Boston Properties (BXP) 28 Jul 212021 Q2 Earnings call transcript

Good morning, and welcome to Boston Properties.

Second Quarter and 2021 Earnings Call. This call is being recorded. [Operator Instructions]. At this time, I'd like to turn the conference over to Ms. Investor Boston of VP Buda, Relations Properties. for Sara go ahead. Please

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

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

Officer. Doug time yesterday's President; any reasonable materially assurance duty statements Although forward-looking SEC. and release expectations that reflected in expressed time believes are Factors the and differ Linde, actual in expectations could no LaBelle, by like implied to or undertake from I'd give Financial the those Chief statements were can statements. risks detailed cause on Boston results filings Officer; company's and to the Thomas, that with The to Executive be it not press does any attained. company to in a update Owen forward-looking based from will Properties Chief forward-looking its assumptions, welcome Mike

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

I strength to all Sara financial the report is for returned the momentum and markets. elevating X. investment that July BXP's and with X this conditions, we of rapidly and cover financial in U.S.; earnings by Mike, that Okay. is activities This real BXP the everyone. private recovery call, and Thank allocation quarter, time our delighted including terms the pandemic, entry the in momentum together Sara, results emerging particularly morning, on first new underway Doug, BXP will equity our for as capital investments I'm with Boston and since and the from focusing estate; to results evidenced activity. into BXP's office economic office leasing; for and several I'm and employees new announced this on pandemic market good capital official you, team improving leasing morning,

the for remains and performance. growth succinctly create low economic interest dovish, June, So the in in awash exit is their XXXX. rising be the roaring all in for and and the dropped around and the have rate economy, to lower. less believes first decreased driven inflation Over quarter the investment transitory GDP ideal the employment rhetoric of we the is factors. X.X% aggregate as and by it U.S. monetary the given inflation is Despite Reserve's jobs annual predicted growth U.S. impacted recent were pandemic. higher use to U.S. for XX-year quarter offices back for rate stimulus, workers X.X%. to environment unemployment second pandemic was and fiscal the June, X.X% been with rates to created XXX,XXX treasury real rate and has Industries High by strong Federal that X.X% estate

second results for quarter reflect recovery an the this financial the environment. impacts and of BXP's increasingly economic Now favorable

quarter Mike we our feet will market million We and forecast, long-term more volume second of the double below and which consensus only quarter averages. own above Our XX% share than square leasing, first completed this quarter the FFO above per shortly. was detail our $X.XX $X.XX achieved X.X in

clients all term and as Center their floors of about are committed and the supports success Center, large X.X to at quality position leasing average work-from-anywhere Colorado is their a and are long-term location office believe in evidenced and at Reston BXP increasingly that at weighted in on L.A. the are repeatedly case signed by second leases important Town tour Embarcadero with tenants choice and overstated. tech We collaborate, Center. quarter Many innovate clients activity Building, are building footprint commitments, the X stated long-term our as expanding and performance years. critical media the the as And of view train the for this GM impact the making concerns Our to was the that strong activity

conditions. for billion equity in cap last $XX.X One Memorial second REIT were significant tenants $X,XXX to quarter, second a related, quarter, for or Charles Cambridge life and XX% anything Moving a to from $XXX this and in year and agreed XXXX for rate. given the up down a of to sold the limited remains a rates. foot a levels, quarter, in assets foot office assets Park market million initial XX% private are Cambridge, $XXX real approximately ago quarter and purchase rates X.X% rollover Cap $X,XXX square activity. a pre-pandemic vacant, lower Also science Notably XX% square though, to declining asset, lease it from last foot. flat estate commercial with interest million with identified office or arguably is XXX,XXX transaction of under square Drive fully-leased sell agreement over

BXP's to active activity. quarter market Moving We acquisitions. had very a capital and successful with

square in announced, to described market, almost strategies the last million X life strategies These are new are: in recently investment the several feet. which of the All grow investments the enter X have aggregate to refreshment X investment quarters Seattle represented redevelopment real leading investors acquire need a we you sciences, the over that up through we discounted due estate set assets with pandemic; investors. and CPP, GIC private program assets high-quality with partnership global joint and office valuations or in at equity venture acquire we

entry our with region Seattle of official the start into Plaza. the Safeco acquisition with let's So

and districts gateway We expansion location in U.S. has logical the life region Amazon given Seattle income and lower like clusters any in employers taxes of employment land and Rent, of real than leading space well other strong for as and values Washington Puget than affordable population workers major Seattle core costs and discussed experienced for Puget both headquarters scale and base, growth, building much global one areas technology science Seattle Seattle, are for the market the other expanding housing. state more afford office to other broader no levels to high a gateway markets, region The develop has have markets. us having of has and estate opportunities strategy. our the markets. BXP's estate Eastside the lower and in Sound potential its real multiple Sound technology Microsoft computer previously The and is of largest of acquire as rent and a Bellevue values given and of market science is both growth

based a the over Kelley We year. had have Seattle morning, BXP joined a executive, in Lovshin, call well for who's this

which has CBD refresh under located at convenient with option. LEED-Platinum and with to currently time. additional average our rail, XX% of an offers And a pipeline have real is full-service feet, the at below a is team ceiling views weighted the features. of access center Safeco leased plane and XX% ferry The build the and that market. certification rents of acquisition, market square own to the whether XX% XXX,XXX architectural future will Plaza equity anchor X acquired the building the is partnership. over market. basis in to heights, Safeco, activity strategy Mutual, square are Liberty lobby a out we coming flow term the We or as investment tenants years highway amenities receive in execution timeless review XXX-degree building opportunities and well our the currently cash and lease recent re-lease and Safeco will existing which years. million approximately location Seattle generous We We from rates transit X join the in comprises and estate on trading a Safeco Plaza private attractive of ground office depending very BXP a is relative going-in or quality of building. to and believe $XXX tenant or is either X favorable believe attractive the the property, as foot, building, $XXX XX.X% investors play, the during the replacement very in with basis the XX% is of redevelopment the costs be investment our opportunity refreshment Seattle Plaza given process. leasing

deposit a to nonrefundable and early posted in We acquisition September. close the intend have

XXX for location Avenue South New acquisition York of York York's of submarket rent many Street, a building preferred which City's also the We prime to a are Square expression Madison occupiers, Midtown both business most the corner the in medium-sized building. will growth for The a with block With and the their Park. of South has XXX,XXX submarket provides technology rapidly Midtown close vacancy, XXth long-term new with become Avenue BXP, from segment. be opportunities given transaction separate users us execute terms this South City the marketing and in will will complete X New space. and building Park Park plan South. and is XXX the configuration, later is subsequently and dedicated square and of a in the advance for at opportunity it X lobbies, seeking strongest feet location unique comprises elevator and year, New allowing entering in brand user corporate heights a believe generous vacated ceiling to by we refreshment appeal growing large

building of comparable square budget $XXX terms acquisition latitude assumption operating million to favorable paying million enhancements. the and us Consideration property creative on we're a economics, In foot, million and The $XXX of for relative building structure or $XXX the we is which purchase OP significant be units the also partnership. to BXP's a leaves the in generous for issuance the think sales BXP. of $XX of will mortgage for

complete Most the BXP issued issuing OP a units by our importantly, at be the price price rise would inherent words, that did stock In this highest value. floor X share tax but the downside transaction determined the seller through our not number structure benefit to December the it on deferral a of our closing such fewer to other the the committed are we if proposal in yield and that by time, a floor. of share. closing at distinguished after-tax with by have contribution is We be to price $XXX of will highest our year, but capped date, to continues Units

project the partners refreshment capital needed up likely time. their the funding of joint a will our XX% interest the investment One in join owning of for all in venture over program by investment this resulting to

home in rents. million our square County, Next on submarket foot the sciences Montgomery market to Maryland science entered science the park FDA, and a to located fourth vacant X-building market life such square the University office with is NIH, the close Sciences the for through institutions Grove Hopkins acquisitions, we to life the added University cluster U.S. of of Montgomery Washington, large Shady currently County science Maryland. life proximity Grove in the Life region. life rising foot X% Shady as is XXX,XXX the D.C. at and biomedical epicenter acquisition business largest in Center, and premier proximate X several the John or The

There requirements. strong use lab ground-up for already acres leases in is tenants on over to to backlog space to and remaining competing paying demand. in The converted lab asset of vacant and convert million for over intend total, large and build-to-suit entire other depending and the and few X next can are $XXX.X life a XX% and will as are X development accommodate requirements of are leased be converted lab to expire a site or a The science the X to vacate market, and immediately. There addition square park buildings the are We years. the use are which office XX buildings be we additional entire is $XXX time. will foot in

deposit This Massachusetts. development is and posted August. acquisition rights, quarter, to in rate. existing in nonrefundable when term The foot Waltham, combined a increased short Life sciences lastly, segment Sanofi's buildings XXX completed another XXX X located in XXX X.X% And excess $XXX the adjacent lab site BXP with of square almost to and square overall comprising growing a and West West development has complete science and acquisition, XXX our feet and off-market adjacent sciences square second a lease revenue. our the our transaction year. the have square price lab Second are Life was XX Sanofi of Street a we at of deliver of life and a X XXX,XXX These to additional in of fourth $XXX to We close which expected capacity property, leased is at XXX,XXX plan X.X% which XXX% is an the conversion feet, this rapidly representing Street quarter site. could Avenue immediately is of initial million million feet comprises our cap and or be business. below Today, market. total acres completed

development approximately opportunities redevelopment now markets. We years, double underway next expected the could have revenue from square that deliver life Waltham, in that in strong million the of XXX,XXX future we to months. amount BXP's currently and development science user the generated is X.X are and lab demand market of projects square Montgomery feet of feet And under and XX sector. continued than have our assuming experiencing conversion Lexington, conditions, strong County Francisco we South X San Within more and control the Cambridge,

have sell Mass, Lexington, in dispositions, $XXX $XXX square we Street Office for an Park or agreement our a foot. Regarding Spring million to

of quarter, X.X over though life to have projected investment X in square asset to he and Powers, On and retire John York considering to many join to expect X $XXX with our internal personnel New Hilary region, million note, has Executive exchange this as gross and to us search approximately an million external you Hilary proceeds of this from our are to development underway development our committed in as is previously. Vice of after pre-leased a as duties management Regional science did close Hilary $XXX commence conducted an of the pipeline not XXXX. are end President. And investment growth NOI told active CPP final the at real a that additional excited have deliver prior in on we've million as sale having Management, the Day September and as is years in of aggregating City feet and and we XX% estate, or alone. next reminder of and at will to add We as add years. at $XX of officer annual or know, and BXP who, and join of important XXXX. a York completed JPMorgan X.X% experience the part billion year. a in dispositions We senior very Manager NOI our to BXP Head acquisitions like Labor investments Year-to-date, Spann York the Investment beginning would share sales our activities, completed thorough we mentioned her New New the

now improving driven revenue the conditions results economic a a growth had second a leasing delivery in of new successful we variable active strong and and with summary, and balance investment streams, rapidly in activity, completion of as private rates markets well a sheet expanding X in capital pipeline, allocated pursue large-scale equity acquisitions, science partners science costs. as from nation's pandemic low strong life the development decreasing the interest hottest portfolio and capital the by strong our of markets. business ramp, recovery wins has well-leased leasing BXP new So very opportunities a and financial quarter investment recedes, multiple to life and as new

Doug. for back Over Finally, at office, I the new enthusiasm. great my our sincere clients and expertise is and BXP express serving the care, with want mandates appreciation to team, winning to which

to variant on There's But activity question that to spend on Thanks, next be the significant and I more every markets the few no leasing have and be. a sure questions precipice going Delta there's some COVID-XX, the to Owen. I'm that, some out a the work. seeing. want day. we're come the of morning, talking atmosphere but fact we're about in The side. Obviously, on we do some whatever change there's the remains, repetition transactional and announcements thing about around in-person is still uncertainty minutes that about the there'll lot Good everybody. talk certainly

are time. employees work, or So that back now organizations ours to come it's as to many take period to the transition encourage their some require in, like going we

of to pretty consistent which during X they So categories. our are morning depending impacts meetings, with some to Many impact to going are on work of size participated what comments on upon really and there going we like the be that talked about put about think, be you that. to in ramifications my home, needs, I conference. space to we The organizations, this NAREIT going from vary are in

Maybe meeting going are some out. that organizational an regarding time of or they is they to think utilize happen space is aren't X over companies amount time. depend, all believe more to to organizations the what's companies enhance are it forward to the much going access lead of now. openings reconnect have the companies it's on to with going for in of lots dedicated we of collaboration employers as going how can doing to a of that demand first When breakfast service getting reality. very the restrictions, organizations are and small this peers office, have. work is the increase new the space there formally idea it work it's been the their the very teams And the they and employers to is work? to if the honestly, and absorption sectors, more their over that frequently. you our experiencing lunch hiring not to time workspace control, how does prior be their that growth that add with And positions going surveyed, cetera, coming will moving other may fill important are over need of will job that's prefer reminders dinner to in it's their offices that going acknowledging jobs XX We all quite years. the then in take restaurants. each going COVID impacting doing incrementally continue those and industries thousands group their culture as be spaces their a the real office, they're have they not large space of going generators CBD we to our believe to in there's But their plans third our same people plans, and or stable. and markets. very et many some in people to to are life office remote work. frankly, these and sort So physical Well, most are teams that open to and labor to possible And when preferences they're taking estate. and based and areas, to think younger serendipitous In a work some requirements in really thousands for this Unlike it take won't where are competitive how months. generation, recession, contact And they sectors, right these have tight the last place the sectors, see going assets, have Will I space returning trying months short but the or immediately. XX or some have time competitive collaboration have is perspective, of they're employees they science unclear are that we an have group, to of which that third other on with very in is set. together and back change And been the and really group. there declare on everyone thousands effectively outside with outside There they're so and decide employers. takes to eventually many long-term while across a growth they're And how are from getting may all in in of many are occurred the to their accommodate technology midsized Employees of Then facilities, more contact. are and few growth, rooms together they're from we their collaborative but are figure building lots don't And will And built, be any term. efficiency matter created recognized moderate market, and really together, little really job

XXXX at are comparing the to employees a now Francisco. City, And February in XX% coming week. had to of So XX% XX% about San is number least in York cards New the that in once Boston who of about and office

it's So very different from to market. market

paying it but parking seen actually grew while driving Center around true not. couple a we're We during San a for and lack garage permits had sequential due to XX% be portions actually parking from At tenants believe every for frequency transient not Center, of Francisco. historical indicator the about parking. In monthly XX% July low from increase Prudential Boston point of we've Our high. still quarter. the to parking, of on of monthly in of the day we've permits in we've that up, And and daily capacity, income Boston, monthly lunchtime only think parking good a close up, pickup XX% office and will seen is pick at Embarcadero our first about are actually in the or days parking

parking. on have ways we long go So a to

rest of in of a improvements at see year the going think year. were the And the expect we at basis. about where comparative on end we're we XXXX year, We be full XX% during of to the to

are grow which, way, increase into dramatic you during the areas. moving As the apartments, the the those company listen back same to by in cities, about pandemic. didn't apartment in urban hearing employees into occupancy The you're the calls,

home this from And as to project, apartments portfolio in at XX% on they're January project, Hub on the basis. frequent And working Causeway in our XX% from planning so Hub a to seeing House that's occupancy those our Oakland from activity at front and and XX% materially Reston having the now really the Skyline is challenges XX% restaurant house. then is being only at And labor, up are to in the by Signature. at both on XX% back and in we're XX% with operators the unlikely of the we limited that the in move

I begun rent not, to Reston, from percentage the and begin major move we're our space our space rent tenants us. made many have continues Last fixed our many that to back conversations contractual of a by their opportunistic to higher retail it would announcements with space payment topic visceral of during We Sublet away to described Believe organizations the to strategy percentage a the was tenant putting sublet back assistance we a quarter, as a rent tenants fixed to belief work had because to on rent. be the market of creating dynamics investors. in again. request plan and discussed or reverse modification that actually in-person

tenant. a subletting there reporting foot at out availability. feet X.X tech a square lot company This large that of be on million withdrew any there post-COVID, CBRE been has space, of Manhattan, space was reoccupied. to their going a backfilled on about of of and about XX% is is portion prime sublet of XX% of XX.X square market, is a million total Mission, XXX without XXX,XXX that the the quarter that but drop In put feet Yes, a was by square

just existing has or, because conditions of the It profile. actionable like lessor's short terms. frankly, the not users is Some comfort of unworkable quite don't

And sublet that The some at are going begin to on floors exists, XXX like San from Macys.com sublet to the had Folsom X Francisco space headwinds getting market. that of but they as it leased, a work. back companies in come to is dissipate were completed

well-maintained at counter feet space about The office leases discussing experienced Causeway from sector headlines science iconic, and commence The signed talked We upgraded the market are new last quarter lot Hub included and going is a cinema there quicker-than-expected basically the to on on across States. a XX XX number and our have were assets think yet We to life in quarter and weak the the United vacancy nonrevenue points describe XX,XXX a square I basis our time relative on portfolio. remarks market that forward expectations. that for our spent of of the of leases square a portfolio. that Properties now signed BXP portfolio taking activity never space square opened. saw continually revenue Now commencement that this to pivot back the I'm conditions office weakness, and is quarter. my specifically, had not XXX,XXX have I of down our foot portfolio outperform. high-quality, We of as Boston level We feet flat included includes prior vacancy in And I assets. occupied million to last in-service to of portfolio When

I'm view relative basis, available Waltham, CBD. activity Silicon Valley, Northern or of there. XXXX. CBD, the finally, 'XX D.C. talk the Boston L.A., going markets, active no All have are space West post-COVID I'm portfolio, activity Princeton into the upon tours, Midtown on transactions latter in to negotiations, about Virginia, making negotiations, so and they Manhattan, the and lease it began all in of don't San RFPs my So in half to Francisco best based we a least. have meaning here's Peninsula, Cambridge, any from we

tenant a that feet of start quarter, I keep signed acknowledged to for company. L.A. growing just unable to Park. our later, with days XXX,XXX had quarter, this to Monica Last we XX Business things tech up disappointment Santa were square than the So a at a Less let's we change square XXX,XXX that lease foot space

starting and from expiring vacancy square During square May, were weighted space, expiring long-term square XX,XXX company. above-market a release that follows tenant that feet average feet extension our XXX,XXX XXX,XXX This holdovers. media of was this a we effectively at foot a the square total, In expansion we that the equal rent had with XXX,XXX had completed of to defaulting and immediate the Colorado quarter. of rent first feet rents in the at a Center

second sublet Business We negotiation and Santa would responding each deals a direct XX,XXX signed requests average in of some Center. or smaller that was X CBD, availability the represented from have the on at during tenant expanding. prefer go either of totaling to tenants case, gross number we're leases and a in In feet, quarter, starting the to Boston, the Colorado roll-off XX%. the rent In about we Monica square Park, renewing in of

proposals July that inquiries Waltham, lab foot for tenants science building, in that life new XXX,XXX the space. for building renovation square we're We August additional and suburban every construction leases XX,XXX we with We've the our We LOI availability Obviously, we science square been the Boston works Life have doing way In feet. square rent square of will are most delivering in cash be portfolio, them dominating since the next much and XXX portfolio. and are to average on The square on feet. about the completed don't feet of of XX,XXX the organizations X responding Boston in on exchanging feet. XXX,XXX of in have that's in XX%. are X have activity this commenced year. an weighted it small, leases totaling just over market. up XX,XXX those We on Street, signed started was in Winter week

have asking space escalation underwriting Asking this the always When about to of Many construction include are months rents project planned which mid-XXs our XX costs. in the when ago. do you above net, lab are our in construction we well triple inflation we high budgeting, and been we about expectation. market for XXs an

So those in those XXX bid and both Street baked Winter upon material our are numbers varies XXX budget into CityPoint. our numbers labor the subcontractor conditions, supplemental. availability costs. for We market It on and depending and

building hit the base would to what out that a escalation XX in it. carrying Currently, bid figured we So for about escalation X% X% months. and we're jobs we would we be

feet square that's leases Reservoir we're Winter of building. In our life space Street, with Place leasing. negotiating to back at to XX,XXX turning XXX science another Now companies Waltham, Bay adjacent for and Colony,

the at There demand first. the rental floor actually full leases In a few more next the we the over to expirations periods the the on signed will pure being and were Waltham the acquisitions is Our XXX. on dramatically We of the buildings tighten late than market. dramatically right office submarkets. in science, In 'XX, space have more sequential New demand we sweet to had the Lexington new going continue in more which a with up rents Boston another completed the XXX significantly to quarter years. rents. expect significantly office Second, this in comparable quarter spot second the life is at XX and expansion land current XXXX, lower York, below the office and basis tours the described, XX,XXX and total, than gross Owen including have expiration current from in in the rates XXX, we And totaling The lease in-place about feet, square is market leases market. actually and XX% converted in on some are

The casual And new and Reston, of Activity feet at XXX September. negotiating of at Dock almost feet picking XX buildings fast including Avenue. Lexington our terms years, at are square square activity. XXX,XXX In We street and provider of at be buildings opening Park is majority a X excess XXX,XXX collective tenants expanding we're include City York have leases more new we at the in a also signed culinary restaurant the over for in plan Square plane we to at Times will additional up. the XX. a on of New XXX of base We available Tower, continue lease The Hugh for extensive XXX. up fitness XXX all Lex, the restaurant at leases, negotiating

of we was quarter, vacant XXX,XXX completed over more which XXX,XXX This feet of than leasing, square on feet square space.

square take XX,XXX currently end of towards feet another Next Reston expected active vacant occupancy space. square including of on completion addition, In we the negotiations the have XX,XXX first by tenant with moving to is almost XXXX. feet,

portfolio. feet and roaring Reston XX,XXX square of of another transactions since XX,XXX completed this Center. TIs the leasing the Springfield, feet flat starts the was totaling for the Reston transactions are in transactions in Town restaurant roll XX,XXX transaction, the our almost XX in any feet Why contractually footage in square on tenant down Town of X we increasing with is a is as X%. cinema, a soft active Center. good square While any to is activity and low expiring elected years. full an rents as by up Retail We've have have it In in location X.X% We CBD, the impacted quarter? to the renewals fitness average square forgo Virginia. feet so Office cash San negotiated basically last rents of Pedestrian X% lower back XXX,XXX where have negotiation been in Center it Francisco office rent. slightly in to by mid-XXs Town floor re-let, for square

been exclude you transaction, XX%. that If mark-to-market have the would

the decisions. appetite particularly Embarcadero And X have affected all street of has feet In an at square the average it's the Center, a higher terrible lease foot San San The purportedly in square plane, the improved behind they over New market York. these Pedestrian still negotiations Reston in Francisco. floors this foot. a rent space That's active used. Boston, and bulk making square in over starting for are quarter, $XXX of activity addition, have Francisco, has last with in spaces tenants' well we CBD but this in over involving of XXX,XXX $XXX and

building withdrawals to did foot city are space. today picked we automotive some feet users rent. And executed medium-sized market XX% feet medical another Macys.com XX,XXX users continue other absorption see have the our I of of building. up a one completed about with square in to that we full markup said in space, the View, square Folsom, completed as However, for square with XXX feet energy for company R&D alternative Clara. an and tech million energy about looking at X XXX,XXX recently lease constant healthy and transactions. earlier, Santa And in XXX,XXX with expansion was technology leases availability We and tenants There for in have In a square of for begun Sublease lease Mountain or and large space. flow has device looking look in a negotiation.

certainly appropriate about for pursuing those We begun internal Platform the building. tenants restart the speculative are for XX, this time of and we discussions have

So leasing second quarter to the summarize, accelerated. activity our in

L.A. is in shape in Our portfolio great

portfolio in suburban Boston, and CBD continue of of transactions Francisco. CBD the see the San strong our We to Boston economic

significant and our have in activity vacancy. Reston We are covering

New are doing York tour activity weaker. deals, is We're terms strong. but economic

and Greater our expanding are life Francisco, escalating science rents. seeing South new at demand strong We investments our Boston construction And San company. across is the in Mike?

$X.XX than guidance. our leasing per our earlier-than-anticipated from which share core outperformance better hotel going the and of consider About my I our came results, quarter describing FFO comments is mentioned, performance, the as to better of parking, Thank would beat $X.XX per of We $X.XX by outperformance. I'm share, you, for midpoint Owen significantly and revenue earnings which, Doug. start which reported our retail expectations.

termination The to in income the is other and unbudgeted expect that $X.XX deferrals from third we quarter. incur expense

had foot in square large and $X.XX leasing. Boston by feet. several in from square including X Our commence technology renewal media L.A., XXX,XXX than with XXX,XXX in expected, larger office accelerated tenant share suburban per health Reston and our square approximately XX,XXX We a our over firm we foot tenants a totaling earlier leases expectations portfolio expansion beat care

our these of in stabilized were residential the absorption. across Skyline points in and our by and seeing leases than the improved in Oakland stronger delivered portfolio at our our to residential assumptions faster completed XXX this $X.XX. projects also projections House we quarter, XXX year recently with Leasing Boston by anticipated. exceeding were was occupancy our exceeding assumptions board in basis revenue buildings even full and improvement The The Hub All

While below rents dissipate. are to continue pre-pandemic levels, market starting to be concessions

Our exceeded per $X.XX expectations our by parking, hotel and retail share. income

As activity improve, in income continue have Doug detailed, as which stream our these components grow should cities. to started our of levels

The we in income other lower operating X and were expectations where termination exceeded expenses. areas

X was our It $X.XX termination $X.X budget. million, Our sources. above income totaled which from came

available space. have First, at the building than and Avenue, demand more XXX we is Park full,

accommodate termination on square unexpected who feet This one quarter, to settlement defaulted expanding categorized of from year. the were million about income we in leases financial resulted in last services income. another transaction our million And $X $X quarter. income their able we from by as second, in recapturing of The termination XX,XXX received tenant. We tenants this tenants

modest receiving every assume do this termination anticipate we a additional any not year. of While settlement we income amount income quarter,

basis deferred XXXX. property receivable same accrued quarter. than strong XXXX to a NOI took the primarily rent in basis cash point $X.XX We've our is Finally, share to in it item anticipated. came in operating and our like One reported and we expect The on is by these expense quarter X.X% GAAP growth third we X.X% tenants pandemic. that second the for due I'd charges maintenance other of incurred to lower on impacted in related line, the a expenses and second per accounts over out increase, honestly, be costs the we quarter will

X% our to due last out same-property NOI charges, GAAP If net year-over-year occupancy. lower by year's you dropped

same-property rents cash periods cash rent grew NOI expired, converted in and those we've our XXXX. free as year-over-year, to However, by X.X%

The leasing require City. explanation. statistics total were impacted in particularly X leases City in New This by also York in retail quarter's leasing York negatively company New

on in City the XX% net. retail, basis net And mark-to-market positive was our strong York growth New increases office gross X% leases total a portfolio on positive leases the and a Excluding XX% rental office basis. demonstrated and on X% of

Now for rest of I'd expectations XXXX. the our like to to turn

X from office the our our the second guidance At of is quarter per $X.XX deferrals than this our third expense per midpoint, we at the second is third $X.XX our and expectations than to the per in guidance Again, quarter of share income due FFO. $X.XX share, lower to -- $X.XX termination items, those consensus $X.XX guidance the provided second above higher outsized our due second quarter, quarter. lease portfolio, third the third-party commencements. midpoint. guidance the to For the quarter occupancy share quarter In to estimates early is quarter. exceeded Net $X.XX

occupancy will relatively anticipate steady. XXXX, be of rest we For the

XXX,XXX As have that of mentioned, not Doug occupancy. leases feet signed commenced have we yet square

year-end. We these leases before square to feet XXX,XXX expect of occupy

the have signed to rate current occupancy, already leases stable combined are occupancy. XXXX portfolio for and the renewal leases, addition, both good the approximate X.X proxy new XXXX. run another million XXXX. cover a for the square square In lease the we of in-service expected expirations feet with remain is XXX,XXX of in This for feet activity, With in of works that rest

and the expecting improvement our other income of are lease-up primarily continued from sources, from quarterly parking residential We consistent delivered our recently properties. our

from in incremental -- in of quarter $X.XX third projected from NOI Our sources. growth result these the assumptions

that expect and of described. We activity, will acquisitions to NOI our Acquisition quarter. to Owen $X.XX dispositions, $X.XX add third approximately quarter fourth the net from growth also the

$X.XX. quarter after the and summary, expenses in third be quarter, of and $X.XX acquisition for at we $X.XX So to adjusting second termination portfolio the deferred disposition higher by our midpoint to the for from higher project and contribute net in-service activity our income

quarter, our office from at a Causeway XXXX. in this in quarter. Hub we by And is to currently $XXX the third not on start tower quarter revenue in we expect million incremental Boston project will be fourth developments XX% as mid-'XX, in growth to any stabilized into tenants delivering the first are leased we fourth that that the commence occupancy While NOI. the generating we'll anticipate developments recognize service the in We anticipate accelerate that

December run life to XXX its expect will be this our Street in full is XXX% in $XX of leased lab conversion that deliver West It at rate also XXXX. science We million year. at

will Our growth our meaningful in accelerate more deliveries earnings development and to XXXX. be

leased year, results aggregate. billion continue Overall, markets our In in deliveries slated the and we addition this initial to they're next of for delivery we're this in thrilled the $X.X recover. of with occupancy, developments to QX as year, XX% the have quarter and

expectations. exceeding Our our leasing activity is

streams Our variable are income improving.

of unique growth prices favorable at please assets future that formal Our for acquire development completes you to pipeline track will is taking opportunities advantage the line to additional some value Can we questions? remarks. generate And expect earnings on and that add Operator, future our we're open creation. growth.

Instructions]. [Operator

Your line Piper Alexander the comes from with of Sandler. Goldfarb first question

capital for it growth or JV, your the the new about The first guys billion have you provides as raising dispositions question think is, earnings -- a external which obviously external you of and lessens that equity. Mike, lot $X need dividend growth,

will all So more won't year will impair the the that after, that life year, year, stuff earnings meaning is way it potential way, dividend first, come BXP a in that be dispositions that the limited really And and science into growth growth all FFO dispositions this the will that growth? for et with we and view see and cetera? stuff good next the through development earnings flow such

grow to growth additional result time. significant goal to it. Yes. mean, dividend a is our very acquisition our pipeline that should development earnings add time Alex, pipeline through that And in continue no we've got over to I time, doubt over about to growth we're working and that over

growth capital. their select potential we and going based So higher dispositions upon a returns we think assets we reinvest to are to generate assets is, over time. think capital what into that recycle we way are that And

about The to I add $XXX we're for we've assets to out. been million noncore only is running Yes. $XXX selling of and thing million X X years, would

assets. noncore fewer have the of of We in them terms

bad sound and parking, the hotel in like sounds well. like cupboard such The the is retail. It doesn't question income, you've thing. Okay. rebound That the a cleaned ancillary the meaning next the the

impacted missing And income quarter? of last thoughts was in million think $XXX what of I full second sort shutdowns. so COVID this then are quarter, the of or the you restoration? spoke your by much about How for back timing was guys of that

revenue some of talking hotel, areas. the were $XXX still We was we million of money. which NOI about is have do those it about in $XX Obviously, generate losing back. it -- to million of that actually the So used

$XX areas So And on the to improved we all. around short at it's improved it slightly, before million $XX and hasn't somewhere that were parking. on has but we are where -- retail the basis, other of not significantly the NOI an million

of year, -- going parking be our so the said at of -- revenue. about the with we're end Yes. to Like XX% I we're

our really parking meaningful a number that's So ramping again. for up XXXX as start people monthly

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

I and the realize trending about trying what the of and expirations do really portfolio? you your you ramp how year. sort flat get at you of talk to you Mike, half kind to talked pipeline, think normal to kind I appreciate guidance takes of to to I'm detail. look sort be year's And it your think you And the about sort 'XX. you to it's just back early the you starts would occupancy? give tenants occupancy of think about when back you occupancy long through of think next think But just to consider or really I of all when guess, in the

this question in answer Steve, the Doug. I'd following So is manner. the

And we late relatively XXX% development are in will leased. vacancy have are 'XX or activities The happen that in We in amounts covering 'XX increase that today. XXXX. modest early effectively are of rollover our buildings

I'd today, look when So at -- we I you get will of if our that's path you XX%, not portfolio it high, the tell to be we're We're picking to first say very the -- we're what, enough smart quarter. occupancy on. we're XX% But this that's XX.X% think I'm quarters -- in few up. or when XXXX, XX%.

be we depending that end science developing honestly, market, we significantly believe recovery we stuff the well how deliver by of XXs now, are upon next going that with hope that the we'll would do developments. Because the year, And life occupied. the are our I in may higher to XXX% we're So and we in be again. right than

in It's would it our modest. big other A 'XX our I market. is is, Boston, which in and the chunk think X% of rollover I in just 'XX. is look, add thing strongest X% is

well going think going and to have So roll-ups there, do there. we're we we're to

going feet We little in Doug again, that XXXX. lot will we're CBD, L.A. think to Francisco working exhibit 'XX of for already has as on There's There's D.C. I in expirations City about the in think early also And have little where we very see in New And roll-ups. in described, square some very renewals San we're XXX,XXX a roll-ups. York

what like Safeco But this for lake. it you is of secondly, little on I'm would the Seattle of vacancy of might a a entrants. just opportunities The both Doug, I it's more of little you maybe sort or curious just focus. Okay. pursuing? just sides bit kind But assume maybe on Seattle I up. the sounds be you're on little And lease I comments. maybe bit And know assume if expand a don't bit Owen for And to commentary looking have development some then got other

I'll want Steve, start and to Doug may jump in.

for of remarks, mentioned As been with months. the I Kelley in on pipeline. moved X a active the my And on ground, help we X -- call, Lovshin, is been Seattle very probably to a XXXX. of in we've February I who investments active reviewing have very that her to pipeline it's

and robust development; two, geographies. I it's: because it's and acquisitions think both you're as it's multiple in one, suggesting,

and area to of Safeco the Bellevue been been in We've at Lake Union. looking we've east is. Seattle So of South there. looking the We've CBD been where the at looking

-- there our medium think in in think pipeline, and we I success have region it's So -- we out a and near growing Seattle robust in will the term.

to ceiling look looking building of achieving That's not Steve, are X%, at assets looking was great to that it's if built perspective can Plaza, And the architectural what bones. value it do that Safeco create not And an great at we've it out to one buy way operating fabulous. that. tenants that which to or figure wanted got building in we other sort can is to assets foot in we regarding got It's we that be, was did space nice building Federal while highs. of and in make think with opposed fine honestly, CBD a with sell it we that go would we to asset, our could do not to stabilized it's was sure is what want and got -- market. what what an are another a to I XXX,XXX little the And are building, is goal become Safeco, something actually exactly our got we do It's just okay? we late the we in beautiful -- the the great through a square it's find views. which building doing. there It's what And rush are how of economically stabilized we you we're a the in where to not wasn't, was X.X% And look, that building return a XXs. we're as prowess. from And We're moving is. XXX the because in interior, that say to not make lease building that Street but will tomorrow the vacancy what to it understand bit

months. we're be in a we it months we and XX today we we're so going with a the to how a we're And market weaker constructive is building when going to believe different and hope to to it's positioning point will at be in obviously, use And And XX the work, set that. do do thoughtful that. skill And we've than the where Property very Boston different very the going and done have a reputation building.

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

more across your changing? value-add people on and of willing in office make talk here. Clearly, you've the landscape to the side we're vacancy And markets? about to active what terms just bets investment is become how on competitive see Can more likely you

Yes.

as high-quality, at market. there real quarters, think few last to seeing described estate an in discounts. And I we unstabilized will think pursue we but we pandemic that felt be opportunity the the we're

obviously creation long robust, are don't office are the life the But rates to we cap think you that's return kinds a of think value anything stabilized, And is people like we competitive Jamie, -- we which want our argue are will assets. just if follow which think the as said, capital wouldn't think we're true, Safeco with bidders anything is our of going think sector somewhat buy assets are competitive. the down. for going our is it from more pricing we that to we are that for than I great weighted think science an last But see there few the shareholders. leave as been will for success leased for it What that that the I less see things. for I with lease I impression do I Doug indicator different assets. certainly I And I holds that And for transactions landscape office, those our average not just is this leased other quarter, these a is estate what could doing. real for bones. not not competitive. highly able you or have market. And that's to think quite capital get thesis term is those that is, And things to

whether then stabilized are you how looking it's did IRRs? and -- underwrite at And you yields And or your or for what how you partners are this point?

based market rents think market If what's underwrite market. We're the in change on that. Yes. occurring, mark a -- we look, to there's we rents we

lease-up. we're think in I conservative the

than over time. And bus X% appropriately being is anything. drive to like trying actually conservative. we're assumptions achieve those yield think we're more approximately I NOI the what But over feel time, a we

Which we're gives done, on it low some you get in that's an at, what you IRR. not it assume typically growth, rate because that right? some when yielding could And a and -- if in what So IRR, leverage and your Xs -- are that's the you yield isn't sell escalations you healthy put we cap differential with obviously, is there rents. between

you a just And a earlier, Okay. Doug. to then made follow-up comment

across all like talking tech just larger space. picture looking -- you were for you the see big the the just I'm specifically talk think maybe markets see either Mountain Bay what big about they View of clearly, Area or coming what tech about about from And should tech? the market Can we it? drove we ahead I wondering of might expect pandemic. to out

really think, they're those what then the places there in thoughtful, tech looking see to expand. very honestly, where some believe talented markets they can saw is big I of And have people you're XXXX are going in you which they people. is and much think for the that currently to that XXXX era, they

the looking -- square can Google Amazon rumor and And tell are in couple Boston Valley. into. what's and lease, We Silicon is so Facebook of to that there's I mean announce space additional hundred a the marketplace. of amount construction that space a that a that there's they feet the We rumor happening growing that's is that we in a going see thousand be looking for you They -- the for there the believe requirements Amazon of but do don't right under when is perception. now in Bellevue that that's

the And enormous more of impacts from see to X whether talent. antitrust going companies space -- do that you're appetite company is these it's think I them there. I companies, not be have and -- just going X I obviously think X or which So or the for a growth companies to or same. consideration, if And for still is

Okay.

Any York. You mention thoughts there? didn't New

put done in campus, on on -- the side. which is Powers is the John the in very west a quietly far they've ground phone. their Facebook Look, fork

weeks demand. ago. I demand that of that announced for seen tech -- that comment You in a interested Avenue the knows other we technology last can Park large announced we've we're We've night. amount obviously, it mean market significant building. And doing X XXX about

being So I York all don't behind. at is New think left that

Remember and large million building, Amazon Google and forget, Google Facebook, Washington similar to very took feet fact, which former -- WeWork XXX been Facebook took took out over in was square the right? almost People Taylor Yards. has space. of & Hudson feet square square took going I that headquarters amassed think X.X And in of X million think, feet, XXX,XXX Street. Amazon what's I the pieces it's In Lord some on. XXXX, entire

that happened. So just

thoughts? do have I any think feel any you differently we So New don't John, about York City. other

posted. in New end tell June, those I can XXX,XXX just of were York. you that jobs open at tech the of Most there in

seeing we're here. lot expansion So of a

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

reposition $XXX the reports, last expect CapEx media views amount to capital expect according on of renew can when you terms of not Plaza, about million. a Mutual us XX And do Safeco your to expires Liberty in to On in undergone XXXX? or the the years, of forward? over whether What has their building you asset going fair you already spend them and remind lease

sublet to Liberty an Insurance what the would utilizing space. Insurance. comment all do. market. that So purchased their Safeco indication has Mutual we're on going not be tenant That to space not wants they're a on Safeco

to addition opportunity -- our making. Seattle the all to to going making going the don't there's have a office sure been a been an spent aesthetics, the not do building, that to present is on budget to don't to deferred on the we on be I give was market, spent We of place have can primary know -- been that's regards what to it building, building When and probably on bones not what that's been So the almost no With we're that's I you. we we in on And focus conversation. present capital. will the has capital you. it

co-investment at only? assets program, is are is the And willing contribute also, And you Or acquisitions? asset BXP possibility fund to to fund? the there look Okay. looking on to for transactions single a portfolio at

a at -- definitely acquisition. look we are portfolio would We

-- want about our that want an I aggregate development. you we're discussions venturing And fund. what As necessarily word our acquisitions But our included. not would -- a company not program. no, portfolio that had to about you to one a portfolio just doing. It's time, asset through I joint we either I know, a think existing at co-investment assets. we a tend clarify that would don't and It's be is certainly or acquisition have to statement accurate used

stands a So understand. asset important particular to for in because I elect neither I joint partner that own. clarify venture it's asset, both invest you every a think just One So "fund." or or on its want to aggregated might not they're and to into

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

signings year look to was in that second number signed leases think But on kind the quarter the color rest mark-to-market far? the signing And of back the what and the how could in it XX%. how Is as for for commencements? possible some quarter should the shake year quarter. just out for how those that obviously, like half mean, gave number I so the does about you I number of the look quarter? based lease in appreciate lease on on get I for of the could lease well, Doug, guess, signings it we

quarters, is we Well, for X the And timing do or so quarters. with spaces because hit not is you lease perspective I that information an statistics reason I which the is provide going quarters of is indication a revenue everything. what X it unfortunately, today, from supplemental X the with our on may

of and just is give it's might of to hard which because sort to a on what's sort So basis, what very what what on, lease going don't I trying versus right? I'm until those flavor So was predict to a know the be happens. you it spaces to on of relative the happen going spaces rent going rent we're

on New York the I That doesn't again, we XX%. then average, in as rent were. and so it, down again, the flat other was upon City market up in vacant. those leased But the were in in to York, building said XX%. just we cash Boston they down were of the on a market we by of mean a the up that what based places paid particular down being and Reston, the were a mark-to-market up View, were was were XXXX basically was of we and will But in again, had might Angeles, may the leases basis. XX%. Reston Francisco, X%. in have about is be And what everything down, on way in to XX%. and X% New San Mountain things Los portfolio mean paid So increases In space got because in lot went And negative never where It call a in space

give the actually So terms on, a months, on basis. you been of down. It's so because reason more data, you you what's that for that's XX give going in wasn't a have than current had So vacant of it we we the that XXX% what can increase space sense right?

Great. Very helpful.

how can about purchase. you potential you're for there? feel thinking Midtown the redevelopment costs additional South you're give targeting second Just the Maybe a about us on numbers rents question rough and

the well attractive going a Powers $X,XXX for for answer. as about me foot. we're the comments, depend where upon Again, stages building. rents to John said, we be let of this more And in we're the who give out And to exactly building is and we things shows different Owen what a it's -- who verbose just do are. going want let bought Because talk up, So this up. depending square shows few under they a make John? may in John We will building I'm to figuring a building. John expecting want early I'll say let very basis. to it for I'll on

because attractive very is building delivered it's us for being The the year. end of at vacant the

the get at and end in plates, vacant don't market We're good it's as get So to said, that floor of time. this pretty for the it year. the difficult and Owen a very good And building it, have year. we cost for paying has also all at back the with even bones, this carry same

-- XXX,XXX- interest we from XXX,XXX-foot this tenant. of tenant much are or think It's well. XX,XXX-foot be if space Certainly, lobby there. things going together. and difficult identity to different some in It putting in tenants. we're think of the stage very visioning larger. do there'll a many our it lot a yesterday. buildings, the different we're case to We in types a of now get which we're very of And you're or that's So and the had We session interesting very went

than we the think think, lease-up. upon So downtime, will. obviously, in convert going for we're a as you will the consistent very year. this, opportunity, do I of would we quicker. be good on this. Owen you. And if of would and with may said that tenants. depends the hope his X%, I don't And branding the We may something Rents, that, go next some better be is with underwriting. really Thank And leasing say we it comments, some budgeting know But how we to our size

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

supply guys and exposure versus of about Just seemingly what you're sciences what differentiating everyone chasing owners increasing broader think we're as sort your headlines How hearing of many other of there overall as we building in are should life you the in science? life are space, thinking a developers.

Yes.

feet control mentioned and conversion we So develop. I X.X that already that square my under think million differentiation, remarks, Manny, the the I is of have we're most important to already land in going control. most we

They're They're don't hottest now to projects life And go nation's have are markets. They're in So Francisco. Montgomery anything. we in the They're in all County, buy out and those Cambridge. South San science Waltham. in Maryland. in

the So our material go again, create We already business. to to raw it. build we don't control have

in found attractively market users said, team we interesting. the our number we deal, County got with site. fortunately, in thought opportunity. Now that's in to already smaller basically Properties. the that thought life Waltham, We of a very open had we're and closing with Boston last the terrific, building And discussions up Montgomery a science a we comfortable a transaction tuck-in that a that for was for already we're D.C. and we And new some which a market process of existing interesting very to being this things were adjacent quarter, lab then find project did bought priced

So we have high hopes.

science." life we think growing it to going do So difference into by the big in just We're executing people life is you already anyway, that's on a "getting of hear I what control. science or lot

I Owen, can you going comments, the be BXP BXP up. Are wondering on whole outperformance are it's broader Michael the that believe sort on overstated? it's BXP of office there's comment distinguish sort your mentioned to obviously, it of In to Because Bilerman. market. office your greatly to office. some doesn't and concerns market opening I footprint, tease to follow impact if I was sort of of the but wonder overstated. you've can assume overall about the you footprint relative work-from-anywhere you out if And impact why you able I relative have impact made to sort the that

believe questions. let Yes. think Look, think Yes, we to some I'll -- me that work-from-anywhere, answer in overstated. answer on said just different office we have will just we due I Michael, -- market the we it's but there or be X think impact different X don't I

the office companies other the and companies look it's property to you much lower. industry, overall at recovery of If relative

for the whole market the just office Properties, is clearly, looks it's Boston not this profile So like concerned. and return-to-office about sector It's about what companies.

acknowledge that's case. we the So

In and We in they're in that over then important. like and are differentiation, term, term, applied things sciences I best are terms our increasingly we But both be. cities are acknowledge better our short of the to markets One, term, second footprint. is our to to barriers remarks long very Doug opening by tech life I the short BXP's that talked driven entry about would X term the that in they gateway Southeast, place the more gateway quality. we And and perhaps rapidly. have the performance. have some demand thing the Southwest, in believe, might And would long say

it much activity look at New this activity in York in tour higher you the was our is number tour high-quality of tours building, If of than XXXX. terms in in year-to-date

have like place. try going corporate of do have tour we to of I in upgrade employees in remarks, to lot his their be soft Doug They're to of the that's ways great think they're offices. to Building, lot believe you're do at to of as return great I in signed. a they're leadership you what locations, is want GM one assets to is to going buildings have And great getting to to only home the a in the wants And but and to that If to from want office. space in do. look going quality. want work and market, go leases future And a the activity, they there's people said not to also want when their terms

employees employer clearly, And the the employee versus lot you different the get show other the the lot surveys a about or question you look I at significant slightly obviously, But surveys, was, had employers flexibility. sort that talked of answers. you of where CEO want when difference, a

variant With gateway masking you this both bit think sort we on frustration be of anything of and with sort of were going or done all think Delta to with COVID. changes while, when that euphoria of up happening you relaxed had bit with the got little should slows Unless your we this markets a the again, are employer tenants that sort acknowledging of the rising with vaccination all Do going it's rate it down the a that given COVID office of do head? of a basis, of we're the into meet the on curious where just the rid be some for think may you things happening. I'm sort side sort the sort and how about what's a current increases that employee just on the things side right? to little be in increased of that to shifting get going hard meaningfully, protections and the tone these

Yes.

We much of seen haven't evidence that.

tends it Our country. in as footprint, be a vaccinated you parts more of highly to know, the

working matter So it's dynamic it, the with the lot completely think this what point. you I a of determining employee and going the recovery, employer the time. office and at is slow I the described the out I the is is don't of policies to dynamic a first that's important that think preference And variant but think itself that's agree think what could Look, the I happen. Delta preference. I -- that's recovery

So question. it's an it's if not when question, a

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

know Just, from gave can But Mike, assets? for of easy you I into and rates guys Because some on the provide I kind of we about you that the head as it the into just back initially a can the it, cap impact kind acquisitions think you piece in run we XQ. can figured going-in I us XQ but just 'XX, rate. might be timing the different know

helpful. because we have give think the confidentiality such. I you agreements following -- I closed I'd will explicit and rates be rather these not give because you this would aren't we're cap just and

Avenue, will XXXX. vacant Park Powers XXX in be said, as So John

development, we we is obviously the basically all as cap Shady -- I the intend said, as as and can. quickly the Owen So vacate there. think buildings And possibly of rate those Grove to

more little well-leased very I detail on detail there's we market we so think is building some close, Second And income the... that. to we'll a below Safeco on When incremental Avenue And very provided rents. able and provide at there. the be

X.X%.

the to you that release to are, back if we in you -- building. 'XX rents you a we where that's what into where when to And said and listen I about market that's be going can think get

did guys buy Okay. just a on And you fee the then helpful. clarification That's or South, the Park leasehold? Ave XXX

the bought We interest. fee

fee the buying are We interest.

buying the fee are We interest.

to it into Marriott one and sense? been If I've And Or there a economic from office there that? of asked redevelop curious then Is couple one. just life myself. Cambridge kind science any just of would doing or times, potential you time? something stop made the there is over last I'm that

the with us nothing in So going for change there's and us preventing there's prevents a from conversation operator and use the contract, their hotel legally that answer having the ask City Cambridge Council is a legally there. about nothing from to

of They people been Cambridge. I successful -- So clearly, other -- again, that And things one ignore don't that they sort have other it. leased we to just don't the net. space office or think and things X it. doing of almost of lab $XXX city foot the million currently like of of We're new at feet rents and build square Square going triple that Kendall appreciate square $XXX in a is between being in

some build utility local structure rather We a to below-grade have later. ground going give parking we have the to happen sooner company. space, to than and But existing to that's the for underground

grow our Cambridge So have plenty portfolio. of we opportunity to

question from next Your Goldman comes the of Burrows line Caitlin with Sachs.

Earlier, list shrinking. noncore you mentioned of were that the disposition candidates

I use know through one So them? I some you the acquisitions in quarter, cases. you and was plan Units OP how the mention of developments, go generally did funding wondering, these on you just as this of

or cash when other only issue identify So else? it dispositions, would something equity, you your allows position do

answer of developments a is couple and next sheet, been we've income that, years. in want. has in, strong the the we've and to coming already mean significant a spent pre-leased got amount start you the and Look, that got you jump I'll in balance then of money can very I if guys very,

income that So leverage that balance going more as comfortable it we're where provide and down a sheet down now, to brings our even capacity. is bring but place comes in from strengthen only to

we're strategy fund activity. debt we we somebody help some on else unless of And So way an the to in our we and for public the acquisition investment an Typically, want and we into private that's with the only modest doesn't asset that some years; then one, going on to can through foreseeable never of access attractive additional own owns type utilizing we is the future. That bring capital whether opportunities That's mean on any the the additional things: to obviously, and comfortable and over will company. share think continue our think us. price sales, of we we're that equity would to that of what kind that. cost And capital profile in couple do dependent really developments have land. equity the that's next X

look we of about funding things future all So when those at think we investments.

fund is capital underway a to all developments with just very comfortable that line capacity done our existing we to on the Doug, currently date, this funding sort and put are are of have to it, finer everything that in addition we are to are with need So mean capital date of I been are our that dollars that and capital how everything overall where to in we've in terms has leverage, we going our coming the those to funded. use that. the of extent dollars of announced additional

But maybe development lot that particular, like leasing was then went guys active in pipeline, development And of the done didn't quarter. it in the Okay. look that just through on the leasing. the you pipeline, a recognize

forward? projects go seeing just that you're the for expectations wondering if you could going activity through those So and

Sure.

Brooklyn Yard, date project, I'll Navy there So and efforts the Jake no regional who which I are about let longer to the and Washington, our Gateway is part -- are only Otteni, Reston D.C., holes talk development, which and pipeline is the from described. which we Pete of in then And our sort of team our where leasing are. development

D.C. in This the is region. Stroman Jake Sure.

feet broker to we have Next actually left had project, great that XXX,XXX the We've tours on building. the X.X foot about square through square million that activity, building. some of have Reston lease in So lots come

a we're we're engage on an proposals -- so And have a tenant XX,XXX square trading in with date. also program -- has market the successful feet, We additional been factory Reston which floor to full very right going now. to

here to opportunities a to leases those good of convert activity, soon. few really hoping So

describe And then, Caitlin, on thought the stuff in I that. I'd Boston,

So the have intent now, we at is said, at economics. is have of right and And are a That -- square said active XXX already have some These Winter feet Street, about letter then we with which which where point pipeline XXX,XXX have we've we close square we're is part arguing now, and CityPoint. just discussions to being of XX,XXX as that some our foot of intent actually executable. tenant signed are I XXX in proposals, that actionable are of building a later. of also we are not discussions letter to gotten we [indiscernible]

of have all we right this that to CityPoint delivered with also you So on sweet expiration working the year a these and to XXX sequencing later, buildings in acquired quarter XXX fourth ready new And in Avenue be spot is activity the -- think X August of I XXXX is available. in lease if that, said, at for of then it is. in where Second why about XXXX. a And is about we've the people that's

the lease that greater you talking Lots are space. life if commentary than existing market science, are in until Boston be XXXX listen to projects of demand the to this supply. people -- on demand particularly completed more building that think opportunity XXXX. are market, of way I Most larger there's for about there supply to won't

perspective sweet amount of significant years, the of a and market, supply. spot the of from has couple So demand next the little competitive over our very

Your with next UBS. the Dilts Brent of question line from comes

where Great. clear, think the a you break current to is supplement, out bit leasing of challenge. portfolio you But it's the York your retail second-generation in some On in I info, remarks, a New in pretty Page prepared referred of negotiations portfolio. XX still that

you about a talk there? recovery outlook could just So for your

Yes.

very to clear. want I be So

XXXX, Motors the for okay, were. in-place effectively the at dramatically reason not were rents the the So numbers what poor as portfolio the space And than in New retail in or re-leased is space because in Avenue. change, the some they happened. General as-is basis back are an are we reason what York That's lower in that's on XXXX, that on we Building some the rents the and as took

spaces They're spaces negotiate So be now But acting vacant -- the space what high-quality call. this you vacant incremental. where basement very building and the a are an different But the rents to center would they're of I negotiating, -- hear in the of we're to are, all the we office going on of want don't retail is depending the the spaces Square market. a because rents upon commensurate and Times obviously marketplaces. from at or fitness restaurant the with are The are a space, are nature rents. leasing we in market very, that team. it's

you've Or then renewal cetera? negotiations And redevelop, a for retail if of Great. you decent XQ. on are et for in Okay. how to in plans got Any have that Boston space? amount up color

lease a is on They on are out short don't anchor. think, actually Boston seen at anywhere work dialogue terminated lease Taylor. now almost unclear, back. is a in Whether our in are litigation with Boston a haven't the we space, paying now pointing I not we And And expect something have that to expiration I to term. the months, & other we on going basis, revenue biggest in So XX going that we that over in lots them which contractual for expiration. will third that an hole they're Lord basis. a quarter. with of that, It's you're the but able which year, not active have long-term is on, The on be in

rollout, -- it where assume leases And how Basically, handled quarter in terminated some because tenant we retail of our those that we had then that defaulted, the they're we but couple able expires we before most next of paying time we matter a a the leases. of sitting we we're be. of just And these rent. what it. they're it's new the deal have tenants, And a in only in left, negotiate will to kind

those quarter in Boston So in the third the situations. are expirations

vacancy. described, them Doug to as we create So don't expect

of a just target Okay. time? have Seattle. market last know over about already talked I But to you And for to on get amount. it one you want one you've where do as then quick that a decent percent the a portfolio

Yes.

gateway question we be -- your driven Seattle we I'll We Look, footprint, set of So answer to strategy we that. think it. bottom-up like opportunities. part more But top address the should down. our by is

So we investments on We're the clearly it be and want to there. to being be volume the dependent the in aggressive will Seattle. grow. But timing we We of attractive want it see. that

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

clarify the lease you -- was you to excluded. big drove that what that the negative at mentioned, us Building XX,XXX just GM square markdown? retail foot Sorry, Can remind just on that negative what and

that also at a XXX was And a markdown. There had Lexington was big negative space Motors at General a Avenue. space then there

I'm tell on tenants to for -- going you I the said, the not going what So rents negotiate rents phone. Like I'm not to and are.

those just were re-leased, and what markdown? spaces drove so -- that's So the

of one And them just Yes. was technical. and I as -- is mean, an this FYI,

is, though they the them even they X paid rent their are prior hadn't because what their that of months re-lease. to define using date rent actually But the defaulted change what-was-contractual X in we they on One in to terminated. had mark-to-market paying was

seeing just far so in on flexibility, on maybe for Okay. on of things, can That's lease seeing second, just are helpful. termination And of wanting different at any that sort slightly helpful. in you what to length variations things. wanting or itself, given maybe I'm additional you're One, options then that in on you expect co-working be would talk just and you trend touch expansion, just we've discussions terms or had if terms flexible offerings lease buildings? your X employees where employers wondering platform the

Sure.

just let platform what define our So me is.

the And and people to X They we'll need up want Center of there We've we actually companies that X,XXX additional They office been back the much have that if know the we're say, then by then it's going of decide of at to because Prudential has want they FLEX we CBD have few long-term get office our X in generally don't are location. And just So feet -- buildings Boston And we And the leased our in all X suburban picked significantly activity or asset. which pandemic. character of what space to and we to want to And of character months, X I'd we this tenants then our are quickly, space over their BXP have spaces together. that's X spaces. they're nature the again, you how we're a But quarter. Causeway. for smaller. leasing square with didn't and majority location don't want space and take suburban the max, is. the at out need. flex the have in prior done, saying, it's going -- commitment. X want And space on past we X,XXX their bit those to that we're space little or a do deals, at a the to figure Hub and vast long-term The -- are they growth all to the

economic we have not time. I could we're to right but mean planning business. now it we performance, depending this I have think, don't time that to the expand that don't over Vikram, And at -- change plans grow on

-- the or the Are sort whether lease that? or the just expansion clarify then seeing of anything options just the terms -- of change any of -- in sorry, Okay. options -- Great. And components, or just lease kind you're you out not term like to it's overall.

lease ability tenant In would flexibility. out that the have provide don't of We perfect to like get we kind they the obviously their can. -- to world, whenever an of

Typically, remarks, leases years. lease that X.X of length people Owen said have I As our been average his years. an that were in we this signed telling average X we've think quarter were

including And less. right average And like that are would science -- or buy tenants on to I that flexibility de the like that way as the I it's time. have be of But more, in would flexible stuff. their you to out activity minimisly leases. space again, negotiation occasionally, tell of are all described, active years more now all longer we and the after some in I are leases said, would giving ability of life periods that XX So their

after You or of lease, of And a can you all our the XX-year something sign of or build-to-suit the stuff in hasn't time seventh that. spaces our the looking XX, is there companies at XX are any of profile But kind still amount been like the terminate are that XX shift really year and that years. expecting.

know sorry, just then strategically. one. it last I a and you've Great. the makes sense lot -- obviously about talked Seattle, And Okay.

other look of Just your markets, you of it we at you thinking to the kind tenants X years, never never. Austin of West tech that is possibility one at Coast I about expanded into look But key any markets Sunbelt expand if of a recently. peers X more as can And there? say the sort next guess

D.C. the One went Look, quarter. -- Vikram, was in and think The market. Seattle D.C. we team plus strategy. into New just Park that's new -- It's Avenue hadn't it's in new we life in multiple which could of are Midtown into as others plenty market, our submarket of itself. we're X a focused argue do got And this Boston you was and new cities our we markets a South size below believe Xx market the gateway the one. a -- the science That's market. now. York logical markets We is X We actually in Seattle. And Properties. managed to Seattle. County to then in to been before, Montgomery for expansion region. South, on I of gateway the went went there's the out

evidence So the "region." opportunities think X all of we have our to deals our I those existing in are robust expand footprint

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

speculative discussions any X anything Great. I believe such the similar Platform science Hudson you else? non-life the Doug, restart there development of pipeline. to Maybe XX. going back as across or discussed the pipeline Are

only is we're our time looking the in say development the portfolio that that residential other land in would Reston is I Next. this blocky project

I be a could start. think that

later You early year, this year. next can see

And Hudson or which, that other for commitment in a urban to Boulevard need be locations. going XXX start we we're to then tenant to couple the by a our to way, position start question of to have really specifically, or your a X Avenue, Madison even large any years start land holdings the of won't in more

And portfolio or your the are curious, pipeline, outperformance I'm call the you it's And seeing it. A? the discussed trading the and quality this Got then today B Class you of activity quarter generating. throughout space in the tenants up from about to that leasing Class any within

either well means expensive I where great located. would our space true less is what other than minus where words, getting who been landlords assets. at space, not haven't B to great would space to from people understand building but are create A, is the changes they modern seeing Class In that of significantly true made tenants minus but place the looking in the don't the has Class what -- buildings, to are Class that not that space as amenitized of up the we B really where office and trading inventory say it I we're not infrastructure as because even are buildings refer A

there "Wait minute. because and of tenants those that so And they're a saying, of sort are

on built, there of believe were and ad who thinking 'XXs, that with with aren't dealing importance the the XXXXs, last the landlords just They the that of and I want people 'XXs, in to nauseam their do call security maintained their not gone cities that is about health or answer to talked in so and employees described well to about those better and Owen with activities we've have era, will of better be occurring." for questions things, those previously, -- couple left long-term I of that move places one it, And that the modern in that's as there's we're buildings behind their come our the great believe buildings 'XXs, quarters landlords there's and everything issues thought for Given been the buildings. really so to that kinds having be to asked better viability as of customers. environment to -- for was core how of better flight a well back

this call speakers remarks. to And over questions now any turn there I no the further the are at will closing time. back for

you. operator. Thank you, remarks. everybody just have their and Thank formal on their Okay. interest for We the call want more I in don't time And thank any to BXP.

Properties have call. good day. again attending, Thank for you This and Boston concludes today's conference a