Boston Properties (BXP) 26 Apr 232023 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the Q1 2023 BXP Earnings Conference Call.

At this time, all participants are in a listen-only mode. After the speaker presentation, there’ll be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

hand Helen over Investor Han, to speaker your Relations. like to today, Vice now the to conference first I’d President of Please go ahead.

conference Reg BXP night most measures and welcome quarter on to Form and and the BXP’s the furnished G. all package call. supplemental in non-GAAP In earnings measures package, supplemental last morning GAAP release reconciled The accordance directly distributed Good were comparable X-K. with press has to XXXX first financial

a copy, Investors receive for documents are website If investors.bxp.com. the not you of available these available in will section at did XX months. be our of this A webcast call

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

Although expectations BXP assurance attained. based forward-looking on give statements its assumptions, any expectations are in no it will be can that believes reasonable reflected the

results or update and to yesterday’s and Factors cause time to from from does detailed with SEC. statements. not time duty by in press BXP statements implied those a undertake in release the to forward-looking risks were materially differ filings forward-looking BXP’s any that could actual expressed

Officer; welcome Chairman to Owen Chief I’d like Financial President; and Doug Chief Thomas, and Executive Linde, Officer. LaBelle, Mike

of one teams those portion limit yourself be that available please call, the Vice any question. of participating Ray Management We the our our Q&A of portion ask Regional will to During President to Q&A Ritchey, in to Senior and call Executive questions. the address you

queue. rejoin please follow-up, feel query to you If additional have any the or free

over remarks. his would now call to Thomas Owen for like formal I turn to the

trends steady as our funding. and company cover BXP's market BXP's Helen allocation in first The capital and and key operating Today, I'll our you, and good everyone. results. quarter activities Thank impacting performance economic demonstrated morning, continued

continued BXP in headwinds, the to quarter. economic perform significant Despite first

we and the consensus per of guidance, of share guidance for per Our all midpoint both our increased above share our market was XXXX. and FFO FFO

quarter square X.X kept with XXX,XXX leasing completed first of average in occupancy weighted the market more conditions. and a We flat despite challenging lease feet term of leasing years

Finally, report webcast and annual ESG May investor second ESG for BXP XX. its just announced published XXXX our

sector two office environment, trends, believe the will which clearly in a current on performance. the economic facing there Though BXP's challenges underappreciated is have significant impact are longer-term we

trend which the we and forecasted trend. a year the now with deceleration remote secular work leasing current we by are is the other primarily will leasing, In cyclical cyclical in conditions. recover and experiencing believe rather last First, economic slowdown slowdown, along driven than a words, economic

level economy economy our significantly year in clear our and offices, the In for of much Our average fewer XXXX, slowed. we our experience. normal million clearly workers but a and more is when square many evidence XX-year this workers is office were the was This our leasing X.X has below observation the feet, using year, just weaker, essentially leasing. own leased are back leasing stronger

are forecasting to Though corporate are as recession quarter X%. earnings S&P of approximately earnings companies There daily lower seemingly growth, of defined are layoffs. GDP we expected XX% a XXX this over in are aggregate and announcements negative not drop

or are reducing taking reducing focused and cost companies headcount more growth, on slowing With space. control, less their

capital In new to outlays, companies heels addition, leasing more space. capital failures the be capital market drives for volatility bank recent required of on including in cautious

office. expected policies to a economic companies expectations and to and the tech return office challenging increasing of industries their requirements, specific to in conditions, in improve. have the more With continue Major return many announced companies continues variety days to work the trend tighten

their and federal for return other in-person to of improving, though remain centers work. cities, rest mandated substantial offices. Biden a U.S. U.S. behind in the Coast increase has office work the President at global West business

The office the overall the current asset are second discriminating market building class. than more much quality office sentiment regarding underappreciated trend is users about

to quality buildings and highest consistent managers available and continues leasing broader the and their and tenant have office. Users facing and the segment the with Clients back increasingly Workplace to workforce Premier buildings prefer materially to office the not default uncompetitive. commission debt ownership, to outperform The workspaces market. stable capital complete leases to attract upgrade are improvement therefore their do assets compelled are

areas Lastly, such is HR. assets, putting segment for workforce the allowed lower not buildings. on and does IT support and more across industries more full work frequently practiced significant This of as premier commonly remote pressure or the for workers market quality workplace accounting, as occupy in

CBRE workplaces workplaces the represent total Premier of and of premier where As and approximately is CBDs operates, than U.S. the the XXX of described XX% previously, and feet in space square the BXP million buildings. tracking for XX% less the of X performance

points the basis direct balance increased In Workplaces market direct of for the to year, XX the first XX points vacancy Premier this quarter while XX.X% of increased basis for vacancy only to net square XX.X%. the for for X.X XXX,XXX of square for versus negative was feet negative balance the market. segment Also the a quarter, the million absorption premier a first feet

leasing of last absorption rent higher positive are will buildings for of believe we and segment was market. Premier X our the BXP the been long-term net X.X quarters, million Premier XX.X Rents of and be undergoing a square activity, square the for CBRE all success. which has and for gross the by versus XX% workplaces, a segment rated Premier feet buildings X workplaces, as For renovation, is including for million majority the negative critical space growth CBD balance feet captures in the

office real all classes first for was fourth also assets year. reduction the XX% XX% transaction down private quarter asset lower of last slowed means period. in no volume as office-specific estate real The quarter, billion transaction an the $X.X from -- across volume materially U.S. to was the to estate by over trend assets capital all Moving markets, same

leased a to and far have highest costs, financing bid-ask for common assets unwilling Mortgage arrange for higher due quality office is gap available to and markets. and capital and so declining creating Real have sponsors. sellers been values challenging only to estate prices, lower reset down the accept

development of difficult to approximately in dearth XX% at of the asset Necco In to several Street $X,XXX interest quarter. Given data But determine. transaction a the a a rate. Seaport property the announced X.X% valuation of there over were lab Boston, XX of and cap of note the activity, a an pricing sale in points office for square offshore foot ARE is company a

service just New global York under property user company science a strong which In a not square comprises The interest fund delivered X.X Liberty purchased foot being did fully One a credit to rate, XX years. cap $XXX foot the building, X for City, Downtown XX% leased in square life million Plaza this building is rate the own XX% from a later into and is X% feet and year XXX,XXX at for is leased. manager, global a cap

currently or There testing greater. smaller non-premier pricing market, several are in rates of workplaces the X% at cap

we market near $XX conversion BXP's the Gate, the in XX% first Virginia interest a Gate for of on in Town quarter, activity Regarding acquisition Herndon, completed capital Drive World Reston residential opportunity Center in World million. located a

XX-acre X,XXX of X the office a a on demolish vacant rental support is development. property to which consists a entitlements comprising garage and portion a site. receiving subject XXX feet for-sale The parking buildings reuse The XXX,XXX office X the buildings existing all stall garage plan, and is residential to of square unit currently situated to and

until Artemis serve expected Development and not in will Partners, owner with is developer of XXXX. member DXP project. the commence to managing as partnership Real current Estate the

on opportunities acquisition undoubtedly new solely and focused this and will residential highly Additional remain we science environment, grow workplaces, development. premier will life opportunistic and in

of remaining be deck $X.X previously retail and have BXP square Center. aggregate as and We projects added with billion attractive construction at view to residential described office upon and lab in observation XXX projected XXX the funded to Prudential Binney active generate Street projects the approximately feet as X our this pipeline Boston million underway investment the and are delivery. to quarter now and $X.X developments yield These billion well

the sources rates assets, currently higher We have spreads and a about debt and mortgage year ago. access market current unsecured funding hold the at received secured is both liquidity to levels select We private recent environment. elevated market have than understandable market our and of which albeit in needs, for inquiries and

could attract into monetize and partners our residential select JV We assets lease also development pipeline.

details we capital Our whether internal on about how more are in access discussions remarks. costs Mike to provide his capital options flexibility. maximize raising to are our but rather able minimize sequence and not strategy funding select will and to best

our weather the despite unconstructive and leasing in market with positioned another with In market sources, workplace well and is strong slowdown potential clients conditions, given both to market had with the to summary, assets and balance BXP our significant and portfolio productive in sheet financial dislocation. capital current economic liquid our premier quarter progress gain to due in our development multiple line above expectations. the performance current share access and to segment, position BXP

L.A. on matter, will years has John X Cohen, office, Melissa the be Lastly, current our BXP's an the Development former elected joined LA region. of BXP's be ago Leasing Vice region. for at effective who in been the BXP Head L.A. President, John project region changes a pursue our L.A. and will professional leaders will Senior of in to interests our senior manager June. of outside Laing, Alex important York to L.A. of organizational oversees rejoin Melissa has Cameron, and New us an in growth native BXP contributor Head These for as BXP's end and L.A.

turn it to me Doug. over Let

everybody. morning, Good Owen. Thanks,

in job have to see the So economy businesses pickup and see as patterns make environment. look I impacted pronouncements incremental we office related operating continue and estate to think demand. of reductions trend work, we in-person daily lines, to supply upon we importance a as based Owen supply it's our we real activity fair demand about that industry. are but continue at the challenging the month-to-month say to portfolio, and in stated, emerging both weekly In And

management, financial where back perspective our professional services to levels our includes data, is The this the a urban San in however, equity. city X which of across we legal that is using XXXX. of asset the and obviously, No different days activity really per the week private track office their services. about times. different People being in portfolio is work markets and spaces The existed Francisco, different frequency than professions got work, than at primarily

focused all work of in enough norm. that's where an of have most are just swing pendulum organization space to and expanding on dynamic profitability, instances decade, We the not space, they and demand don't and week workforce, are could technology employees and the on their find the life short future today. way most office aware the reduction reservoirs for but organizations existing The preservation. The last cost planning has it's where science isolated themselves not required their of capital their existing and back to they're users but over

positive of space. market through the leases they lead evident some are move services absorption. needs. a in are professional lot footprints financial actually doesn't It's more smaller reducing additional the replanning uniform are near-term their a with and firms as variability with services are module, This law Those signing facilities a to few to headcount that firms less There's while space that taking with space. office layoffs

on our Building it's Town are and General assets of Reston of equity, core X,XXX premier Center strongest just This in teams Boston, is in Clarion These way, capital wants broadly have space concentration Motors asset San management. any Embarcadero their Center surprising By pool the and and in at funds, companies in XXXX managers. Pennsylvania and Salesforce occupy their in user Center specialized clients list. the D.C., to is demand hedge Tower, it's Manhattan, is the managers, fund not activity why workplaces typically Northern The that venture, speaking, BXP's in strength under Prudential alternative Avenue available not and private at the Virginia urban which we don't XXX Francisco. XXXX the growing

rates Availability story. above not These of in York space Francisco There firms track each rates market Sun high at a the XX% every published a and challenging New or all supply markets. The pocket headline San brokerage Belt picture office in the every availability are across is and or market. of in by reported as coastal the availability virtually U.S. is headlines

recent why our and gave being hold last data much X and redefining operators most less We premier as and dramatic spent explaining between of numbers relevant. demonstrates business the workplaces workplaces the developers bifurcation premier these headline Owen general space. office which the years

office space of foot floor at buildings and in client the Third looking on Park are XXX the be not Bay with If a Boston or attributes a assets square downtown. location the building there Availability to premier primarily premier Avenue is matters and specific considering of Back XX,XXX exterior a client on wants South and Avenue, matter. availabilities. The single those in limited configurations, Midtown

X XX,XXX Street space to between XX,XXX client a expiration square Center, this could be outside the a availabilities. this to the lease XX,XXX foot a there building. Francisco, Embarcadero at the XXX Avenue tenant space XXth This why can as alternatives a Clarin growing Fifth quarter I Park South with with and client a limited the the occupancy foot space had foot is no square at in released described north This in mid-XXXX If Lexington, with in at is of client XXnd the client. recapture are quarter and downtime renewal. lease Last Street of wants new why immediate we San floor square at XXX view and a is of we and Avenue floor to quarter,

million regional that are headline committee, completed brokerage people quarter of business. our information in which reported feet it's On expectation but on nearly by BXP's year, to an the leasing our teams think per call, square X The it's last was We relevant space. gave XXX,XXX the it's about average. as the we quarter. transactions first as just feet feet square XXX,XXX not true, factual translates for of during square

were There expansions with our this tenants, across contraction. growing were the XXX,XXX in and XX feet. We leases square square markets. XXX,XXX conference public our feet XX or X have XX at March reaffirmed new We renewals totaling leases had XX Citi webcast. in and

commence square to that XXXX. vacancy, totaling anticipated our is X.X As we to we in signed of on sit have million here feet that X.X yet today, approximately in-service square feet leases million have commence space and

a the added secondary these occupancy of we on leases effect shows our that occupancy. quarter, This quarterly statistic signed

it Our leases which properties portfolio, is rises but in-service This square signed with to headline includes leased. commenced, not in-service XX%. include not occupancy and XX% and our development does it stands at portfolio XX.X% feet up to and million X is the

additional million in We of the of feet, more than I a negotiation current million currently we XX% pipeline have totaling active square have us of proposals. and X.X sign totaling feet. XX% the and negotiation would of square X.X leases square proposals in to XXX,XXX expect over leases feet

the million So leases to space summarize, If we as space of about expirations. quarter XX% square of XXX have XXX,XXX add It active or dialogue first feet of 'XX. are to feet of on end we should square X.XX our these in vacant space occupancy.

We signed commencement. with XXXX an million square feet anticipated have leases X.X of

Together million to with occupancy. the X.XX our adds this leasing feet square pipeline,

expirations XXXX remaining million feet. X.X are Our square

This overall show a due Virginia. feet restructuring is of in the activity XX,XXX year. portfolio X% cinema leases X and still shocking. a about to calendar was on and D.C. mark-to-market foot Regal The our bit this We which across lease expect square the million the in supplemental, Springfield, have was lease little square XX%, were additional down down we to

the If exclude with other down on were in lease, down portfolio cinema the X.X% flat up Regal in company, Francisco. up X% down. quarter City across and leases and New up XX%. was signed York you We D.C. up the X% the XX% in were slightly and Boston essentially San space second-generation Boston, The we this was markets

we XXXX. default XXX the During Winter where the on down of operations. quarter, speculative forum life biotech company was at one a XX,XXX experienced basis a Street This U.S. on its science built we square on in shut spaces feet

our the To life some is provide exposure, XX% our credit clients with with on than higher science We about new the or that's on revenue. $X in-service annual life a rent. million billion. from rent as values a public equity of companies from our $XXX comes perspective prior revenue X% are space total negotiating lease is science over market total X%

of is XX $XX funded. million XX XX XX%, and up public The other made privately clients,

that the of market Francisco, both added in $XXX Activity annual XX% commence the the We've and have discussed, slow Genentech, yet South there leases science as and is small built Institute. life from touring, have Greater a AstraZeneca with but are There that I the to private the to to total and be Boston is with few new is continues are are unleased large also fully revenue bulk space market. across Broad demand companies that for being requirements previously San signed Roche space. of million, looking

client fits new XXX at Water Our this Street profile.

the portfolio majority at We of workplaces XX,XXX in in each partnership San market, want BXP property the space lease South available are complete the open outperform and The was turnkey our XXXX, and new feet. and spaces. the our fundamentally in in will properties. we these negotiating demand also totaling will to Gateway market leases existing continue because at requires will premier to X Francisco clients project be of of the types development comprised square lease additional and the to XXX

and feet. clients make We above up and leasing small- and leases lots and the leases during of the medium-sized financial renewals. we cans square Medium the square feet 'XX. small had through of over leases Occupancy captured XX will XX,XXX be in XX,XXX X completed completed professional will service X quarter. only first and bulk We

also will We have have contractions will some some expansions. and we

San York are and Mike. concentration Tour financial here activity the continues I'll the to in call of Boston where City stop and to Plaza small strongest be firms CBD the and sirs turn District Francisco, New professional concentrated. over

Good morning, Thanks, everybody. Doug.

do, shareholders, needs discussion I and and of a questions of of debt going our the But first liquidity, received the the performance changes would with the start guidance from the state from a of capital near-term our our like also our we'll details we've I cover to to am markets couple address perspective. quarter I to and So before our year. for

talk a commercial there And estate. the is portfolios. terms tighter financing been we There's and for reference financing credit premier spreads of are rates media is while agree of real lot and high-quality, lack the higher workplace in for costs, assets available both and underwriting of criteria financing in about available that well-leased

the million and in incremental with months, bond of million increased green the to and providing issued extended term loan our of of we fact, syndicate a billion, unsecured proceeds. banks past $XXX market investment-grade In in $XXX X $X.X bonds

strong in comprised We position $X.X $X.X under line cash are a currently of full credit. availability our and billion $XXX of million billion of liquidity with of

We and including pipeline our do have XXXX needs, development capital facilities. funding expiring refinancing debt

remainder XXXX, we approximately project the For developments. our spend $XXX to of to million fund

issuance Our bond the maturities to of are limited debt consolidated third quarter $XXX million expiring XXXX a in XXXX.

fears extend $XXX credit and you into in credit bond market the failures have XXXX. meaningfully. of another the over has spreads in due a spreads window higher coming come experienced March, million broader bank market quarter have and If The In the April, out settled first of XXXX, down, volatility of crisis. we the coming in our

We our which option issue needs. we extend pricing a today new levels, just and option joint it for continue monitor spreads headquarters X-year have our market bond in located as we XXXX. on portfolio, an for the Bethesda, issued it and last on additional expect Marriott between mortgage inside the a X-year In is and venture wider XX-year to open, loan we the to to but exercised deal still are could our to extension historical an a refinancing at is X.X% believe we we X.X%, than November. Credit

available Hub are XXXX XXX North $XXX mortgage extension Boston on D.C. the totaled in expiring Causeway we at in The this. Our Washington, mortgages development is just XX% anchor our and new Capital and on that leased. have is leased of an Verizon share, million option for XXX% that remaining million $XXX expirations

actively these are We expect the extend or to loans mortgage working term refinance on in sheets. market and

years. varying As fund market over in capital sources are source we for been to of evaluate debt XX cost to unsecured amounts requirements. reliable bond has The Owen capital mentioned, that our capital us have consistently us for broad a available we in a array that

fixed a liquid bond income with have very who core and outstanding for a us complex of investors partnered have We supportive years.

available is just market I than higher us. market at mentioned, but As the The a is mortgage opened, historical cost to our also levels.

This over our well-leased have capital in large if at market assets today's with to can We workplace bond XX% premier our secure portfolio raise mortgage we and a assets us inside of pricing financed selectively and allows be pricing. to appropriately want unencumbered. leveraged

activities. We're also And fund investment highly active are utilizing investors our to evaluate continue opportunities development institutional equity to private with help selective, they us. in acquisitions and although

represent attractive offerings We pipeline to these existing of developments have properties and well-leased unique investors. that an

of $X over investments. dramatically in Asset source And in billion recycled the The slowed interest and past sales into has capital definitely sales with properties are years, another X rates. efficiently have sold capital. the of asset we've the market increase newer

lower a for XXXX. is it us in So probability

that However, including liquid we we properties are in today's more that sell, assets our in have could portfolio multifamily market.

and So and to while capital turn the continues and pessimistic real be liquidity with plenty sources capital, can that multiple the of availability to debt strong we on equity of estate discussion of to. public we broadly flexibility have continue

Another dividend received from a dividend about investors our yield. high question given are trading is policy, we X% at historically we've

since We have of consistent maintained XXXX. a beginning the dividend

we're flow our the the business. assets into We've within on without our excess Our been dividend such and for need our special policy to growth FAD dividend, sale annually cash of provides of reliable the regular able gains in selling that reinvest coverage dividends. fitting successful

it slow, sales to developments do to the a policy. term, our over modify requirements. increase REIT our dividend our the steady for flexibility Long If income. the we capital as a time would in goal our outlook economy is to negative the and sales distribution become in activity create our and markets more have relative asset term, expected to dividend near room and In add slowdown maintain our

to FFO $X.XX Now quarter We earnings per reported to turn share. results. first I'd like our of

income. with our all higher-than-projected of the share. higher midpoint exceeded lower coming $X.XX and expenses rental the operating fee results Our is guidance coming from per variance portfolio from our our FFO Nearly and NOI of from $X.XX from $X.XX revenues guidance to by

commodity The to the mild expense reduced related lower energy Northeast. lower of savings the costs winter are utilization in result and both prices due the to

incurred lower also and We maintenance than expenses expected. repair

a As for XXXX funds we're operations increasing midpoint. share at from by $X.XX our the per result, guidance

is per share. Our range new $X.XX $X.XX to

beat Our we our $X.XX year increase into the operating FFO less be a lower recoveries full expense. QX form expect year of QX savings repair the as guidance of is the of and the expense than in of the will expense maintenance moved and deferral rest

our year that the increase our portfolio of expenses guidance So and $X.XX in full revenues. includes lower $X.XX of NOI $X.XX of improvement better-than-projected comprised and $X.XX of in is

our overall, our guidance same-property of property that increasing remain our the range. XXXX be last This we're we While with NOI offered portfolio that includes from at assumption NOI range quarter. flat midpoint we will comfortable the guidance growth same

a on X% to While X.X%. of we growth expect basis, cash NOI same-property

no and We fee we development for We've to construction basis is our increase flat fees. the management of increase for our remaining rates Currently, a have assumptions. rest made and are by of income increased assuming interest in XXXX. point guidance short-term additional combination full share. rates XX $X.XX The higher then the expense changes year per for an

better from we've $X.XX to per for of operation $X.XX our from funds increase So is to at contribution portfolio per $X.XX it share our range guidance The comes midpoint from $X.XX higher of and fee income. the to and $X.XX summarize, projected share. increased

in some a portfolio clients. on portfolio. are a diversification details similar. the credit And science life provided quality is of The reminder deep results if take very the to leased leases the of dive last X% Doug item and the our the like of cover on clients, would technology you our our to of I

large our about companies. and comprise from over is revenues clients of traded Tech XX% XX% publicly

with XX and of about rent public have companies smaller leases technology million annual each. average an private with We $X

law our clients firms, Our companies, a our Check The revenue real diverse of base. companies. and of of of XX% firms, other rest mix and media, portfolio service financial retail consists life estate, professional manufacturing comprise science services

geography. exposure. and construction and client, is base workplaces a by approximately given are Overall, talented And is weighted leases our lease workforce. portfolio focused This leads premier by lease by annual client attracting by X our our diversified focus high-quality a on to desires incredibly which average design, industry on term expiration years sector manageable attract retaining that and longer-term is portfolio that

that remarks. Operator, completes formal our

could you great. questions, be line open up the If for would that

question of Steve [Operator the Instructions] our show line And Evercore Sakwa ISI. I first from from comes

the that Doug, appreciate there all development was on the pipeline notice no, made projects leasing. got that I on leasing did outside you new comments I that of I really added. incremental the guess, X

could speak discussions you're of do that I you projected today? to pipeline you much on pipeline feel about, the talked the that how So is just still maybe that guess, you the how in yields development leasing the on for development? And about

Sure.

until the of as Platform pipeline Jose, San which it's deliver the a pretty beginning property, the unleased So XX of XXXX. And can lot of market there's is technology Steve, bulky, places. It's in won't today. surmise, you in right? not So primarily probably in in demand X

started you'll tenants, XXX our impacting on we large And of out time, carrying so floors. the meaningfully there sort -- the that. we're notice have I'll there. and are on X we projects, Park that's smaller-sized those an longer of you period other is let going So to second conversations conversations starting a are bulk in X And are no Hilary, you But to with Avenue want the than have overall South. and and when these increase that. of our costs we interest therefore, because is development in and expense assets for properties time frames higher some obviously, leasing a on pushed comment

will Steve. I that we -- success it assets will slightly returns be have, our lower. the on depend So leasing the development on

how So be. basis to I But to on you Avenue can't comment many going give Hilary? Hilary, you points a Park comment if on South. want they're

Capital from John in Kim comes question BMO from of line Markets. Next queue the the

JV is on grain You office market elaborate was banks. hearing put your discussed against inside could really more of you wondering into of mortgage just that capital your regional which we're the debt mortgage the with and and healthy the overall, market extending the today. who's some goes issues on being willing assets debt currently, to maturities pricing market bond I if how

banks, that banks regional conversation credit to obviously some banks would like I do that something So we not the super that there. call kind do with business think lenders They're of of out them. with necessarily multinational larger global the ours. have the and is is regional around We on and us properties I

I really there's offerings the been CMBS including, three large in the generally of there's are are and million. several then to companies, the think, have side, to pension maybe $XXX which XX%. marketplace, that been month marketplace. those there's loans that distributed XX% component conduit active million office part individual the last insurance most an And And and of the life between funds, somewhere market, is on there's the conduit $XX those where And

do do million, and a a and you slight step could get securitizations. different a conduit, a You larger couple into loan $XXX of say, million, $XXX

if financing tenants average get think income we've market. recognized finance weighted a to lease markets. have I that So will long building term, again, you with good the And quality by that talking good in a the good stream and to been

at below. for are were. below, right working properties on, currently still in that We now, they do to that it's what credit not that bond sheets but higher those deals are we're where credit of there's their significantly the loans spreads have term desire than a what on market spreads But below types

that a those we're anticipate going we're that of And on. are on couple these we're markets got we working dealing with. I So that financings said, execute to mortgage as we've that the

John, is perspective. just give another Doug. this I'll

for and right? assets or refer go for and we of XX-year a XX-year We're X we Google example, long-term of financeable we're to a years leases would modest So have what XX% not doing for fivce leverage. for would highly looking likely credit lease a Microsoft these lot with finance, lease I where amount as a And years, LTVs.

they be those in be believe the or be marketable insurance So banks, we of they community, highly the assets, lending domestic various they the types counterparties market. to companies, are CMBS foreign

in small-sized Washington, term then that's D.C., $XXX a a And sort capital. and lenders we're as in Mike number of have asset from had looking we secured suggested, additional on where a a for relatively of that. maturity million sheets asset, we So

being that evidence is seeing are secured additional receptive we our initial. portfolio to so And as

our line America. Bonnel of of from Bank the And next show Camille I question comes from

Following how the proposal to or in classified up pipeline you quarter pipeline? a even leasing year pipeline, this you the on on And compared how can deals last active comment please ago?

of So sort the minds, but yet other is square a that have if started in we conversation not are of XXX,XXX negotiation, pipeline. a lease exchanging AKA, an meeting haven't and letters and of If document, we part things lease characterize way active confirmed negotiating I of intent, we we it's a of the letter that's are have intent, feet. that

that active stage of stuff And going I slightly the some more the stuck into I we done than negotiation quarter. because had have the the we in or active reached proposals quarter, would say get second was in last thought largely first to quarter

of thought but signing had meaningfully we our I are X larger growing the get quarter-to-quarter, just pipeline sort a feet -- first of that signed with that chance we modestly pretty say, X quarter had X. would it's what XXX,XXX active in or consistent didn't is, been proposal And the last we There over yet. deals, meaning square

line comes Anthony from show the our next I from question And Paolone JPMorgan. of

Yes.

BXP where capital deal to you out terms just to that a for growth? would would in you appreciate put pull all all markets right the look an I color want prompt be. would cash how the IRR, Like like? capital trigger underwrite to of and you rents you're might you on now, flow would how for the So door and on trying pricing what But triangulate what

Owen. and what it? to not going in we we're building would buy the go a be, make it over thing office One is would couple that of say. So out I cheap It's time. first things cheap -- can less A hopes

focus merchant focus as to the on going going builder as life going workplaces We're portfolio, segment. also to We're on a development, opposed continue a our to owner. residential science focus we're on probably office in long-term and to more premier to

So I very is important. think perimeter

think cost the Look, up. lot post of our what's rate our stock a of One, and would But depend then on a asset. in it's X%. going look trading risk looking of -- new profile is be terms cap mind in capital. putting is that's through about the terms of what we overall a on two, to currently we're as certainly overall got guidance always three, number Number yes, out at And for. it gone to be

And I Sandler. comes the show next from our question Goldfarb line of Alexander Piper from

cycles, given along assessing open given and or capital opportunistic Or current you guys dividend bought have lines, on keen times. today, the So markets limit purchases. asset transit the capital those more let's Owen, assets, doesn't up. bought But around therefore really Fed, Central Grand to Mike's prior if existing the opportunistic in and buy those market prior the Avenue, stick and say, incremental preservation comments is focus Are about disposition Park XXX, the guys more some only you in pipeline XXX company's to buildings you confident other hubs?

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cannot a that York this a all that relied lending secured it's right got large like market. asset what's is appreciate to we're I York market. schedule. that -- will market guess market billion put very tenant, I not of I the commentary maturity now single about, long-term about on securitization your think get question say, $X let's talking I on is the we really realize vintage into the the were City, loans but and done But and vary, again, loans a going doesn't City, It's done the this of credit because securitization historically now if on building which for with CMBS New seems often. near-term have multi-tenant, New apply the

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about Doug. assets. a So this conversation I other don't people's get into to is want

we from in our soon that were perspective, CMBS maturing So Manhattan we done. anything obviously, do have have anytime And transactions portfolio. two don't large our

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Fargo. Blaine line comes question Wells the Heck And from I next of from our show

small advantage you smaller in you that suites any your talk the taking spaces that helpful. tenants? activity amongst to market of professional and into around else companies. activ how about from services anything your medium of accommodate commentary doing Doug, down tenant just breaking Are and the spec Can guys really small financial most groups or was you're vacant demand

our to there? was think availability right will that be you now to would the additive example, we about front in and very approach we existing have the Bob talk, of the where very some want Bob, activities we're do what in things of me Francisco San are I series answer we So going we was put changes is say, kinds of on I'll some are, a of for to market. the doing. deliberate about about let seeing, talk

Sure.

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smaller typically, of success the far. do them these with space. are when little TI tenant. with we designed these a need turnkey, can so have where some had to we've suites a And fact But we in put other bit And that of combined great larger they we suites we after might be find when

And we've program Pete, maybe can had you on comment that's probably and been. in or you last -- years the how successful the Virginia seven for can Reston, Ray

Sure.

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we've are successful of prior tenant of But type RTC urban the program point, suites great Center. number been being on addition suite that and a And on balance all this we all high of number to that that's full core spec the the with did them. in leased discussed. Next it's activity or have at this been spec very then spec exactly of in and the the And suites of them to there in done floor We at a out Town there, success, the delivered it's of at out leased -- delivery. many have capitalizing

some building quality Penn, to we're be suites have a there. likely but sought in XXXX market, front for quality bit competitive at there left And them of to of done have we where think that's success will instance, spec good buildings, we'll due right very, after little obviously, years. the leasing the very in we for and build the a space the suites after think some many D.C. spec on more we of the that the

Goldman comes Caitlin question from next Sachs. our from the line And of Burrows

quarter, feet of year. quarter one on about leasing. expectation now you about talked another rest the million feet square did for the of In the just $XXX per leasing have and XXX,XXX Maybe square an

increase to an are at Or and wondering, activity what in if it in just general was that kind is points of activity a that? and so, point? more leasing is I expectation So specifically where this of XQ you And seeing beyond?

it's feet of I got square feet April think into I've negotiation in square of SAC, based I leases, proposals about of So -- through themselves manifest under right? XXX,XXX million got being it's I X.XX sort talking that our general significant and believe we're of expectation of signed leases active will went upon a I've number XXXX. and pipeline,

eight got another of I've me. So months ahead

will it, that it's to confident leasing million exceed we to X but not feel we're foot able I upon going I our achieve hope be a projections. So very based square market

feet projections and X same-store numbers. that's into square Mike's and built million our numbers Our are it occupancy where was

Michael from Citi. Our next Griffin from question of the line comes

curious Maybe that get San the campus announcing Peninsula shift in submarket Francisco, mega to thoughts the be we your on off just better Google San to back pause probably down about think benefit with XX project? stabilized you you know Could have I Jose. relationship XXXX. expected be Platform for Google. that this I to till a not it's a potential being see

can would So there any comments you helpful. make be

Sure. Bob, do you one? to that want take

Sure.

the the that other came news. on have campus. they're first adjacent today their they the the whether stopping false off, ground do by have But project not We still the will out in or they me, with CNBC to -- the planning excuse with the year. is we that building day out remains First this that to on would mayor Google, reported proceeding be Google seen. It's project or relationship a report be that project been yesterday Friday interest were of and

to time actually in years So put starting tell. will because got they've They're several the person. place away from infrastructure building all a

show line the I of from question Mizuho. our Malhotra from comes And next Vikram

ones. quick two Just

the there you their four So back. can three with rework just those risks have sort you being leases I are potentially remind being and just of terms any us, -- one, in think of performance given or

And can CapEx the, next know X outlay the sort environment, years what may of I over time, been just the of in on you this the you've And over to buildings of keep buildings you CapEx to wondering investing sort I'm sort it, competitive? then broadly, keep separately, the embarked like call had us of fresh. just -- remind look kind

second Let me answer your question first.

and to I your I that would CapEx. its modest business So overall, on CapEx between of question base building $X.XX of what what that year spends is as typically BXP somewhere ordinary on foot second refreshes refer sort portfolio. would on a course And square defined our is as $X per and say

new a to or General It of at and building amenity and got center redo doesn't center a X our market lobbies. totally do a we're Motors going going or we're going include a the we're to if new center to or amend build

doesn't that. be it types include So those expenses, outside of would which of

be quarter. they units next to WeWork regard client of in WeWork take and number is that portfolio reducing the With the the space of have. the WeWork WeWork, some ours, not We've to negotiated amount terms of get in they likely is WeWork our clearly same from that is in to from relative BXP of reductions we position when

show I Ronald next Stanley. And of Kamdem question our the from line from comes Morgan

one quick and one a Just follow-up.

Just on leasing the asking the a question in different way.

quarter, be the occupancy I the before potentially half. for expectation down in So first was first to thought

And was like the you Maybe on the comment that. also market, Coast. than So specifically West leasing expected. occupancy on probably it there portfolio by Coast for your in versus the love sort could of comments just to more I'd East hear sounds

wondering lot subleasing I'm been -- how Salesforce other And And sort -- Salesforce space. the that. a yes, thinking news just subleasing could And guys market for are about a there's follow-up was potentially space? you follow-up in of on the any tenants quick about be of Tower? if

Okay.

X questions and try answer about fast. and that's I'll So them really

for and less. square X our XXXX, lease feet million in so feet million in So a square X.X space lot we of expectations XXXX, were

expectations for The our the was with consistent were what first quarter, year. think, pretty I

So there think are on I a of basis. any relative changes don't that sort

pretty we bit expected to with saying occupancy in go think consistent little basically a been XXXX. where occupancy, is Regarding been down we've we've

we we that's service end be pick space million reduction as occupancy towards in I so of when we XXXX. back up occupancy early will relatively in in quarter or But to And we that quarter modestly There described to flat exactly in of end year, will describe the XXXX, some that the more didn't meter back of X.X again. higher 'XX think net-net, some going then our the be because it end is we the to the enter the have think likely expect will occur. the expirations. I second square get

sublet With They that Salesforce consider do not space we has have of doing part We're a have like on stub to the "Hey, space market. long-term tenant lease? us the conversations. their regard not or Tower, would consider to back. said, a would a to you Salesforce.com taking And you and come would

neighborhood. you "subleasing sort can So sublet. with But done pulled I'm space Tower of XXX that were they moved their have the other the XX get Fremont of go is that and specifically the on single they've on up going be the tell at obviously, of what at of they because is majority they're likely their of when they their to out Salesforce space" buildings location they their Sublomarket. aware with Mission, to not that out I in going And

thing So that's left is the Salesforcetower.com.

on would comment I we this. just add, have Bob -- should

of market have the We in And attractiveness easiest space the is the it's actually for frequently reasons Salesforce market given they floors relatively inquiries on Salesforce and is the asset. the tower it's because full. the Tower, sublease of putting completely have one the

is every inquiries Yes. probably building. leased. XXX% month get space people multiple building I the about we It's sought the building San in and after add, in Francisco most looking space for just for would the

Bazinsky comes Dylan question Street. I from line our the from Green And next of show

are environment. transaction the the you line, that cap Owen, But dispositions that at buybacks view would about mentioned curious implied buybacks current how office thinking buybacks the to are you potential guys illiquid. today. Just get And markets guys you X% capital? obviously, that to the now in I rate if or finish potential of stock able trades were fairly guys the realize use you

stock a our Well, the and I our and remarks so why very getting of represents we've time. at upcoming it much is uniquely in to how point maturities that's that think that. time debt investment, we reason inquiries and access the Most recently, dealing in are been things our and Mike particularly we on interesting capital with this spent like

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to don't buildings lot Again, office one conversion. compete of Just assets. a on with resi these your a quick

curious BXP that to product you movement? just really that because how competitive term? it think something longer So think you're for Do about doesn't Or guys you not about? just matter excited it's it you helps Is guys?

No, say I it would this way.

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buildings empty, of all, not them has First like are that. be lot that of building fully many and or office a something there's to XX% are empty, empty

the that's very characteristics one. is light very and in property, to access Number particularly depths are Bay number important for residential. air physical So the two, important,

large very floor plate buildings So work as well. they'll

not over But these a buildings at where most themselves appraised are or then forces a conversion I And today out think economic. valued economics; level time. office lastly, work is will

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instances add is is we probably this therefore, repositioned the land would use is, a conversion, that Yes. may intrinsic really an of value what think just certain where residential. cities World higher and happen buildings And the I it as value illustrative in and has certain as the better Doug. is have example in Gate of no sort where a and

as probably the residential so buildings be taken will And down are there though office and buildings. currently then readapted they're be that sites commercial sites will even

Why don't circle Hilary back we XXX on to Hilary? Park?

guys we signature South year, at proved and you pipeline we told Last XX,XXX Can to from everyone wanted to to color hear that's Helen. Hilary leading either quarter, into just largely seeing in of to this that for Okay. square demand that or now? I foot in be out would Spann. negotiation. regards be the XX,XXX It's Midtown correct. itself Doug described add thought tenants more I leasing Thanks, in activity with bit a to has addition me little XXX already what the to that

this at and for more that on XXX,XXX range is foot really building. XX,XXX tenants a South currently X Park spot one of just sort XXX,XXX market recently, South. check square feet for tenant XXX Avenue that are the have But we toured tenant is think XX,XXX feet foot from We with leasing discussions and Midtown in in square five interesting, I what to the is square square

square also at we just to potentially yesterday Tenet And lumped that feet. square has XXX,XXX XX,XXX growth at start and feet toward to

tenants some where So demand it document transactions. that these take the shifting time go larger the seems is going toward they're tenancy Obviously, decide little in bit play to as will that a submarket. profile and to again out

we're overall, trading market positive paper that market, think if all about in that right tours and I tenants for it's the signal feet XXX,XXX I But that square now. with represents of And a market. at the in of are combined what the that looked the are

detail share So to additional with wanted just that you. in

to back showing to questions Owen I the would like further over time, At CEO, queue. remarks. Thomas, call in the turn I'm no this closing for

everyone the Just in attention concludes for and call. interest time, want to That thank your BXP.

call. for attending. you Thank you. Thank conference today's all This concludes

this all may time disconnect You at