Brandywine Realty Trust (BDN) 2 Feb 232022 Q4 Earnings call transcript

Good day. And thank you for standing by. Welcome to the Brandywine Realty Trust Fourth Quarter 2022 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Jerry Sweeney, President and CEO.

begin. may You

our very Officer for you call. morning, and Vice President Chief George everyone today's Dan and of Catherine, our President Tom Palazzo; in much. Wirth, our you Vice Johnstone, are today participating with Chief earnings Officer. Vice fourth thank President call Operations; Accounting thank and me Good Executive and quarter Financial On Executive XXXX our

of forward-looking certain beginning, our discussed federal statements within information meaning constitute to Prior call the during the law. securities may

estimates we based be Although, anticipated assurance these on reasonable reflected will believe in that statements assumptions, achieved. results give are we cannot the

For further that with the as impact release well anticipated information as SEC. our we results, file annual could reports our please most reference quarterly press factors on our recent that and

hope first you looking are to foremost, Well, family holiday wonderful had season and we that XXXX. and and a a successful forward your

we'll color plan. and fourth remarks to out During review that available quarter driving briefly the prepared then key will questions. Tom Tom our any provide results, results outline guidance. George, I our assumptions and review this and our certainly After ‘XX answer ‘XX are frame transactions recent ‘XX morning, our on Dan, business

estimates FFO consensus our by we reviewing share, FFO $X.XX year ‘XX with share. So quickly consensus full exceeded per posted per of fourth results share quarter $X.XX and line per in of which $X.XX

feet XXX,XXX of During the including fourth leasing ‘XX, quarter leases, of square feet XXX,XXX of executed square we new activity.

leases equal at ‘XX activity square XXXX new that pandemic quarter XXXX. the the experienced XX%, favorably new both in back to that we X.X pre our and executed our in leased it fourth compares by exceeded during million looking our specifically, we feet was levels leasing of XXXX. we of XXXX, which to space, year For More volumes XXXX,

a XX% and cash a a also of post mark-to-market rate GAAP basis. We on basis, rental on XX.X%

and square just GAAP shy of Absorption was quarter XXX,XXX a full cash basis. XX% the of just for feet. mark-to-market on on shy by year XX% basis a Our negative was

negative this rate. half a of known run which in in our below of annual half was other rate outs, tenant the resulted Austin, retention move absorption a result were the quarterly default Now tenant while

And So for our above targets. previously our did XX%. business the the we of guidance below the XX.X% January due XX% December for did were bit accounted post XX quarter each year tenant our the occupancy retention sale lease basis little anticipated about mentioned We plan of metrics. at and Tower generally the to default Bridge forward occupied points and end into which split into lower a on property. those was move And at

comprise occupancy From portfolio worth continues it's $XX.X XX.X% XX% which NOI leasing suburbs $XX and midpoint are an and range. that Pennsylvania about our Austin such, underperform. million portfolios, Philadelphia, our lease, And exceeded our $XX to of and million million occupied noting of XX.X% DC revenue of to our standpoint, as spec the

outlook. look solid it, we the a is As portfolio with stable at

and ‘XX to ‘XX have tour Fourth in physical package, of through rollover tours quarter average third to quarter through ‘XX X.X% by our tour fourth an the As Physical we we exceeded has average an forward of tours noted exposure supplemental encouraging. been also XX%. volume of buying quarter also reduced and ahead our XX% X%. was by

square ’XX, over X.X million our volume year feet. full the tour For was

quality of to advantage also tenants experience the move taking opportunities We up continue to curve.

flight XXX,XXX to the result XXXX, square quality. of feet this activity During leasing of was over

totaled square square feet, portfolio while XXX,XXX our continue at to totaled feet. looking a as contractions outweigh addition, in tenant XXXX expansions expansions tenant point reference contractions In of XXX,XXX

over ratio X to contractions. X.X a almost of So expansions

of operating million And on portfolio flight fourth executed feet fact, up our which in operating curve. the lease prospects quality tenants. On new are to Our pipeline about our leases square portfolio, includes to square million X.X move the quality of development we about million XX% pipeline X.X quarter during is XXX,XXX were leasing that of and advanced XX% on projects. in looking feet X Also negotiations. stages of our the

at the of venture economic and our in net on XXXX two the range X.X as EBITDA, of quarter Looking liquidity X.Xx uncertainty, leasing more The higher meaningful ratio joint benchmarks. EBITDA, to higher was key and debt certainly development our track the activity we've times based due quarter. and we transitionally debt some activity. core fourth rate ratio from midpoint financial metrics, And at metric this our the the net to from leasing X.Xx debt EBITDA are our discussed, is our to spend in increased decreased and attribution of and ended year our to which volatility third

the we've since last recycling So progress capital our and financing call, significant on proceeds. raising made over $XXX both million of by fronts

coupon. a X.X% $XXX a proceeds by essentially $XXX wholly In bond to collateralized unsecured maturity. completed do took The did has five-year we our of five-year due bond announced a to offering between previously complete to an secured And seven the investment differences the secured an financing unsecured debt to December with grade used it's note that's unsecured As provisions and million coupon we and important properties. two we Those note, February as flexible remain retire January, million borrower. were in owned at debt plan release pricing route markets about prepayment years. secured we X.XX% solely

swapped The we term unsecured roughly date below fourth million X%. sales team during sales June get at of $XXX also Also actually proceeds, generating towards XX on million maturity rates loan quarter, the $XXX cap were two two our the X%. those

combined all significantly improved our these results liquidity. the transactions So of

XX% essentially is at X% rate. fixed consolidated Our debt a

until $XXX We have our debt bond. no matures consolidated million XX October

our of and We credit hand. million cash also availability $XX full $XXX million on line on unsecured now approximately have unrestricted of

leasing business we expect plan projections, execution in at capacity and XXXX available SIP, TI As after on about our full we development remaining noted costs, have our our page our million development fully of capital on funding ‘XX. to XX spend all $XXX yearend based spending

strong usage the year $XX during so on business of based million So very liquidity our plan, position. net only

quickly XXXX. Turning to

‘XX We guidance of share. as per FFO per FFO and the $X.XX below $X.XX to ‘XX for FFO. follows. the share projection are At of is our midpoint range primary are share ‘XX per earnings midpoint $X.XX $X.XX drivers The providing

share Prussia will contributions store ‘XX NOI $X.XX completed XXXX the as is King improved about million, by on operating and results. Colorado, exceed as expense growth well $XX share. per to Road XXX interest increased or from higher Our results recently offset though ‘XX $XX million, Those or by same levels of NOI Dulles include This a due financings. XXX $X.XX

projected We contribution share from interest ventures, primarily projects from about due coming not decrease being per also have $X.XX higher and and in initial to ‘XX. rates, several development losses online stabilized our until joint after

as per in We $X.XX amplify can decline a in also projected income detail. more decrease other well anticipate And $X.XX the as share per Tom those land XXXX. in gains over share certainly points a about activity in

Our key operating headlined by two ‘XX plan is metrics.

is mark-to-market cash Our range X% XX% mark-to-market and X% and between is XX%. and between GAAP

activity. the and certainly our ‘XX our lower it's ‘XX ranges leasing of driven remain strong, very they composition are these than primarily projected by levels, While

example, the City during suburbs. from CBD, XXXX and higher Pennsylvania revenue University For leasing with contributions much

in higher markets. Pennsylvania of shifted given our leasing and core volumes have ’XX, to Texas Austin a For Philadelphia occupancy high level

rate on of growth than from GAAP a X.X%. results. core based increased XXXX development X.X% revenues, will to be be our do City while will plan on University debt occupancy activity continued given will in X.X% conditions be zero perform XX% our Spec levels on anticipated $XX and CBD business XXXX XX% are current in run Austin revenue cash X.X% Capital and leasing net at the NOI will drivers to below between in done about anticipate with between mark-to-market with and we above ranges $XX range leverage XX% redevelopment million range the or store will between to those XX%. The to and Our midpoint. which EBITDA million a project lower XX%. $XX will be is XX%. and And of our between perform between X.X% and do And Leasing market ranges. basis. basis. the and and spend, demand same Retention X% X.X% to We the levels million and XX% between XX%

payout midpoint At the of and our XXX% FFO guidance payout current ratio CAD dividend ratio. XX% represents share $X.XX a per

monitor with business underpinnings to in could liquidity and this Our activity importantly, talk million substantially needs a gains. believe activity, between as plan we'll few to plan as dividend does our the clarity are coverage we at $XXX addressed sales our as payout sale on moments conservative they targeted and levels. the $XXX current more dividend generate outlook, And progresses, additional of project that million the business Certainly will ratios, and coverages board do we levels. get always continue more we economic the keeping both

that financing during of King Prussia project already first XXXX we completed, our the engaged are Schuylkill Market construction addition Road In XXX to we into planned the which and enter our Street on project, and fully the to of loan a leased is here activities Yards actively year. half

During XXXX, we also non-recourse loans ventures maturing. with have two joint

well. refinancing the already as these discussions We underway loans well are for with

financing have one refinance yield. market We is opportunity. in financing is lenders levered venture loan And a a debt joint reviewing currently first very Square we're XX significant over to mortgage. Commerce this a The current million $XX low currently our with on the that

maturity in of with well. August is partners are as our second The there efforts refinancing underway And ‘XX.

the range touched will half million on price of dispositions. $XXX proceeds properties the generate in million between And for plan are in year, million of million anticipate those market during to the a we in year. $XXX $XXX the including those at $XXX discovery. between As we second to to We occurring of anticipate business have I our

XX% and with that office. is have portfolio development, active $XXX million owned as million. requirements Science funding at the we looking $XX development, of in This of $X.X we development and remaining XX% wholly leased currently Life our outlined under SIP is billion aggregates In XX%

with hold, opportunities, XX% venture and obligation $XXX last capital million, share XX% fully million. development more office. the the starts the are be in approximates joint cost, On venture rates. with and our other I $XX $X leased cost a existing as funded this is of entire pipeline residential, Life on on is mentioned XX% Furthermore, the in remaining more this million, and remaining At full by clarity development Science partners. pending of joint on to joint suit cap of future call, Brandywine our pipeline build equity pipeline, venture funding leasing a Brandywine’s our front, debt, $XXX million than pipeline

of life our And have will we X% space upon life approximately plan Looking XXX,XXX ahead, of though, science to feet we million existing science portfolio. completion X develop properties, operation, square square the about of do space. representing feet in of about

in our As X we life is platform objective square footage. to science that identified on to page our grow SIP, the of our XX%

now Just some King lease leased At in leases. remains a review redevelopment online $XX our is funding feet. of quick over with remaining at for Radnor our XXX of of a projects. Road strong XXXX, with million leased XXX,XXX square XX% and that a specific pipeline mid-year coming those Prussia project XX% -- market of

costs half split is base, on in is We requiring higher currently will You the for have ’XX. and And time at residential totaling life of life JFK, of science in XXX,XXX we which is extended science tower split. feet, about second of delivery the a which an several key original up is capital year. pipeline pro active the budget office more on we our XXXX square stabilization leases the pipeline XX,XXX Hat have to of And science project systems as build generating see now quarter. return window our project The term the pipeline wall from activity We've progresses. square superstructure last the now for complete construction on The longer tours. a done this as prospects halfway XXX up over feet XX:XX more continued while given the note also SIP assumed Hard building. cost. to forma life QX and is on the the life our XXX% had science that also increased

the We also year, first start block residential of all so delivery the expect on of half of schedule remains in second there. to this units

is building XXXX and Market, on budget. size on our life schedule XXX,XXX square foot dedicated also

half is construction as touched have A, in we QX. enter pipeline will We from Uptown during, leasing on ATX in second and anticipate again of on square construction over loan this a a Austin which into feet, And XXX,XXX budget. also I ‘XX. we project the time on is totaling on up Block

two down is That On XXX,XXX due leasing office larger there on quarter, the hold. to our primarily pipeline component, users putting is from requirements square pipeline, last feet. their

been now that to up full focus point to program. Our this users. multi-tenant really building marketing to shifting a -- We're on has up

build quarter phrase our commentary forward progresses. that pipeline is as development But up pipeline. wrap the key flexibility. expect on to And So the to timing our the pipeline in

have basis the land of office. We we low million diversity, about XX build only and square can that required the a to product feet XX%

With life and X,XXX between the square X ability to apartments. million of X do over and science feet

Our approvals to further us adjust next market overlay meet do that give flexibility demands.

as Our business ‘XX million I year. in property the million dispositions, to does plan expect of the they'll the of include mentioned we $XXX $XXX second half occur

total ventures is While joint about JVs. looking of our our do we plan debt debt in or not many sell with our our from ventures land of including million million our anticipate parcels from XX% $XXX coming and ’XX, $XXX our really non-core coming that to for levels of continuing about at joint operating

of plan anticipates several those XXXX JVs. recapitalizing Our

liquidity, redeploy So higher $XXX XX% used now JVs and the year. as into a of our basis. of leverage will reduce strong on a development leverage improve and liquidity attributed end our operating debt pipeline, these to buybacks dollar by or results. neutral from financial including stock Certainly existing from reduce opportunities, the million we assumes will overview debt our permits activities plan were remaining our Tom an is provide fund by generated growth about

Thank you, Jerry.

diluted income net and in consensus FFO $XX.X with per million quarter million $X.XX diluted or estimates. fourth line $XX.X per Our totaled share, $X.XX or totaled share

the regarding fourth consensus, line of our number moving report had with pieces results while compared quarter Some variances call guidance. and quarter quarter a general several in third fourth were observations our we to

due spend. million. our quarter our primarily overall million or our Our $X due portfolio call occupants, $X.X and other performance being our and Termination income better guidance to primarily above third $XXX,XXX occur totaled below below interest Interest $XXX,XXX XXXX. the to portfolio income items was higher will was budgeted forecast, the income other quarter million capital portfolio. up in by throughout that capitalized quarter guidance primarily It third to due totaled $XX.X expense slower third portfolio

balance we bond million was acquisition to off the thought increase The G&A personnel quarter partially line $X.X offset the where was the pursuit end be our So credit $X.X charge for guidance. of or transaction. of above $X.X below to due costs. million expense a year deals of third million by at lower costs write totaled x our onetime the

did Before occur quarter. gains to generate tested one We not land transactions sale to occur. XXX,XXX that the first in the quarter in which anticipate

quarter Our below fourth debt interest to and net ratios coverage service respectively. X.X And was debt XX%. GAV and slightly X.X were

to annualized of high quarter end our and EBITDA our to of debt X.X. X.X fourth which X/XX above Our churn was was X net guidance, a

we part have expect far XXXX. do As become changes, portfolio we the this will and as that core stabilize we during portfolio or of year, expect five, our four

an will collateralized unencumbered. have seven million two our complete financing million anticipate capital significant remain that Prior January of last a financings activities $XXX made five-year Jerry and offering financing, $XXX future completely did million unsecured coupon since progress On X.XX% borrowing, call, owned ’XX, at fronts. And wholly it's remain the portfolio In Those and unsecured owned December in the recycling blended financing unsecured a wholly And we secured by properties. on we completed will five-year at securing was our $XXX our financing X.XXX%. to we financings. rate the bond we secured outline on raised at X.X%. as borrower

over rate, preferred of line and our loan the maturity our are We its XX% XX floating only -- rate balance also swapped at now trust term our debt our and X% of fixed consolidated unsecured on only is just credit through line $XXX date, million June floating securities sheet.

are we maturities Regarding Square debt, marketing joint our venture on XXXX of Commerce including working the property. currently active

maturity $X.XX extend midpoint We're XXXX share. share. basis, diluted dates on are to FFO per lower our a will $X.XX asset the with loss is to has per decreased possibly be leverage. lenders. also ‘XX current sales the considering guidance, and the Based share also our FFO We at already maturities net $X.XX partners per loss on midpoint, with our some with existing working

expense As GAAP do in our small Interest going drivers up. other JV. be NOI Market the Jerry to Philadelphia income We But management expect $XX mentioned, primary is up Street being incomes in as expect do a being sale and of fees. lower, to interest lower we increase be be XXXX a million. result to of and the

happening FFO the that is project initial West. rates liability some that million but expense We our gains Yards land caps of interest anticipate and due we some to Our off. our on XX.X losses of terms burn which down management is anticipate in also do opening down of swaps Schuylkill primarily will the JV higher also residential primarily $X are and at

XXXX the on about is Most the the portfolio. NOI continued of life leasing go through same net increase Our XXXX built Prussia on we $X.X development of following year, $XX to range assumptions. having million of GAAP NOI that Colorado, improvement expect increase to our to store be $X an of incrementally we due million. the million, XXX and of at was we as about million. higher King will be science XXX expect $X do And of some

Our And and be interest $X the to will due total million G&A lower million. from primarily FFO contribution expense to will due XXXX. joint to million higher is million consistent with that $XX to ventures $XX income expense. $XX

asset But the year. interest of there line talked second $XXX we incremental forecast time. do of expect the of down expense that use the do will credit million. some but of hit We bring to year. will be in that the about, later expense line as total half part the we We the interest about sales be As have throughout a during

that And our million redevelopment for further capitalized -- do projects. anticipate We below year. to $X interest on which numbers can to increase onetime as continue X$X $X this through to and $X due land and we And selling interest Termination well. those will then million other items ‘XX development million we year have $XX ‘XX. $XX land income, in second we normal between several are Capital million of no and of as $X progress parcels. program sales buyback the anticipated be million. our is non-core Prussia recurring it change at Road. do And have million, we to as and year million. King in go loan XXXX million the the happening There activity will in we $XXX XXX half sales million acquisitions don't and share see management $XXX between model Jerry There's in activity property property no we fees the construction ATM anticipate a model. and Net of the as mentioned on or

share Our shares. be count will million XXX approximately

quarter plan about $XX.X the to we look G&A have is of be that $X.X the of FFO compensation increases we'll expect NOI. to The $XXX the million. $X.X As property gains we fee should From plan expenses about general a total be And the total expense will be perspective, recognized we sequential and our for million. contribution as joint million, year interest at million. first million. year, capital from will our have are $X.X million. will increase ventures $X about is land to million Termination about of our half due $XX normal assumptions first This

of to going the Colorado, mentioned uses leasing million contributor rage offset to earnings, for primarily and XXXX be range reduced primary is to lower King partially Dulles costs. $XXX due by as between higher main Jerry for infrastructure. some Road, and Broadmoor development redevelopment. XX% to CAD are The XXX%. and Prussia Those are XXX The on be work XXX going uses Our

joint common total. million, to capital dividend about million, revenue ventures revenue is create contributions $XX Our of should $XXX equity maintain million our be $XX

leaving balance the Some to primary joint $XXX our of did million we retire as million sales credit operating Based of million which line to $XXX development cash be bonds between Square. January. had the million on from are sources but by of $XX capital availability. capital will between cash of including that operations almost some our at on secure sales joint The the land to We ventures close of and of and Commerce proceeds, of $XXX our going $XXX generated be the also program will in approximately that million. our as million. And end ventures balance well contributions the plan, about term anticipate flow $XX and loan full the year decrease $XX hand million $XXX the

net due yearend. our a have range. projected X.X EBITDA And range increase spend to on to XX% also minimal the debt the project, to And be We income debt primarily which to JV incremental is net between will X.X. will in the by our XX% and development will

additional better development will of interest believe are anticipate projects towards reflects ratios this Our stabilized, to core our year. leverage coverage include the spend, eliminates joint active those joint the and metric core closed leveraged are coverage We leverage metric higher We such un-stabilized elevated. developments approximate our fixed believe growing and ratios X.X ratios. redevelopment charging that EBITDA X.X we also X.Xx, in which our our a to due core be excludes ratios of ventures of development and pipeline, development portfolio and rates. We net That more end decrease but these due and to ventures the projects, as core sequential the debt highly our primarily projects. these decrease but by as the interest represents leverage XXX the our capital will back believe And to will will Colorado.

back the Jerry. turn now call over will to I

very ,Thank you much. Tom

line stable near-term quarter, through takeaways is have liquidity operation portfolio an and solid mentioned our to and portfolio ‘XX zero, strong all continues rollover bonds, our our X%. mark-to-market, business I credit annual keeps and With is very we covered shape spends plan footing as dividend with the manageable covering believe of all standpoint, reduced that in capital Since to our key we last Tom ‘XX from velocity. in wholly solid our baseline presented finance average a while or mentioned, strong fully growth only only So exposure forward prospects. improve liquidity of accelerating fully and we our needs, leasing operating

where we and wish your the that for in families you And We open that yourself and questions. up to interest delighted start really we do end question of the do up. you that well. we'd one Catherine. time with floor be limit usual As ask to and a follow

Instructions] [Operator

from Our first question Evercore ISI. comes Steve Sakwa from

Yes, those thanks. forecasts. guess end on and I morning, below know at and Tom. I year, of operating numbers and kind Jerry the outlooks some I for came original just portfolio the the your of in to core the occupancy. start Good wanted of lease

expected And those even but be you've numbers are some to in or lower retention ‘XX. And ratio. got flat of a up

So your year. and just the last of kind your of seem trying new to sort that short hit numbers pipeline to of confidence leasing leasing square occupancy in up to kind fall level,

why take that Sure, don’t Steve, one? George, you

process Yes, the sure. actual points in did or moving Glad of in substantial January, fourth XXX points, and had was another about to did, fact, December. occur up occupancy short we occupancy, quarter in and Austin XX,XXX did good that not look we the tenant on occur default square XX feet come basis basis completion, in but morning,

year, that commentary, Philadelphia, CBD that's and And XX%. as of really about twofold, is really levels consistent occupancy, risen. we're anticipate feet out is Pennsylvania XX% our contribution now in the square we average a bottom again, that is some in in The closer occupied the to average of roughly be ‘XX. in relatively probably They the occurring were outlook with a DC, the ‘XX year, in footage the Jerry XX% CBD be of So probably end we'd square ‘XX, XX,XXX going require to to to contribution we driven off which Austin, but dynamic for for being occupancy our our levels will with close XX% that about and mentioned an his have thought in of about been of for would XX% what at square only we've in and the all-in-all pipeline footage past. XX.X, have contribution XX% XX% projected are seen Austin the

have to good that activity, do our square currently relates it a focus lease XX,XXX since feet lot Austin, levels As tour is have on was there, some we December. space in given particular, about and of in a defaulted of out that of seen we back

So we're levels building. see in to that already activity starting

So the big we of remain And prospects that lot from positive, growth properties answers our professional of and somewhat service just in see of pipeline. suburban the lot service are characteristics we insulated Austin, we companies. a still in believe -- a more that financial Hope tech

it Philadelphia new the life for And these expanding some they assets? mark tenants to pressure new or the to new Austin of through I with sounded to square and you is know quickly, feeling tenants just then kind versus you, tech in case was just the are maybe and us a Austin the to of can slower. Austin tenants color talking so obviously timelines? the wanted and tenants market that pipeline, on Jerry, Okay, yes, just on XXXX, of more a thank give about market? the kind the development many X.X But you slowdown how kind you've the Austin bit feet quickly. XXXX, are that tenants walked on in I to mentioned, flavor just any which touch but you you're science like in-house or maybe of little Like talked

is is XXXX happy behind. which and companies this development, which Sure, coming to, look, Steve, year, then take XXXX, really which a the at the online Yards a Schuylkill year look later about

touched significant quarter-over-quarter. of majority The growth prospects I up market on is of As in the companies. the pipeline are

tenants square significant new consolidations footage We the city Philadelphia with are region. the larger around who but other areas have also some coupled several are the But capabilities. to from expansion

better, an That's call quality, good into surprised into uncertainty, company to last the all So to quality, and I to developments. of higher have we all pleased. know the of we're high continue coming for seems companies. talking activity pleased two rents this managed amenitized higher the standpoint, a life a to And of seen, good dissonance to because that happened line before just there's really in to From deals pipeline be tenants And city our building. are quality, those companies the that we're market to tenant upgrade in the to willing the interesting position existing be older seeing their with a projects. those Not new get higher stock. the I tenants do level an new of point, one just at to economic on velocity from major even seem Yards. that quality pay up to base into continue in see And that higher new very but the love run better office years. with to to it's we very Austin. looking of looking driver in move be of kind in very trend still quite quality office actually it Schuylkill more they're kind region but sector, pleasantly touch better portfolio, we've science And we been prospect second, jump the for higher very that then we're from across move to region And really buildings. what's lot be a of board to

software our a weekly the tools, very closely outreach programs and on monitor actually our basis. So through tracking we pipeline that CRM dynamic

discussions substantial marketplace Steve focused Relative building us really a trying Austin, number and had find a far, a paper. of that in doing lot been user. and of lot we'd the on of we tours those trading thus a in were And full to with to

in dead but of got put really on As comments, on those not I my a hold mentioned couple put hold.

A other the So a approach. really trying strategy. will we're the return a couple the markets. are push think the have some answer then who quality building then, markets. Did bit, than shifting with to But your we a seeing bit, that We trend been bit to certainly large and prospects our They're but successful. it's be We multi-tenant question? to a a components from take Block Austin's slower behind vast majority that would find of even we to workplace a the towards little presents. see I one midsize about improving tenant Certainly a of big think other

Lewis comes question Michael Truist. next with Our from

you. Thank

the this in can Commerce mentioned difficult interested So sounds lenders be And JV office heard you properties though we've a it like financing general. obtain for including Square. that year, obviously there's maturing that lot to of even

on if loans? So regarding to might financing you what you're to anything or for pricing environment? you proceeds speak the able And expecting be those share maybe can

you Tom, take want to Sure, that.

of are of has Mike, Tom. bit a we that I are newer and side, be for lending to banks, it’s there lender loans, on mainly are a which traditional Mike, Sure. we hi, seeing, sources, to talking their new on a your that number pullback origination continues On think the been loans. appetite

of debt of the are be looking it the funds. it or be some one type other at opportunities, whether we So whether loan, securitized maybe

may other group have sources its a And it project looking although of a the TBD, good bank, month don't getting expect really in higher other We a the so. I we we'll is that still couple to handle a with have quotes is kind it, where it. progresses single just than at of how were are Pricing be pricing, be if I near size. next pricing, think rather debt or due of those the traditional banks than the to one future. than to they see banks So today. on do though, we're over And would this there taking banks,

little a cities less hand to Okay, into commutable the on you Center an office bringing those flight suburban that the already article talked be quality market suburbs are flight the more trouble But there's so broadly great. to post bit. offices quality tenants because perhaps And Philadelphia the recently, other is in I and better that more about COVID. in position, easily into going might City, people arguing are theory a Thanks. then read

seeing that terms the there's are involved other? you of strategy favors anything suburbs think in over a the know, in So both? the city? in I shift obviously, That demand one you you're versus

were out suburbs, we city. to tell people, out certain at question. discernible to Hey, or We seen city of Michael, the see into couple points city. moving few really the either into the a trendline the you expecting We truth. great moving more haven't move the to We a that, the only really tenants from outside tenants we've from seen of conversely haven’t city CBD seen move a the to seen

think a tenant announced did, do our And suite on So the continue they company great to to focused to no Arkema real Radnor access credit, can Radnor is look portfolio lines the high-quality or We quality and space served tenants and base. both and Interstate highways. love employee amenity a build places. -- X we line in on Radnor of company, tenant location type, the really train example I great discernible by upgrade size. to see we a by by trend they their And of present

has a -- transportation daily seems suburbs By workday positive and location of be than the office city in And as occupancy is in very driver city. think though and traffic levels during returning are But the a is on the pre-pandemic the to locational it levels the the to the It the and in kind higher line. what trend Michael I foot of mass suburbs of occupancy, been as city. place, those folks whether or had I George, quality of is in far even in the So those yet. basic it suburbs. city though you've know, not than the higher in decisions predicates numbers, that the are kind back is percentage the

large But plan. everybody bring there's even -to we're the the just employers I to it's XX% in two average back add closer closer mean, a And XX% a back in that still number in of on, office, a to kind suburbs, where of even to bit seeing probably to week on a three-day slower XX%. to little hybrid the city on of Yes. again, have been kind a

It moment our question. for next Just one comes from Citi. Michael Griffin with

can on King bit, talk we Maybe Prussia. thanks. specifically demand for life science XXX a Great, of

city product additional was demand kind be cluster our a down core further pushed is the great. is, -- like asset science And CBD how you of there suburban this? Philly? noted from out confident of life in think a kind You there back This where a quarter. that commentary is of you any that for are stabilization you Just could would give

XXX? Yes. I'm sorry, on at confident Michael, demand the

Yes.

Okay. think No, confident. we're I very

we hybrid really behind that think a I predicate leasing the office. And kind project the kind trying the our and market costs. of was of life to assumptions that is -- science were capital

to to mentioned, the I our did by yield about $X.X as and raise that point did So $XX just We quarter, this the recently. X.X been we building by million. as we've really marketing the delivered capital cost increase

they've we They've science condition, little decisions, It's demand while Center, put It's been what across which in and of become Science demand is showcase board. in in really lot there our strong. companies. We it's the to has a we're money making very -- strong, of seeing in of few So here drivers, now. -- few for frustratingly drivers Radnor the tenants a of part it the been building. the really of we a been invested they've slow have been which that magnet infrastructure life a Life kind kind buildings a have

look at life we that a it's pipeline, bore full XXX% as science. But

than -- space take as bit to their frankly they more and the through a planning technical we little requirements tend requirements. of we're Some they just talking users larger to, would go time like Michael, are

look drivers a stabilization occupancy the behind, that taking was when just key they're targeting existing and back. date drivers date, at one pipeline the their of moving So behind the

here the where is of but there life the also quarter further institutions, kind University be springhouse. of hubs in the Prussia some science to of primarily seems life in activity King drivers, suburbs, Philadelphia City to in demand well fortunate anchor strong north But the particularly some kind pretty of as science as close Radnor, proximity of

life a And a then you on predominantly of kind Street have A primarily good leasing been very suburban also of here city, Navy pads the So couple of around low-impact have There's few manufacturing good while or some it's been and generated University and and very XX other between as the City market. that the XX activity research those in front. based the pods science well. city down pods

we're So -- very science side life locations. the we're the City University encouraged we both on actually demand in the seeing with remain suburban drivers and

that can might find portfolio that a helpful. And just any in default definitely you. in Got bit? are then the And on in your That's similar tenant other Austin, a expand there on you themselves situation? tenants

now a bit reserved the this ongoing got I to I'd where a Skyway of was project XX,XXX and our to with little and the square a course action, have we've pipeline a eviction do business for of in of weren't Southwest the them we've the Yes, default -- due forming said, -- just be we're tenant to. was got Martin the dispute of feet XX,XXX fully one the as to They market. foot negotiating. lease in were of and got course over stalemate space got proceeded point with Yes, had square And really Sure. glad on out a 'XX our so We on But XXXX. at one reserve. that which we next kind the having a the impact negative we tenants Corridor. plan back about

I are And in other any that tenants there might you default concerned the --. guess, could be

time, from mean through not folks on not really, the I go his and basis, really time, any along always time. space. And not utilizing this and kind don't of this kind space of have at versus receivable Yes, assessing at our this other -- we monthly risk we're asset Michael. we utilizing team, that that accounts Tom we with really perspective. management think who's a at

of as and second. who it start people Michael, -- Tom pandemic and did in we where at and jumping were even the you Yes, a credit needed issues. for the seeing help back is We getting this where go were

more retail terms For were area. fairly And having of the most part, in we office give most lot did the those we of not in area of the than defaults. relief lucky where a are

the monitor credit we through team we and our fairly on that been really the we've good of do that. monitoring as tenant's job a go year, does that, good So

is we what been by far don't really we in So that the a so pandemic we've the list it's has following. nothing than This largest have tenant our lot. saw been one first on different

think us So will we lead be current collection in that collections. there's clouds now really right storm to our don't change tenant going see any and to any rate

next our Credit comes from Okusanya And Suisse. from Tayo question

little Hi, dividend. about just good bit wanted morning, about everyone. a talk to the I

of basis between Given the you forecasting guidance an a to get FID you XX tight. guys dividend so anywhere coverage really on are XXX,

your how of going of of uses forward, the you given curious especially kind it source think in XXXX? capital of of about kind kind again, Just

in. Yes. Tom I it be that, last Look, free was acknowledge we've payout and had in let it's will and tight that certainly me several certainly, the to weigh we for feel address higher years. guess, 'XX -- the ratio than

'XX flow obviously as wound to as we So as XX%. with a a a We'll business thinking about we we strong hard conservative started took the we've example, during of XX% dividend, XX%, foundational established in at and we're up off and baseline range cash closely 'XX monitor our an that think the plan. a look we but right But year. point

So that very capital to forward controlling manage cost we expenditure. good at we sure our revenue and making capital become

from. So grow to gave us we springboard feel that baseline a good

at the as $XXX million sell, between and to mentioned, of million look we as also, we $XXX properties. I plan, We expect

exiting addition joint partially ventures, ventures. joint to operating couple a of In liquidating

generate some So losses, gains certainly impact those income. but may our sales some anticipate of we also could taxable that

good flow very premature has dividend. our And outlined announcements, the seen we that gains it cash be from in take cutting So as baseline variable might the of look you've felt liquidity sale -- with at our place, potential the also, we Tom is shape. we and in a to felt

this will forecast. change to looking continue upon economic and based from certainly very that to baseline flow confident grow circumstances. our we're So now, ahead, cash subject Right

assess And will we company be that honestly, coverage tight, office very a dividend quantitatively, covered. challenging adequately for So shareholders. should been wallet qualitatively, the year be it's

much keep shareholder the as cash conservatively make on returning flow as that and after we wants we very baseline Board with sure the really our getting to base. to So value our pragmatically comfortable numbers folks can

place. in the keep was So decision the to made dividend

they will appropriate. course that that any monitor of the Certainly, as always the adjustments was the kind as the thought But Board make during do, year, process. of

So your that question. hopefully, answers

swaps follow-up lot Could at maturities a putting on side. give point helpful. the rate us think of sense variable consider just debt And of very debt would some of debt you if JV general any for of this you upcoming a on kind then the where kind you raise debt? of That's just a could and the you outstanding

just this in up Tayo, wanted the Tom. that. I I'll on jump on to is on Sure, follow dividend. Jerry's comment

year, have, we dividend the the well dividend our we at this dividend that our income looked sales gains having because we ended of gains. as As did our operating utilization on as between the up full of

dividend has stable onetime than dividends or of it and giving always to kind rather goal the gained. special sort we out have of keep been extent Our to monitored

we top basically in monitored of right actual and that year on this dividend. So came our I thought

whether That reasons And would generate dictate that as sales, for know we the those market. look well. and the in have happen at would we in so dividend we will we'll quite the bit we monitor a gains may keep place certainly that as again

more As place. we maybe look JVs, we a swaps at the executing in at couple debt for on are the the looking on probably debt that's

we out. then on seems rates, dip are right further they increases to The may are a there as we the where into be So from get to 'XX. that now. rate little looking And

are extensions to a those couple loans. banks talking We to of about

those XX% we performing they're in but are most general extensions, So leasing still activity. leaving about occupancy is properties well. can The good portfolio well, whole the pretty extent on the of get to the performing

lower debt we about today. debt, partners we hope we at that where curve curve looking So talk extensions is would than might some on to then that be get if the the our can on may that something the fixing out

And America. Bonnel our from from comes Camille Bank question of next

pricing year. And the expectations sell? or mentioned talk see might you stability of Hi, morning, we to quantum to to your when Can properties? the you you're This looking this types geographies start targets of office what disposition asset good morning. more for broadly,

Washington, terms as pricing, a marketing market of our at look Pennsylvania question. of properties properties D.C. have doing Philadelphia couple 'XX, test for That And sales out Great we discovery. number the morning. like of in there sale Right we've Several is in properties Austin. as target everybody now, few looking now. all we The operation, actually, of three Good program markets, well our I also includes price a the in areas honestly our think of properties in at -- as the identified suburbs. suburban Yes. sale. in a we for for

they can Buyers are debt will trying out to will to what pay. what yields trying kind of and where figure are that. out they price sellers So pricing figure think stabilize be

the been with of as signed, packages actually volume been checking the confidentiality out the are well people and on of have we've So share rooms the that the due rooms reviewing happy diligence pretty file as number tours.

example, an in already one the This we Pennsylvania agreement launched we suburbs; where on have is January. marketplace you back give have we XX-confidentiality it signed. the to So property in a

fourth Tom's and are were of course of the while pricing; we markets, during do in I the going That's the to many ideal, quarter this can. translate to all why year not year. come certainly point. than we're they have today We reasons get of better things in the as up couple that they as a know how debt the questions last articulated, market know of one as at really the Now don't

for pleasant a are seeing Where, Square pricing. out clarity certainly on that again, pricing more we to at has think more come us. we'll financing. we certainly, and of are looking number But high-quality been through looking know. loans. there office get on out, The -- lenders that, don't certainly our surprise visibility lenders are get more that terms And So seeing we once we Commerce we and a lot

I are we're now, that actually X the up get the we're from some from of that the to very from want bit rates some what think thought see right we take we're definitive sequence opening once Xs of some we what happening are more we and a the the going level targeting little be these the given to marketplace advantage high some answer how these and of pace if properties Is macro hearing selling. of But I in to favorable, term upon a market lenders year. some spreads And current we cap of on of in that compressing helpful? until and a see is the might market up degree, Xs, window. in, can't refinancings the we opportunities offers low sales really a modulated based properties exists to quality those accelerate carefully lending during to terms We've you of read. course Does your question? give that But that will

Green comes Street. question from with next Our Bazinsky Dylan

And taking guys. the Good morning, thanks for question.

comment Just portfolio? your expectations across curious effective kind on growth you if can of the for net rent

Yes. George, that? on want comment to

our But I opportunities. think in at market. market market suburban of And portfolio average lease Pennsylvania to where and kind I look we Dylan. today. Philadelphia morning, below good a absolutely. it varies Yes, mean, X% probably little we markets, probably see best CBD When is Look, bit the our is today,

And executed, continued So on of mark-to-market our were opportunities depending Philadelphia. we those seeing people roll do to coming as out market. last when leases have best we're

even construction pace So requests. outperforming in rent free increases is the and rental in we've costs rate seen

side think think of factoring rental to flat in Philadelphia, I And at probably look of effective kind when it you are where on has relates rates in Pennsylvania construction down we kind and rent suburbs as Austin, I growth. the net pricing where So to gone. are are slightly plus both currently

on PA our been I happy and on of one of the kind City, add a that evaluate, look leasing we've CBD business in really our one activity, that of the we've leasing University do projected the they Dylan that. particularly than we've 'XX ratios composition activity mark-to-markets we think monitor even are And basis at things that key targeted. actually plan I been properties. at the points receiving Yes, suburbs the take the and when given mean, with look to activity, very we capital in 'XX. lower on 'XX of a is that's we our our And

So suburbs. couple up here growth ability CBD pretty we about our City markets continue to rent charged Pennsylvania filling core in effective the to drive remain of a University in

Austin that. had mean, and capital I on, D.C. years decrease there of we price taker some operation static, and And have 'XX not mark-to-market 'XX. and in to but a then in in George of so remained As a portfolio costs really to we're positive look, have for Austin, the have down holes touched to somewhat candidly, fill our number fairly

much So Those possible. a triple we're to very get aggressive done again as leases in very least net spaces as posture on marketing up those soon basis. at a are

in still have a is issues an costs still model. building upward basically don't too built we bit cost the So electrical, that's seeing board controller-based TIs, pricing anything have we're which et which tend play inflation big sheetrock construction I bias. mean of in the upward are increases into across superstructure carpeting, is of kind moderated but decreases on really in. hedge that cetera, much Construction to

you. clarity some provides that hopefully, for So

on helpful. And asset. Yes. Conshohocken No, touching the appreciate I the just there. was then that extremely color

I rate of suburban in I cap anything at mentioned you of that you I the it sort high lower sub-X% mentioned Xs portfolio? low Xs guess that the that's question? had a rest than there cap previous think kind mean to in your the traded driving rate. of Is

located low our props, rate is end that Tower Bridge quoted and contracting properties. our think Radnor are other well I range love really certainly for place. cap the like I the of in properties We X very

on, it, I think kind of in kind thinking I products, has think particularly I we're call for of rent to the the we some Virginia, effective D.C. Northern just properties trading range not gave those that as the of there, are the, before. midpoint where of closer growth I touched been the marketplace great that other

seeing how good average of potential with debt year. we we're How time on lease pretty weighted caveat seeing lease of capital every during somewhat we my to to that play translates to good out demand. Again, mean by actually deferred course pricing costs, demand. good still a very term, the premier I have things but I see credit to But all structures, asset the nuance tenants. no want good We're talk list buyers good driven really answer a

Crow Our Raymond James. with next Bill question comes from

morning, Jerry. good Hey,

guess increased Is And the joint that of joint today's is -- does I As talk pressure? you your to financing selling do increased rate? future what at rather venture sense it than partners, assets venture mean in there agreements? you part other an interest for

Yes, Bill, good question.

on As strategies we into look at enter really we financing joint really are it, these for all operating side, the ventures us. transitional

the in of of some both of reaching of been parties. we've the half on kind exited have their of joint we Certainly, ventures. So done all is discussion today, the operating lot past, as joint to the includes recharacterizing sell for in to the a second are assets. of partners and every frankly lot ventures the the more we a there end think now in capital about today What of doing our 'XX probably one the targeted ventures should would of if time the We on joint we useful to a platform. side, have we're of time have been active talking cooperative. venture more sell life the JV now terms assets joint But is front markets

our that's kind whether we was of during Bill, exit that joint to interest. mechanism those partially where So expect a through really ventures a 'XX or sell couple our we of the that those of prepared do lot based exit of put recapitalize into we discussions, buy-sell on it a course comments

discussions lot the are very venture facing trying understand properties three And pragmatic. They of or realities we our eight and estate portfolio sell that two those property a refinance operators. that the understand smart, They're out really or partners smart out of balance. have All blessed active. particular to partner, one joint too. seven a They're that, and real we're day. refinance the sell very are business. with We assets They and we're

the discussion returns to maximize productive, with both of all we is on forward So how parties. partner focused constructively every

we will joint do of importantly, XX- of 'XX done, horizon can terms first actually more out some on very interesting recycle XX-month the these how So helpful? we Is be getting of half think in a to but operating these of ventures. financings developing that of some

-- think dividend then you of either share their side? West et how active I you're is And repurchase or platform. where cut the for I'm your there dividend curious, so. more lower of implied given Tom stock just your Yes, on a rate, just what cap trade-off kind cetera, but getting about, trading, between a Coast repurchase peers curious implemented but then And thinking the the

some look, the venture we that think our a that I is. And liquidations. is And through about company excess selling through Look, liquidity shareholders as Yes. liquidity levels assets, return sales I our strategy think surplus existing joint some keep it's to certainly sound you -- it as some where can we generate approach -- let's talk asset generate using. is as

those we're that, comments, As think on on are buybacks as very buybacks basis. share focused very grow our both table leverage the reducing to provide either view the longer-term Tom very overall buybacks how and of cash on a implement debt continuing really being of part are carefully, on table my capital that of to there's one that metrics there share and certainly our and more monitor debt flow driver in the tactics. liquidity I no leverage-neutral flexibility. of But debt But near-term question mentioned and to source on both focused I I we

Thank queue. the are management call further you. for turn to like the remarks. no questions to And I'd in closing there back

our our plan thank participating our first later you business Great. 'XX We to much look for this year. very you Catherine, you call. on very very progress much. call quarter thank And you everyone, in updating on forward Thank much.

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

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