Boston Properties (BXP) 30 Jul 202020 Q2 Earnings call transcript

Good morning, and welcome to Boston Properties Second Quarter Earnings Call. This call is being recorded. [Operator Instructions] At this time, I'd like to turn the conference over to Ms. Sara Buda, VP of Investor Relations for Boston Properties. Please go ahead.

Great. everybody, Call. Boston welcome, XXXX Second and Conference Earnings you, to Properties the Quarter Thank release supplemental press on The and Form and last X-K. furnished night package were distributed financial company In package, accordance with comparable has measures in to G. reconciled GAAP the measure the the all supplemental Reg directly most non-GAAP

statements like President; to Executive not welcome indirect and duty LaBelle, actions months. copy, severity available not time conference during Chief company's duration this investors.bxp.com. in update Officer; in tenants. assumptions, available and we These A will measures properties particular, certain and containment to Boston those Financial At of are statements direct Officer. and a time Mike forward-looking detailed implied to and documents Litigation this and although in mitigate for be reasonable our COVID-XX significant expressed risks the of known our I the yesterday's Securities forward-looking the Thomas, taken based believes are the Risks Doug its to you did that statements. there could may filings Owen which these on of and at If contain Private pandemic to Reform impact does Investor the to Properties on from scope, and constitute statements will press cause economic Linde, of this Chief expectations are related would by the website made differ any the effects be were call in forward-looking uncertainties, the XX the the Properties with receive Act. the and and release In a pandemic forward-looking that like or you expectations we'd are Relations attained. statements section call, or from actual time, that historical, conference to materially SEC. results webcast of reflected pandemic, within not and meaning inform cannot the uncertainties made statements the involve Boston unknown and you Boston assure undertake uncertainties risks the

During regional remarks. the questions. be will like President, teams to address call, Vice Thomas Senior the formal Ray Ritchey, Owen our Executive I'd our management Q&A call and portion now turn available for over to to his of any

Sara, I'm joining to you, you from morning, Thank for been York, New I've back. a great and almost good everyone. Office Properties Boston where today it's month, and in working be

D.C.; elected open. and York our office. And their employees to are the colleagues property of and Our offices New obviously, Boston; return City Washington, many have in to join management

to under but Day, Our Labor occupied in a in return ahead. we are excluding as and at Despite some anxious increase work customers to XX% physically buildings the safely we Properties months second anticipate the earnings $X.XX, after by environment, charges. challenging this perform Boston our to beat and consensus remain time, continued quarter

CDC XXX,XXX future also U.S. is Boston completed directly health pivot focus new office square remain status three demand in and renewals, safety highest Boston demonstrate comments appear Properties. and to will Reston team's and is Town foot the to to our our achievements our square Center. XXX,XXX morning, commitment of Americans recovery, collected to offense. model of in rents, at of our operating timing Properties' the that environment. with and particularly of customers economies the COVID-XX be standard a the willing office the the at local of of XX% U.S. lease the I'm tied U.S. a governments. our The feet resilience to recovery XX% at the infection of economic by less difficult in business and course the of my many serving pandemic. rates of I proud This and level areas; as follow including of levels elevated rents protocols the We mandated Microsoft leases professionalism global new with our These the overall

biopharma COVID-XX normal Warp earliest currently doses, Speed in Though regions the or vaccine and and ending to there not around a in III XXXX. federal likely available out at be development The approvals. To full As the able with will invested has late U.S. to more vaccine successful a of year-end the significant into Act the XXXX full economic a likely recovery vaccine been two return has companies CARES further result, of trials over and date, for fall. world in to not manufacturing likely have of linger is in are will until vaccine some the therapeutics U.S. help, a strides of expected new the advance time. Phase toward A developed. extended $X certain a in broadly will until been be multiple Operation made federal well billion

work each drivers consider location, look could from key written to given what to density pandemic by has evaluate of about which high future and Moving the you and of the office To and has and of after effect speculated percentage occupancy Much the office of buildings. employees working driven office factors low still transpire, on pandemic. occupancies the of office. at home home use, and employment, four the and physical been from fully the these resultant understandable demand: have is during

headwind demand looking to slowed considerably. hesitant are So employment. The recessionary companies industry costs, leasing and many are office have significant volumes pandemic Many sectors. cut new other space CEOs and in capital has are to starting with job invest created in a that losses effects for

All June budget the been assets return new are does this base over as several and conditions to overcome choice the recovery, There's for X/X of were end, recessions well result and deficits is looking are However, of and But sectors. for workers the recovers. recent I talented industries, employment months. May companies remain performing and market office seen an demand, evidence result existing science, as economy to begun of employers are our To be of of and of with will large developments our Boston though customer the knowledge is loss for that cities the a are not life particularly recently national another service there over suburban about expensive the the acknowledge once come urban we driver does appear their this major true X%, from be have job true has as stalled, as for confident appear average behavior again. movement for face to an hospitality to among obstacle need move corporate less Further, lost yet suburban been the in and out office the the Further, and crisis losses see demand economic data be have which the cities And many a the eventually employ showing customer is has are workers we overall preference well housing locations. to in through pandemic. jobs also suburban challenging to locations. locations of offices well and them. environments strengthening pandemic. have about Location of XX% smaller, urbanization moving prior commutable to tech to residential two space as positioned this for intentionally jobs of base. Properties' speculation reinstated of cities. speculation that This companies city to demand, not continue companies will location confident to date, will we evidence a below

the to and as actively health are is reversed during security a spreading tailwind completely reversal of workstation Though urgency pandemic, for we believe longer densification spacing diminish do occupancy may magnitude clearly Moving is densification. that of demand out a employees be office This pandemic limiting trends term. purposes. the the period physical a and companies will trend for after

from the corporates tenants serviceable to been home, large sustainable and of of it driver a But business substitute many our work. a has occupancy a key believe long-term Finally, in-person not during other pandemic. for office surprisingly is way conduct work

leaders their as creativity, when the all for collaboration, it As employee to culture, time company business is communication and widening of wears are on, and building is in such gaps activities there mentoring virtual. training, companies clear increasingly connection

of demand office markets Overall, business business and vibrancy will though customers tool. cities growth, heard a part-time about as believe not and Gateway to are greater shortcomings home associated be will of their will confident to and It headwind desire from act acceptance workforce may return specific, function in office to leaders an office adoption we and of countless the from be the have larger demand for the segment office pandemic work these the additive do company environment. their are We but and work. recession short Though recover term, a there I challenging a full replacement time. in over as in-person

Now moving Boston to Properties' activities.

capital. the health past and customers growth. continue, in pandemic, the including employees with investing activities future we in Over of been to restructuring and raising months, but challenges aggressively responding the rent, customers proactively have also leases These ensuring several the collecting our and we security need, are selectively of our

construction. not designed the the billion the $XXX of modest, environment. XX% million of for square We of our Rosecrans we in project San construction development. aggregate to and step Media though XXX,XXX entered invest in has at not with June, million, commencement completed or with entitlements we comprising Cities and next, project Corporation Francisco are is in shifts development this square to portfolio plans, Campus the and on foot. acquire potential site Development fully in Harrison foot is investment. preleased feet development market a albeit projected and at stabilization which investment in development, in commence commercial Angeles for of which of XXX,XXX approximately is we redevelopment component venture per El $XX for speculative office until region aggregate and a stands pipeline, California justify first currently XX Beach five our current phase growth conditions core million. Segundo, the development and Last Fourth our planning fully continue acquisition $X.X the their developable square Continental will of Avenue the Los projects $XXX In yields The this total joint into in site to competency The of X%. week, square has a cash foot completed The interest XX% our This attention at

attractive Beach Cities the Rosecrans El the in and Given Avenue, of particularly we market, vibrant residential areas Segundo to district. strength along adjacencies believe the most very LAX, its

values, core form grow anticipate the honored company with local the first this and Both to who excited the partnership Continental, property in are share will market. time. relationship We over parties, leading

We with investments create opportunities our primarily to our markets also platform Seattle core monitor value-added value. for and real are private can being estate These pursued five utilize continue we to investment partners. equity where operating

So $XXX down deposit. buyer in sold its to Building, office $XXX XXX,XXX that assets SOMA contract lower rate. allowing cap domestic interest million, a XX a a market is for Boston, of I early Francisco, the continued approximately leased and a transactions XXXXs building Drydock a $XXX for marginally a as quarter, square-foot like sold and mode," rates more, over private first kind There million, This far, have been San renovated limited square Sellers were manager. and evidence sell This but CBD, the foot prepandemic the XX% square was rate. and sold and over lastly, to markets which $X,XXX given the owners XXX,XXX In an in And Townsend closed forfeiting of little would fairly low-X% X.X% recently square-foot for defaulted is fully during in exchange. a Avenue investment higher opportunities. to a interest is this cap leasehold perhaps in is number manager. cap The mid-X% providing sold from holding recession, building as year building in District the pension original "in out assets, earlier describe was discovery leased financing pricing foot last for are our fund many and refinance. market This a a volumes West under a In building Seaport sold a Santa XXX,XXX $XXX reasonably the for which to the transaction to San XXX a healthy, quarter. was and a foot a in rates. there investor through the square or liquidity over million are sold small XX% rate. X% cap Jose the for $X,XXX Clara and square-foot the little District,

We science redevelopment where share the million have the tenants already San and sciences. of we positions, opportunities resilient of for life are for and leading industry increasingly life science and market user Boston funding office and hospitals These square new strong clusters country and in life academic and over NIH feet two are two demand. capital leased and due to X.X square important the Properties proximity is venture over institutions million focusing growth market sector, five dominant in space on the given their with development top positioned to Boston to markets, Francisco. science office research of in this feet well life

the portfolio continue of noncore to capital pandemic, and our through upgrade the sale assets. despite Finally, raise we

management of completed Washington, retained to foot D.C. quarter, for the sale XXX,XXX East in Boston Institution in divided the the This the Southwest in CBD feet $XXX interest Properties Tower XXX,XXX square of to Gallery square a consisting development the we the rights and of leasing million. Smithsonian Capital Tower Smithsonian, Boston portion various a which the retail provide continue conveyed. and property office services East for complex of and Properties purchase capacity. not parking garage will to retains space,

of We building XXX,XXX XX% Junction Annapolis a in million. many Eight, To at of a clearly the Park in square the land a foot of XXXX sale Maryland requirements real office recession our suburban vacant also parcels due and price Office Junction sale types has and completed to Annapolis the two been user for estate gross a the period both for trying physical distancing to pandemic. $XX of conclude, interest

the minimal lease years the U.S. importance next and Fortunately, rollover are economy, opportunistically. strong and eventually pandemics in longer recessions strength for in-person to emerge major strategy the momentum. in we liquidity Boston Properties terms, Boston few confident of pandemic and the have business has to long and franchise, term from and end, properties, the All we the cities lease invest workplace. capital and with

turn So let in the you. me Boston. call to over Doug Thank

everybody. morning, Good

Prudential feet So since all Mike LaBelle, at here are and together I than we've more the Center. at corporate X. office June sitting apart our Buda Sara And six been

So last than investors group meetings basis. think late we're our had than calls on, conference call. I longer It April, And and I put days on week. certainly feels XXX has a since and we Sara also guess, more our she's XX Xth or out organized lot analysts updates since monthly with a

arisen in Owen has economic discussed his induced because are COVID-XX's shutdown a in As thing environment remarks, our on the focused basis on, of day-to-day business is business. most we the that that

been and The employees, that economy XX our the government and of be our minds. our environment CDC and ago, daily workers immediate still test, shopping, government the and safety local our inflicted are to While Plan utilization Health manage activities Security encouraged commuting, it's we are Almost to based care, a on life first tenants, service to the safe industry's our ramp-up a regulations. of the the and have to manufacture on has the visitors space. our how published days by mass dining, and schools, providers provide and and business, determination continues on day to and we foremost positioned vaccine, we going science health all for assets damage realities leisure impact our distribute of of gradual activities the

bring to their of plans their We office. and the workforces had one-on-one regarding our have group with tenants back conversations hundreds to

early Phase and in we III of are June, requirements was Our Massachusetts. in Boston, city the in first late shelter-in-place market now May, in and Massachusetts to remove

in and However, work continue businesses to from both buildings, the light. encourage to continues very home census and governmental our be leaders suburban urban, to

The is in return Boston not work moment, buildings. XX portfolio is includes to tenant infrequent Virtually drives to the over elevators. single get suburban Our the census At transportation five and about occupant use. a the employee feet not it's there about square million X%. X-story elevators and single- under every vehicle

which greater D.C. City also We York are left orders. similar markets, the New and their lifted shelter-in-place in levels census seeing have

quarter. a service have sequentially is is of traffic it June, and utilization with While the retail May its and This closed. up reopened volume of our COVID and Last first exclusive food Parking fraction tenants levels, is of is those pre-COVID morning revenue number my a some still organized remarks remains amenities Cambridge our around other restrictions, our closed. Hotel in I themes. but and described remain subdued our components quarter, and this are

XX% XX.X% second as quarter. of to office we at occupied The the expected. quarter portfolio the to perform as continued Our XXXX first revenue compared in ended

to quarter. collections they during rent on As Taylor's our in in entire period second remarks. XX%, the These reported April, Ascena this were said, about nonpayment statistics. make the the and company and in talk were May, Ann accrued going to parent A/R really our one Mike good Owen include of June his in at is statistics same note want I charges about our July.

few We paid terminated XXX,XXX defaults, their that square Ascena leases. and to retail have cure have This large rent not tenants they their were totals put when feet. that over into we didn't addition in a default

possession, and space, sufferance. these ability footnoting income are are no as but to their not expiring long in subsequent refuse tenants quarter, as have and to and as we any relet As occupied these in showing spaces we recording we relinquish the tenants it

includes During some large leases discussed suburban provided signed and got was during a square Reston, that projects. development that XXX,XXX pre-COVID. the Don't of quarter. our XX,XXX also our started operating in New all assets the lose square and square under feet our in our The feet; Boston, our remainder that we small they feet, quarter, feet; the square the call updates of leases sight XX,XXX activity we City, for last the business and York of XXX,XXX completion

the user for at We the negotiate Hudson Reston Waltham square last in XXX,XXX a life portfolio next. and We've on virtual potential this in foot feet our each one mid-XXXX's a sites delivery made couple proposals in office for distinct development the And and presentation new of frame lease a science a proposal months. space three of foot made of of continue to to excess million square majority did remaining Boulevard. XXX,XXX square four earlier we time month, with

continue planning despite Some activities economic long-range current uncertainty. and the health

and tenant X, is reevaluation relocation last customers the on action impact safety on XXX week, Facilities economic are a an are as showing Motors businesses. little Many And There all a that short-term rents market the to expiration. we there our and actively moved any of are year conditions travel have pursuing transactions Where now going in that Madison tenants transportation, shutdown on again, of of expiration in for the XXX,XXX submarkets, post-COVID dollars business percent the early sublet COVID-XX directly necessary, new very at don't extensions. primarily large absolutely that a these are that no their reductions; back markets. the have on an concessions economy. companies a a in of they are revolve simply be their have and inventory That have a Boston that large we Francisco know to in of retail It's many blank very is XX-month forecasting located decision. transaction the service that views. Anyone limited due a impact companies. one early their back the our square resulted was and and number those of headcount July extension completed resulted in with their a from weaker. Building space foot to are extending or to focused unit the negotiating up their XX,XXX that that square immediate in regions XXXX right San an at example, On foot advisors additions pandemic and most that prediction. executing interest to industries the and the tenant a up you getting extension tenant General technology since completed for of block conviction. dramatic on uncertainty hospitality, and XXXX. blank professionals had impacting come and have the primarily serve There our employee's However, around expiration that in are that the revenues occurred more leaders has food shutdown It's Avenue, their volume seen few brokerage transactions tells true

in Some TripAdvisor Francisco Boston. Toast and examples and San are and Airbnb Uber in

Francisco the To increase sublet space short-term market. majority with is to the space, limited the small relative date, but City had has book added sublet New to is been of of to space expirations, However, largest with an cash the foundation has it's Properties' its units years at San contractual going X.X that that want years. over repeat while in impact York revenues business length eight ongoing the our availability. and flow of lease is Boston lease I still office in average

already Our GAAP the of me, baseline described excuse square $XXX we've The the that tenant write-outs delivered, feet the no other occupancy assumes similar from XXXX transactions a office recognition. and the before second space to of I the XXX,XXX timing virtually remainder where for but million. revenue contribution renewals, leasing additional minimal is write-offs, quarter earlier, than of was revenue controlling

move-outs $XX of of expected million average square an average with about a months have feet about foot square left. We on one rent three with

figures in of Reston was months revenue office from versus XXXX is development the XXXX. not Street that the half This in include first second half. only the XXFifty in contribution XXXX six of months Market the Finally, three

of cash our retail to about institutions, our casual with including than JVs XXX brick-and-mortar the including XXXX goods of of of reopening baseline this The fast, out dining So so our office per $XX.X amenities. about revenue month rest $X.X retail technology, higher restaurant about more sectors, pre-COVID, financial retail, is operations, revenue. XX% year our X% up billion. was revenue fast, second X% for our sitdown you total would than in telecom if full other about unconsolidated is to the of XXXX This have going slow. be million and half all we translate with and together, revenue, rental This consolidated and consumer share XXXX. contribution, put urban stuff soft casual sitdown of being remaining After the made tenants breaking tenants bricks-and-mortar

the XX% we of bricks-and-mortar relative collected pre-COVID cash basis. month to about During of July, retail our rents their

$XX is other XXXX food impacted of their quarter get We $XXX was continue with comparative interim employees accounting, to million period work traffic, going percentage million well to to in to service many ways will the XXXX. XXXX our XXXX, the and service of amenities are using we their With as rent in XXXX. space on into share Retail half and our back assist as parking as million under to and to an limited retail million our cases, compared our XXXX. know in second and sales moving them in $XX.X the $XX XX% to get parking for going not reopening their that retail back was for are revenue levels cash revenue our arrangement tenants' Total in we discuss. of in and Mike

cases the COVID-XX of XXX% June, some dropped that some LA in market. parking sequential in While was in garages, increases large actually, we've and base over increase and very in low seen in May June, given April the in

to we XXXX in recovered expect back not yet, parkers monthly levels XXXX. don't many to have We get monthly and

to the expect of bulk our population in buildings As generated. a up, up and is into parking Cambridge, choose parking as do significant ramp our drive will in more occupants revenue the where pick we Boston

that's total for an and uncertainty $XX Boston dampened million in D.C. HubXX apartment of the lease-up about and Boston market, college revenue. In-person to in extended we at in leasing Our for Boston in Oakland the in apartment due only in at lease Oakland. with we momentum demand consolidated $XX has has but XXXX Skyline projecting We're the portfolio as have in Skyline consolidated of portfolio the postponed the orders. the XXXX, and repopulation contributed the X.X% in revenue projects begun regions, shelter-in-place leasing project revenue million lost

have we also are their building to COVID-XX under and see portfolio, to is surprised our developments losses contractual of most way potential due schedules. across have new procedures. schedule productivity of resumed, and no Tenant we All with within been the delay our for the completion worked All projects safety base pre-COVID obligations through have on pleasantly construction the consistent issues.

my of events. to quarter. and Square lack ground traffic have again once in next the from turn will strong enhanced hotel got at Mike. it the me business still a be the the construction occupancy it's unlikely to operating we're remarks, will a opening. level nights MIT-related trades. Here, from reopen The to the reopen but is visibility variable by room businesses of costs, the times in timing on Cambridge the year that and can and generates going clarity of the it Marriott minimal not has the actually let the no productivity its occupancy on certain of concludes on and for of allowed bulk performance, over We've has Kendall the the buildings hotel Marriott Until sustain that Corp. hotel. This This

Doug. Thank Great. you, Good morning.

I'm So pandemic, perform we rest recorded the write-offs three total office to revenue things of going this second our of XX% that the for continues credit to our second well. cover performance, perspective Despite XXXX. quarter some core high-level our quarter portfolio and comprises morning: that the

showed on hotel the described our call, expected and retail, parking primarily in and last performance. weakness we As our up

described rent did the Our tenants We of recorded million of in stores hard collections $XX noncash the industries Doug not reopen. of revenues. as retail And pandemic. the as of consistently. totaling pay tenants have $XX industry been continue improved, accrued have entertainment reduced as this tenants and majority impacts in restaurant of to to rent. second stores and This July, struggle that share. accounts soft our this as categories quarter, consisted million goods at we million quarter, have $XX with evaluate by well and Many closed our begun to write-offs vast The hit the though receivable the retail relates in in

Going Tower remaining bankruptcy retail, backing local and financial at around The a indicated is their $XX.X Ann of and Taylor restaurant Times us concepts, primarily are for parent and forward, in on cash leases headquarters is one space. Tower the one week. limited the accrued stores Ann's stores, million we leases unpaid we rent. and venture, entertainment are rent is are ownership primarily is interest our last City. million share. Square, will of headquarters we basis. Times York Taylor Square in Ascena But a Embarcadero their reorganization and not have more building obligated which Times a space tenants our in Ann and The Bryant it what Prudential record to annual in Ann retail income $XX brands. collect million will in They who by it's in at or for $XX.X joint Taylor, XX%. for largest write-off for write-offs clear these Center currently a plan, definition, our Center. from comprised pay Lane Square their two four feet New hold They've filed unclear, where square also of plans office XXX,XXX company,

As structure we and basis some most as are Doug recording appropriate. rent restaurants a cash percentage a our rent on of described, temporarily converting to

is this related million of to tenants. $X.X Just office remaining write-off

$X.XX of results share FFO these quarter per second charges. reflect Our

on have that the $X.XX the $X.XX per with FFO second would which share aligned write-offs, per share, quarter's we above quarter. analyst been our in provided for is closely consensus The framework last call. the came results Excluding quarter

tenants is cash and tenant Boston, leases delivered lower to will expense year. higher expiring as resulted space straight-lined GM lease where immediately, abating piece we XXXX. early later. next recognized the the square in have in and not well over but in this results as completed XXX,XXX income XXX,XXX $XX lease Reston occupancy a a million our this but to income termination straight-line replacement in the this suburban feet of square with of We of of in XX% our XXX,XXX a or retail second coming executed foot primarily at quarter. They modifications, took majority XXX Microsoft of recovery possession rent, with rents can't The building until Reston. be quarter foot to be in portion space and as the deferring that expected due down We square We come in

Our transient parking population. be last increases quarter that the loss and improvement revenues the described came nearly to in at our in on all building to $XX quarter, is this a parking. due Doug of parking $XX going decline in the million from of for million dependent represents

to operated is million, a hotel, have we loss it. closed, Our no of immediate reopen $X which plans and at

Both deferral our impacted you As same-property from the parking the adversely of COVID-XX quarter hotel impacts. our loss with statistics would concert into the were receivable results rents revenue this periods, of in expect, and several cash write-offs our of operating our accounts meaningfully impacted were and and later FAD revenues.

would XXXX quarter X% NOI ratio and the XX%. these primarily over our same-property been additionally, our grown have Excluding by COVID-related second items, have would cash FAD

included of page a Impacts. a these items new report supplemental We in under entitled our have COVID-XX summary

of rest XXXX. the to Turning

environment. guidance to uncertain formal continued due providing not the are We

However, like to for high-level I provide the remainder would some of the perspectives year.

they be workouts to quarter though basis remain improves. to a in and tenants with run recognizing continue some rate For described. and of primarily the this we on expect these others $XX receivable delinquent. occupancy. $XX lower engage the $XX tenants cash half retail million second to to lease rate have environment million to until accounts and office retail wrote be for quarter tenants, XXXX us, million to quarter, revenues these run second be We'll due Most continue expirations the We're refused that than of completing revenues, with We for anticipate sector. second the revenue we off Doug

For Capital our million our approximately contribution in billion of XX-year end second parking XXX,XXX issuance. The sale $XXX hotel feet our Washington, approximately is for and quarter quarter interest to from June, we expense, the recent having the to bond D.C. million. for our revenue, the per lost square full $X be of will Gallery quarter. the million we quarter. at third rate And second quarterly $X.XX quarter run a we a be of And FFO rate expect in than finally, their due $X higher for good proxy expect run sold

with it's outlook, our that years. earnings many creditworthy to large of long-term are corporations contracts about not that you to primarily As important lease most subject think remember revenues expire do our for

second of annualized is Our write-off, share excluding accrued office the rent revenue, quarter lease $X.X billion.

residential the our higher For rent likely in the contractual provides a In from contribution X% lease-up a Street only just XXX get period during these of challenging developments economic contractual of our in all base of of year. will remainder XXXX, half the the of annualized This expire. revenues conditions. strong a from revenue of X.X% lease XXXX, and Causeway latter expire we development and XXXX, of

portfolio position. at parking nadir, flow to Our our a back we're when and the operations, the a experienced close. These strong operations their line. retail meaningful not in have in units If the be XXXX. our we do, decline capital certainly they revenue business coming we at directly will We're also and will are and are hotel bottom, bottom

We liquidity and have $X.X cash $X.X our includes of line full billion credit available. billion billion of of that $X.X

balances cash redeem development pipeline. entire consolidated our debt $X.X and fund our are billion Our costs our through early in remaining sufficient maturities XXXX of to

and earnings years. it's is development Operator, the the expected completes significant questions? over to pipeline preleased, growth remarks. Our can several you That XX% for next up our open if line contribute

of Piper Sandler. first [Operator Instructions] from comes line question Goldfarb with the Alexander Your

there. Up morning. Good

versus you about guys that are many where to the that about bankrupt the about and with write-offs should the first office like Mike, write-offs mentioned, refuse leave you how you talked mentioned guess, you the you that write-offs like the took tenants the to Taylor, is, small talked this tenants go you we to just backfill very I space. have that So space? in and like regards some question and Ann part tenants think of of closed then So how their

rents how the write-off them that from retail back you actually you many business as to it restaurants, cash to space relet eventually expect guys are the tenants, So recapture versus rents of to think come about and bucket slowly we go or guys that? closed and collecting and now percent have that's still open and you

this is Mike those that regards aware, probably just it those as tenants "open," start of I process we of the that. can is are assumes than much from other and talked in Alex, Almost tenants revenue you're any with about everything XXXX. not have paying. and and no Doug. all to that we numbers do legal just And don't But our

and as relet there's obviously, start pay, the us long or to take to it the come there. how But we to it's they to So we move sense upside, table no as have of going process. through

Taylor, tenants Fitness. that only Ann spoke two bankrupt, XX there's which and of, Hour are Alex, And also there's I

at They we vacate in write-off. York and unit have have Fitness to of what XXX are clear we're space. with New Santa space. Hour that's It's going the and Lexington in to And So million a a that a part going XX Monica, not that we City, couple also do dollars. they're

then that space, And is Armour Under Okay. good? money the still

capital base. that and tenant a that's current raised company amount last they rent, a a And have Under their revenue in they're paying a significant significant pretty is of Armour quarter. the

viable, a is retailer. Armour Under believe strong we So

on the second And the is then investment side. Okay. question

you El COVID. closed this Harrison, did You you and the JV, announced on amid and guys Fourth Segundo

what given sublease going So your would maybe have those everything may comments the two on? you of coming changed us could markets your have how that office and entered of previously pace that's on? that's on given underwriting projects you through just the considered you walk Doug, And them versus

start do that one? to you want Owen, with

Yes. Yes.

break let two apart, Alex. So me those

So Fourth on and working Harrison, many been project a we've years. this is for

entitlements first is which feet. phase, full million for We have X.X the

before we to So proceed. we were going It's Prop the occurred, all M. have designed pandemic and the

trying or to on And pause lot We going to conditions a think for market in So acquired the We additional what site you talking on the be then as attractive, lot about investment our the included is pandemic site. with talked world LA, perimeter, the pandemic, a we've that are an in it been a which about know, option we've value whether nonpandemic El had we've put be. see our to wait grow a the project on we Segundo. world. L.A., to

in of we've proceed of pandemic. lots modest at with with our in we with described looking in And Corporation, company Rosecrans venture in to our frankly, to our Segundo. been deals were the Continental Development on return property interest as the given and the investment El in office there, the relationship discussions that also before the going given and joint confidence, Segundo, and site to Continental El given we remarks local market. long-term who's have We the this And I a my had, our in Avenue elected partner conversation leading on business,

Yes. Yes.

So break let Alex. those apart, me two

project and been So is we've for Fourth Harrison, working years. this a on many

the for have million which We full is entitlements X.X phase, first feet.

It's M. occurred, So were we have proceed. all and Prop the before pandemic we the designed going to

we then about you the lot our we've a talked it lot grow perimeter, L.A., what option to acquired We additional site. the is a or talking are value investment to a pandemic, we've we've nonpandemic included whether going in world pandemic in on wait a as on Segundo. with the market had to know, think El So see trying that which on be. attractive, pause conditions And an We world. to put project the be the site our been about LA, for

we've in property deals market. And before we return confidence, and Rosecrans we Segundo, We with a our conversation partner the office the going given to were have of in who's relationship that as our with modest to elected in site been El I given and the And looking of business, also Development described frankly, pandemic. long-term with leading Avenue the on Segundo. in interest to proceed Continental and local our the investment my on remarks in Corporation, this discussions had, at there, in lots venture joint Continental our given the company El

Okay, thank you.

Thank you.

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

or sort a realize a you here. Thanks, of of for question quarter I Mike here guys took this as morning. you of in is Doug. tough But sort the pain lot sort second of good

things lot out out Just know there of are of But retail this hotel else sort laid quarter? And are of they're of think fence? occur, about QX, is how much might kind but out there but I paid paid, pretty bad you're of as the move and we may realize a there things leases maybe that things forward. trying you the but I about dicey do what about, be sort of to still just other on how office? it's mean smaller, you sort within through parking. of flushed sort other just they think that kind sort of I in realizing through worried I there? got mean

I of you've paying. companies. I tenants of think the shape. great those we It's impacted And strong the like significantly portfolio have have. office been well not Steve, in seen retail their that vast are. occupied. tenants mean portfolio the It's majority is companies our Look, It's are revenues not

tenants. based tenants So upon complete guess. the the full We we of last thought did tenants our our were included of vast We office and in a was that is the I months, payment retail. our their this credit where tenants. majority about stuff charges And very both scrub of appropriate recording the history it thoughtful four and nature retail

that everybody. are credit some entered deals was into think it's tenants of deferral we with, where good. these rent that we There So

about that. straight-lining we're confident rent There's we've we to said that get expect those So rent. we felt credits, not others so and deferral, that confident. And we're we that reviewed and

on it record to cash going a we're So basis.

at a looking may impact at we on about we've of strong took. there our some that being you tell And kind But really whole future for tenant our really of fully analysis the we of in tenants. based and done if point, challenges of to not pandemic is. upon be be job But and we thoughtful expect this not, feel to charges don't really additional base or result to the there's charges this our going view. what it's length what can't predict possible I So future is, the economy additional our what

as just payback? follow-up, QX you What that $XX time to million the And is money Okay. quick think, rough was you believe kind the is in that that abated table million, I said of a good. $XX get

getting obviously, of these by XX So we're it majority months. vast tenant. varies, I'd say, the back within next tenants, the

payback. 'XX of and XXXX So it's kind

other probably did get is because add The we're extensions addition months, many XX%-plus six getting to sometimes to payback, probably going would by by we we get of more in extended months, I to three a with these going tenants, and leases by that the we're thing the year.

were the we opportunity advantage out lease we the of the overall try we and to of helping having did took take when improve situation cash that So were facing clients our flow terms some difficulties.

cash on then some realize on quarter. second based the based of the had quarter, sales And in Okay. million the about I you some escrow, sitting the $XXX think sales first guys and in I

to does of Just sort thoughts able special maybe to money? require of time frame? be what are XXXX that dividend a in the Or required successfully that that money the

the reason of not do retail believe we've dividend a I require money. primary loss because are and been will the from the that, of And that revenues all and hotel the obviously, parking. the about talking of is the our So lower flows special cash it

are million, the dividend. to identify next, $XXX to of our And money, nothing of something With we've XX which about that on Capital there's right got I Gallery we So the current room is that in focused or that. the something regard $XXX in like million creates think, reinvestment now. days

for we that consider would a to likelihood So point. this I be at it low that something would relative find

is tenants. our stuff rest that security is So cash like add that restricted out basically would to the and of for money that liquidity. in deposits just The come and

have money first XXXXs. from to in Fourth the the quarter the And anything the in any been invested already have doesn't do So XXXX of Harrison. and deals with that

nothing cash all, but know, want for investments that. restricted if there's I and in don't Doug at respond left I Doug, don't you on to So no.

Okay.

you. Great, thank

Yeah.

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

WeWork on coworking a reserves potential or and your exposure, specifically the how to of just do Thanks it there any questions. for Is first your need you view kind for broadly taking Maybe writedowns? today? comments and

you do give... want Owen, to

which environment per been which is the creates given selling based model, bit talk that have forcing I a recession think, a I the product as on the don't little given coworking has square to we Why clearly, pandemic, a about industry, Look, for challenging the foot. and spacing, Yes. per seat generally opposed mentioned which before?

we see think this the and will customers believe work. demand will being said, that And in in people FLEX the own individuals, by space. offering. out of procurement in small see customers We are it. retail believe our some long increasingly, want that number from their who of see quickly. be product, percentage because small a be will space term, of we in there that we the given the So recession particularly the We We interest want from enterprise of interested in BXP interest flexibility customers it getting

here relationship happen, this pandemic have is an well if And balance have leadership. again, they a to significant And to is but share, going to at the So great successful through They be I manage have long by be with know long have through they what's going never and over is, market term, stay. we think they capital get new that sheet. on XX% you to who providing you question And They them. opportunity I the who and if product and think think their exactly backed are successfully? to we the look is this They pandemic SoftBank. going most WeWork, specifically, have important term.

accrued first your there roughly about exposure for million. quarter question. our that thanks was balance just I total, And associated was $XX call with Vikram, rent the tenants and on spoke we an coworking coworking in

We that full they So analysis with first exists. financial that That and and the support their a the WeWork, the did we're comfortable have. quarter. that and analysis credit in we've still mentioned of on based liquidity

every for revenue their while reviewing get going of comfortable And as we're as And speaking, good lot an We're different spent industry, these operators. Doug we're of almost short-term paid. a which this have not said, them, prospects all is obviously current financial we on continue are one six time reasonably And is news. or five we Mike of we're to operators. moment, statements at what sure that the to

to Okay. any next, known impact half potential from I move-outs more any year. it, one. give the a back your little focused you the months. move-outs perspective, need then you're But maybe think, top XX or some Could just you secondly, get Starr of talked over in about release? could that think on to just of bit or And XX known a just there? of Great. there maybe you color, Indemnity, us move-outs call from that about the larger color off you XX And top have this in Are I Number XX. what fell spaces terms clarify clarify just happened then

many to floor cases, in them. Mike, of over our that's footage Again, for believe for and relocate. company some space cases, part the wanting that some the enures square The that suffer were New in up called general, are tenant lot or do economy AECOM, that in significant And of are out XX,XXX are when rolls tenants spend that. in no have Jersey, square six or Boston So in moving remainder the feet and backfill portfolio. obviously likely we're picks I'd portfolio X.X% retain in numbers one across of in some said cases, of And a across that obviously a of the renew that because in shrink think, San point. have we people and XXX,XXX grow, that have say, of Princeton, the there foot that stay year. out some at and we'll not terms Francisco they'll to over about of not But occurring in about largest square to of our the revenue we they'll describing landlord. ability in a our XXXX. our the a And In XX,XXX rolling to in the tenants two tenants economic expirations, I is we I they'll that's cases, capital that's next have conditions unsure months portfolio that

during So recapture typically, improves periods of over rate time. time those our

Starr The reason XXX And Indemnity, Starr, available. other with space be space primarily they on, to portion change took at Because only tenants a C.V. tenant they been Microsoft leased their no Reston, there continue was them moved Microsoft. a which that as is moved up. in is to lease. that Park, immediately to of said, took And there's I off that's we the in respect because

So the they moved up list.

you. Great, thank

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

you. Great, thank

investment you So front. with in partners working equity Owen, Seattle had talk those mentioned comments? both the on about interest Can of private and you

Yes.

we we opportunity. So could we to Colorado provided been think as footprint for that our there. opportunity. like find the waited growth and think, mentioning, right little enter bit the Seattle like A right would that point wanted We that, we have go the Center. market for at the I year, about we before be some LA last a were about speaking market to with We and would

far about what we Seattle, on chosen same the And say are have then act looking actively was So not things, what second so Jamie, the I question? thing that. and but would at to

like like just through to working private partners mentioned investing You what with wanted and forward. I know might that in... equity look going

Yes.

we know, have in as past. done you the So this we

with past joint raising. maintain have done capital with active We dialogue Norges, acquisitions significant in equity private market. ventures also and past a for the CPP, very we've that We

real capital. our at further. be market to are these know, partners we Obviously, private maintain And be the to and we're estate. going larger is not for than you to leverage not equity equity raise we to we're We equity going looking our acquisitions. current capital As levels, the working issuing extend with market want public to want

yield some do equity add on our are basis private that get raising it that these the basically partial capital involved. partners. from with we're So to deals given additional that other the And to we of does benefit fees is a

equity looking pivot as as are as during opportunities think pandemic, private think with be offense I look buildings, value-added partners. that those continue I to and we'll likely at the start and I So to we doing it's existing described, are we things

in Okay. looking then you'd or And Seattle, was life office be that at? science that

Both. Both.

Would is just maybe little bit to Has as a office there offices? have there from they then you're more important. very how sharing? on still there's would And be what would more dedicated that? talk but a obviously Or but any around the from redesign from latest people a been spaces? processes still of home, I'm thought curious talking tenants, little generally shift also bit people home, work or Okay. you to think mentioned, had work your

are with Yes. customers right I with dealing footprints. Look, our the their now, pandemic existing think

rebuilding space. So dollars they're They're at the what not spaces. spending looking they significant to their want in accomplish occupancy

Some dividers, dictated possible, And work simply things that they're like whenever stations, regulation. hands-free can open of in streams, that in at think, taking government out by doors they're looking within work be is I the that, areas, putting plexiglass space, streams done flow stated, quickly.

much densities do even pandemic or health security subside the of of I doing companies strong build-outs rebuilds But got lot as time, a a that going like don't expectation office going Doug, yet to will something minds. you'd complete tenants seen that? decrease know workers' do I will that I in of think you've is if add on over in increasingly haven't environment. pressures forward. And a think We to post-COVID do think be given though I is our to we result the with

perspective tenants those with that not would under Yes. of patterns the be conference we governmental to we be going any seen obviously, who is rooms" deals say of, that the in the really offices, last? workers make. going understand divide long but construction, But to permit to the doing offices. change What they're looking technology reposition are a What in And that all at going have configuration anything whatever regards base impacted their that expectations to have furniture "hollow a I may spaces. way are and to the we changes they're thinking density going think about a what building Look, "We lot space. accommodate generally buildings configuring out nobody number where looking to are at And most they solves the of to going obviously collaborative utilize do the significantly is we I floors then very moment, the technology can now and and utilization need problems rooms the inability of TIs." are furniture, seen the are pull our do to the that a might the to other because, saying, how have forward? companies, they building use choose our be again, that the and might of companies in their to in those of general and going how of sort of are layout And be be have nothing it's from lots this And they and then figure we've perimeter how date, of to And to buildings forward? how infrastructure cases, the areas. we many they with don't it start terms change have well for them to

And changed per a though, attitude per space, less person movement is or space person? sharing COVID? there dedicated the more space with Has dedicated on like toward

Yes.

do work to that employees There's about now, one to question back are want not that. another. right no definitely, close at think work I

feet that's is a so open in clearly, spacing a of that lot maintained. spaces, occurred minimum where So distancing six at the has

office much do think talk of do security this about health a on to going to going health our to reversal is why going it where are that's much in than for think minds densification, And various dense be less to customers. it's So going I minds, layouts forward, because the to safety when demand is less the important even it's do be reason. I going very today, well and of impacts is be employees much minds on of I COVID-XX we going world prevalent on think received to the be be our by is

Mike. And for follow-up then quick just a Okay.

feel lower total like going about to then coverage a all quarter? this on boil NOI, how new you just dividend you this And based impair forward level? of So it much actually down, percentage did as do how

was thing expected a accounts I perspective think of charge-off, from charge the biggest $XX accrued that million the the would rent over of was long Whereas right? NOI because in time. right, a Well, that leak be affected paid, receivable period to

the percentage allocated it that, through these most small been life some XXXX. But would to mean, spread I So leases. suppose, of have be would I of of

either the us really retail or would they don't replace it's it, until it, the be tenants make start that $XX ongoing So make have we these million to paying side from them. then they and

And then dividend coverage?

a us opportunity actually and As kind that previous order to think cash to we've in we got and no XXXX, some stay our to income assets this is. dividend. I lower of where that able we that which for our have to I point, mentioned At provides gains, of to this be maintain would mean, question, have supplement In it us sell some gains. I plans to continue dividend expect significant an change provides the this in enable kind gains to

our So dividend. at going in that any on a what's to world. and But our basis talk Board obviously, based a this that's point, outlook I the we up quarterly upon don't decision change to that's anticipate about on

any now, impact. So Operator? think I there's don't but right

right, All thank you.

Yes.

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

the rates that to Hey, call, two with office wanted drive ultimately talked going Bilerman four them. And factors I you rental and the and effective those it's of at independent of Owen, dig here Michael Manny. in values. about to demand front are sort on of

corporations The first difficult all a as is with lot have part-time full remote footage companies I versus environment. more there's about those a lower work from some to would imagine declarations from plan talked made on that get in part-time remote, the of you headwind a I seem even agree being square some But items you, just basis, would that. home that which for

the or to densification of around may that Have to to from foot work going of that does over X-day with investments, X- the XXX,XXX footage, to put tenant you are hours what you're mean how baking last seeking square some XXX,XXX, need? or help sort that out And last headwind? make would or you decade? had X- different the the and XXX,XXX, more compare for numbers than XXX,XXX it trend week amount As deal a what frame you've square in

Yes.

the space will. from customers that aspect their when have assuming could Otherwise, a home, it on do the employees you a lot won't there's be types also and schedule so going just the office; about do part-time flexible in I suggesting think buildings schedule you not to going of could in And that's configuration, that going two, they there's we the workspace. be to that our savings. they are demand, headwind on when prepared that customers to be, they're feel the that space. say of to a your to: be come workstation. the do And But demand, out no of all office So an one, is they space if that be when Michael, a no I'm savings that they when to which want of think some that's start to probably with have or that to and our challenge. what impact are think on that, they work additional workers I they our and have

mentioned your most all these is the actually to think that second I are office is I part why Now this? seeing market right most in to the think what's of the term that Look, to now in the recession. it's driving difficult. of the I there. we're challenges That's which the factor conditions, factors four recessionary important the short to out question, effects. go quantify how that's mean I it's there

home going going look described. just in acquisition So very are be are I the market not or and by currently by prospects rents it's what I work be and we're most will their And and we driven that densification, that suggest it's the on menu importantly, that we term. any that growth And to to we driven where conservative are are whole are. balance you short recessionary between effects from think, this at,

sort up good of a break between the And different and factors to Right. it way is this drivers.

for are while where about home The also they're and by And you wants been commute their big And hot to live, have a so aspect. about there's talent, think second driven as why typically, So the is I buying. a office. suburban you to that right? market, going boon in about think short want clearly, talked everyone the lives you to West location decision-makers one, there markets, LA it office

barrister moving the Won't decision why lead be very businesses that urban wealthy guess, of New generation flee out ultimately down Florida a making Connecticut?" a a I more saying, the people to to to York Florida those or and So go "I'm then "I right?" shouldn't market concerned down that's here, to to with want people going suburban? younger say, markets at You decision-makers chase my all down to employees Florida my versus going office presence having to create have look in moving same in to than and large-scale people

different definitively I Michael, different are challenging that answer ownership, business think dynamics has different question every a it's going because to on. just Yes. characteristics,

is commute "Okay, maybe conditions families have now with accelerant, the saying, maybe are locations COVID-XX a to to see. work. I we evidence being New can time "We're York is be in commutable to think is Jersey is individuals, going say, evidence here on back an what see, lot to at to market looking that do go where chase the residential because to think this are I were it." particularly, that young able of the talent for go evidence area, this do locations I lot we commutable the And the saying, New the think the pool example, York locations into very to going they're they're Westchester, talent think strong considering of pool." leaving But that these to who we're a we New I the and not and companies city, move seeing

we that's what see now. right So

Okay, that's color. you. helpful Thank

of from Deutsche question Bank. Derek Johnston comes with next Your line the

of in guess still is offered San space is, glut And market I ground is is the on strongest currently you. your second affecting Hi, everyone. nationally? the Fran that being How Francisco Thank vantage? San to sublease dynamics from market the

Doug. So this is

market now market San from obviously, is community there not not the and portfolio in businesses our yet lower. in science an Boston in Boston that Francisco The out market in that have given fact the answer stronger market, perspective will is for rents because we it's more market what right the is, affecting now. right a life nobody San the the greater has it. relative So The be there's ancillary is relative greater the that the surround is there's that It space. will is looking San affect strongest market Massachusetts than San in employment than There's Francisco Francisco given just Francisco. happened stability here the and the to extensive market market

and when to finally from Okay, great. go or do up look team expansion? metros today's? the for what interesting Or on there down And which road you regions mention being secondary and LA offense, you several other quarters markets coming are considered the Seattle. did Are any

urban my we Our for areas I questions about sized be LA very answered today, and the significantly in this of of our remarks, should in we another took growing to I deployment Seattle. the you and to U.S., step, mentioned and LA, operations. a And scale quarter one footprint. our consider an we earlier modest step, the ambition other increase that are albeit four just major footprint have in in

are other cities looking time. this at at We not

and forward. exist, in also but to and deal all four of mention plenty see, Seattle, significant where of over we'll seeing two we're also flow trying the LA investments I opportunities, only are grow, given markets time, in where We going relationships would I our terms things. not and of and types we markets the in currently those to access think

to part pandemic addition of that the major over always development as investing well. we in our four and of in pipeline we our be growth have, have entitling, is in are also, also We we markets, control the all land that existing a significant portfolio will investment once and Operator?

Nick question next from of comes your And line Yulico. the

you. about Thank abatements deferrals. wanted ask I and the just rent to

A that quarter. that. questions $XX couple helpful, You broke in just out of which million was the over impact number, on

to the of money store, how you get decision much with deferral to was up versus also include get And negative deferral particularly, do of since I'm some reporting I'm are related came expect to how companies which possible that seems in it that presumably, you a your same office? other piece? as then retail then back? interested is how to that it First, conservative And just the versus to

Mike. is this So

we give deferrals an in did to provided last NAREIT the like instead of to people So question first, paid amount accounting FASB that normal And result deferral being change shortcut would guess, to with up put change a answer of overall accounts straight-lining receivable on a them that material to by rent in modification, was in I judgment. worked really your it's not the the tenant. kind a that lease be able of

the So when in the basically, The if pay we you're after months that things. don't rent just these could just income, have there's lease the next put no three companies change saying the somebody, to and vast months accounts the of wanted paid, the for to three do had we that double that, of you lease. receivable. but And it out gets three extensions then and months, pay the that you relieve on did, we stuff receivable, cash get majority for

these we're just lease the going modifications. to all made we So like election treat that

was way. an to some tenants longer same-store of of tenants. of three than the we deferral. have it of With We the in number because most the few respect breakdown, mean, to these And appropriate later There of we're Only thought majority I them. And reduction took a deferral. deals. XX% were deferral these in is of were is come the was XX% one and in will of to majority of every so these it. we vast how The was additional tenants. the because cash single it do this was period, later cash for straight-lined that or abatement of That's deferral. going a basically We and most office there some deferral our decided kind that same-store year retail total, the higher

expect but somewhat next for less, quarter restaurants further little would doing deferral bit similar I it's the now, could right we period quarter. have with tenants we a percentage So possible about have this those we a talked We rent activity. to similar that it's of and time. And additional do a another

extensions paid with couple So that's And years. back gets over of And with the are this kind again, next we most of tenants. where of we that. these most of did

don't costs rent to, going do the deal have what longer-term of just to higher So is that so leases a part to the we these that downtime in was overall the just getting again, And than we're rent the with secure wanted getting transaction lease, back. over significantly to the future. big be terms or of deferral we

Okay. That's helpful.

feels is a question like right office what, I stalemate rental Second just guess, market. now bit going back to in of a the

And to? does that new I terms terms? XXXX tenants are you and not really there's fall a have I'm in discovery the When not lot feel asking it you much any are in price Is leasing? at and talked it that need office? also of Recognize yet that issue? adjusting expirations. the on would leasing see not time, when wondering, a the seeing competitors same because in for doing to Are near-term rates, a no you not hard more yet point And adjusting do to to leases gut Doug be to really you guess because what Owen, concession think, there's end? about if start return new are I any back looking and but unless at employees color it's appreciated. predict, Is of

"ordinary My Let And on to to can component be our most activity." actually architects go they of things I right to higher get out the a decisions where normally every start they position space people to become critical which own of health would that will is XXXX me when Owen say start see that that one do to doing upon do transaction happen do, solution, earliest. start will in into to start kinds then make parts gain anything. health spaces, in back that obviously there's start leases with going expire very view they would as year. is planning, going people lots latter no actually the is the add of mean be now, more can and proposals, virus and ultimately, in you'll And to I depending the to transactional confident occurring. what is solution that then on. the to and at the volume the area, the is

And terribly So from obviously, active I third don't get see transactions take being the quarter a time and to consummated. transactional germinate perspective. then

going a transactions that's just will because be items. to are that additive associated I cycle there's potentially with much development timing just longer perspective. important have from see actually The those to a occur to So think, some new term lead economics,

so and front two years alternative facility of that, getting think, for growth less you're to looking you've looking And have in will have give because the Owen? or if economic new capital you're new assets impact are at to is or you. I perspective, a again, going existing or where three work an to those building to a transactions, going to from what take people opposed to a put as got market

to second spike there's of virus. first going I of financial that's vaccine they for to there's Yes. are because course some guess, the yet. add, again, the in until already would covered No, have progress me, it's it. virus I Doug, feel I country, and whole businesses, spike had, across the made, reticent looks good think a be I definitive the it's but The think U.S. the business it's like about nothing We've certain make you just leaders certainly but areas being commitments to all a

just And activity recovery see until definition happen better a has when the some more so business leader I can returning around earnest. there's don't in

asking being And so really your right rents now, adjust finding you or need concessions offered? competitors, not you're to adjust or

in I us it's extension? a Can are far give proposals with, are I by not few reconfiguring active and give move, six tenants dealing thinking a and you relocation, what new for one is between. space mean that the month right? that's those soliciting we're Can XX for just tenant are market, extension? months?" that mean are about looking they wants relatively you than, "Hey, of we requirements are our There space can lease a with few different year out to extend that's their us

activity, hard having there's no without reset reset, to And so because too. pricing it's to pricing

appreciate Thanks everyone. it. Okay,

question from Lee the line next with of Frank Your comes BMO.

Hi, just if I your want potentially do XXXX? portfolio? this think census across at assets just in X% could to heading office in is Owen, and go your And this suburban You buildings. then you into mentioned September clarify where was or

sorry... I'm

Yes.

we running X% they're all New And and suburban any are data And in CB many portion for buildings deal all similarly good of buildings pretty So under Francisco. York the CBD our XX%. in City a our billings given those locations. of have X%. San of day, running in buildings Boston, with our to CBD days, in on And

As back shown work And to us I said until are in vaccine ask governmental into make and not is the to a the level portfolio and heating going feel respecting authorities think a home going But Sure. people go therapeutics in more look to as that from work going bring the think rate said, at wherever perspective. business like everyone to is to meaningful don't XX%? be of Could X% going spread maintenance the you from a from to I that the before, a of it's reduction our XX% leaders continue to Owen desire to fall, to there sustainable some has that is the at until, to that is the across is up change. XX% economy. as the possible. a degree September virus number And the we I

go New closed. XX%, on if and D.C. this and Yes. at are regulation you and as is aware, Boston portfolio, our at California York around New there's Jersey well. XX% are Be area

as there's So well. caps also those

agree close of a to after My up. get tick "anything have to Doug. now. right to Day. we where a I don't I the go it I summer little going certainly you'll think hear I up But after normal," it's tick you'll above with back that. do bit have will Labor are think I think a guess is but

figure you of move this one known the over then expected And Okay. a do couple past to have outs, of how going sense back the feet square has months? changed million

so square million XXX,XXX the square of that Yes, feet going X.X was and believe is feet, number to stay. the there's about space we

about So ones time, declined. a the not for have meaning long of months, known has are number years. if And number the know that a been we

Okay, thank you.

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

but cost properties and could of the we resume? move debt is you CBD you.Owen, transactions for lower opening with office given referenced where moving thank stabilized remarks, Great, in your this costs lower, briefly hedging rates cap once see

I let's levels. assume going to when about I'm lower, prepandemic say you're you talking

you I about the have question, of have the think to to the that think you building. think answer look characteristics to I

think building got definitely rollover down. cap So think if that credit I has could to a they credit very several little you've an lease rates buildings' a to innovation those in kinds I market of go and will A or hold tenants,

to have rollover, dealing to going uncertainties what's that there's a answer time not What's that characteristics buildings are I more move So the the that's are if lies question think market probably go rent? probably because of more that described the rates out, go is with to What this on the where for given we've think releasing I and building. rollover. that your cap in up down some lease the of uncertainty the going of what's space there's the about market call?

of think more traditional any science versus that toward proportion life expanding science office? portfolio? cons as And your expanding the the what are a could pros reach are what and into for sector, And you mind targets total about see into more then in as there life you

strategy to to the the best very in life our has to to Yes. today, the the about, we've time the strong new strong science office best be in for and and Well, a buildings. talking most active space. well serve have is that demands a locations try want the as properties always those have are cities, And the locations been at best customers in those as that and is be tech very as

my we portfolio business, So good development that news we I in years buildings in in already foothold that can the and a we is, have biopharma tenants we execute given that remarks, the upon as over in of you think the described the I have that development. this The Again, over we have asked. feet, have, we the ahead. is you million gave square million question feet time. of some figure period a square that longer the toward that's that of gives the five if company magnitude today potential XX

just a question. finally, And housekeeping

like it with top tenant's just are that top if the that Leidos there's impacting tenants. XX list. happening off fell tenant abatements top also the curious Going XX to or respect anything back I'm to looks list, deferrals

Center, two old expanded That's they only they buildings now Leidos them they're because the and new building, the their new in where and old No. building. quarter, building in were at into in Reston end we of the Town in the basically out they was them. of at were and building relocated moved right once they're their still and

had So lease any and do with all transition it to nothing that that to in about do changes was term.

you thank everyone great, Okay,

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

Great, thanks.

quick Fourth one Just a Harrison. and on

major that the project increase I from acceptable? to ability returns what that pressure with know I looking dealing get and be signals pause guys the in being ultimately, guess, pretty now, you're your metrics, in space that environment confident about on more rents to talked on hurdles the that and deem now. guys you or it's are in sublease achieve that are project you market. maybe a You to for difficult for ultimately start But going

Well, I will think to to mean portion with tenant I building the be we're now. speak prelease customers a activity. the attempting key all or of actively that

those would robust, our construction that the describe of conversations, But So we the that the on to want I of this benefit not the then, environment in that And marketplace. Doug to the we've driven say economics it be that about by call. a those recessionary course, given effects talk might project. on costs could this will be demand given described see it's given

Yes.

come if movement Just it's much How prepandemic of on quantify costs? far that, construction kind the can what seeing you to as relative down, so, in you're as levels?

of we it, the anything months. We're on call bid base not can't have basis last, building in significance we three a

that larger reductions the seeing capex the company, a X% of doing of we're On across more. minimum projects we're sometimes and

we're in As rates. business with shallower to starts increases escalations are contractors lower the industry, competitive more That subcontractors position rental basis. the for be reductions what and us see pipeline put regards for in going to to to construction to their hungry annual be get where drive not the going we're rate as for a of the unlike seeing pressures, future the that therefore, will opposed margins believe to there and on we business an and,

right actually we have So until is for pipeline now, bid. won't know something. did the in sort And we nothing we be of to

Thanks Guys.

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

WeWork on Yes, good comments was and morning. but miss I coworking any there region? in it, around didn't hopefully, general I then dot-com

current seat quickly. model SoftBank. They we environment dollars sheet, confidence specifically share. have WeWork, challenge on We leadership, did again have they the business coworking it because recession a various their small coworking, we including long-term said, that attractive sell by is banking they the square as that for But given operators several will existing market new they bases, and billion coworking and acknowledge balance difficult larger summarize continue a given We think That get individuals, a to the I'll separation are be have the to a that challenging the foot. versus going clearly physical XX% have of and The asked enterprises. through that we a customer have to look to for are period earlier. pandemic. in given business we being trying the have that you're over the requirements

the strong We a have them, and that with relationship being chance great of think have in successful over long-term we a they business.

at point, do back or giving mean that this not of So anything nature? you they're space

No.

you. Okay, great. Thank

at like turn this time. questions to speakers for would further the no it are over there remarks. And to now final I

Okay.

remarks. to think attention like our for this I'd that all I Thank you. afternoon. everyone concludes of their thank

concludes conference This call. today's

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