Office Properties Income Trust (OPI) 2 Aug 202020 Q2 Earnings call transcript

Hello, and welcome to the Office Properties Income Trust Q2 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to Olivia Snyder, Manager of Investor Relations. Please go ahead ma'am.

morning, good and you, everyone. Thank us Thanks for joining today. Operating OPI's me Financial Executive Chief the and Officer are on call President Chief President Officer, Vice Treasurer, Brown; and Chris Matt Bilotto. With and and Officer, David Blackman; Chief will a of our quarter business details just financial by followed a performance In session provide the analysts. with our all for about they moment, second XXXX, and question-and answer

today prior is statements written materially call XX, may recording no First, to forward-looking of I release actual made and results the results of prohibited those Thursday from obligation other and publicly law. the statements The would without Private conference any today's contains meaning based XXXX as that Also of July the like to company. OPI's securities are Act XXXX the retransmission company These call differ on consent we beliefs conference that the in Litigation note call. within to of revision project. today's Reform and Securities or and of today's note undertakes conference that statements revise the forward-looking of forward-looking expectations

upon or accessed forward-looking with the those Additional in which filings contained could any Exchange Investors are the website. SEC SEC's place from be Commission reliance information statements. Securities to cause differences can our undue our website, and or concerning that factors is opireit.com not cautioned

financial including distribution basis operations website. in found to reconciliation normalized our In addition, or non-GAAP also can our available from call, cash be EBITDA net we are available will basis data cash income which adjusted NOI. and net figures funds this non-GAAP A be these normalized package, during or CAD, supplemental FFO, discussing operating and or operating on numbers income cash of for

providing this on basis and FFO cash be including NOI. we addition, call normalized will In guidance

without non-GAAP for reconciliation at estate. unreasonable We reconciliation to is of are of and as real available the required disposition gains or information these related not such guidance of all, losses because such charges measures certain part providing effort as not impairment our or

to Now, over call I will turn the David.

Welcome Thank Properties you, earnings Income good second Olivia quarter and call to for the Trust. morning. Office

If you which performing recurring listen a that will theme is is you business prepared incredibly note our underlying our to remarks, well.

quarter, cash renewal normalized feet strong the that regarding estimates we Office NOI tenant space, new the above activity second six produced the term same in FFO for and year-over-year both market the and X.X% more weighted than property roll leasing up rent expectations. average X.X% in consensus of of For We and we completing exceeded growth guidance the for generated leases quarter. Despite our of also also lease usage years. XXX,XXX demand had for a square second quarter, and uncertainty

the XX%. XX.X%, up fact, while volume year-over-year approximately In leasing was market our down was broader

portfolio occupancy basis comparison Our year. in basis increased previous XX consolidated comparison the points in points to to XX and prior year the

million of for we $X.X representing rent period. points of XX rent Second same cash collections and minimal strong of September, the the at end through contractual high months rent the office the quarter remained only collected deferral rent granted sector XX% with have and collections of over cash for April totaling basis

the been sheet proceeds used $XXX below current our economic June of of for we last have disposition in the Leverage of of million unsecured notes unsecured liquidity. revolving of to facility. target and and and result weather our successful $XXX program approximately the million quarters XX-year credit down XXXX, pay positioned we senior July, range issued three balance a the completion to As impact OPIs our well the challenges. remains has In

low agreement Property under These our liquidity. further million capital recycling support Park to an our a business transactions We program. and $XX.X full also entered sell for healthy leverage

also year. as to is target less be shareholders the CAD to our below than full is it second long-term Our expected for ratio the quarter XX% distribution payout and was secure

recycling. Turning a $XX.X Denver This capital an XX.X detail program. years. purchase tenant by July, entered for to XXX% closing, to acquire and This close from price we a expected this acquisitions CAD is office acquisition Colorado acquisition is Upon with single-tenant accretion million. for capital and we a leased funding property diligence before pricing grade to next will In call. concluding of our an the recycling proceeds to investment property rated earnings in and more provide on created our agreement

opportunity of believe interesting we Although there beginning we to handful have the recycling program, be a in quarter. capital may properties temporarily an market our paused fourth

not is to operations. financial be diverse I'll take flow sell review base. turn it advantage today, tenant Chris? high opportunistically profile and is stable of that cash now supported call position forced by OPI further and it OPI available. we quality both credit our strong strategic should over to to to and will Chris assets This believe leasing strengthen the our to capital Our is

Thank you, morning everyone. David good and

private report are We economic strong OPI's outperformance given of base to the quality portfolio, and diversified challenges. a tenants. market current our are testament pleased trends tenant several believe assets and We of quarter operating activity government strong sector our the of second these and results

rent of leasing XX activity OPI in XXX,XXX with per year that a fully X.X weighted average headquarters. National years of by during seven-year owned weighted are Chantilly, increase of a square a XXX,XXX occupies average with occupying and XX.X%, occupancy the of include we During previous generated one the Office the This of A adjacent and XX,XXX average rent the square rollup leasing XX-year contractor a quarter quarter in of signed leasing in Maryland Class over lease three term X.X the our foot new to a located over has a completed weighted roll-up years. basis a a We square ended feet X.X%, weighted average Year-to-date, $X.XX. X% new government of with lease of XX%. quarter. lease term renewal lease buildings for a leases feet. second per the point In rent rollup of quarter, and renewal Notable Reconnaissance in tenant Virginia, executed county we and with feet Annapolis capital square

Although down on leasing up while was total has was a comparison, activity. volume market XX% leasing new volume year-over-year our broader XX.X% the pre-COVID lagged

leasing that However, advance stages and discussions current tenant square with up, tours feet of million XXX,XXX square with roughly have picked negotiation. in our continues renewal pipeline of advanced to active activities is feet remains covering leasing X.X

footprint. believe do to on leasing and providing management employee for requirements, supporting retention and office for opportunity our out maintaining Across a asset where expect from our with needs, and It to our these consideration and their property which relationships. see we We given X% and more move-outs as proactively created XX%, out the quarter OPI's discuss remainder strategic interesting which creates all in rent. management improvement to for has to to real Washington a we de-densification, that around our of questions for certain flexibility guidance have the we annualized tenants Through support changes XXXX and security we to long-term and their we OPI. estate at to tenant quarter's without portfolio of points contractors, evident footprint Considering the close positions As decrease X% collaboration a need to tenant results. teams, their proceed be end with the minimal. believe located management rent SIR, XXXX, which their we continue result, renewal their of the prior is development we that are for the COVID, an of government of requirements, with property growth only advance government projections. need continue year are the the work annualized requests XX have been security move RMR an the been point given occupancy properties X.X% for rent. touch an evidenced expect overall around basis tenants to of This locations in to for a with office and conversations uncertainty active roll-up remote DC accounts with by known comfortable footprint is around activity first With

are this the Station and out unencumbered. We Capitol property to located have is been evaluating from within which move well and two are preparing get Union back includes The DC's a floors. excited property for for Block this redevelopment, frankly while we a one Hill for it addition is submarket mixed-use of

generally. of will but result call $XXX our in the We later on delivered uncertainty costs long-term provide X% of in cash-on-cash recovery remains and to outcome in more office on impact approximately are XX% redevelopment anticipate XXXX. There early around the fine create and is and million when the long-term speed value tuning plan of the economic property the significant return will detail an

However, businesses strength risk sector, of geographically and the goods and which will XX% times. through rated tenant portfolio essential tenant almost us financial XX% tenants, economic make stability in all to considered base and our industry our of uncertain manage from the diversity annualized including of as Nearly tenants we revenue these benefit we believe us XX% derived is investment our grade both and by from secured by is roughly helps government of times sustain during the with volatility. industry, further involved of up services of low tenants retention revenue or XX% annualized to drive

RMR's wanted I inaugural on company the Sustainability call corresponding Report. highlights the several This milestones. publication over turning to and the Annual advance Before ESG recent of Matt. report comment across the initiatives, to

Trustees and advocacy recognition include: and XXXX OPIs first, representative Some examples Board the women by XX% earns board of high women education on company. consists of

the the led Energy category. Award OPI same-property of management year-over-year programs XXXX earn RMR by in Second, from And Year energy Partner Management Excellence the EPA Sustained the X.X%. by reduced lastly Star Energy energy

We on and turn operating call and now over to will so provide Matt. results. is financial well testament are further expansive achievements Brown to platform. this our proud these inform to connected RMRs the details Matt I of estate

decline FFO and $X.XX reasons; due per of estimate decrease NOI cost Chris to share for in G&A savings the place expense RMR high or Thanks, in Normalized share $X.XX the for everyone. $XX.X $X.XX consensus pandemic, a COVID-XX guidance mainly share end increase the beat per by which good million in share, an of and of per response initiatives $X.XX In was level. second which and quarter maintaining per we $XX.X to average in morning, and the was of previous put following quarter our to our May May XX.X%. in for per to in share, $X.XX declines mainly and expense second interest our per share, June. a mainly share share, in per $X.XX CAD in $X.XX June per a of CAD in dividend July, declared million share in price a the ratio of due decrease payout LIBOR of due or $X.XX a resulted

for the X, XXXX the the is to be XX% paid sale decline due for and a second was and our expense operating expected The depreciation $X.XX we XXXX. is from to expenses decline QX XXXX. to $X.X properties and of RMR in share dividend management below target lower million April amortization of Our million income quarter for of to property compared XX debt average OPI's property well all to covered and business XXXX second dispositions fees million XXXX. for levels G&A the to $XXX aggregate Rental proceeds compared of $X.X as April quarter lower declined price. X, mainly of since result due since

In resulting from merger with legal XXXX QX of addition, amounts higher fees SIR. incurred our in we

RMR. the XXXX. decline X, total quarter based since of loans $XX.X paid $XXX for built of million currently market repayments represents $XXX April As of was The is senior secured the $XX.X mainly into believe interest compared million with to and and $XXX reminder, of shareholders fees XXXX. on term result million a capitalization. of management a the alignment in on million capitalization XXXX. in repaid our total unsecured We since of of market or Interest paid repaid management second note million quarter XXXX X, July debt management the is a assets calculation this business strong being lesser expense with under second contract our

property to the for results level Turning quarter.

property offset to in of up second free decreases of primarily was of and expenses. cash total, million, of the million, cash of end by or increased to In property our same increase which cost rent by expiring The removal, the RMR pandemic compared an made which $X.X range and property is operating XXXX, premiums increase in the decreased which quarter, expenses real million insurance in response million high rent by guidance COVID-XX from implemented X.X% of initiatives driven second contractual areas is in of in operating basis cleaning estate trash of increases the $X.X utility, received in $X.X the savings taxes. result For $X.X NOI beat quarter X.X%. the

OPI from tax taxes estate real in estate has Although program as have successfully million abatement $X.X real over increased RMR saved XXXX.

represents pandemic for our the of XXXX managing result our our the cost X% as and While and to share of the decreased of of a expenses basis improve also can conscious utilization. was our in quarter the in uncertain, growth X% G&A a in expense cash to challenging parking our and to same expectations, excess including efforts and our property we be to which testament approximately income, NOI, $XX profitability $XXX,XXX third quarter normalized on expect of less of X% the expect a the third we makes and which basis lower income growth This to QX to with due same $XX basis Office which to of between in rental be Based cash forecast per NOI which NOI third by volatility in property order share to savings exceeded price preserve sequential and is FFO thoughtful quarter our period be of COVID-XX on XXXX. NOI than estimates as expectations a RMR compared the current estimate. line between contributed

for with collections collected As collected it rent the relates obligations pandemic, to of the were XX% quarter. adjusting QX rent for COVID-XX granted rent strong deferrals after and XX%

and of July obligations month. were for XX% granted the As collected after adjusting for rent collected deferrals XX, XX% rent of July

XX has the OPI During our payments million, September April fall of that contractual impacted these $X.X reported relief, modestly to rent revenues. the XX Based totaling rent increased cash deferred requests QX call, on revenue for XXXX. points $X.X of accounting grown through July one XX tenants include period as deferrals beginning of The month earnings rent exchange of granted deferrals the guidance XX Generally XXth to our not base monthly represents these in had we of to-date over amount of is to tenants. of million which number the total deferrals have rent April the in rent basis related granted

However, they temporarily our has abated. To-date reducing are flows. been no forgiven rent cash or

not and fitness amenity paying tenants are granted business service their of currently watchlist rents rent OPIs are XX XX these and tenants health tenant total $XXX,XXX obligations Our and includes in monthly have and the deferrals of In which XX and contractual restaurant not quick rent. building square represent tenants. been approximately points feet mainly business XX basis

AR As a $XXX,XXX receivables line income XX increase $XXX,XXX reserves we $XXX,XXX points basis of from previous result revenue the for QX or the rental is of second recorded and straight which including of quarter. an of quarter

connection notes. in can only and the of of $XXX with million third sheet penalty of June on our balance availability Turning We $XXX debt $XX which have prepaid in of XXXX of unsecured liquidity we over-allotment to the adjusted EBITDAre debt notes million issued currently revolving the credit availability XXXX. X.XXX% annualized $XXX In had July for facility. and $XXX million our unsecured June be of million XX, In their million range $XX These our maturities At facility without including approximately of At below issued consecutive $XXX XXXX. capital option. XX, these net was June revolving leverage target credit X.X due additional remains notes until starting quarter. times, June exercise an our and on million expenditures. million we we senior underwriters

and We during estate capital to million $XX leasing building including industry. $XX.X disruptions current recurring million quarter capital. have on facing second we sheet million weather on real the remains ample spent the balance strong $XX.X on improvements the liquidity Our and

leasing in million our As earnings Based capital of of XXXX managed down improvement leasing forecast concludes million to and expect be up questions. which current of We're obligations ready our to represents quarter our $XX.X Operator, our remarks. tenants end, years. capital we approximately shared $XXX forecast future million. call call initial $XX.X we our for QX as tenant on XX% had designated our is from million and approximately which for open related recurring allowances on prepared with expenditures by leases that $XX capital unspent the of consistent forecast

Yes. you. Thank [Operator B. And first comes Instructions] question Maher Riley the from FBR. with Bryan

Yes. Good morning.

David So of can elaborate questions. a upon couple touched And you maybe you or this and on. that

eleven for tenants those they I there. the not watch not type like on what's applying XX they're are not You you tenants on thinking what's going kind to wanting addressing pay are seems the you PPP of plan list mean of paying fitness just healthcare about that? tenants how have dollars, QSR

deal Matt, you with might that.

Sure. are tenants that for One in tenant has bankruptcy for filed not that paying. eleven example

tenant Another buildings said to they they've in example our plan Gym things inaudible occupied stabilize. until is the and that rent us and kind a don't one of of pay to that in DC

some actively of right just business bankruptcy which our working declines we're So in tenants though with with really struggling now. or and

Okay. And the... then

Bryan a bankruptcy for we're And file being so financial a At the of condition of rather the of position -- a not that end bad. tenants careful we'd things we have versus to rents is very claim not might that potentially could one rent claim. delinquent file where then filing deferring in being be

play the moving Got sold as that there months measured to paused, on. kind you next quarter. you assets for? and it. in current dollars opportunity months And that expect you we sell fourth is David an what millions kind a of your What the made on what assets program think you of potentially and to over I view of few -- rate sell might out and was in what the differentials $XXX, might between comment maybe it how might over of that with to as is to the but be X and capital look hundreds be XX or there $XXX $XXX, you things kind to COVID be may period time able going recycling of of that other should out were cap might acquire as

questions those Bryan. are good Yes

for those really have So opportunities quarter, only second I from very would what I added. whole it I call we opportunities we maybe would economic to There core lot know call real the pricing or very the assets we has that transactions, opportunities would say core as like estate very be. acquisition future few we'd some what been a potential assets seen sell the for have non-core have where not levels. been pre-COVID think during as hasn't changed capital and is value We some to

have assets minus so looking cash X-year the by capital assets buy recycling comparing from more we at contribution focused versus And that we been on is by average contribution capital. X-year what mean I and that our sell we cash program the NOI

So believe X% we X% cash can to sell what looking contribution would buying the we're cash and a more with to that selling. to at properties CAD X-year points differential that XXX in XXX we're is what really annualized in company contributing what consider that's than I basis we we're that contribution

do can we think we so, this And accretively.

cash and our over months to capital with into goal we but selling is next sell, million That our we makes continue find there that won't the not attractive program. would bids be recycling the our we annual for market $XXX XX what sense. if Now we're get

interested might ask how bit I near and your And on them in come bit be more you there. you might your asset then property you that that just going currently comments on Union property you the Great. XXXX. about online was to Denver acquired more a Can Yes. what little inaudible color us I might is, much around spend give back think it you what little said doing a you

bit really little more Just that would a be helpful. color on

want Chris Sure that. you address do to

Sure. Hey Bryan.

agencies. noted is Station who Union as Block Washington relocating consolidate GSA, DC in building other to to by a from to another the a with is be about it's this going occupied location largely So

process. XXX,XXX over this doing And been the grow purchased to we've so working density couple close the had at two in building credits credits feet opportunities density or and of looking proactively a floors of is really about last years of so, fluid square by and up to kind

mixed So I more just focused about use maybe we some which by option retail of kind and bid we're of through have potential we're the form actually user focus the component really office building tenant of of options a the GSA that require a and with handful of includes on, guess for is competitive also we're it. to the single family option and that existing lease conversations one talked and this we kind with on a to building. a will GSA. could in entire take go It's the that's process But more capital. still process other

the play. so we the probably risk footage. And that's of then again And square on the lesser NOI play, kind would but additional get lesser mixed-use side,

get for and also think I think meaningful that we're higher rents with tenants be a project. in active off we could some kicking we conversations

the the if still the so XXXX, happen should positioned early with QX by and timing end can anticipate we is, vacates option proceed well in that be desired the is delivery And XXXX. to of GSA

you very Great. much. Thank

Morgan Stanley. next you. from Gabalski with question Adam Thank comes the And

potentially target or just to more about? for were that potential the to and the you for assets how opportunity said be guys cash and came next Thank over sort amid where of assets picture part capital previously might so are the wanted meaningfully assets that come now. for COVID you five just flow has the of these for slated of question. it's fundamentals the need of might changed a kind I And guys. really assets years, always the sort to of might I sales while these these sale about sale? the sort up for and sale, sell that sort become recycling, you been don't of for your assets Hey of of bit a ask any sort targeted said below lever there more But that I'd sort taking like more you little

the these Sure. the the in our It's we them transaction answer a property on disruption because good assets had to COVID. recycling put that question. program, capital And due is pause phase - is, market are of next short there for but this targeted

So us of a were they weeks very they building marketing the properties going of not COVID, like capital for are that a willing to to ago, ago result Noble are basically and the buy we sell, opportunistically that a nine forward value. relative property but we'd potential was of we came in couple Energy. price acquired building are they fourth but to high has asset Chevron long-term to Fast that assets not an tenant XXXX, and and of we being pay the performance It the quarter to that said, potential for resolved as high by identified a to thought were of Vegas. Houston that Noble In probably for recycling. part the we sold a months hedge quarter campus wasn't

trying the And so to have opportunistic. OPI in what And strategic how the do we don't, If assets at we're we those the be market and and begin for move the company. right is find will the opportunistic I us wait. way can find only market, properties and But pricing to acceptable, pause to the that think be we out if transact. is is position prices we'll we

buildings and are or sale new or maybe I'm sort that. we're far and shake-up buybacks capital very you guess I shifted of to chance the development project as seems the capital it share priorities. slated more I then just that acquisition into Denver. guys broadly, of of anything sort guys sort buyback in as wondering just institute for flexible Makes you of capital were allocation mean environment is broadly re-invest sense. priorities it. that has And COVID becoming allocation how any mix like in there in even new And your continue that with like the current Got sort maybe just more that just like

we months we a ourselves it's to shifted where putting hold, repositioning with priorities. be more balance necessarily be wouldn't our generate capital. say but of capital and again a want strategic we capital, our I COVID put Yes, XX with that position allocating opportunistic But in sheet good question, allocation our on returns has spent good COVID kind could

done a have We development of redevelopment. lot RMR platform and across the

believe assets long-term, So can that much vacant. we markets those would then are where rents capability core in rather we would we grow and located sell have we that redevelop them assets we

And in think exploring our potential portfolio four will you years, three, five so strategic to we to decision. able opportunity. That next redevelopment probably the interesting three now I make have be we maybe to to are ourselves a see over position

just sort your how this leverage environment you planning it That's sheet does guys sort sort at available the What from stated take shape I sort change wondering let target really are it. of me, of year guess environmental balance effects more be all sort liquidity Got does helpful. next of the And of how mean, on conservative really willing is I just recycling? your -- leverage more be to change affects in good to maybe one I'm or as guys the high-end this of your and you have said. the latest targets prior are thoughts for out And charge to two? to ranges. then continue back that mid of leverage capital

right have a Yes. good It's interest now down. leverage question. take this real to equity We our issuing don't

primary tool our capital is recycling. So

buy we're is our be have we to below we fine address is assets rate successful I hope being selling answer we'll target a guidelines relates leverage it X% that, assets, to how haven't And big that development. changed that your so ability modestly we on think as we're X.X%, to still impact and question. I the how helps but our

you absolutely. Yes, Thank guys.

the Markets. question Thank Michael And from next Capital with RBC you. comes Carroll

want do about said, this talk what's one what to would the there, pursue timing in developments the development. comments those that portfolio. bit or tenant guess, just guess, the projects what's I a there the of I a could you David you currently feel first your you about expectation? and pursue to have like Thanks. the free Yes. you to little was a handful need I move-out

got, off What of Sure. XXXX. probably about the kick Chris beginning be XX which talked would we've Massachusetts as Avenue, quarter second of

the likely We know and are high one something vacate, it's will sure the substantially XXXX. we have and that is an do rents two of tenant market buildings we more occupied not an interesting is if grow a where could tenants where But more Boston area got growth Boston in currently asset XXXX, vacate. that that it the are other a whether we begins could located would believe when or in in market, probably that we've very then where we will XXXX, we be redevelopment. But where

are which a for we spaced, company. sense the makes So these strategic of think well lot reasonably

with little planning Okay. there I out. will moving mean, in a stay And guess, that's do moving they the XXXX. in holdover bit I and they the and the that's on the a longer then that's building have are Avenue DOJ that I through that chances believe -- Massachusetts they building what's to.

them them for while. they the have been We've building. with on Yes. I actually out build-to-suit been, years It's the actually a working last three CIF, to guess, get and working for of a

accommodate they've their so that we've extensions done during with And to period time them short-term -- build-to-suit.

them beginning And of is for build-to-suit next the that then Okay. ready year. and in done move to

Chris, you to want address that.

so starting have it's moving building, already -- that a them just pay and to and They're phasing over. function rent on complete. they is out contracted already of It Yes.

they if would is lease there stage, reason the of to So past that this expiration QX. no stay at end is at there no, believe

Avenue remarks hear a looking that I that And your at building. I is Okay. Massachusetts then, you Chris there in guess, about tenant correctly

debate. a is there So

to want else you lease or or pursue this you If to redevelopment. somebody it if can

correct. That's

either option, think significant going investment. to a be with it's I

for substantial I building think just to reposition for years kind of in lease user a XX is other a full going long-term neighborhood plus use development mixed require side development on or to the of

Okay. And then…

lease an less government opportunity much but doing for clearly, return. opportunity, It’s lower XX a Yes. Mike, provides interesting a a risky is it because years

to have both that address just we're going so to progress. And as

their on you're there. decision you And that yet Okay. awarded the government to then waiting so hasn't that still

That is correct.

I you on that and is Okay. the me then like a for speculative little more do more would guess pursue if option. the today. one assuming prepared last bit And remains you it mixed-used a I I'm that are market that basis guess uncertain to is

them. you want answer Chris, do to

another mean, Yes, but could are that. have. speculative accelerate I as pursue of would ideally, if think basis. and bit would GSA as provides help a option, building of this idea levels attractive I more say, the than user the we And teed we onset, we we go, of a to I kind for more don't leasing with tenants I But yields. kind mixed-use long-term I large user a – it waiting provides Dave I leasing on be think around occupant. a believe, noted it up that Yes, on ready would think various certainty some little in conversations full

the think The We we use could think are next Mike before ground. we XX% option. pre-leased But in could. shovels we be

Okay. you. Great. Thank

comes question next [Indiscernible] from And with Mizuho. Thank you.

Hi, good morning.

guys provide and moved declined to top revenue can Just you and the looks in brands. XX your tenant a Technicolor an Technicolor number list from bit number It tailored annualized like on XX. if update wondering

about I recent is on tailored restructuring Just closures know and reporting some there on and layoffs. curious store brands. the of function their

any So updates there. just curious about

do Chris, want that? Yes, address you to

on Sure. Technicolor. I'm here

around and on its of kind With their obligations impacted it holdings. a was was it debt Europeans restructuring largely restructuring parent primarily

entity so with didn't the a have side, on lease. And the it direct what impact we kind is which have of U.S. our

they've on progressed week. this submitted based the actually through certain milestones actually plans the and various received that's as early so And as approvals

what think optimistic feel to liquidity plan so manage additional give based we to on to their and approval of of or and continue the proposed. to implement their I as through business going them it's business capital kind should do kind access relatively is So, restructuring it's the going that

brand-- tailored For

interrupt Chris for Can a I second? you

You can.

Yes.

resulted France separate their in Alabama Technicolor, with from is their XX what them -- from number Huntsville, their renegotiation a in corporate So, in dropping and in did number XX. of the we to rent lease that of restructure us

Okay, great.

Brand. with sorry go ahead am I Chris, Tailor

Yes.

Brands, of them but this some of kind kind indication the and for we to their the I corporate there in news their is things until furloughed a bankruptcy headquarters lot some mission-critical. that making as reopening which it's on QX Tailor business think building do. I challenges of in of monitoring. We've occurs something the They as guess, of might their filing a different what I think little we're continue their one of brick-and-mortar stage think couple that Houston they with as that for the they with QX. usual kind about employees team current bit is Now, plan, in just have a And view of their that stores local anticipate with potential is we kind having have been conversations any about a more at of difficult I

are something to indication there with have no monitoring but real so be we And we closely the might that an on or it's not whether impact them. with buildings

it uptake helpful. And quarter in lease mentioned term seven-year larger have the renewal. renewals might non-government skewed and I remarks you renewals. weighted your any guys average prepared see from renewals X.X long-term term you That’s looks Thanks. about is may in a that been any did in but tenants be years, if know on by just shorter like wondering the

Yes.

we and couple I both of did say example cases there's So, with short-term for did. we this that kind where consistent would renewals environment tenants I these Chris. the is in it's guess, just quarter a so for of this and reside the that

two did we of three So, and between renewals term. years four short-term

consistent I is we that's building over a who been last the would and One years company often This three tech in with building three-year lot say happen has in renewal or a deal two with Texas. see general. of for tenant and XX-plus what a and in only I them a the Austin think done has

where surprise the they like market rent. positioned take renewal where for a us that we example and And upside increase dealing this our and of Austin have had in over is not advantage a so think so a it's do rents tremendously grown roll-up you're recent when this and did last deal three-year with to cycle XX% I with this most

And and this how And particular was think of then renewal they global just really in other was a so years plan with a with the to kind that's this is building its don't building government four plan shows benefit. California specific closer just of it I as is but there put together in kind and for part view the location. we of their long-term, the risk overall strategic strategic that any as case

Yes.

is occurred we quarterly our was but have So, because that during out When short-term always trying of some nothing COVID-XX the quarter do that are evaluate impacted there There space leasing we ordinary. second say generally, yes, needs. nothing would the renewals. we to people their is what

great. That's last And one one. Okay, then helpful.

touched forward think on guys seven I million so G&A should you to it's think been previously should how back this few haven't in wider we that think a You that in earlier million closer going XX about how curious of quarters guided we half. given range just to the last about

do address please? want to you that Matt

Yes.

for share and remains off remarks. price covered in QX QX. a the I G&A million as OPI my Based run is currently, where rate QX So, expense was that trading good $X.X

Okay, you. it for that's me. Thank

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concludes So, call. thank our you. that Operator

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