Boston Properties (BXP) 1 May 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to BXP First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Helen Han, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to BXP's First Quarter 2024 Earnings Conference Call. The press release and supplemental package were distributed last night and furnished on Form 8-K. BXP directly all accordance comparable G. package, to financial with supplemental most the GAAP the has non-GAAP reconciled measures Reg In measure in

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

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

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

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

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

to quarter for market office sentiment the the BXP's Thank performance you, everyone. negative good Helen, in defy the sector. commercial first and continued morning,

the fourth to relevant quarter just elevated leasing a XXX,XXX with XXX,XXX than quarter per our 'XX FFO is forecast activity feet. of of is the quarter completed feet than for associated consensus when and And given in the square comparison XX% this with square of first greater the more quarter. We first we leased which line market leasing, under was Our share year-end. 'XX, at

Our in lease quarter was weighted signed a years this average also weighted XXXX we in signed notable of XX.X the at leases comparison X.X leases years. average on lease at term past term

Our BXP previously with occupancy for AstraZeneca. This closed remains at We in that the our of joint is Binney the terms. by fully attractive venture lab level property stable. Street, transaction Norges million raising equity announced funding company mitigates Cambridge for to development leased $XXX XXX development on

The and our impacting conditions. important tailwind long-term a of BXP's growth. interest more clients' our factors cost sector, investment cost and be spark new rates the Lower reduce opportunities development or in would market and macro of most X to our earnings improve external capital, moving activity performance growth. rates Now for corporate transaction earnings interest

years, in currently has been exact be space which the to the and There growth about time, created of we over in are hire will jobs is and economy believe crisis curtailed about the around unless year. come and XXXX, trajectory XX% should office-using X%. in earnings But earnings remains the process, S&P rate growing San and long-term S&P down Over next Companies not written such XX% leasing for are on critically are activity. Many X over their per AI a unemployment net but XXX space XX% to rates, are increase to the we overcommitted grow time, Though categories Francisco. U.S. important pandemic average that during of sector space XXXX, XXX technology as in demand. versus growing. constructive earnings low, X%. was exceptions annum sector And the which in only the XX%. grow the it was per demand requirements new office only Much speculate post financial BXP's demand forecasted which digestion do can their are driving employees a of over generally timing. interest clients, global projected space from has to the a X%

quarters term, XX.X% XX many strong broader XX X% Workplaces the XX% over the Workplaces Over tech is feet experience Premier companies return last CBD Premier continue feet market. Likewise, the for broader a our the and vacancy market. will of earnings absorption long markets buildings office X been Workplace defined million in Direct to market. is space. square materially has representing space a as we negative requiring more versus million for square net for to broader total the versus expect best X growth the Premier XX.X% outperform positive of for

rents assets quarter. portfolio, CBD that XX% are workplaces. BXP's in premier occupied Asking and first gap the higher than CBDs predominantly broader located the leased widening our of XX% a This XX% are These the where outperformance Workplaces are market, for quarters. of assets prior NOI as comes from from in is evident XX% Premier end of

workplaces BXP and for balance leverage was rise highest to estate down of the and and commercial disinvest stability spoke down about to and strong real development as advantages markets, markets, long-term asset several the estate U.S. more from new prior space, for X% sales BXP. Last sales development. the for $X.X first financial is volume leasing secured are than premier quarter advantages Today, commitment Transaction class intentional commitment their for equity and the overriding quality the clients per premier was X year capital all unsecured the transaction owners, ago. advantages volume and office I The priorities total key focused competitive and private Office office as a a the FFO building equity sector, very time. continue build base XX% debt billion, Regarding the the real low decades advisers workplaces over to building our clients up over of in in share as private capital with goal to limited. BXP's to our are as of our percentage quarter XXXX, activity from dispositions. was quarter, over on in their a XX%. and and many of in X assembled are one strong sheet acquisitions competitive portfolios BXP investments ever access and well of competitors in to quality preserve

early of and growing bid-ask Lenders marked start plan. To the later in challenges, On current significant prices. selling pursuit to opportunities from Now been volume levels. a Doug investment transactions the clearing material We're their cases new there remain will down to this venture higher activity of see offense struggling for quality high-quality office as in joint investment Notwithstanding assets, assets. Institutional highest for markets date, our workplaces, longer assets. know, lenders, with has interest and agreed leasing. few in markdowns to year and in pivoted for modestly to attractive less in through and there leveraged generally transaction X lenders at rates. buying office assets last late that invest with premier most these year are are pipeline assets recapitalization who market been in to in portfolios provide and more given limited financings, activity X you quarters quarter in activity, off institutional of given counterparties. core in market in With a details spread require on remains interest we not our in-service the electing their owners first primarily the a will types and are borrowers assets good to this XXXX. active expectations interested the maturing are And coming We fewer of types premier that in highly institutional there asset opportunities leverage. owners our diversify asset involving are cases, have, and seeking increase continued workplaces year

will and Dick's the grand celebrated standard We for amenity this investors offerings entitlements city in from Kendall development, quality XXX a in and in Square square the Broadway as of weekend, Comprising feet contesting and at in the us building institutional commercial Sports a Kendall for Boylston commercial XXX units, and with new tallest X opportunities. foot for million Cambridge Prudential residential neighborhood. Earlier store we service state-of-the-art into Center we setting the of XXX of XX Marathon XXX,XXX design XXX residential opening part we a building. build Cambridge Center. select with On Street month, also Boston the received delivered from on our Street House be interest tower to on to-be-determined the of square Broadway future Binney stories commenced have

capital equity and year. designed push forward in that with of are control half raise several to second we residential joint continue projects intend which venture to for entitled We the the under being

space in approached we For all anchoring who interested our core occupying clients office been markets development, new development are and have projects. multiple by in

labor described. material capital of exacerbated by escalated must to market earnings a pay a anchor development premium Given and rent challenging project, clients dynamic issue new launch is the today the justify to a which growth costs, previously

new very for for markets, there will office activity new Though be development favorable limited also existing office office BXP's has new core also a slowed, which the will our future development in be foreseeable that portfolio. -- our very limited is

justify the to economic ultimately premier development. decline for bridge workplaces, rents rise, vacancies continue should As which to will gap new

the is current raising believe present environment, we a Though opportunity market asset we capital in themselves. are if than through in selling sales buying attractive opportunities interested better

of development defined projected aggregate aggregate quarter. in and handful the exploring. BXP and retail a first a generate attractive significant to continues as office under of delivery. are pipeline feet investment to projects funded underway billion upon square small we million with million dispositions with be X.X and remaining XX as projects the $X.X execute have of BXP currently yields are the lab billion We end residential of approximately $XX These to $X.X

in summarize, market assets dislocation. growth. in to clients display and backdrop level. earnings dividend stronger prospect resilience market during and negative renewed sentiment, to share to is market to continue the corporate interest and continues lower positioned this stability and FFO BXP gain well rates of of for BXP provides both also strong a time and The occupancy So face of

the me call to Doug. Let turn over

markets going and me is you're on a in picture. leasing going Thanks, hope I what's our today with going going you're from and our hear what's our on be what to revenue Owen. perspective constructive on pretty picture Good to morning, with everybody.

we here jobs, spite office-using of space. As of broad the quarter, absence of first pickup the lease at end a in BXP to continues in sit the

pretty white in earnings We employment collar And pockets are not formation, clients going improving, are high and and going seeing space any across submarkets shrinking appears while to we be rates. Overall select there for improving growth clients see to economics. to in broad it's additions. economy until are job in of leasing we're pickup constrained space. where and our the availability interest we There's to space is despite momentum optimistic reports and persistent potential supply there for market, of are competition lead a

our $X.XX leases executed X%. per was averaged As and mark-to-market leases this quarter the last the relative the that to reported up the year, been the cash which quarters. than in mark-to-market of of in-place up previous starting was it's about the The cash in commenced X% this lower few costs overall on quarter rent transaction supplemental, is rents

large had CBD San stopped rents The up up default space, on have in up for Francisco X% the down replacement XX% with second-generation increased X%. in to part Boston transaction, is the leases a about in of the quarter West Coast Adjusting been down about was due starting would XX%. paying. and Boston, this in that and on up X.X% Boston's tenant X% signed on numbers D.C. a cash in Manhattan, we we're

of As 'XX. the quarter trend 'XX in quarter first we BXP's seasonal first to Owen what up in picked experienced relative activity the stated, the line of leasing of

XX completed XX XX,XXX totaling square renewals We transactions, XXX,XXX XX,XXX X had totaling feet. we feet. leases square square X new feet encompassing for square and quarter, This and expansions contractions XX XXX,XXX feet

for expansions for quarter XXX,XXX the XX quarter, we existing expansions XX in were lease X 'XX, of Last there XX with there with renewals There 'XX, Fourth new our As XX a and were among and were XX XXX,XXX. of and XX contractions. and renewals first X comparison, clients leases new clients. X clients, and leases were of signed point quarter leases, contractions

than was color the new the the with with This XXX,XXX square from New Boston, there leases XX,XXX up greater across X,XXX activity, D.C. XXX,XXX that Coast firm almost took feet in York foot region, new was XXX,XXX transaction XX,XXX our contraction square XXX,XXX this law you X Activity of square feet volume. square XXX,XXX square additional although that an square quarter, the law long-term square of the square feet this a XX% entire feet only in D.C. West some XX% portfolio quarter, encompass in on lead extension and same in And due all Reston the made to feet. included feet firm give activity feet to New clients. attack portfolio. Princeton York additional

New include of firm in floor portfolio a manager in the few Francisco leases some Waltham. with relocating in a manager teams in firm in San of a been is similar in an D.C. a building and last a a level brand an transactions law with South, being a in-process an captured in consumer a while these Park documented we as a transactions of XX% extension to for a transaction Boston clients by XXX,XXX consistent York, market. the the downsizing Coast Midtown, define under law New the renewal the have up renewals legal along we've by of leasing taking floor and asset and which in of a full active negotiation, This Equally is quarters. These transaction we company XXX expansion change is over made of XX% and multi-floor no Avenue March company and that made Midtown our important asset York, premises have our Post in pipeline. XX, Waltham, volume technology in multifloor of expansion square leases Virginia feet Reston, West full of New with completed. our

to an in-service XXX,XXX commence that vacancy, seen leases At to square includes end signed deals. feet approximately the have the of feet, uptick on square XXXX. in totaling number the anticipated in we quarter, had active We which had XXX,XXX is of yet the commence that

in another have our XXX,XXX signed of shown of are for in but feet exposure rollover with states. occupied square the leases commence These they We have also reflected to new leases clients currently yet supplemental. our reduction

they of premier But asset our Back under to equity These user demand fund the soul from the CBD occupy Bay activity growing in all instances, Francisco strongest some San heart venture and driver clients managers, are their an The these including and New legal teams of continues demand. and important management. are our capital York their In financial cases, managers advisers. want specialized and organizations our and workplaces. come and to hedge are funds, private

technology Coast We related see client continue West significantly to our Coast the to more the demand concentration demand in East portfolio versus media content due of the on disproportionate and Coast. West

there have of much encouraging trends portfolio. some subtle the across been However, and

continue our Our to and availability. Back have York City outsized to Centric Boston Avenue portfolio New demand relative Park Bay

pickup the space concessions client our we of Urban our Waltham there due clients While XX we've still Edge of been at increase that cannot are able and accommodate in a strong available days, elevated lack to is last we rents actually buildings. In taking portfolio. in the levels, have certain to activity

client foot with XXXX an feet. downsize square expiring XX,XXX planted to We in square a XX,XXX tech have

for This other are new and within us quarter, we for XX,XXX a completed square expiration, X of clients, in XX,XXX and the client another that ones lease building. relocate the negotiations existing feet will square stay but with feet with

a a our of Second XXX,XXX a than XX/XX/XXXX. pipeline proportion company different a square when extend negotiating transactions in of different on subtenant square with these feet building, building. a we're square were foot XX,XXX lease XX,XXX We're our nontech user with a Urban lease and 'XX. an we're lease their in to existing Additionally, expires lease in availability on a Avenue None lab foot XX,XXX Edge with square foot prime negotiating negotiating in more

occurred to York ], All New XXX got [ of structures provide spectrum, for of we shopping available XXX X and to and portfolio. Virginia, a XX the very the client in they extension capital is companies small [ days. In Center anticipated home Comscore, and enhancements buildings businesses house Town XXX see concentration week headquarters wind the the York transactions, are in number District last interest to and with the with and interest. environment more continue and the food, of and when of of to the Mandiant Columbia the ], York this Peraton, services the accelerated days like our at Avenue end a beverage the the large unwilling leveraged market our technology VW, Batel dramatically. for Metron, have legal lease New the Reston new College capital financial location the Northern other -- we planning, of space natural therefore, Board Leidos, the Microsoft. Because New SAIC, little to in At that at of also Washington industries. of largest and a It's also continues regional Kaki the it's for over

XX,XXX additional an This a pickup relative for be at and and the Francisco there which organizations focus, 'XX toll relate that's a in building, on firm, supply. [ San market story. to Next as a of however, abundance north foot we positive continue to to moving while continues to view-spaced space, ] They city expansion expensive completed city, demand for continue of a in and build look Reston well And client space are space. the law road absorption will available their outsized activity there square to technology is an in the lease for available quarter, continue large the we of premises. The upgrade from as tenant with new AI to looking users small seeing

conducted Embarcadero renewal only square well law We're has at their is a negotiating firm with a this XX,XXX an exclusively adviser a firm last to activity. tours the spaced have lease light. north activity Center with transactions on a floor new as client We company was a a a there foot continues material however, in foot parcel prebuilt up are XX,XXX totaling and and for X law of clients with X a lease existing discussions XX,XXX negotiations for in the square-foot in technology a view square where that with financial a with tenant picked in market. feet new market that the number L.A, full interested completed We Seattle the XX,XXX floor. West square level suite be of with a boutique CBD we market, point. been pickup a of Today, expiration-driven that's The has and retaining almost completed quarters. as quarter lease remains

Century in While head firms in rents those not strong prepared as seeing market, space and downtown demand City growth consolidation profitability, and Santa pressure to west West buildings gaming financial be in streaming services is take job continues from great professional There demand are clients the that in and yet reduction low-rise space Monica. media from industry area. L.A. impacting the overall the is and to

from forecast I as known our feet during As client in quarter the during square XX.X% commence quarter, also we where, our last occupancies to signed this will with deals mentioned, XX.X% Princeton, of XXX,XXX new slightly year. this expiration feet that XX,XXX square a we call, of declined have

X business. fourth how occur outlook recover a issue thought we of inflation, the will is quarter, into XXX,XXX square the brief make going additional drop feet X own is some and XX%. is spend quarter. Mike I portfolio The of quarter will San where and the expense lease at XXX,XXX the move on have impacting level second XXX our inflation we square second Times I'd that interest in expirations large We feet day and 'XX comments at his to in time remarks. Square, Occupancy Folsom across few during discussing the the changes in in Francisco to our as

as not -- new interest No changes but costs was normalized. starts We projects in any very X%. The project energy and associated in we challenging. expense are stick-frame financing, our to are earlier, make now escalation X% the seeing we construction of the residential elevated building costs more continue to describing as with with the bid deflation base building build codes, level assumptions potential to along any pressure Owen

of who seeing business. come we which focus is interiors and However, on tenant on a subcontractors work costs are maintain reduced that improvement the are demand down jobs, reflection looking a contractors group consistent of to of book on

the the office longer tower rates new at to interest longer-term costs rate be the necessary it's leasing long-term we approach high-rise levels, rationalize levels and and development. New construction economics to are environment the new unlikely the corresponding interest market see elevated in before building, remain going deflate to rents

We winning. in, where space share. That's we primarily an by with environment and operating is available living driven experiencing world leasing gaining that we're market are are the

successful by clients premier sound doing to condition, in As teams, property that. financial will choose just operated in properties BXP the management best be continue

and I'll turn Mike. over stop to it there

Doug. you, quarter it. everybody. full We've guidance. and to our also performance our first markets plan debt quarter. of appreciate XXXX been to Thank Great. morning, morning, Good the This cover I year this updates active I in details the the also

with start the going debt a to of structure. summary changes in our of I'm some So

we early cash, with million $XXX line of available was notes February, paid our plan. in that unsecured with In off

bank bond currently program. markets actively additional utilize. We unsecured a $XXX unsecured tap and also that entered beyond an the paper This us we mortgage market for program market offers commercial into to million

including We raised is points. from rate terms SOFR overnight approximately to weighted million fees started full of X we've a and the X.XX%. average week, The program issuing under all-in at for $XXX XX rate, the ranging month basis last plus

by used in which to $X.X $XXX pay million basis billion our will term or about per share to proceeds points We've million, reduce cost the XX borrowing loan our from XXXX. down $X.XX $XXX on

million to billion. $XXX increased line credit we $X corporate addition, of In our by

Our global be real evaluate and their commercial they as BXP of relationships. estate exposure supporters strong even certain banks continue to exit

is to demonstrating our office the quarter and and real stagnant the Despite first our portfolio earnings operating estate like conditions stability. Now I'd strength difficult results. turn using statistics, job to growth

X has quarters. the past Owen been and described, Doug occupancy relatively steady for portfolio As

portfolio by line rates is revenue to share $XX X.X% High top up quarter. last quarter challenge. our from or higher, revenues biggest NOI this again total of or X.X%, our also earnings continue $X million are Our up with and million grow interest

share income statement. This Portfolio interest recent deferred than was $X.XX share. value increase funds expenses interest to our to noncash It's debt NOI majority on reported later expense higher from $X This $X.XX point operating noncash out Binney due net higher-than-projected we of exceeded that interest expense will acquisitions. We primarily offset quarter, closing about expense, half higher related our also in below-market our of increased expectations The from the lower-than-anticipated that of to by important expense million. acquisitions, interest fair by expect timing more this to per and changes to operation the quarter of first $X.XX booked our for fair is XXX in ago, to from net this interest we value for of our due to first Street the lower-than-projected the joint our the year equal share per and demonstrating line income of was be that quarter with venture. from was stability per related in it FFO X again, was quarter guidance XXXX. our

full acquisitions. York initial So New Avenue Santa the we Business moving interest providing in-place for the our the debt swaps to and assumptions rate year. valuing Park utilized finalized guidance, our in XXXX Since Monica and XXX

be rate interest will that for in increased value change debt we by the basis hedge Business Avenue, market we on in at assumption XXXX. New points determined loan For the Santa rate of amortized the Monica through XX remaining XXX for that York Park, expires for the the term to X.X%. interest expense our interest the And our

share last quarter. guidance we the relative interest XXXX our for guidance we guidance These noncash full in our have the This value XXXX. reduced is noncash adjustments we result in additional year used our when estimate fair reason per an FFO to of impacts expense primary provided adjustment and $X.XX

actually is of cuts Other to which also our guidance. The we expectations we assumptions to impact rate NOI same-store quarter our lower the for We've short-term The higher now Last debt for interest remain portfolio conservative cuts forecast. second the assumptions paper expect in the relatively offset unchanged by X operating been changing dilution but late $X.XX rate on market pushed from rate cuts in compared interest program, expectations any time. expense overall, the have our out cost forecasted from floating commercial at prior quarter, prior partially by in XXXX. rate our was occupancy commencing rates XXXX. the to and of impacted

As we of the slightly quarter, to half expect in did Doug decline before back the decline described, and do to expect quarter occupancy quarter occupancy second this we the slightly in improving this year.

of by per same-property X% for Other for in reduction assumption negative Our our our our assumption NOI income to growth modest guidance a X% share XXXX is expense unchanged. reducing include to modifications fee G&A and $X.XX projection.

progress like of The item for offset This $X.XX midpoint expense to primary guidance. The prior value higher join we mention that guidance sustainability at of can our from noncash achieving reasons summary, wealth higher $X.XX is interest $X.XX the by towards reductions it published rates, website. the for XXXX. We from our and So our impact and are higher in year of goals to XXXX and critical and efforts our by our emissions be our to report information The of webcast sustainability on invite use on intensity, and impact carbon on X gas X May Scope of reduction per for the expense. would XXXX you we lower XX. I interest carbon $X.XX share. $X.XX fair us a are of to operations greenhouse reducing reducing represents our and achieving net a G&A expense emissions energy sustainability our contains full report, for last per and found $X.XX narrowing X interest FFO and share short-term

the remarks. out not formal our questions? Investor up open If please can team. you completes line Helen received for an and invitation, Relations our Operator, have to That reach you

[Operator Instructions] And question Yulico the first I from comes Nick show our line of Scotiabank. from

Yes, could that I about acquisition opportunities out picture for the You Owen. How question opportunities. there? you're thinking bigger different there be a maybe guess mentioned all just some

is which Broadway, substantial a XXX launch just commitment. did You capital

happy You sure have maybe not price, stock you're I'm a about.

about like you focus to so -- just the investment be along helpful. or to lines I'm Anything trying how think looking issue you company? that how to those via now understand are back fund right stock? we should you expect would for And the equity? Would buy And

Yes.

Nick, say. things I of couple So would a

those building me that It's entitlements achieve let new entitlements. And XXX requirement First, to tied as square commercial X with that but those in additional -- building residential you about and X have Binney available also think we still XXX receiving Cambridge. was requirements development, into But of of of part again, start we're or the us have a that commenced a feet that FAR the commercial Cambridge last the million development. buildings. fantastic commence launched was to to year. XXX of entitlements X it It's development building for allowed It Broadway. Street in we

tremendous In new of opportunities, investment in in amount I terms as remarks, dislocation of a my there's described office sector. on going the

institutional you going to decrease that a overleveraged want of create opportunities their is You've lots got assets office. and And to owners have us. to also exposure of number this for

and portfolio where office periods down cycles BXP Street estate, real back look Clarendon in acquisitions significantly were those its at with building of like real in and enhanced XXX GM we prior time estate When others.

happen and we we to to We want cycle, participate. in it. want So going to participate that's this think in again

time accreting we I have earnings own will how on to, our and transaction in are its attention we our of close do that, we fund it. think also paying watching And very stay to each leverage. terms over as And obviously,

from comes Evercore I from our line Steve of next And show the Sakwa question ISI.

maybe to is existing development for wanted sense maybe we're Doug, for on year. How follow this is and of the much get I close getting realize of I positive a your how just this I leasing And for the to up portfolio? on of much commentary guess middle pipeline? sort of just the the

any beneficiary 'XX. signed of going really be So being the to are probably than leases they a of 'XX more at are

development on think the building up you do importantly, about the and existing how just But within as vacancy the filling the portfolio pipeline? occupancy up

Steve. Thanks, Yes.

numbers. pipeline different give to X in So of pipeline, of we the activity that I'm have and our you going sort

XXX,XXX the have development it, existing square all of other square feet feet of existing XXX,XXX feet available that the of feet deals the and space. XX,XXX stuff square on, -- on portfolio and it that the going is XXX,XXX are majority So of square rest we is about

is of world, deals the that list now what -- of tracking of and of as sort list signed stuff quarter, my it leases have in have the sort active about a And are across And feet process. might are have looking square So market I is this we then are -- we the has think million my then opportunity I on the we that right we is tracking back have are another X.X is of potentially regions. a I our there pipeline our tenant all moving on occur. Again, And these and to our in-service teams us. and is almost it's legitimate for forth. deal not that, at paper that These a call portfolio. exclusively in

going that's And of of there's consists South pipeline and our conversation on and Waltham, development joint nothing can in today, building which Avenue XXX Park we we in San life buildings well. the there Hilary that part there going really on have about there's if on again, really the of my comment you activity then no Francisco. pipeline as science it have active venture then our So in that think South and

portfolio. albeit if want core majority And the in maintaining Hilary, we on vast the activity have self. so that is Avenue occupancy first, about you Park the the XXX -- And to slowly BXP existing and then comment increasing of increasing, in-service

clients activity terms of common think come Midtown Avenue we I Park will put year. are to amenities the can areas Sure. say starting Thanks, leasing see in this first high in quality online South, the saw South I as actually a part activity see slowdown more finishes in we that the and the XXX of has in we've and Steve, the very that and lobbies the place. of the and Doug.

across the activity our there. It are the interested to self locating that pickup remains are we so at case And a industry XXX businesses in Avenue Park starting see sectors. span in that

financial has asset come that media South general into as seeing corporate Doug tech occupying while to building. an show from in building tenancies, so management been And and home Midtown firm everything in mentioned, services that historically interest we're and to and

activity leasing volume fact that of we in the be the a while feel it. seen since will meaningfully executed building picking it it out the encouraged leases anecdotally, but we think, that terms the opened settle and is the bit, I where up remains by coming in completed to quarters, in interest of stepped has up

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

you some space. is, question And having just same earlier and shedding time, guess overexpanded tech from AI I companies the demand at my mentioned the space. some

you how of before the there how go demand maybe is to that more rightsized? perhaps, nets could Just put some wondering out. Exactly big more rest tech how the is is dimensions much if around and AI

Yes.

going you I view. I'll simplistic refer you to a would of what more I'm view comprehensive let Diehl it, to as give So a and give Rod

demand, on where much So of when the isn't East incremental in companies are really of a they're less there view net-net, the taking lease, the is Coast, simplistic AI way space. it renewing most technology

Coast, the and Francisco, go place were then it's more On Francisco incremental coming down San the plus more. overall And San you would bit traditional the skewing sort a into from But that West I say all taking predominantly It's there technology. the marketplace of of in of in technology what can is CBD little Rod, companies. AI. absorption greater on

Doug. Yes. Thanks,

in I was There San pretty completed. XX% the substantial. was the large So Francisco. of that that yes, leases big were for about up a very last for year, AI believe course, year, X year which leasing overall was activity of made

of for the been larger AI did deal activity in also still there's There's the again front. is one last market 'XX, tenants the on space. more those into year coming So that

closely where we're watching So that goes. see that to

it's So spectrum the companies that different it's bright of And definitely themselves these across I a AI, technology. but spot. as think often find broad to

AI of into are industry. the you the fact, see in in tied are Valley, that many some companies, which them automotive there Silicon down As

in own as well. portfolio, of our a of market some and couple have them We those are in the

definitely the additional So demand Area. for of Bay optimism consistent a point and

question the And I show from Kim our of Markets. Capital BMO from John line next comes

compelling point BXP. But where premier percentage between workspace your same which You've occupancy been that making a benefits the a it's case CBD between portfolio office really commodity bifurcation bifurcation exists between gap. portfolio, suburban, the in CBD in and XX and -- very

difference, So just does given performance I'm make you wondering, that the that reconsider your to commitment suburbs?

[indiscernible] start. is and let -- This is as me this well. Doug, let comment make a So I'll

currently of vacancy. We self-inflicted. the and the availability in of matter occupancy is of are that the is we part was geographic majority that The committed suburban, our locations to truth have it

suburban of So to part we use were of some Lexington during Waltham our highest was looking the it XXXX best assets. assets for XXXX at in our when suburban and

science long value be We life those office "traditional than of facilities term the deem is as that facilities. better the would over assets

And so we effectively cleared out some buildings.

Winter which is Street and and of purposes. Place Reservoir amount cleared is the our availability buildings an So XXXX out colony the we're other example are effectively where those big predominant for

not unfortunately, And to the market been us. has helpful

to and lease life in so off off that model building building companies least we for to in better makes that of space doing the a that the economic some to tenant case pay quite we right decision, at frankly, building. a But we're holding when the opportunity we've one managing that think we're availability. that the wants have aka sense, And we've office it appropriate had science that and rent made

it premier is a explain we XXXX, level pharmaceutical portfolio are have other on comment on of our we you we York more are that Princeton not lab. with Hilary, industries, New but anywhere in Bryan science an the probably I basis. and greater activity business associated do relative availability Princeton the now It's have predominantly right and is large first comment companies Waltham defined other occurred during -- activity the has in the and in property And life assets area. in that by SG&A on I'll pickup our -- has. It's and the our Princeton the an the that the Princeton, Then And market. second but that why let are Princeton in function. quarters on portfolio else can than can't market

Sure. Thanks, Doug.

Princeton the activity first pickup activity and As signed the but second leasing incredible third in that we includes Doug seen in leasing in said, and leases, in be quarters. expect executed while second to we've the market continues now quarters an and that and also --

is new activities. of it, as lot A referenced,

campus of of Center experience increased from an expand of or needs units return expansion of includes portfolio and who business of clients today Some that it business and have exist office Carnegie expressed consolidation and to that to the in from lines to the ,and the people of both diverse particular, of with where expanding. point, so reasons it's bulk that from. is is concentrated a pharmaceuticals, coming set the is But in of pretty highly are and demand pretty foreign Doug's pharmaceuticals

we And the coming encouraged the quarters. out and amount in incredibly we're by signed to of so additional leases leasing see activity, it expect of coming

from commute downtown taken continue about, also what it the XX This Boston, and population in the than and the Waltham less Urban Koop miles echo I'll lightly density an we to Edge be market that that of terms Doug call for and is it is shouldn't of an talked surrounding intentionally because Waltham. attribute Bryan that's market.

on what Some Doug up. brought color further

urban the are Bay feels rural, have weaknesses which mentioned that weakness. and continue an all some amenities, in little we between That's a We Where in we and of of we attributes the that is taller highway et We to to side the is to and there. different suburban And -- buildings, conventional project I-XX, attributes there for who access market Reston, continue the and of Waltham familiar the forecast we out than similar for are those Colony, is going ramp spread in seeing the are last more more but east year, quite real there cetera. estate see there. improve have new assets that location most actually maybe that are describe. buildings is with conventional a put bit our seeing But analysts would very very is more a edge that a office Doug which people difference very suburbs this, believe where urban attributes close. is to the like the

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

timing on progression lease the Just following there. earlier the on rate on taking this and and potential occupancy, up out maybe and an just year question focusing of element

look at pipeline, remaining and Doug large You Folsom in X your conjunction exploration plus which you about feet Owens' and when Square. XXX was But leasing of with the XXX,XXX talked think the Times about you year the rate square you towards think said characterization still up those the you of and in growing by how the half as end do year? can the pipeline you guess into is move much back XXXX. I the lease of

rate, use occupancy when talking about word rent So you're not economic the right, assuming. rate, I'm rate, you lease

again, I to steady. going and it's think that slow be So

or ended in when projections first we were guidance at gave we'll our year to for to quarter make the have hopefully schedules, progress. And we look our during the you the X% X% we where they're exploration right? X XXXX our to next additional or continue years. pretty end that at expiring we every X and call XXXX if mean So then was the I then manageable, be going of flat to X

water which to of that need we is, we again, -- we market we but coming share gain markets, have do it's We so don't point. space. And we to sort my our have in And market lease gaining fight when need at share, companies technology us. are -- to expiring,

challenge it's occupancy so to in dramatically term. the short increase And

occupancy point upwards. the to getting we continue to are moderate where will we But believe

Goldsmith And comes UBS. from Michael our line next question the of show I from

about What then you and options new multifamily are development? cost do And the is what lines, on of think the the economics what And upsize process paper do capital? the have? of thought the program commercial new your same how you along

Mike I expectations and on then return answer to for question multifam. Well, the let's the commercial question, let our want paper answer

form floating additional about paper floating primarily primarily basis issue. Historically, consistent And that amount rate foreseeable of rate of to this we now, paper over program we think Right continue debt. debt this commercial rate, I So a we will joint debt, access looking to on unsecured future. have in of can cheapest markets going enter $XXX we're rate about unsecured rate. we've of to always have be for and have but because in We're decided floating fixed it's fixed moderate environment. the been especially to million $X.X venture the billion a we we

I paper years. go next it's consistent using high piece using basis from commercial ratings. of as a we XX very program down And several will there it a points But forward. we the structure can it, by got view this debt credit our think because marketplace, over going save liquid we've

for it has good, access now first experienced positive. which been the our been very, of So we've and couple has weeks, very

building it. we're investor base in an So

arrow decision. just So like of quiver drove in both that capital, capital additional from we our cost felt lower a perspective and

Owen, It's me Yes. address let Broadway XXX development. the

in to I our described building. is It's finishes to not stabilize the planning. Due tower development coordination and the of its of for given XXXX vault my not a to until notable As remarks, XXXX. high-quality expected a project until is building this quarter and the very expected tallest the Cambridge second The Eversource. residential in late and and design the also first it's and deliver units with

to and about talking last or as all X of we've development East this to for have So again, you Cambridge about on you project overall think of X years. that the been working part the

the our Broadway development. development for So forecast below XXX returns on alone the typical are thresholds

yields the However, at receiving if from that we're look you the package. entitlement entire

do think it and have It projected includes we XXX we entitlements those hurdles. get Binney includes that Street, returns that Broadway. remaining our So includes the meet commercial development can we still with XXX what

that And those going the urban are be higher in returns at than expectation looking our new stick that meaningfully to to then build, development. extent are we

well yields starting XXXX. new about of that's talking excess we're in what XXXX, X%. And so a residential we development to in And consider and need

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

X-parter. Just quick a

for a the is first the of back pickup So expectations on half the year. occupancy the in

portfolio. Bay rest Avenue, occupancy Back the -- Park You in talked of higher the versus but markets about relatively are those sort of the have strength and

a stronger gains, the of is the the it guess other I trying Any So on a biggest it understand seeing of what quick. to portfolio suburban? life is the That's parts in one. Part on environment, back we're guys Obviously, just like sort are fundraising half? update the of sciences ground? seeing better where demand? Is expectations curious part you I'm X occupancy is markets? Or sort

XXXX. your space in would some of in we now in buildings in answer I some of pretty is to pipeline refer described, pretty to to that where the Hilary believe a to it's includes Motors what have as with the granular. activity, and It have as So tenants active first take where quickly like smaller Virginia, we almost in is in Princeton, pickups or greater conversations right we It's in General Washington, in occupancy that question in building, in activity and majority where happen Waltham, occur XXXX. those active It's land of Metropolitan pipeline described D.C. we primarily are transactions deals the expiring will Western the a going XXXX. all market, of I vacant that activity significant space, that the XXXX. It's of will are

the kind And to is really going way ticket so and that's big everywhere, there's offer would or other. of I no you dramatically things one it's what change

some say The be of recognizing we're turnkey or made question, handle get and in by necessarily has terms move can control space before, signed. start to just a our what where the to it, doing occupancy for relative we when the clients which revenue buildup by going in you've been to part And we're is it numbers. demolished tenants all is the the in would in we we point occupy the having minus to that positive earlier. decisions whether hope we where they space getting which we're into role percent going XX% addition space that of me so able this work XXXX, where end and physically that's to or would want The mean believe to back the be the occupancy in they're is the think able on actually of be our to in to of what and we're timing a we're again, I will we XXXX. And where get lease saying plus were, space good see have why surprises look, effectively leases that that heard -- -- don't we

what's market, on science, I'll greater life demand Bryan Boston think the Rod slow. the relatively demand is On a San I life Francisco. about I'll poke in talking take let South in science going let describe science and at life

in talk So we Where as same was have more producing the quarter, life market, was also maybe don't say by going and that only I'd the investors, spot the we pipeline. But little encouraged any vacancy, the is things are in the the we previous have are, said to into there encouraging. we but it's the were we encouraged to funding you in Cambridge. back more down do yes, encouragement Waltham terms the is it, possibility the in that products it clients, they bit as coming which of there a call is, sector. fact their of to they science are they when is noted,

have that clients excited are we the is our what of that's So they on. getting about going very encouragement where we're most have

Yes.

be several of Just floor deals, stages done XXX,XXX years South office Francisco, are market to is X, XX,XXX various tend project stories. that -- And in in the them, smaller, foot to been X San were The not we've a terms X it's those few feet, market and deals in is in Gateway converted it's building building, the XX deals XXX moving that XX,XXX back. the tenants slow. our call deals very in that activity, and completed, there, in. But one new that are in basically of the the and is building

market. our that So section that actually quiet. is demand attract that well in has to building very been the is But positioned

be We out floor, spec full basis. going built is tenant have to a going they're when is which a to do be to on a there. We're to space that that ready going accept

tenants So the there. -- larger but are not

question comes from Richard next our Anderson the from line Securities. show of I Wedbush And

not First a down normalized to X%. your have were other lot it or today, if any most say of comment, out up would I'd and REIT, be $X.XX you you

NAREIT, a rewarded at data for On Castle think as commitment you be So in -- I my to defined is to a and space that over utilization sub-XX%. on just commend question it'll the taking peek office by the I for still FFO, time.

utilization. the we're scenario your BXP know was not don't utilization premier to it long of type, that you office? long I back to to term asset a permanent feel like still to pre-pandemic. sort of just I'm underutilization what of can it of about to but curious need still work condition near get long-term is looking you a story when where Is think Or a do the you compares office if story term how very tell. where sort comes fully at there have

Yes.

Let me there, let to me -- lot but was that a a it. at take stab unpack

measure So time. the period community. a imperfect It's highly a demand. think perhaps an first of data in is of And I and in media very Castle footfall in financial urban area of measure office the all, over decent I used think of a it's

use I So workplaces by castle mean what systems premier their owners Many buildings. don't that? of do in the of

office really it buildings course occupancy, standpoint, peak office take the to days. whole for the exactly data looks the not on effect being sure It its you which less focus need today leasing is really at a doesn't of which are occupied week, So that also over measured. from what market and we're relevant into is less

everybody the I uses is not our really experience, a following. it, it's reflection of but So know which

management. you are our of swipes, same the buildings same-store style at data are level leasing of they turn XXXX. they buildings look for million Thursday, turnstyle roughly or today. And when picked feet Tuesday level did data basically do as that were have level square in half March of XXXX same the -- York, for of essentially as same at have they New under the out our data has And we in We that as of carefully XX in March

is basically New back. So York

is interesting The Friday and slow before is pandemic coming other up. already was thing Monday the that's

peak space XX% measure. on a you New So Certainly, San for if a coming actually only And days which when are to the of your the is way where you're people those And about important all was. in lagging user XX% days back because they're that say need for to week. Boston have Francisco, -- is peak in. or it's about basically there's is really it is XX% I York at space, days. X place

the it So on is the it's across peak whole what not It's week. days.

improvement. see we again, So

the As not home. the earnings of of from I we tried to is reason hiring space. actually not their say to clients leasing earnings, not services that It's Those We're growing slower issue earnings, their the work over we because of taking they're they're the if and serve. in a and our -- is growth of today people provider consumers. growing are not over remarks, they're not businesses, and my businesses because think not

up. grow year. And seeing as frankly, already should now the seeing some we I think we're we're job of experience in Doug this did right later again, shoots of which first a quarter, to think very will I our start earnings that good articulating leasing pick those that green

releases construction, That's the XXX% to these sort right? be long of press time Manhattan. delivered stuff which in it construction to the new is going XXXX, buildings a unlikely think that under building potential you're that the and for under aren't already what going new how associated the from part is Midtown at any to just such is clear about with you're of but frames buildings a X-plus there see construction areas in not means perspective, seeing building. Look metropolitan these new XXXX, not I in delivered Rich, years, macro of thesis And takes is next a vernacular build

are portions continue be to it's become the lease and to in up the percentages if that And too relative would will and difference number "a to pick will continues transaction of space to and point incapable space D.C. making buildings office be buildings all dislocation have the marketplaces. And are a we to see this that's seeing its people deem of to of of and to in occurring. underwater Washington, capital at premier back has the less in debt our because our is much we're less again, that premier harp saying, we no are of because the between there holders the properties find other the that in the sort I buildings and out leasing we going What premier of of of the occupancy, minus" there put benefit sort prepared is the the available inventory, capital described accurate is thesis lender. that this a for not so there's and to the equity -- to Owen the are fruits

of of a the the a dynamic look how maybe of minute you a if It's talking by changing [indiscernible] sort spend the And problems things very availability into building market, because to want characteristics way, where has which tenants in these Jake, go a about can significant can occurring. they

troubled would Doug deals. somebody a what to who of our all there's really I and is who weight real in flight buildings buildings the certainty to we preeminent wants noted region in but across a the definitively that The community with quality, dislocation workplaces to kind D.C. favor. Most flight portfolio. do across deals just and of new also our just the are tend are assets the to our great brokerage playing Virginia maybe Yes. seeing second of our of really activity Northern and there's

for we're So our favor in sure. our that seeing region playing out in

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

has think, Mission, to Maybe fleet build I fallen related newer which XXX a WeWork. just occupancy XX%, is at below

talk So Doug, in the bigger over health that how highest SOMA of generation that force your does of I sales demand then Market view talked rolling but the vacancy? first year? that how the coming inform is And know of picture you about can you the bit, South in about ahead leases the of building lagging market demand at end of at at and a

brief comment Cait. I'll let and it. Sure, make a Rod describe

their consolidation of availability which how Zillow. that's And space our where market? WeWork occurred in So describe expiration are in looking the that majority building. that in all Rod, is sort an have we South there earlier fact things in prospects portfolio is. a you with have leasing the And truly we actually It's can and and remain the flash Zillow, to at negotiation them with of

Yes.

We've So referring that's it's you're rise to of on that We've Zillow/Trulia space up couple floors right. a better had of had the building some low in activity that The top. and former on is it. space. the activity

spec full suites the market. fact, the up on floor, response In floor from XXth we of which getting completed is the excellent just

leased a technically have the was to the portfolio, it got mean XXX,XXX availability I earlier as the we back We space the first So that we call, just space. we today square on balance that up quickly. The feet. vacant expect day Folsom SOMA is mentioned. get the of XXX -- That's

been for However, paper activity some we've various that with time, been tenant now. We've it chasing had that. and right marketing another we groups. trading There's on we're

getting we're activity more at Northern on shots So would that had we've seeing for getting these looks our deals. market. say good I

is. Southern attention So I'd say our frankly, a the Embarcadero little market bit some Center more property, is stuff in getting of

coming Embarcadero I be still more from companies where just where the market. attracted nature Just to of to is demand is South focused tech that's think more the tended the traditional Center,

well. There is and has some and Salesforce getting it's as space looks it that at sublease been that good they've is market on marketing the Tower Salesforce

mean, there groups are I there. So out

the that lease So I'm we're use to very up. going confident space

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

cuts half, anticipate move I leasing quick sort rate guidance the expirations Or do X mean I rate of you achieving I clarify -- then XQ guidance? And given just secondly, Mike, you is just uptick sort of up occupancy also in terms guess, your just where in are? want adjustment, shifted just run guess, Just to you baking that One, outlined curve where just the what ones. some in -- overall? that sort the actually for in the you were in the second of has to of

not does occur, our So what And interest in on range rate year. won't when if I is it that additional rate the think in cut guidance our a expectations, rate because within impact an meaningful of expectations the have is a late on included the have it cut we year.

inflation rates going year. numbers don't our So kind significant Fed impact think if as later there's going what this and to we'll no year, be But I both this think the next the just with year about cuts in see we to have happens a it's where have to of might guidance.

signed you was leasing? which in was leases Doug of The then individual about, other occupancy is square down of when And XXX have that going Doug which a little it's guess, of take the I Tower. in down talked plus have a again XXX,XXX for on expirations question is, Times company, already XXX,XXX back I over to bit feet have of the Square year. Folsom half the that QX that's hold. we for bit restate done, the square of significant in in many about, size will little is talked didn't the expirations the -- to that expiration QX And be we X which for the the we because can LOIs the XXXX, feet question? So of which don't start

that the after move occupancy confidence us will northward start expectation. the gives that so And and our second quarter hopefully that. to That's stabilize after

And question our comes from Bank. line next Okusanya from Deutsche Omotayo of the

wanted year. the for just the go to back I guidance to Yes.

year. you're talking up quarter picking occupancy of take second the we first midpoint rates about We're XXX. midpoint guidance, quarter, of XXX higher of we about take for quarter, the probably at fourth the longer, if So or the so in

us you us the could So be? What earnings back the just will in of the drivers through half? that help acceleration of walk

think, that fourth the are third quarter. really So in Omotayo, impacts and going us to help X, there's I

have The the we talked improvement the that to first from up, occupancy about. expect occur portfolio is that we expect be we NOI and because to

that and will higher expect NOI second third would than portfolio quarter. first I the in show fourth have So what quarter and we both

The other G&A. is

first the seasonally the because just is quarter on second of high taxes the G&A as schedules of vesting So well that timing in are and as payroll. paid

the quarter move fourth pipeline. is as interest meaningful it bit our see pipeline. today. And slightly is development between piece the pretty a third the sequentially lower little then I bit But last being And expense our and as stable today little and on we income where a by as from $X.XX quarter quarter our and then expect be we income and interest. development offset $X.XX do to interest than that drop fund spend we our interest in lower a it next lower is capitalized have by that's it quarters, will be between is could So quarter

our are to are the FFO So midpoint guidance in third the really the the fourth achieve those X that things the improvement and driving of in quarter range.

line And Michael from I Citi. question of show Griffin from our the comes next

need what Just maybe on side, would willing lend debt curious thoughts. today I you lend to so, new yield justify to development? be And kind to mean, And on development if of I'd projects kind your interest have what of office the would are you at? the rate think Owen, banks undertaking get yet. to

getting is Lenders are Mike. to on. the this can of team respond this payoffs. So rest and not the I'll add general in

So they this and typically, necessarily that to paid that. In their hopefully constantly they're replace them need and off. paying not off getting because grow pretty have are environment, volume requirements significant borrowers they are

exposure So estate and commercial properties to increasing office now. real they're not excited their right about

appropriate I than I would stabilized lend banks think they as to a at a yield to loan. on an be of So property provide not are excited whole, a think more debt lending, piece likely do construction

maybe XXX out don't that a had fully you construction to particular a But speculative. way there's property think over again, XXX I I pricing very the you to came available you know, going the But there, get could financing leased anything little of in if banking, to done. is be, SOFR.

at So SOFR is X.X%.

talking X% X% you're So money. to about

the really it's of really, sense that that case. make hard when is So to

And little very of financing about talked to that think limiting bank Doug picture. the factor in is market again, going I So way the construction on. another new

Yes.

Just to on add question that, on development yields. to your

residential. this let's versus So science life divide between office,

a life were X% when get to we're office, So gone rates. development in that up I to it least cost of range. the has Doug low, inflation the those those is And gone described higher points. And very costs as also, described, XXX difficult part financing. also remarks, rates on the Mike are of as of my targets and very but it's basis given requirements at part say science, I'd our yield X% have the described, And in up

no basis it residential, So that's contributing. And we've points cap exit over with always the then XXX about was -- thought on untrended way with rents. the

mid-Xs. some little residential evidence the there but in so gauge, to is And of say, today, trading, hard high-quality

terms We yields, in venture partner think the development as and now is of I on Reston. that. -- And least in at a for Skymark, probably I we engage you're residential. joint us, right So that's need on in have development in which at mid-Xs our to going

on it's analysis trend other an one of of on and an just financing, to going banks upturning in there's important relationships. going -- by other The bank there's is note these their profitability

So kind exiting are and not they other if you going have to these you're and be services banks, other that, providing forward, where provide they a a willing to see broad relationship capital relationship profitable they're can growing and things of with fee going they're seeing where today relationships.

we benefits things because income set we this. of where a very broad that like that deals relationships again, have bond and we -- these things that and get these have, fee So us do

we -- relationship we so And acceptable. profitability is have the

on added mean, to stable our last And -- banks wanting facility. that. our continue new you've are financing. X X seen we or we have to banks year, to add our we So I to

we're continue in looking are what doing We at calling banks are to us. interested that on have and

plus firms the goes wondered information a have been the additional just now. the is capital and incredibly as passing of not closer for loan, that making particular that credit weak any is has that stack down also and market criteria right in equity. course, also front. property the way there development pre-leasing that a development criteria everything actual And they're it's up. on just for on And And of that we've the of underwriting the Mike, goes their

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

some lot of pandemic overcommitting have space you in grown last? on. I leasing of tech some comments go Is made event, in XXXX guys you count discussions to about and these earnings being sort of with of to in several companies mean, this how lot 'XX remarks to of versus layoffs we weigh sort that wanted and of about if companies then do what I'm in that for maybe lot process. the how long how this they're the back you you that during your tenants, the thinking a of gone of a Just has these a head prepared the your are and curious guys? telling a process currently digestion I on the that to despite last grown these have digestion years sort expect just a with event? that over guess much

you're to some really Short a health going over seems commitment. shedding market. lease is, is the There's slowed said, That it mean, have on, [indiscernible] answer I yes, But in There's as answer. on you was of out there key with have don't down issue what agree I tech very relates companies some instinct recently. digestion. the taken to know. some we our touching sub charges several space the the

grow they of trying very exact our market, their going back at They're -- But past in to what out have and future. figure going nation. we've in earnings, they and are those the space innovation center the I healthy. that think be bright cycles point, some is companies on to of instincts all going challenging. will to that's in is seen They're a the They're but the timing the in

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

take Owen whoever wants Doug to or it. or

So but all to to same. I'm a it's going ask X-parter, the related

next office Lexington centers. Central? invest resi Central whether on Virginia or your about laws it's to still landholdings to that If multipart, think because -- do you new the what's future going that think potential it an to Grand As Grand guys you assets benefit to investment east finally Central of what in have takes in West come existing asset Grand whether from present be may any of Northern to to you of grow any there's would data the a AV to opportunities investment for company, convertible? And three, conversion for

there. lot a there's Well,

all. You violated okay, answer Alex. rule them question. That's of still Helen's We'll one

anyway, XXrd Street, at Lexington is is we right on are well. So start. I XXX leased just XXX is subway fully I'll its where is and station doing it the to way. close it's where and well and very or Avenue mean

performing back and Avenue, but So XXX right, is the on well. it's extremely mean same end I at are lag, on the and location buildings -- Park those

on access is I think Avenue because the also the subway. that location Lexington unique of to

conversion ones So on to not residential, going and in emptied characteristics I for convert existing there's empty I physical leasing. only I the there's but so frankly, be that all of mean a assets, life level don't -- have they residential. out or assets to any think for don't -- we've that of I to are they science portfolio our sure want opportunity some don't to ones some them say the think significant any it. I'm have

some residential. challenging from regulatory said, in is a local being see have in less land with many little of to several used overlay to And the are supplemental process be. and to land our parcels communities cases, commercial going states communities rezone all That that's it do you than working our that given and we that on of that we in

So to that currently certainly where do to We've we benefit. them for own. residential in our will going And number now, increasing that's that's of markets. is may seeing looking then real think be this I of that felt team an right involved I there's and we're in there always commercial important in but of it's to think get it buildings projects conversions we opportunities, certainly be an and our unfold at going unfold estate, one don't office building slowly, you're many

Yes. side the residential the conversion of for bit And a just carcass us. sort of put meat little on to on that of

In Lexington, office that units. we demolish a that square we or and building XXX entitlements Avenue. foot getting Hartwell are we plus have build to will residential minus XX it's So XX,XXX

but is going we're to piece hopefully, we're some said at We some land and some pivot, Grove, residential. to a thought we to to going life which about hopefully, doing Shady science do, In have of we're that be point, bought going science. life

the office that also on structure townhome site townhome either and both older to a convert we sell we're an residential. multifamily, approval or in of a received residential piece potentially buildings existing townhomes working some we we're we Herndon, the just to and apartments, that portion third, so Virginia, developer, are And then to inexpensive bought selling and development. And parcel to likely and of and multifamily develop the relatively parking with sell

the on. jumping that. And kind we've office some So which to we are then doing side up of country, assets which actively to other time, the some of we build hoped had North quite at First, our owned for

real office obviously, of Monica, provide working Business about city site a build else to to see become unlikely Monica would site. for kind on of potentially would just Jose over we are some the affordable next, in be who now other with the a to call Santa decade housing of Santa San there's portion a that a it including what -- residential there, parcel We converting not But development that Park question down but or it, residential not entitlement, uses, residential would will I that. And see on and also somebody to then X. build and some

this something of So working we is sort that speak. actively we are on as

the office Boston in to converting of residential, District building an Bay Back an in Washington, an D.C. office CBD not in in to or in to building building residential Financial or Times It's or the office about Square residential.

with do likely call be economics the would buildings which or X actually next, potentially the not years. if right Our line it, they X that kinds of now up the don't assets worked, over convertible

comes question Upal the line Markets. from KeyBanc of next our Rana And from Capital

the update the on on Carnegie color your Center. I ongoing give for wanted and us you an XXX Folsom update the Times Square? thanks to backfill if Doug, pipeline. on the quick, existing see can real And Just at X

mean, XXX you don't then reiterate you can Square. can X Why mentioned I talk I I let that. Hilary, Folsom before, And Rod, you Times about -- but think,

Yes.

on it's market. it's nice XXX. Yes, space. It's of It's best space. space on got portion and ceilings quick in excellent floor plate the XXX,XXX a it's some excellent have we real it's low-rise high feet building and size, feet XX,XXX the Just the that of and

so proposals portfolio. to it, but And to marketing had space we've our very we're and we've pursuing. that that going So it's do space, on that in high-quality we've continue been been --

fantastic Times the the On signed the X space major we converting square for direct team Square, in law by X of building of was job Times lease and has think a tenant XX,XXX done feet. the at to tenancies, I sublet direct in in New some here a first that firm York Square quarter, that

chip pending the to away continuing we're at vacancy. So

I will the among Midtown markets say exhibiting is Square of submarket or in sort reasonable that less Times weakness. more unique

on with In terms to by I convert the there, demand, bit streetscape other of address. neighborhood with in things our very to to little and and that the tenants we a other that going just think of city are to But direct the do encouraged and are tenants. we some has working hard are which sublease folks ability the

continue at And at chip breaking pursuing away it. it that's the we're I the building. just of as wouldn't are for going It's submarket just that But a by demand large at moment, We down every in that's lease. the sense describe that makes submarket lots away tenant to of lease to door. it sort tenant got chipping

the I Camille of And question last America. in comes from our from Bonnel show Bank queue

and recently, costs about has for the commercial taxes. [indiscernible] pass revenue Mayor property I tenants. understand of a the been are ways raising Boston of manage through you streams talking to these looking to can lot

tenant's upward a the pressure somewhere market do whether sense cap on tax versus take increases to adding But get this in rates? an in they So a a not to these operating impact less change Boston of going And margins. your you view investing much potential could that attractive, does lease else? make

provide to every our a the take that to spend year, increases. We dramatic to to hours operating let So have do single reduce our we is well. stab way have his don't so perspective And clients. we treat Bryan change I'll expenses not escalations and that, tenants expense me doing, ways that we as hours do a let to good think things finding can on everything passing and and possibly at we're we

a Boston. of sector of The bears benefit portion the commercial taxes or currently city property the of burden in disproportionate the

cost, down, valuations, we and to go thing bearing. residential would the expenses think than it's obviously, overall environmental hard up associated and change they those to very assessments occupancy, higher assessments office good for regards understand it with what's for assessments going proportion sector bear of be a on us commercial capital commercial with a issues rates, all to are go know currently As property interest

types in right the for don't sector we'll policies isn't from that not the the Bryan? constituents be are our hopeful good of that with be pushback that that asking associated we're types of to that the think any to -- these the the will business. of the the our We're it kind time commercial our of communities various do day burden proportion buildings. see these so ideas given larger we will good a And on sort have probably companies of regulation challenges and there or business for that occupy

have Really quite clarification, than other clear our position. it no to we Doug, leadership further made political

to concludes closing time, call our back this turn This Q&A over Owen session. Thomas I'll the remarks. for At

Yes, no further and comments. Thank your attention for in you all BXP. interest

you. participating. concludes today's call. you This Thank Thank conference for

now may disconnect. You