carried the level equity venture we and of our

very this leading joint investor. significant second with institutional CPPIB honored venture and pleased global a into are to enter We

presence With our Class manager property. for Lastly, acquisition, which X campus this located largest this vibrant this our million quarter, A million increased Boston X or two Waltham Winter as Waltham a we further million XXX XX% increasing $XXX office square to of Bay in and market. owner feet the around in square space position office $XXX building square leased to Colony Properties adjacent foot. foot This in acquired our Street XXX foot and square is XXX,XXX is currently

lease We presence building and up excess capital use plan cash example to five X% to XX create rents years. invest of return approximately our in good unleveraged refresh upon value. receive of and and our a where estate existing of rolling market acquisition market we within to the to knowledge a is million skills This real expect to strategy and

occupier as market attention Co-Working intense on provide WeWork business provides and shared the perspective the an procurement that situation. Boston the price user Before given flexible major important aggregated I remain requirements. term for certain and demand option Properties positive a I office workspace premium on has media a turnkey space conclude is the has innovation a an market which for participant, at believe been We to office wanted will

industry. New shared believe X.X% leasing anticipate proceeds the of an net challenges well and we workspace as higher. with its built activity assuming WeWork for recapitalization. shared and position in market in growth X.X% in has it this Francisco. of the been Though industry put the York potential, in absorption the has executes high share the has recent represents gross capital workspace given perspective, potential pause in raising Its as and has San a further To materially U.S. only space important market all recent growth the from office we and

received Properties, the revenue. open impact our in more in the X% Regarding all Properties for potential been a from our have WeWork portfolio that leases And whole facilities full. assets revenue Boston total WeWork and is owned about are five from we substantially of Boston year partially than

have our FLEX and also offering shared by other And workspace with operators lastly, relationships own we BXP. called

we delighted you, ago told targets the third X% exceed of We've on also were So, to strong sustainable the growth for point we estimated summarize at performance inflection commitment FFO outlined BXPs and per of trajectory and year a year that delivered the ago. the on a growth quarter, XXXX at are track for we growth. in midpoint. We're with our share forecast to with XXXX

Once again allocation coming property of and growth pre-lease a balance and same we are solid smart of through service delivering that expense capital development growth into control.

along most developer greater choice. West strongest credit BXP quality on sector our per of unwavering geographic East across FFO outperform diversity strongest key metrics share or and making the to recently growth, of that and a higher and greatest Coast continue and markets, landlord We customer satisfaction focus assets developed we've scale, either rating, both portfolio an newer modernized Coast

over me turn Let call for the more to Doug details.

Good morning Owen. everybody. Thanks

edges they year with a last this for night. My So, growth the of all about guidance time the of our think this to the opportunities same-store lower you to is you perspective going Mike's band. our our you we the upper saw market and XXXX portfolio guidance. in as our commentary annual as is that which for and that release that backdrop relate provide remarks in to morning my focus should going range the on in introduced press

stream We XXXX. of has going clarity effect expected on the range provided an especially few of forward and outcome which of the extremely creating amount leasing good years past the have a completed revenue for had significant durable forward over

surely and the in rate only rate construction I'll a the building the activity of projects, it's in has XXXX slowed the mid when mission Francisco under digits the low But available XXXX. leasing first an So, single single actually start and Area. before lack guess to digits, in has not will San space. deliver. It's simply Bay speculative the availability vacancy anyone's

and total available Prop of to feet. December M average CBRE few that at on that blocks M Planning M the available allocation about large XXX,XXX over allocation gross. in square indicated annual feet receive partial October, out and a a square over received ago Prop put even We're if base scheduled rents XX,XXX In report square XXX,XXX square $XXX feet to before buildings the of its the a Commission LPA feet go our Prop have days the XXX,XXX to allocation Xth they're a for bringing availability Harrison. asking for

allows end building. current start Our occupied the as XXXX believe for we building XXX,XXX early foot the project the quarter at fourth plan of XXXX. and phased XXX,XXX We of the square a as could foot a deliver development of space and square

out. still So a pretty long way

San leasing in with the expirations CBD X occupied XX.X% XX%. our XX.X% Francisco million increase Our portfolio space square in we feet ended gross floor about at XXXX, and of foot In rent X.X XXXX, quarter XXX,XXX full of completed portfolio. we've committed. an entire CBD To-date have square average

on We have a one lease out floor.

single at We triple are enterprise of about end over single taking users. our floor compared we at where floor triple floor XXX one X. $XX an to $XX are and for build rent floor is office growth net. out a the own small easy expiring a Mission This to asking one leaves net And dedicating

to in Last prior XXXX that our has renewal time, this And at year the of CBD. available tenant multi-floor full seven floors. expiration entire have We the the end we had proposal. portfolio in requested one

In grow. we has recently market the well that in space Santa X feet. former campus feet turn looking square opportunities. of million purchased in for companies XXX,XXX Sunnyvale in close to in and a XXX,XXX to proximity in portfolio are proximity continues the large leased station continue Caltrans Silicon valley Yahoo Caltrans quarter feet are of headquartered of has other to companies a Valley, the development taken experience blocks Clara. have square this Francisco Verizon another that Google, aware in San by close almost Uber who growth valley large This led as the from Verizon we strong to as square

View At our to enabling renew View that continue in excess single will in we of of Jose, we to XXX,XXX we In this XX the or making square Mountain is are product. have soon for availability. rents most our storey portfolio tenants that's large In Platform Area significant in net existing in It's Caltrans. San that XX are site blocks and Mountain next looking Bay space. space presentations opportunity triple XXXX, the of feet release portfolio, to where

on remains to considering other dozen XXX,XXX Google or construction assets companies the much insurance the growth. will views Manhattan this of in relocations there technology Coast. to capital. on law need are square tenants from their our are significant These new more relocation requirements firm, supply transaction Manhattan robust. substantial changed. requirements that and tenants conditions known and companies to be companies, a active Demand deal, There million XXX,XXX announced East moment with banks, have in excess square market Turning at media completed There that Uber feet X.X now renovated significant technology it are in will their discussions in feet of a that older still are project. represents either existing seriously

few over newly So constructed to availability while the on of economics the view next transaction optimistic we shrinking space, cautious years. a have continue are about we

renewal This a of in with square XXX Anchor feet. minimum our starting at XXXX quarter, we Lex for completed law a firm XXX,XXX XX-year

Let's here minute. a pause for

extended have We Lex through major feet our every above portfolio the entirety. space started we XXX XXXX. And in XXX now back to that XXX,XXX Avenue in was in expiration We expire relet that due City XXXX. at Park its and lease

square foot at this commenced disclosed building in early XXX,XXX due the completed with to in a As the costs we this transaction our elevated Motors supplemental [indiscernible] quarter the quarter. XXXX are note, that renewal General

costs but no a in provided There in Excluding or higher lieu was in TI that concession. a free rent total lease the that drop transaction would transaction $X.XX $XX year. we

the Avenue New floors block foot remains at York Our square Park XX,XXX Motors building. in the XXX portfolio in General four focused

lease floors three the Avenue and is are the into for are today interested in that Park XXX tenant of negotiations We in with at existing final four discussions an floor. expanding in

and work of of currently quarter last expiring this building. General floor XXXX negotiations that opening Apple number activity agreement space XXXX. in top, for month, Cube smaller the the during fourth building spaces expect the full vacancy the in we revenue floors have the the We on lease completion at additional two commenced reached are provide four vacant plaza will have of since a of extend At Motors the the the and to a

up progress. work revenue commence of during Activity that won't meaningfully some XXXX. spaces the quarter still have to XXXX. do shelf on though three end available is have full great we floors until be We the second with But will of

will feet. East Street, to entire XXX,XXX collecting XXX want at we cash also in I rent XXrd square note two that on days begin the

push begin recognition which will yet GAAP However, our this to our late has incoming of into their out improvement tenant means construction revenue XXXX.

and in and market space to expect [Rudin] real Navy open estate quarter. the and this we conference WeWork can real XX last to had community. ago, project two tech to we participants we Dock weeks organization, Yard. another Wegmans [ph] the to are opened a Two adding week the the September tech everything amended later with opened the tenant over doing the hosted project. estate experience we for amended Along XXXX day CRE

We XXXX. tenant but is discussions sites revenue imminent continue have there and expectation for lease to no in hence no signing in contribution additional our

DC almost to continuing Moving in for that occupancy Metro workforce Virginia. of going opportunity originates The on growth in as be has tech for expansion that employment base XXXX. DC, company and grow XX% improved fertile the Northern where NOI largest the have to to are a Virginia identified tenants Northern area the is

Last Security contract billion the big the the computing that deal. pretty contractors businesses expanding. serviced Homeland Pentagon the awarded $XX defense a cloud and addition, JEDI In are week, also

is But outperform There the a starting Northern X% Virginia. expect the of We Reston vacancy in rents with demand Virginia. this high significant under low rate market Urban Core XXs and office to create to vacancy XXs. the still will in continues Northern initiative in

This in Reston feet completed three for on and executed available renewals floors Urban Reston XX-year quarter Core. feet the Dominion GSA square the foot our renewal the a lease Urban project ago, Facebook with Core. XX,XXX square with and And we the we weeks XXX,XXX of XX,XXX in square two

but We few probably these still to some in of are of all in We feet known of square a XXX,XXX large tenants we number requirements active square make lease square with Ray active of are XXX,XXX XXX,XXX a feet. XXXX, excess deals, will them. availability have negotiations in expect two of totaling and expects to feet make there

in to be space here late vacant this of is sit portions during XXXX, expected we XXXX. As

touch let's market are where conditions as in them our we Boston Finally, on company's history. seen current the have good as

there in similar the availability. new in While XXXX will more between in to little create late XXXX under to are active construction some in with San space extent And construction there plans requirements current and Francisco the Boston there are XX are available will for the very CBD, deliver feet. there Currently, XXXX blocks beyond. large and square XXX,XXX XX,XXX in than is which buildings active market however, supply and which

today forward portfolio is continue transactions. occupied we and complete XX% CBD leasing Our to

In space XXXX, expiration for lease. square in on realize that floor During one XXX,XXX revenue of leases of almost the that tenants until an existing expansion won't with we renewals average to XX% CBD. expire. of rents Much in the Boston leased that expansions and we feet of completed delivery have the the portfolio early existing so upon is we quarter, we lease and full out a other expiring about in CBD increase entire the have

in Lexington we on XX% leased Street We XXX square demand Waltham availability availability the no which our assets. Friday. region development feet to including There significant to building that our to recently be development XXX building week at XXX In under is square but is feet submarket in where have Broadway, acquired leased the feet this new square Akamai continues Cambridge, XXXX,XXX entirely have the opening approximately greatest XX,XXX Causeway XXX, bringing at square an additional our we feet XXX,XXX XXX,XXX leased. Tower

XXX plans Owen for our Street. described West

be may became to So, foot we include an XX,XXX now life XXX XXX we third also buildings the of in building Waltham Street. the vacant that quarter. It during until the Waltham converted inventory off is have Street we're at potential holding at tenant sciences, end lab square XXX West to to leasing have but visibility August. expanded universe The XXX, West were better our added adjacent requirements,

buildings that off the signed ownership intend mid knowledge with at with leases of Our the we vacant on invest at active already as along Colony have negotiations we has to the space in or to the Bay in XXs. paid rents low half

rent XXs New the are and are triple $XX in rents mid lab market pushing construction for offers this net. in office

for our workspace quality a remains demand tenant high for customers. primary fight strong for conclude continues and To talent to focus the be

in Mountain strong We mark-to-markets assets and occupancy Boston San our opportunities in submarkets. and Waltham CBD are Francisco revenue the for have very suburban seeing View incremental and related pickup

our activity are should Our at the and XXX revenue good XXXX late Avenue Park product improvements having some deliver we high-end building. with at success Motors General

vacancy, Reston, need in and absorb and but XXXX in have lease is Ray negotiations requirements that. still deliver Stroman we near-term on the we in the in new expirations Jake Finally to Ritchie team to going Washington some some good to bring

translate Michael activity earnings into this our XXXX guidance. now operating

Hello Great. Thanks everybody. Doug.

So last XXXX released FFO guidance. night and XXXX our we

of our range. FFO X% expect the XXXX of midpoint guidance and initial FFO We at growth XXXX our is growth XX% for

combination Our growth and our delivering a accretive operating by fundamental strong new of portfolio being is driven performance developments. in

I into busy quite on touch jump the details, our were to recent activities this we financing I quarter. because Before want

XXXX. of priced a the strength now start points plus the complete XX% to the our delivered we to Causeway pointing will XXX Hub First, in development closed be Office on of the The is Tower is that second remaining costs construction LIBOR Boston. attractively project a XXX the to loan in Causeway at pre-leased and million to at financing fund $XXX basis quarter

We a use in a $XXX $XXX million to of bond had XX-year that at of new we the early expire X.X% issued Second redeem XXXX. to proceeds November due which million existing bonds X.X%, a unsecured was coupon.

The million a which in of totaling for prepay guidance old the reflected premium $X.XX $XX bonds. As results year the is to charge our a charge our share this, is of incurred XXXX. redemption on quarter the debt full third FFO for extinguishment per and we result the

expect to lows. view opportunistic We by don't as the credit this more volatile potentially near and increase Although interest and we also it in all spreads are time our rates impact significantly going basis trade an near-term are The interest $X.XX forward per on points. million $XX reduced our expense is borrowing reduction XXX costs or on of a share. approximately year per $XXX million

share same strong to had our strong performance up cash our We we basis Turning earnings same X% had after our third same quarter and year with over up last as our on and up a charge. property NOI revenues adjusting year. results, with debt FFO up extinguishment a share over XX% X.X% X.X% well the of our NOI property property last of for

same calls, NOI half the track back against moderating of on higher described we've prior as is property XXXX our growth we As in comps.

large This cash to in We to XXXX. free XXXX. executed is recently fourth negative with the due of tenant quarter the be in New property XX-year York of expect that at our lease slightly a included rent the same end flat performance will extension City

property to positive quarter for turn to all cash the back our expect XXXX of of We XXXX. same first and performance in

from guidance. of of the or quarter, higher approximately up $X.XX funds reported share at from we expect midpoint increases fourth lower per share $X.XX than and higher updated our per The million and in quarter. the $X.XX in leasing the management fee was NOI service from income. than hit will primarily rents than that higher and share expenses projected projected $X.XX portfolio third the operations per outperformance came operating For better that The $X projected share earlier we than portfolio per

Causeway this new at earned quarter fee higher the we and commissions on Hub income. income on fee For service leasing leasing our developments

including the to year fee the our non-same contribution we're of XXX share; basis the The $X.XX Winter income per $X.XX midpoint versus in of range XXX exceeded increase properties our XXXX, $X.XX For per share. our NOI our increases property Waltham assumptions an growth and to that share; from adding $X.XX share. Street by our of of to at in per recent points the same FFO in This improvement share acquisition guidance full guidance. updating per XX of per higher and $X.XX $X equates

We interest $X.XX borrowing project our lower primarily benefit of per the net also lower share from of rates. expense

We provided last Web night our our supplemental in for detailed initial guidance report FFO XXXX site. on that's

XXXX, our strong to As FFO trend. growth ahead we continue look to we expect

growth NOI our by same be developments. occupancy XX.X%. for from portfolio, delivery In driven anticipate higher gains at as rate property occupancy this rents of and of the as higher portfolio both in-service well new an ending year Our will the we

this square quarter. place rents. we occupancy expiring year XXX rents For on feet In early renewals from expect Boston points to occupancy around is increase higher XXX,XXX where highly urban and role basis XXXX, in suburban significantly leases focus to a up occupied expect in we Boston XX.X%. lost ending the market Cambridge In the our the market, Boston portfolio our so of we is portfolio,

the back is anticipate Doug activity gaining occupancy Waltham in As in XXXX. described and we robust

GM commence square or In mid-XXXX. more Building of approximately feet vacant in leases XX% have the signed Park New Tower, square this Avenue has by will that Times Square of we XXX,XXX City, York space feet at than XXX,XXX XXX

expect City We York higher with and remaining the have in good on will that leasing next New of occupancy year end a Overall, revenue to expect portfolio. be activity space portion we leased XXXX. recognition the the by be

we're below Los XX% rents. market currently In Angeles, leased with

at end to of feet XXXX the on most expire renewals XXX,XXX that square of rents through the opportunity approximately revenue our leases higher We through the of at have XXXX. completing increase

As both and in also the our that on to Francisco mark-to-market gain Doug San highly we're Mountain opportunity View. City rollover has revenue the in a though detailed, occupied strong we continue have to positive in

have in that Next XXXX exposure year this also stabilized income downtime temporary of and will that our our XXXX. is rollover behind XXXX occurred revenues exposure our our impacting is reached we district, have occupancy year's full rollover described in detail where the having in limited. and at the the quarter. will both also us XX% we Salesforce In Tower majority Reston earnings exposure of the Doug in benefit occupancy from

guidance Our cash and to and X% led strong NOI growth property by of Francisco. NOI growth in San property X.XX% same in in Boston XXXX same assumes revenue

XXXX. assuming We be value to million from now free $XXX $XXX will million non-cash Fair $XX million the to rent a that's to with rents approximately cash $X contribute million rent non-cash only rent of convert decrease are from majority that rent. vast being

So rent. this of our basis negative growth value burn-off if higher, XXXX non-cash same exclude XX the of property would have fair been points impact you NOI the

will the We key XXX of and also Winter acquisition properties XXX, growth the delivery several see in this XXXX development of quarter Street. from

incremental deliveries Boston. Our and million President other to these $XX $XX of Cambridge and development Street the and Point the acquisitions key square The in foot in growth Waltham NOI significant most includes million Broadway phase of to assumption development Podium City in XXX,XXX Causeway development our Office of XXX unit XX XXXX. growth as from is contributing residential and as in XXX retail in Reston, our XXXX in the Hon phases well is

X.X deliveries and Our of early new investment. XXXX billion $X.X million feet square XXXX totaled and

accommodate terminations decline We expect relocating primarily from XXXX. recur. clients This several that assume million not approximately XXXX to new lease termination by to share by or $XX instigated we XXXX income us in to in $X.XX will relates or per

fee services We also in decline XXXX. income and our management expect to

Virginia Causeway We're in a the These completing several project TSA two we first for development projects. fee development phases that the third-party. of the Dock of and the Springfield, are Headquarters XX, Hub managing large on include

or a XXXX $XX is per represents and $XX midpoint XXXX. million to million decline income share of Our fee the million from at $XX $X.XX assumption for

million. is for $XXX assumption expenses $XXX million net Our XXXX interest in to

that expense ventures in we addition, million unconsolidated joint the is incremental statement. interest our contained with income ventures expect of line our $X joint income In from of associated

equates cessation notes to savings In in our modest our interest capitalized by expense higher interest development expected $X delivering recent offset funding interest XXXX for increase developments. of $XXX reducing million offering, of million usage midpoint. aggregate, costs at our debt incremental is expense a The the costs refinancing June with created this the expense interest from from by line borrowing from credit XXXX we've and

over NOI range our offset of fee is a deliveries That $X.XX of $X.XX from this with an property $X.XX a our XXXX are from of share G&A per $X.XX summarize, portfolio per in of lost the guidance. share share. increase $X.XX in share and by share expense, per is share guidance and represents initiating development termination and $X.XX management per service $X.XX midpoint per to partially asset $X.XX share of net increase our expense to acquisitions. interest per per At higher So share in income growth decline we and The XXXX a the sales. comprised increase FFO of same of $X.XX per midpoint, income,

the anticipating we're FFO using of and So in XXXX leading year. up following a sector our XXXX, guidance growth in with XX% midpoint X% for another growth growth we're FFO it strong range

internally through demonstrate to terrific are property in investments pre-leased both increased occupancy by growth returns. and that continue pricing externally new generating We attractive primarily development and investment portfolio and delivering our same very substantial

next Verizon, contribute East to Mae companies. NYU, XXXX scheduled the to new building $X.X are XXXX have Gateway in leased and XXX Marriott the these quality City Causeway another XXXX. several Wilmer billion in Street They between leased leased come online to Boston Avenue roster to high pipeline meaningfully XX% in to is in by and a to others we our looking commercial a the anchored Bethesda, York to continuing leased include development developments to headquarters XXX to The further Hale. new that These Google, Cambridge growth space Reston New projects and working add we years. pre-leased Fannie of XXrd of in And ahead, Pennsylvania late over will

for That you line the Operator, completes questions. can formal our up open remarks.

of with question Yulico line the Scotiabank. from Instructions] first Your Nick [Operator comes

year? next first of year off, outs? that of is of any Reston what in from And ins terms known negative year, guidance Mike, are the can for I move Thanks. guess impact are kind growth next you some other major same-store then, the benefiting next NOI to what move quantify the GM other

the renewing last on move think call and little of actually tenants. was were successful been rest talked because $XX million we've which and about bit recovering a a the GM in of was we couple same. I the So, our about GM We outs, approximately

a we're doing that Fed, rollover the renewal of a on strong to done no opportunity and there we're there's and an The seeing little Boston, renewals some full have renewal be Center; a we eloquently the of of had that, big Bank out America; in early activity. year better the vacancy. we'll pointed roll Doug Street going than is expected. Prudential get GM activity XXX we'll bit that so up have did activity at we've Other we lot XXX we to we and good as than work continue So, with in Clarendon at Cambridge of to and we've at although early have continues

ups York in that tenant big commence years. floor Embarcadero to of basically XXXX, with a lease, City, that big of is in middle growing year-over-year. a all roll New that we'll expiring all We when it of been available for And also comes significant. building of leased. space four We've the couple us. Center had And is we're

building will NOI to GM and the Doug office network. grow our generating XXXX growing in leased success expect of is portfolio the So, described and and the in some all that we we've retail had be revenue as from

in of our some already I assumes of bit that with I the that the done of a which of described. success following portfolio low going opportunities have more of in the range high-end got things all the and that just that front little we've so we've is the say everything we sort the range in us assumes that vacancy our end

should for give not a spec going market That's lot helpful and then, targeting that about $XX to now you're assuming the $XX, And how Can but Okay. is go like right XX. in Platform you're brokers feel spec, there's expected net market, us from And I'm may there's something that rent. And project dollar that construction that just the when in heard we you much start demand. of question not yield. a we feel thanks. cost on second think

how going about to we think should mean Thanks. begin? it's just I So, the opportunity here and when

So, Owen. it's

Diridon Google are Just seeking the I and area entitlement to is the is next bit that a are just project that the development about their made ahead projects think on Station talk which the on other for plans. Much some positive. not building this right, they're progress marketplace, little in to of development of you're the finalizing that pre-leased. entitlement a we goes

We are actively speaking project. for and with anchor tenant to an now potential acquire hope customers this

in investing incrementally it are We today.

commence I based requirements are into leg conditions. this physical would year the We project the the will and of and market it site, on site that clearing preparing would drawings, we next anticipate

The based yields in and forecast our on for the expected are the project excess costs X%. expected of rents

is This Doug.

You should think about project this is phase right. a

is to be three This XXX,XXX buildings here. are just feet. square built there So, under

And the so, do the same time. something, of the something to buildings do three all we not if one at buildings we of were with

Thanks All right. everyone.

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

everyone. Hey. morning Good

in instead up talked than your You giving bringing development share rather markets, about additional the thoughts within especially maybe of sources rather in in us upside. of with equity JV just private developments. growth -- especially in assets is stabilized the Can selling developing one you stabilized on your some JV more than

of of as Owen. are because in we of bringing we pipeline the us. have Manny, front joint in that So, partners venture robust its balance, I opportunities a mentioned, It's

current we to leverage We our are price. our And intending share target. not exceed at don't equity to issue want certainly

perspectively from to a partner then a pipeline, to, specific So we as make development levels what bring We that's the or governor. whether leverage JV need to are, and deal. our our want look in the on we needs capital a decision

diversifying would risks well. XX, there so and also And I Platform our risks and as also -- definitely rewards a case the a well as REIT also it's are there from site mitigation investment, the in it's because pre-leased. it's not of decision say are but we are

million we of we described sales, sell asset I this conducted assets, XXX that of that nearly is to terms sales year In material. continue

it doing way But, before for with so have growth. can't developments make requirement significant major is inefficient as of our keep that major to for assets described that. the the will capital embedded because I raising selling gain. a assets brings our And us a and in We down capital retain a of to most that forecast invest we FFO development sale special comes dividend,

we how or that's anything you think So want it. to Mike add? Doug, guys

that about show the of big into sort happened talked had for of could that to [throws either or leases in are chunky that or now guys other starting impacting any that Is you of there have stats? the wildcard past Doug, sort earnings us you anyway stats] off those mapped [ph]. have roll or lease numbers

a think to try certainly provide of way give and -- some can information. We

and rent. can you of us we I I tenant to is they would in would you the particular of think for that, the -- explicit that of appropriate. was I because them rent but get not capital rent with significant lumpy form that a capital, hesitation free giving be value that That be skewed the numbers, in information there any economics when unappropriate our -- the so was didn't mean, which and describe gross that free up roll of provided think tenant they're they the in includes allowance. occur tell with a TI I terms

are which to across things an in leases a those it that little make "capital happening of challenging are is a intensive describe increase free a a in the much of trade are of these part sometimes and by So capital. of businesses bit the portfolio capital in more true And so intensity" because cost it we stuff perspective. negotiation. transactions, the -- kinds office is way short-term from transaction we this additional the that for revenue But we rent

you can as to and to if specific much as ask sure happy clarity think it we back you and and try not we I'm you can. about more give questions, we're come So than

And left to I've so Mike for one want Great. feel got don't I too. out, him

in how declined of if you a XXXX, to talked event? You XQ same provides isolate just about were much Can you quantify in 'XX. the that then lift store that

store is experience of can quarter be then, think Reston. quarter Well, rollout a what third I we're first that tell in a you XXXX of the XXXX, second And quarter growth. I should strong in of and the same going think to I

towards -- it and we'll then of the of dampened increase because rollouts third be the end the those again. should So, and second year quarter

the that's way think best respond to your I to question.

everyone. Thanks

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

Mike Thank quarter follow-up that just you. negative territory. on into wanted to fourth I swing

New lease does a that major that rent partially You When burn was mentioned period by next York. rent in off free year? on driven free

XXXX year. rent off burned December be period. before will It the of was next free

it. Got

mentioned Okay. York. commentary questions for market your in New was was And assets you're if would like How strong rates. Doug, cautious you that on wondering product. And economics the the cap older build of GM also leasing I building? York, that demand transaction you a new on characterize New mentioned couple you for prepared remarks, in on

two first the the Owen question. answer let questions and answer I'll I'll third So,

in lot very recapitalized in York the That's the And that for not activity or on thought the on leasing XXX City taken that activity Park Avenue of months on. both explicit not did six Motors Avenue, Sixth of District have demand So, buildings buildings assets. And specifically and exist. us going have strong. XXX regards GM for on pretty those building, or that's reposition that Building. and repositioned think got amounts we've recapitalize New themselves Avenue Avenue, the energy was ago the With to is of Park are I how "new I and there both is Plaza significant to General construction" Lexington or with that a

capital building So in built older the it building, had a describe of may put in into when dramatic while which has terms new amount it as an you activity that it. was of

in building of And other activity floors entry are last And to And good full or tough you if renew pretty and it's -- have floor the for a the the in XXXX. are going so, construction. now two tenants other really have of the a two three years go renewing two the that lease that have because top on building. we we out and a we experience spectacular there, after sell

basis than today months better lot a So, on relative a did we six ago. we feel

And on market York, then your it's bifurcated. the capital answer New to think for question I

of the up for specific in bit York New assets. softened little think classes I a market has

So, me let explain.

$XXX cap That quarter sold in Midtown execution million. and of last a was terms quarter on smaller So, over great we in XXX just as It last that just rate. had asset. Madison mentioned was I

assets York, for think market very I single demonstrated last quarter. think strong there's I'd bite as we call in So a what size I still New

are buildings I York term in including New newer that think very has more for also buildings. -- I a and think some buildings areas of and that rollover. market the near significant commodity up tech-oriented buildings like robust market certainly is the softened a for for And bit buildings have

there San that last it's Francisco, On you that spillover XXX a And XXX if South this question, tight There's submarket. to gateway tenants into capture demand? anything moving I and some can tech Is may. with over very market. increased of do of

things is yes. answer The that think are We we there can do.

We they we're we'll use. coming thinking a.k.a. I in discuss we'll the are based -- have that can accommodate of and thinking to quarters. have about office how of real more that some be so think might repositioned, hard non-traditional about in that And, lab fact buildings those process in

you. Thank

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

inflection I at an GM guys. that there renew Anything you you your a risk? showings that you are at mentioned sudden commentary. Hey isolate thought was of can more a Is and that better Doug, specifically? you flight all are anything previous getting lot [indiscernible] that things there maybe appreciate or get

than it I why question that So, John to Power, you're because don't you to try answer closer am.

side and fabulous or around store three kinds of app door, the the new the years a Apple or we've to Lexington and Apple as plus one, stores, Doug the to Well, our all mentioned, front having the been tenants certainly configurations. without opening showings number go

huge is it's spectacular. that if been say And would there, you haven't I pretty you go difference. So, because one should

had with just before, and were that there in had space available. We was where some and showings Secondly, I needs sizes we the market number marketplace. looking are and now is looking a active we of for somewhat of mismatch what the people think this up between have but timing the tenants matches of in

you was up that were but enterprise WeWork seems for were the know proved Co-Working Owen, just helpful. earlier offering, back out flexibility. one That's I the your tenants to space. going FLEX we comments on Then, and thing that I'm curious, to guys have like pay the willing now

space I'm may or pay how should and from curious of see over next, maybe what just premium potentially be flexibility? office leased the capture could three you So, recipe guys landlords to changing years the be to the mindset for of kind one with

them continue and corporate That' to controlled to is And they basis Yes. provides a ability unique are Look, that express we question. their that's on are to seeing to own that secured very spaces facilities these want are brand have talent. because good the long-term that their users want headquarters be compete how market a think what in and and major them. for it going I

building a being you for headquarters to timeframe company a a headquarters the on its these if number long-term basis. That all often or -- for a these than volatile And a pipeline, at space of square said, either regional corporate, we're look needs companies. required company needs the are footage, our development of corporate more procure personnel of the

the think again, space users So, that to basis. who on procure it we some XX%, to flexible it do on be that the clearly is able to a there hard procure percentage of on corporate their some that companies large knows? say margin, to exactly is there X% But a space there's is, if are they those value margin. customers And it's that what could out many

into work we the And FLEX and by with tapping now that. other BXP operators ourselves are

And is how short-term our you're you one of as today and figured own the leasing do it costs Because think a vacancy on you you out are building, a are TI like Obviously, priced? that for basis, premium the the thing that owner be? what that? be how FLEX, rental in space, higher. the on be is with basis rewarded we should taking if more should risk. I And space should marketplace being short-term the

So that's how the market is evolving.

space. following, something with and either this trying to example. this is for their particular just this in I'll I've talk typically topic to Meaning conversations do a.k.a. internally And an "platform," you companies the are used I which the give shock is would previous absorber most part about word,

a take renovation that's their place while to in a space tenant we're have to that being some Boston place because have We agreed space send own piece to because going do a building. nine of they they're and is the renovated space their building don't the they need the for people in swing of major months

or sure take be portfolio those to lots small types there towards these if is not. have "FLEX" of or where BXP to then, going it's that primarily of the are enterprise types see of we seen space. kind trying situations tenants -- we I they mean building that shock -- a they done are people absorber that may consider are significant not business in that's So about have that tenants or need space way opportunity they're to and yet, hire under not the still growing themselves new a for And and that construction be but thinking permanent space of they I across driven users. may by

we where in for configuration the and hundreds additional into not it try in tenant the segments it floor in two think feet floors, appropriate a but we X,XXX, out a building we're and are square type X,XXX, of and a of the of floors there. change of And for in meaning can a that building significant XXXX, without putting charging looking much subdivide to premium. So or space, what particular easily way place are And it costs. we a here XX,XXX of are particular needs be

is for our it's Prudential and these in and the client evidenced having on something with Bryan as customers dialogue they base we're is our FLEX that larger What perfect We're their This compliment of existing a interest Koop. finding to continues have strong out the finding hub. is And like said, be on. that predominantly daily especially that short-term Doug Center the projects it for user our existing we're customers needs. primary

So it's call market. the they'll as not much it freelance

predominantly existing Although been customers users. we enterprise those do in it's have our FLEX,

to one kind maybe guidance account, And cost got helpful. the the million? quick for just unsecured have of the given do XXX XXXX related going Mike, forward anything in one you That's

is mid in We pulling so in due. XXXX don't $XXX I them at guidance nothing about forward and roughly we I million we're -- coming obviously up early. it, its that think thinking but have, X.X% those there's mean, and looking paying for year,

Great. Thank you.

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

the Great. that's team talk hoping project the how Thank center Northern Virginia. about you. actually mean on data or I might that office data been up can center sector? you office think talk you in by the gobbled comments JEDI land and and about could availability for what Ray was more if maybe And end and demand given

and the get will corridor, Clearly expect landlord to County. demand letter Hey Ray. JEDI major XX% Obviously, is a dominant for talent focusing the the and specifically corridor. invest toward JEDI DC we focus Jamie, most of as in a through the the of headquarters And region, exposure owning in Northern all cyber the going traffic of the and Herndon's, is The entire it's that internet with of on data be Dulles Virginia. agencies lot majority the best centers cloud in both great three Virginia. vast for Loudon office product. And agencies government news

We make lot But, recipient expect in position point be deals a or on any time. we're requests at space this in to comments demand. of to the for not a of specific that

in and center in building Reston. building, Dulles tech the the I note It's about the the that in new sector general of Leidos the can to community never And corridor say town out a the demand just one specifically talk in of that vacancy has is to stronger. relocation been doubling we important vacancy large XXXX. Reston from size

DC So, is meeting bad is existing we're almost of But, great news the the tenants. match there JEDI the news issue tonight. guess natural important the not biggest demand as our to wind is I that

So, both. we'll in be equally hopeful

to thought long Is translate actually on demand? into real it how there any takes

be think immediate. the almost is demand to I going

most talk from you saw then, the moving Silicon they're some generally but Francisco. the we of people about from to the or to of the you're I Francisco types Valley, are And just most, San CBD we even And be shift? the thinking gears or about headquarters of will South peninsula thinking kind matter switching either or see matter that are to moves and the a Valley. just Okay. submarkets how that going down to Stripe Can to San product Silicon how the some headquarters, should about announcement, going not mean, of city

Doug. is So, this

So, couple things. of

San available no space in is Francisco. block there big all, of First

the you sites is have now between is XXXX Pinterest in The on of gets looking and and who still is commit grow hard built city unentitled one time new anybody -- Salesforce So a important. something going at when saw also significantly and unentitled. to really to building and to them workforce is the time a

that the around And to the Silicon Valley. more so, move and more becomes challenging it extent to

in can CBD headquartered are Some some that of the necessarily talent absorb put large the it is Silicon fertile Valley the Silicon a city. looking them companies headquartered place CBD Valley so at not -- to for as a location additional that

two looking there why public for Valley. transit and close of example, we're in I is right critical. so now is there or additional Uber, aware are others assume that went to down And Being that the they're for Silicon space three

so more going bullets and And Caltran the you the closer importantly you to get stops the off the the be. to are on Caltran, better to

in not in transaction a it receipts that to that is Francisco. payment has the to With -- to Oakland. Stripe, the going made Visa of number are the they're there move are not Square I that the Francisco in regards payments to tax clear business business. from San There's moved San city think that South grow companies a are of companies hospitable gross

to grow outside the more likely And grow to will that of types city. my of less be the companies is likely those in so city assumption and

that transportation. the matter is that the proximity But large of in district grow. few the -- are so opportunities to fact tenants naturally there are elsewhere. It's close city importantly again, causing most look And a places for public in are is, splash and in make they to itself the looking to

any thanks. in 'XX the starts starts developments development then or are guidance? last, Okay, included And there funding

those to again, that we there. work I prepare Platform not is some anything Harrison mean, nor of the we're starting obviously continuing XX start, and to assumed cost to And start Nothing but capitalized. that costs do new, we're development in including be Xth will

those associated our of or credit cost So, the line would otherwise costs, of interest be off with funding come would capitalized. which

Okay. All right. Thank you.

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

Thanks. and think Good its you of Doug, JPMorgan divergence morning. just kind in net of the overall kind impact city services, about how of on potentially of out versus recently of we're big talk sort moving the next years sort I that announcements jobs kind the out dynamic seeing couple guess absorption. plays could into coming financial and maybe I of kind tech wonder, over of of you the

make in Owen what's a respective. general city I'll comment on describe from let the I'll So, phase the going and

been Steve general, refer not growth business. job in what growth job services as financial quite in would the lot there has some So been There technology has a to time. for in sector the of you services financial

would for businesses. consumer because with that refer investment associated is Marcus there lot a general a lot the oriented JPMorgan of oriented large, banking in it's space that bank. being Sachs and operating the online financial bank's or not oriented been as has is or seen we and technology tech Goldman personnel tech kind Presumably "growth" online are of by taking an I But businesses. what there services jobs of the mean to in-person created. their others new we've the So,

cities or technology companies. growth. a are And that those there years, all clearly private said case of And a relatively growing of to like further South marketplaces. been And of forces our Francisco San growing life advantage And five lot glass be business repeatedly a and not labor bodies. equity are asset the numerically management because are to in growth of There's trying in ourselves way position lot lot take customers to fund and amounts has this put Boston little you've these science we've in the new place been of of four those we on there's are been of businesses technology growth in the -- seen is the of a the in that hedge and in a tremendous alternative there. happen

of seeing, and in And LA now and for to of see of they're so are that. in kinds that and a growing Francisco natural the are the in now -- country it's guess very similar group tech -- days. we're San And us York, continuation they associated customers same in effectively with plans Boston name significant And expansion. titans the for which New now the is, them, the those in I having largest these have

what read. personnel. of its view is experts read you to own strategy with JPMorgan not respect my that on we We're Steve, it

However, as banks the outsourcing following, York cities all I country. of some would to in always the well say as the New JPMorgan their other are workforce major around

And in of version that. trend that so, don't it's the XXXX I XXXX, years. I news' 'new on would any think going just that's probably there's say been for

place and still to the talent are of I that a headquartered client is think for banks need that the York they be concluding So, New variety reasons.

in believe banking of is are And is because these we're all In traditional grow are is some terms of going are businesses fewer the technologies efficient. U.S. like of in the on with that industries traditional that being picture, creating is the seeing the more job the we today most using and their whole -- making businesses what people. companies of are technology that innovations areas the broader many able growth to

before life the on cycle certainly science of, this figures. come though, if all in job if of figures large these so, growth for said at operators. legacy not you has most the technology, into think office you has publicly the pretty financial therefore, absorption, I've and net demand And been services has call States, United I like industries that life business And cycle, very this and of shared that flat. workspace look take one and and if the a from been prints this lot no tech science office

of just out of or different get figure just either the things is, to there guess kind for questions trying at of to to get same stuff markets and speculative back just a and that the guess little end. needs how Doug, get terms of high better range. end. speculative like the of I'm leasing a to different maybe to come peeling occur Mike low bit what's end I sort on back you realized I or it store. on maybe or of just end but the going guidance wiggle And sense for, And some the Okay. of of sounded or detail trying high in of to for the onion to the the high to sort room much Thanks. sort I Doug, gave roughly what a lot tenants, on much I'm was to how

as in put footages And on to and Mountain and where getting have they're bit of much done is know it's quite clearly -- don't how more rains the much good come you towards grounded. right? going have that and some square a you in footage I the the of square of not to I on. I as have on. clarity the more stuff which other So like the similarly we But number if View what with transactions his available relative a a the signed, think space and how get are importantly, high of got a percentage that the speculative, of absorbed. on our is you Ray Waltham, And expectation and that stuff I range we high DC Washington moved on sort in are basis we clarity rent of of guess And did speculative. can job it's so we up And to we in as the those And the working more describing of low-end I speculative, transaction So we range a define end that those there's top is comfort there of Steve, which the described don't ourselves. get has is little with you end have degree can team year a think provided. completing range, pretty

give there's mean assumptions these quarter And we and about make how to every components year always might and what I done build that. get guidance what have our every Steve, get speculative done, guidance. we when of always we could

do. wouldn't up we and But every we is is set that Obviously, So, similar. any this we've I process time the that go of we done or have say the process what to every different opportunities different that is analytics through the come year. with quarter the through from

trying guesswork Yes. that inaccurate or there imply I on the wasn't guidance. sort of to was something

I trying leased, Hudson to of X sense much Pennsylvania Boulevard maybe and just sort Ray, that for Just for of baked to in. the a back. on the much guess And can is the comm., circle just already XXXX but but of how Pennsylvania, lastly, well the Hudson get just prospects know kind then, I is for discussions and rates of how on kind we space sort X then XXXX is of the balance Boulevard. is

we seen them. of or four just overall in version years And XXXX we taken the wished as best kind strong as and have we for it three device we the it, ever the two locations at than of and At half market The even for the I've space had another the space the is -- But image first-class demand haven't is proposals deliver for don't in requests for have brand the more space. city Penn, of market. XXXX new yet. more we we a to Penn,

John Powers, Hudson don't it why Boulevard? X to I turn for you

second We're with about Yes. had the foundations. underway done quarter. delays couple X that their probably We of Hudson CDs we but to Boulevard, we're sometime in early still expect a have that, with XX% now.

they're been that's is very now. have finishes I two If the of give at later uses order not XXX,XXX actual time designed. finally probably developments. have putting half we're a over to very quicker received. optimistic we than enough But, floors a a steel presentations, dozen, years we very there us to much know, for forward, pretty and probably proud a We're committed this which to behind to excited but first do. went that We the it, some feet. year all it, of lobby probably Buildings do well building When a selected, whatever, nine about other don't we're we point and We're have little developments very, market. go. to not the in very,

bit. little a add just me Let

City So, year construction of vocabulary sort New a the that the in dramatically York ago was speculative amount of is new reduced.

first was XX Brookfield's deals strong be building in that the at building. hit deal much negotiation Spire is additional going are lease next view project. Boulevard their at committed. at So, There the of Hudson is There to

their XXXX that think today about don't constricted serious there. So, the Whether next year know, is or more is better XXXX, there that taking a it of I be set Boulevard. large much a lot is in the who Hudson was to opportunity about from lot that's out get they three us comfort ago, to I opportunity going make than a to gives terms front we of slug in set us more commitment, when which of requirement somebody going the be is but legitimately a feel space in

Now before. has to for that of John unique any kind we before But, that that clearly of we there going described competing product we're anchor make have We other be think kind forward. move we're tenant buildings some are that, a commitment to waiting with.

mentioned already I made. about. to to talked add the that pitches side, in John which that, addition And would we've just Yes. Doug all supply the

of years. We of that couple also next new the perspective be into pipeline customers going see coming strong are the market over a to

certainly the but in is project. confident we're uncertain, So timing

it. for Got Thanks. it me. That's

line of Anderson Your next SMBC. question comes Rich from with the

Good concerned FLEX morning. of XX% WeWork XX be to that's all Thanks. I'm you Hey, of direct commentary the about some But, If touched to issue level Wegmans there there forever. issue of of any pre-leased on everything terms we that? in part be Would degree. indirect there tenancy your some of to concern Docks going kind an just, know the, a sitting thanks. would Is And be about? and it's by at away you problems. face I of type Properties bring on moving WeWork interesting. that. in there wondering to could been and supplement WeWork Just Boston sort Is backing in willing with attracting new of

a are up even The being taking fully open, That in building. all on high yet. is clearly it is we WeWork And completed expected. occupancy, buildings quality yet. and been the of project completed an property the lease amenities XX we the Dock incredibly but haven't than this said offering So, has slower not

got a had It So it's an it's It's views. you the end amenity office can a imagine. think emerging at great show. I location. the every of And It's great got fairy dock.

the confident job done opening, Yard project longer Wegmans all wonderful we're have place making. for this the people about a And the of talked term. Doug on in their So Navy

start. and them WeWork terms have started to desks their they sell they of about opened talk facility In I and good And comments. to off then a to WeWork they're in my more specifically

than or Yes, okay. your but and the to a two comfortable the go Is kind are range is comfort know -- denominator REIT in or operational that as Mike, lower it's [indiscernible] that's debt that to turn higher zone, the six-ish long-term? go EBITDA designed sort up it for number of goes average. of you developments I

we in EBITDA leased stabilized before, and comfortable not be we our now. think right built we're this with investment for do are were everything debt any and range new talked I let to long-term the we've below we think also I would six. to get and if that just and the about

because and when we prospective, believe look EBITDA, balance to that So we prospective think capacity. at our look about debt an And kind Xx a of our in cash length those ratings very the comfortable credit asset, and our the We're Xx. support net our of with ratio our with that of between flows very, the at can EBITDA leverage quality to of net sheet we leverage company existing we debt ranges.

different us anticipate necessarily not in zone. term would I a longer So operating

to doing on just of our these because basis. joint leverage we're new is forward our Owen about want long-term before, acquisitions developments going on we're we our new explicitly prudent some what and that be about thoughtful ratio be said a Rick, is clear ventures what some overall asset to reason And of the and

us And for be like levels. we thing the feel managing to prudent so doing just we -- be is to those it's

last Fair the at at just and lower translate line? Would you for then, enough. could growth to we're looking X% me, year would AFFO if answer that X%? next than it be what And maybe higher -- or FFO

I more capital is. get little fourth mean, visibility, and I we the as, and a bit leasing and I are three the than to look costs think XXXX the of be that. where quarter can We're quarters way going at think about what good so the into we've pretty is it got through what XXXX we

XXX at going would somewhere we're I end, to to the a range XXXX So XXX be suggest the share AFFO. for in for

think which told gained about occupancy about of And to we you a basis about occupancy what then, if significant game. during points -- digress, pretty is the you we in XXX XXXX year, just

of game. we normally was that the be occupancy increased deal than both costs rollover the might that keep its transaction So, because more same occupancy with the that it place, at to leasing significant incurred portfolio and

our basis told so In XXXX occupancy you gain XXX to slightly points, I've is less. that expected be

So XXXX, moderately costs less. than XXXX be that anticipate less could leasing I the would in

think million about million, I for CapEx. will CapEx, similar CapEx year somewhere this it's CapEx honestly, they our compared year, As think our to $XXX be we a next around $XXX maybe

if then, you I've guidance you given about non-cash think And rents, for that.

So, year-to-year pretty non-cash rents are basically similar. They're flat.

our you about think think dropped about of kind basically then AFFO. you if and those So, things all three FFO growth, to

midpoint So, almost $X.XX, FFO it think $XXX our a at growth is million. was I at the --

of anticipation to my would drop that, is AFFO that so into our And most get line. we

if could $X we that, And year a than so bit basis. be higher at FFO an next on compute you maybe little $X

Great Great. very color. Thanks much.

No problem.

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

you and dollars. free Hey rent dollars something TI about mentioned Great. Doug, interesting

big and a picture building. move you A So, costs say at to tenant a you into Class what look it if

add can technology architectural [ph], tell $XXX a costs. a know if foot, foot, don't I $XXX And engineering but us. that's [FF&E] You TI, a fees, you

of the of the for how about said the is of to when rent. or allowance the either tenants cost by XX% that all costs free out done, whether of what cost X% them curious And pocket much then I'm And get the overall and relocated. covered it's is or TI coming

hard be complicated answer in So for ask blurb. you question, a John, it it will a me queer to

thoughts. you just give me the let So, following

construct of markets number strong. one So, less have improvement the these in is that very and every free different the are stronger that, are tenant markets one different rent is a that and markets allowance

giving be term. Boston to be no that may an amount lease for example, we And rent. as giving today building might vacancy of for CBD And build in a with foot So, expires, TI free time XX-year the some existing out an we time. $X giving upon square $X for period only a of when depending of we're

paying bucks So, square a if giving space, the portion and we're XXX you that, okay? a giving costing and foot build dollars out your tenant it's for to significant plus of we're is simply XX the time

they're piece a the out foot, top their a XX DC, a allowance is transaction of for which space, $XXX into build Juxtaposing square they're getting the weakest tenant from getting that to XX a cost where rent time. of going to to perspective, Washington CBD market of an in also and free months of $XXX on

a that marketplace, portion. in So, significant

probably they're is for term in of significant So which and Washington norm. XXX, a $XX on XX-year just call new if in basis then building DC, a sort XXX the building rent it's a a on covering them and bucks square is a giving portion a it, foot a gross we're the

costs," So, suburban those San more really in varies in is I DC both it's of of the market think CBD of Washington not it in in large "covering a for free phenomenon. in Francisco by terms part equation the City Boston, York and and New transactions and rent but significantly, and

Great you. answer. Thank

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

Okay. Good morning.

feet, would nature, boutique you'd of stuff of that size, would or presence Boston would that a projects seeing but you the continuing sort over quick that questions I One, have expand XXX,XXX few typical a -- on out some to sizes, look your developments do think in more thoughts be here. look your general quick be that it the you you're think at a would the the you call it investments, Just earlier, extent that you smaller to square building touched market. of LA on there,

a as It's we not like with something if with. Hey like smaller certainly Alex. groups associated into we're the We'd us lead easy. at program, do is We look possible to the or working property would broader that larger Owen. would felt whether projects the it

we So, would both. consider

And type at as a and off one larger run hard well. both scale we've taken projects projects boutique

landlord DC Okay. center, leasing, no it to about matter they And that new tenants new concessions center the landlord seeing thinking new the to to leave on certainly increasing? to well chairs. want market, guys that TIs those just offering just you and then do going in retain aside, for building are where town seems is they're musical Reston and there always tenants New on tenants seek but to have York similar existing overall obviously, like offer you go what construction? while comments Ray, Or at construction as I Are you always your there, come an is just will therefore town up, DC and it or Reston like

XX% I I exceedingly to think, are own renovated these those our it's doing recently XXX% a And very six bifurcated important buildings. or even it's are own note that, leased that that buildings And and is buildings we market. first-class well. have portfolio, think we newer of

buildings ventures also joint own We we our that are three others portfolio with in struggling. have in that

is commodity of So, rent. and for And even demand a the higher concessions tale need with it's a and we those the I our two we struggling. more occupancy the on and the plays the them cities the maintain there give level own of and the highest both clearly at have tend portfolio, higher on rents in best new the we construction leases for we're think improvements. class get base when existing rates tenant But, to highest

well. space markets, again, The little more top the challenged. space commodity doing two tier exceedingly So is

you. Thank

Okusanya Your next Tayo with question comes of Mizuho. from the line

to in in wanted I mean just when is those specifically of spend that's deliveries at developments for XXXX 'XX, I just of than in XXXX. new the up. on of assets talk development how think beyond strong filled details about good lot in XXXX outlook deliveries development additional in XXXX, the regards about 'XX, start everyone. do kind seen given a the potential like in great But of kind your demand pretty guidance look the I of most morning side, disclosure kind result Good the but thinking markets. are kind we of to Hi. I you've

Tayo, this Doug. So, is

that dates for So, quarter our think we assets Owen supplemental and went described this I provide into new the disclosure those.

all translate other that We opportunities have of into pipeline And hope a development. are we have to looking at we across of we pretty "land that healthy positions" a our portfolios. number of

I XXXX I'll examples. have delivery, a we think stuff, if most started of give but XXXX some XXXX to would in it that you

we So square station in square would development XXX,XXX permitting San working on which somewhere Platform site, in under be feet XXX,XXX the San XX the feet. just -- and The residential, but site a Xth a Francisco, almost Harrison of Jose, of square The currently phase foot XXX,XXX square we're which to would piece be Bay XXX,XXX that Back site X potential in foot Boulevard Boston space. foot there's X a probably piece building in would space. Reston million of is build, be Hudson is square next

So, that a delivery. XXXX, a would be of kind

and is that's of that land a there stuff lot in we So, currently control.

are is in -- on before in that important would are could all all come it XXXX we they of Francisco either, space of not millions would additional of And me get that later. submarket, New are our the Clearly, or City, online pieces or earliest. Virginia, there Waltham, square that the sooner more hear potential to to say of surprised are submarkets organization that at things being in San are get York in that in even be other discussed growth. to development there going, You of internally Northern feet none currently XXXX greater components the working

Thank Great. you.

Okay.

think interest remarks. your you questions the in I Properties. concludes concludes all Thank your certainly for and and Boston attention all you. management's that Thank

This concludes conference today's call.

now thank may attending. for and you You disconnect