AH Realty Trust, Inc (AHRT) 2016 Q3 法說會逐字稿

Welcome to Armada Hoffler's Third Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, you'll be invited to participate in a question-and-answer session. (Operator Instructions) As a reminder, this conference call is being recorded today, Tuesday, November 1, 2016.

歡迎參加 Armada Hoffler 2016 年第三季財報電話會議。目前所有與會者均處於僅收聽模式。在管理層預先準備的發言結束後，將邀請各位參與問答環節。（接線員指示）提醒各位，本次電話會議將於今日（2016 年 11 月 1 日，星期二）錄音。

I will now turn the conference call over to Michael O'Hara, Chief Financial Officer of Armada Hoffler. Please go ahead, sir.

現在我將把電話會議交給 Armada Hoffler 財務長 Michael O'Hara。先生，請開始。

Good morning, and thank you for joining Armada Hoffler's third quarter 2016 Earnings Conference Call and webcast. On the call this morning, in addition to myself, are Lou Haddad, CEO; and Eric Smith, our Chief Investment Officer, who will be available for questions.

各位早安，感謝各位收聽 Armada Hoffler 2016 年第三季財報電話會議與網路直播。今天早上的電話會議，除我之外，還有執行長 Lou Haddad，以及我們的投資長 Eric Smith；他將可供回答問題。

The press release announcing our third quarter earnings, along with our quarterly supplemental package was distributed this morning. A replay of this call will be available shortly after the conclusion of the call through December 1, 2016. The numbers to access the replay are provided in the earnings press release. For those who listen to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, November 1, 2016 will not be updated subsequent to this earnings call. During this call, we'll make forward-looking statements, including statements relating to the future performance of our portfolio, our development pipeline, potential redevelopment opportunities, the impact of acquisitions and dispositions, our construction business, our portfolio performance and financing activities as well as comments on our outlook and dividend. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. The risks and uncertainties can cause actual results to differ materially from our current expectations and we advise listeners to review the risk factors disclosed in our press release this morning and in documents we have filed with or furnished to the SEC. We will also discuss certain non-GAAP financial measures, including but not limited to, FFO and normalized FFO. Definitions of these non-GAAP measures as well as reconciliations to the most comparable GAAP measures are included in the quarterly supplemental package, which is available at our website at www.armadahoffler.com. I'd now like to turn the call over to our Chief Executive Officer, Lou Haddad. Lou.

本公司今早已發布宣布第三季盈餘的新聞稿，並同時提供季度補充資料包。本次電話會議的重播將於會議結束後不久提供，並可收聽至 2016 年 12 月 1 日。重播的撥入號碼已載於盈餘新聞稿。對於收聽本簡報重播者，我們提醒：本次發言係截至今日（2016 年 11 月 1 日）之內容，於本次財報電話會議後將不再更新。在本次電話會議中，我們將作出前瞻性陳述，包括與我們投資組合未來表現、開發管線、潛在再開發機會、收購與處分之影響、我們的營建業務、投資組合表現與融資活動，以及對展望與股利的評論。提醒聽眾注意，這些陳述受若干風險與不確定性影響，其中許多難以預測且通常超出我們控制範圍。相關風險與不確定性可能導致實際結果與我們目前預期存在重大差異；我們建議聽眾查閱今早新聞稿以及我們向美國證券交易委員會（SEC）提交或提供之文件中所揭露的風險因素。我們亦將討論若干非 GAAP 財務衡量指標，包括但不限於 FFO 與標準化 FFO。這些非 GAAP 指標之定義，以及與最可比 GAAP 指標之調節表，均收錄於季度補充資料包中，並可於我們網站 www.armadahoffler.com 取得。現在我想把電話會議交給我們的執行長 Lou Haddad。Lou。

Thanks, Mike. Good morning and thank you for joining us today. This morning, we once again reported quarterly results at the higher end of our expected range with normalized FFO of $0.26 per share. And once again, we've raised our guidance range for 2016 and expect to close the year between $0.99 and $1.01. Later in the call, Mike will discuss our quarter result and 2016 guidance in greater detail, but first I'll provide some comments on our overall corporate strategy as well as an update on our development pipeline. Since our founding nearly four decades ago, our goal has been consistent, to build a portfolio of the highest quality real estate through conservative selective development complemented by strategic acquisitions and dispositions.

謝謝你，Mike。各位早安，感謝今天加入我們。今天早上，我們再次公布的季度結果落在預期區間的高端，標準化 FFO 為每股 0.26 美元。我們也再次上調 2016 年的指引區間，並預期全年將落在 0.99 至 1.01 美元之間。稍後在電話會議中，Mike 將更詳細說明本季結果與 2016 年指引；但首先我將就我們整體公司策略以及開發管線更新提供一些評論。自近四十年前成立以來，我們的目標始終如一：透過保守且審慎選擇的開發，並輔以策略性的收購與處分，打造最高品質的不動產投資組合。

As market dynamics change over time, our strategy to achieve this goal will continue to evolve. But our key advantage of being a diversified and vertically integrated organization is our ability to quickly assess, react and adapt to changing market conditions in order to capitalize on opportunities as they present themselves. A good example of this is what we are seeing on the development front. Over the past several months, we reserved a notable tightening in commercial construction lending with loan dollars decreasing and equity requirements on the rise, thus leading private developers in need of greater equity sources to our doorstep. For potential partners, we as the lead developer and controlling interest holder provide substantial advantages in addition to providing equity. The strength of our balance sheet and the ability to obtain construction financing, over 30 years of real estate development, construction, and asset management expertise, and our in-house general contracting company to provide tight control over both cost and schedule and partnering with high-quality private developers that have local market knowledge, who have already invested the time, energy and resources in teeing up a project, whether it would be through site selection and acquisition, zoning, permitting or architectural, we can significantly shorten the overall development process and therefore expand our development pipeline without significantly increasing our expenditure of internal resources.

隨著市場動態隨時間改變，我們達成此目標的策略也將持續演進。但我們作為多元化且垂直整合組織的關鍵優勢，在於能迅速評估、回應並適應變動的市場環境，以把握出現的機會。一個很好的例子是我們在開發端所看到的情況。過去幾個月，我們注意到商用建築融資明顯收緊，貸款資金規模下降、股權要求上升，因此需要更多股權來源的民間開發商便找上門來。對潛在合作夥伴而言，我們作為主導開發商與控股權持有人，除提供股權外亦具備顯著優勢：我們資產負債表的強度與取得建築融資的能力、逾 30 年的不動產開發、營建與資產管理專業，以及我們內部的總承包公司可對成本與工期進行嚴格控管；再加上與具備在地市場知識的高品質民間開發商合作，這些夥伴已投入時間、精力與資源將專案前置到位（無論是透過選址與取得土地、分區、許可或建築設計），我們便能大幅縮短整體開發流程，從而在不顯著增加內部資源支出的情況下擴大開發管線。

As a result, we continue to see a robust level of deal flow for projects that meet all of our development criteria; Class A assets, high barrier to entry locations, secondary and tertiary markets in the mid-Atlantic and Southeastern United States, wholesale to retail profit margins of 20% or more. In addition to sourcing new development projects, we continue to evaluate several promising new joint venture opportunities across all product types, office, retail and multi-family in our target markets.

因此，我們持續看到符合我們所有開發標準之專案具有強勁的案源流量；包括 A 級資產、高進入門檻地點、位於美國中大西洋與東南部的二、三線市場，以及批發到零售的利潤率達 20% 或以上。除尋找新的開發專案外，我們也持續評估多個具前景的新合資機會，涵蓋所有產品類型——辦公、零售與多戶住宅——並聚焦於我們的目標市場。

A perfect example of such is Harding Place, our 80/20 joint venture with Southern Apartment Group that we announced this past quarter. Harding Place is a Class A multifamily project in Midtown Charlotte. The site provides residents with convenient access to the Greenway as well as downtown Charlotte and is strategically located in close proximity to the Carolinas Medical Center, one of the largest employers in the city. The Charlotte MSA is a target market for our Company and we are pleased to have teamed with local partners that have more than 45 years of combined experience developing real estate in this market. With our construction company fully engaged, we expect to deliver Harding Place in 2018.

一個完美的例子是 Harding Place——我們在本季宣布與 Southern Apartment Group 成立的 80/20 合資案。Harding Place 是位於夏洛特市中心區（Midtown Charlotte）的 A 級多戶住宅專案。該基地讓住戶可便利前往綠道（Greenway）以及夏洛特市中心，且策略性地鄰近卡羅萊納醫療中心（Carolinas Medical Center），該中心是本市最大的雇主之一。夏洛特都會統計區（MSA）是本公司的目標市場之一；我們很高興與在此市場合計擁有超過 45 年不動產開發經驗的在地夥伴合作。在我們營建公司全面投入下，我們預期將於 2018 年交付 Harding Place。

Turning to the remaining projects in our development pipeline; this past quarter, we delivered both Lightfoot Marketplace and Johns Hopkins Village. The initial performance from both assets has been solid, and we expect to ride this momentum program to eventual full stabilization. Last week, we eventually broke ground on the next phase for the Town Center of Virginia Beach, representing the latest chapter in our successful multi-decade public-private partnership with the city. We expect to deliver this next phase of Town Center in 2018. As progress continues as expected on Point Street Apartments in Baltimore's Inner Harbor, one City Center in downtown Durham and The Residences at Annapolis Junction Town Center with construction well underway at each site. If you check page 17 of our supplemental, you'll see that our current development pipeline includes well over $300 million worth of projects. Given our historical profit spreads, we believe these projects when delivered and stabilized will yield significant value to our shareholders. This value creation may manifest itself in a combination of ways, including total and per share FFO growth, monetization through dispositions, NAV growth or multiple expansion. We believe the result is organic, profitable growth that could lead to a lower cost of equity for future opportunities.

接著談我們開發管線中的其餘專案：本季我們交付了 Lightfoot Marketplace 與 Johns Hopkins Village。兩項資產的初期表現皆相當穩健，我們預期將延續這股動能，最終達到全面穩定出租。上週，我們正式動工維吉尼亞海灘市（Virginia Beach）Town Center 的下一期工程，這代表我們與市政府成功的公私協力夥伴關係在數十年後的最新篇章。我們預期於 2018 年交付 Town Center 的下一期。隨著巴爾的摩內港（Inner Harbor）的 Point Street Apartments、達勒姆市中心（downtown Durham）的 One City Center，以及 The Residences at Annapolis Junction Town Center 皆按計畫推進，且各工地施工已全面展開。若各位查看補充資料第 17 頁，將可看到我們目前的開發管線包含超過 3 億美元的專案。依據我們歷史上的利潤利差，我們相信這些專案在交付並達到穩定後，將為股東創造顯著價值。此價值創造可能以多種方式呈現，包括 FFO 總額與每股 FFO 成長、透過處分實現變現、淨資產價值（NAV）成長或估值倍數擴張。我們相信其結果是有機且具獲利性的成長，並可能在未來機會上帶來更低的股權資金成本。

Our expectation is that 2017 will be a year of significant value creation as we continue to build toward deliveries in 2018 and beyond. And we would expect a significant bottom line growth, that I just discussed, to naturally follow that timeline. While we have been able to grow per share earnings by nearly 10% annually over the last couple of years, the timing of these deliveries suggest a somewhat slower growth trajectory over the short- term. Moving from our development pipeline to acquisitions and dispositions; this quarter we completed our planned disposition of the Oyster Point office building in Newport News, Virginia. The Oyster Point building was one of the oldest assets in our portfolio and one that faces stiff competition in the sub market. We are currently under contract to redeploy our proceeds from this building into a stabilized grocery anchored retail center in the Charlotte market.

我們預期 2017 年將是價值創造顯著的一年，因為我們將持續推進，朝 2018 年及其後的交付目標邁進。而我剛才所談到的顯著損益表底線成長，也將自然地隨著該時程而發生。雖然過去幾年我們已能將每股盈餘以接近每年 10% 的速度成長，但這些交付時點的安排意味著短期內成長軌跡可能相對較慢。從開發管線轉到收購與處分方面：本季我們完成了原計畫處分位於維吉尼亞州紐波特紐斯（Newport News）的 Oyster Point 辦公大樓。Oyster Point 大樓是我們投資組合中最老的資產之一，且在該次級市場面臨激烈競爭。我們目前已簽約，計畫將該大樓處分所得重新投入夏洛特市場一座已達穩定營運、以雜貨店為主力店（grocery anchored）的零售中心。

We except to close on that acquisition in the next few weeks and look forward to providing further details after closing. You may have also seen that last month, we issued 2 million shares of common stock in a off-market acquisition of a stabilized retail asset, our sixth transaction involving either stock or OP units. We acquired the property in an all-stock transaction from a seller who now holds a significant equity position in our company. We believe the acquired property is the logical and strategic addition to our portfolio with tremendous potential upside related to redevelopment opportunities and I look forward to sharing more details with you at the appropriate time.

我們預期將在未來幾週內完成該項收購交割，並期待在交割後提供更多細節。您可能也看到，上個月我們在一筆場外收購一項已穩定營運的零售資產交易中發行了200萬股普通股，這是我們第六筆涉及股票或OP單位的交易。我們以全股票交易自一位賣方收購該物業，而該賣方目前持有本公司相當可觀的股權部位。我們相信，所收購的物業是對我們投資組合合乎邏輯且具策略性的補強，並且在與重建開發機會相關方面具有巨大的上行潛力；我也期待在適當時機與各位分享更多細節。

Whether it's through selective development, redevelopment or strategic acquisitions and dispositions, the management team at Armada Hoffler remains committed to making the right real estate decisions in order to grow our portfolio, create value and return that value to our shareholders. To that end, our current payout ratio suggests that we have more than enough room to make thoughtful recommendations to our Board regarding our dividend. With that, I'll turn the call over to Mike for further details.

無論是透過選擇性開發、重建開發，或策略性收購與處分，Armada Hoffler 的管理團隊始終致力於做出正確的不動產決策，以擴大我們的投資組合、創造價值，並將該價值回饋給股東。基於此，我們目前的配息支付率顯示，我們有相當充足的空間，就股利向董事會提出審慎的建議。接下來我把電話交給 Mike，請他提供更多細節。

Thanks, Lou. Today I want to cover the highlights of the quarter, thoughts on our balance sheet and additional details on our 2016 guidance. This morning, we reported FFO of $0.25 per share and normalized FFO of $0.26 per share, which was at the high end of our expectations. Our core portfolio construction company and the two new development projects recently placed in service delivered excellent results. I also want to point out that our AFFO is exhibiting solid growth this year as well. Dividend pay-out ratio is 74% year-to-date even as the share count has grown significantly this year. This pay-out ratio is well within our corporate goal of 80% or less. We believe a well covered dividend gives us flexibility going forward.

謝謝你，Lou。今天我想說明本季重點、我們對資產負債表的看法，以及2016年財測的更多細節。今天早上，我們公布每股FFO為0.25美元、每股標準化FFO為0.26美元，落在我們預期的高端。我們的核心投資組合、建築施工公司，以及近期投入營運的兩個新開發專案都交出非常出色的成果。我也想指出，我們今年的AFFO同樣呈現穩健成長。儘管今年股數顯著增加，年初至今的股利支付率仍為74%。該支付率完全符合我們公司80%或以下的目標。我們相信，股利有良好覆蓋度能讓我們在未來更具彈性。

Occupancy increased this quarter as did same-store NOI, which increased for the ninth consecutive quarter. Same-store NOI growth was positive 1.4% and 2.3% on a cash basis. However, we do not believe this to be a meaningful metric at this time. Due to the volumes of asset recycling and early delivery development projects, only 54% of the year to date and 59% of the current quarter total NOI are included in same store NOI calculation. At the end of the quarter, our core operating portfolio occupancy rose to 96.2% with office at 96.4%, retail 96.4% and multi-family at 95.8%.

本季入住率提升，同店NOI也增加，且已連續第九季成長。同店NOI成長率為1.4%，以現金基礎計算為2.3%。然而，我們認為目前這並非一個具代表性的指標。由於資產汰換（asset recycling）量大以及開發專案提前交付，年初至今僅有54%、本季僅有59%的總NOI被納入同店NOI的計算。季末時，我們核心營運投資組合的入住率上升至96.2%，其中辦公為96.4%、零售為96.4%、多戶住宅為95.8%。

On construction front, we reported segment gross profit in the third quarter of $1.3 million on revenue of $39 million. At the end of the quarter, Company had a third-party construction backlog of $246 million, which will sustain this part of our business for the foreseeable future and should translate into profits at the higher end of our historical range.

在建築施工方面，我們第三季在3,900萬美元營收下，報告分部毛利為130萬美元。季末，公司第三方施工在手訂單（backlog）為2.46億美元，將在可預見的未來支撐此業務，並應可轉化為落在我們歷史區間高端的利潤。

Now turning to the balance sheet, we continue to take actions to enhance flexibility and strengthen our balance sheet, including refinancing upcoming loan maturities, hedging our interest rate exposure and continuing the use of our ATM program. We used ATM program last quarter to raise $20 million of gross proceeds at an average price of $13.93 per share. We believe the ATM program is the most efficient manner for us to fund our growth and development activities. If the stock continues to trade at recent levels, we will continue to be opportunistic with the ATM program. During the quarter, we sold Kroger Junction, the second of the five non-core properties from the January portfolio acquisition. Combined with the previous Willowbrook Commons sale, these two assets sold for $12.9 million. As previously discussed, these proceeds will be used for balance sheet purposes. We are evaluating the remaining assets for upside redevelopment potential and possible retention. At the end of the quarter, we had total outstanding debt of $519 million, including $102 million outstanding under the $150 million revolving credit facility.

接著談資產負債表，我們持續採取行動以提升彈性並強化資產負債表，包括為即將到期的貸款再融資、對沖利率曝險，以及持續使用我們的ATM計畫。上季我們透過ATM計畫以每股平均13.93美元募集2,000萬美元的總收益。我們認為ATM計畫是我們為成長與開發活動籌資最有效率的方式。若股價持續在近期水準交易，我們將持續把握機會運用ATM計畫。本季我們出售了Kroger Junction，這是1月投資組合收購中五項非核心資產的第二項。加上先前出售的Willowbrook Commons，這兩項資產合計以1,290萬美元售出。如先前所述，這些款項將用於資產負債表用途。我們正在評估其餘資產的重建開發上行潛力以及可能保留的可行性。季末時，我們未償還總負債為5.19億美元，其中包括在1.5億美元循環信用額度下動用的1.02億美元。

We continue to work on refinancing the 2016 and 2017 debt maturities. During the quarter, we closed on the refinance of the Town Center 2016 maturities. This new loan is for five years, $35 million and floating at LIBOR plus 1.95%, a new loan amount of $6 million more than the prior loans. We also closed on the refinance of 4525 Main Street and Encore Apartments. The new loan is a five year loan in the amount of $57 million with a fixed rate of 3.25%. After these refinancings, there are four remaining 2017 debt maturities totaling $30 million.

我們持續推進2016年與2017年到期債務的再融資。本季我們完成了Town Center於2016年到期債務的再融資。新貸款為5年期、3,500萬美元，利率為浮動利率LIBOR加1.95%，新貸款金額較原貸款增加600萬美元。我們也完成了4525 Main Street與Encore Apartments的再融資。新貸款為5年期、金額5,700萬美元，固定利率3.25%。完成上述再融資後，2017年尚餘四筆到期債務，合計3,000萬美元。

The largest of these is a $21 million CMBS loan secured by the Hanbury Village Center that matures in October 2017. The Center has high occupancy and is anchored (inaudible) with strong sales. Thus we've had strong competition among lenders. As we continue to evaluate our exposure to potentially higher interest rates, we have put in place the strategies that includes a mix of fixed rate debt and interest rate caps with the combination of the refinancing this quarter and interest rate cap we bought last quarter, 99% of our debt was fixed or hedged.

其中最大的一筆為2,100萬美元的CMBS貸款，以Hanbury Village Center作為擔保，將於2017年10月到期。該中心入住率高，且由（聽不清）作為主力店（anchor），銷售表現強勁。因此我們在貸方之間獲得了激烈競爭。隨著我們持續評估可能上升的利率風險曝險，我們已採取包含固定利率債務與利率上限（interest rate caps）組合的策略；結合本季的再融資以及上季購買的利率上限，我們99%的債務已為固定或已對沖。

Now let me walk you through the full 2016 guidance that we updated this morning. We expect 2016 normalized FFO in the range of $0.99 to about $1.01 per share. This updated 2016 guidance is predicated on the following assumptions. Total NOI in the $67.3 million to $68 million range, third-party construction company gross profit in the $5.1 million to the $5.3 million range, general administrative expenses in the $9.2 million to $9.4 million range, interest income for our mezzanine financing program in the $3.1 million to $3.3 million range. At September 30, the aggregate loan balance of these mezzanine loans was $50 million. Interest rate expense in the $16.2 million to $16.6 million range and 50.2 million weighted average shares and OP units outstanding, which includes the stock issued as part of the October retail acquisition. This guidance excludes any impact of future acquisitions, asset sales and other capital markets activity with the exception of continuing opportunistic sales under the ATM program. The increasing guidance is attributable to several positive factors; construction is having another strong year, portfolio occupancy is increasing and the two recently delivered development projects are exceeding expectations. I'll now turn the call back to Lou.

現在我帶各位看一下我們今天早上更新的2016年全年財測。我們預期2016年標準化FFO介於每股0.99美元至約1.01美元。此更新後的2016年財測基於以下假設：總NOI介於6,730萬至6,800萬美元；第三方建築施工公司毛利介於510萬至530萬美元；一般及行政費用介於920萬至940萬美元；夾層融資（mezzanine financing）計畫的利息收入介於310萬至330萬美元。截至9月30日，這些夾層貸款的合計貸款餘額為5,000萬美元；利息費用介於1,620萬至1,660萬美元；加權平均流通在外股數與OP單位為5,020萬，包含作為10月零售收購一部分所發行的股票。本財測不包含未來收購、資產出售及其他資本市場活動的任何影響，惟持續透過ATM計畫進行機會性出售者除外。上調財測主要歸因於數項正面因素：建築施工今年再度表現強勁、投資組合入住率提升，以及近期交付的兩個開發專案表現超出預期。接下來我把電話交回給Lou。

Thank you, Mike. Thank you for your time this morning and your interest on Armada Hoffler. Operator, we would like to begin the question-and-answer session.

謝謝你，Mike。感謝各位今天早上的時間，以及對Armada Hoffler的關注。接線員，我們希望開始問答環節。

(Operator Instructions) Dave Rodgers, Robert W. Baird.

（接線員指示）Dave Rodgers，Robert W. Baird。

Wanted to ask, I guess, quickly about the acquisition that you referred to for October and you issued - I think it was the [S34], it doesn't sound like you are ready to fully talk about it, but it sounds like given that you've already issued the shares and talked about the acquisition having closed in October that maybe we can get a little bit more detail on that before you are fully ready to announce it.

我想問一下，關於你提到10月的那筆收購，以及你發行了——我想是[S34]——聽起來你們還沒準備好完整談它，但既然你們已經發行了股份，並且也提到該收購在10月已完成交割，也許在你們正式準備公告之前，我們可以先得到一些更進一步的細節。

Dave, thanks for the question. There is not much detail that we want to talk about at this time, it's a [stable] center, and I believe that the NOI is in our projections for 2016. We've got some very sensitive negotiations going on right now with regard to redevelopment opportunities there. I look forward to sharing more detail as soon as possible but can't do it quite yet.

Dave，謝謝你的問題。我們目前不想談太多細節；它是一個[穩定]的中心，我相信其NOI已納入我們2016年的預測之中。我們目前正就那裡的重建開發機會進行一些非常敏感的談判。我期待能盡快分享更多細節，但現在還不太方便。

Okay. Well, thanks for that detail at least. I would say maybe Lou another question on the development side, **time we get more joint venture opportunities, how is the 100% equity owned pipeline look, it sounds like you're maybe leaning more to joint ventures but I guess, correct me if I'm wrong, how are you thinking about putting capital to work here through new development?

好的。至少謝謝你提供那些細節。我想也許再問 Lou 一個關於開發端的問題，**隨著我們獲得更多合資機會，100%自有股權的開發管線看起來如何？聽起來你們可能更偏向合資，但我想——如果我理解有誤請糾正——你們如何思考透過新開發來投入資本、讓資金運作？

Well, as I said on the call, activity is extremely robust right now both from our own sourcing as well as JVs. We are basically blind to the source at this point in time, we're basically cherry picking the opportunities whether they come from outside with developers that we know or we source them internally.

嗯，正如我在電話會議上說的，目前不論是我們自有的案源，還是合資（JV）方面，活動都非常強勁。就現階段而言，我們基本上不在意來源，我們就是挑選最好的機會，不論是來自外部、我們熟悉的開發商，或是我們內部自行開發取得的案子。

Okay. In terms of maybe the financing plan, Mike, you are going to reference paying off some of the secured debt that you have, it didn't sound like you have a plan of financing those assets until those maybe just go into an unencumbered pool, is that correct? Is that how you're thinking about it?

好的。就融資計畫而言，Mike，你提到要償還一些你們的擔保債務。聽起來你們並沒有打算替那些資產再做融資，而是讓它們進入無擔保資產池，這樣理解對嗎？你們是這樣在思考嗎？

Yeah, we still have time to come up with that but right now, we are thinking of just keeping the credit facility in its current place right now, it's $250 million with $150 million on the revolver. And kind of been doing what we've been doing here in the past, maybe will look at that one as a floating rate debt on that one. So at some point in time, we want to monetize again and sell it, we'll pay it off and add it to the borrowing base pool for the credit facility, we could do that.

是的，我們還有時間把那部分規劃出來，但目前我們的想法是先讓信用額度融資（credit facility）維持現狀：總額 2.5 億美元，其中循環額度（revolver）已動用 1.5 億美元。基本上延續我們過去的做法，可能會把那筆視為浮動利率債務。未來某個時間點，如果我們想再次變現並出售它，我們會把它還清，並把該資產加入信用額度的借款基礎資產池（borrowing base pool）；我們可以這麼做。

And maybe last question, I think the only area that you really have any meaningful amount of speculative development underway would be Town Center and then a couple of different Maryland Apartment buildings, but all kind of on the residential side, can you talk about kind of the demand in each of those markets and kind of how you're feeling today about each one of those projects; even though they are just getting underway but how you kind of see the underlying fundamentals for those assets?

最後一個問題：我想你們目前真正有一定規模的投機性開發（speculative development）大概只有 Town Center，另外還有幾棟位於馬里蘭州的公寓大樓，但都偏住宅端。你能談談這些市場各自的需求狀況，以及你們今天對每個專案的感受嗎？雖然它們才剛開始推進，但你們如何看待這些資產的基本面？

Great question, Dave. I don't want to take all of our time. I can't tell you how excited we are about the Maryland properties. Every scrap of news that comes in of what's going on in those markets is more and more positive. At the Inner Harbor with apartments in lesser locations than our Point Street Apartments, we are seeing unbelievable rates and unbelievable speed, so we just can't wait to get that up and the same is happening at Fort Meade. We feel really good about the choices that we've made and look forward to getting those completed and leased up as soon as possible.

好問題，Dave。我不想占用大家太多時間。我無法形容我們對馬里蘭州資產有多興奮。那些市場傳來的每一則消息都越來越正面。在內港（Inner Harbor），一些地點不如我們 Point Street Apartments 的公寓，我們看到的租金水準與去化速度都令人難以置信，所以我們迫不及待想把它建起來；Fort Meade 也是同樣的情況。我們對自己做出的選擇感覺非常好，也期待盡快把這些專案完工並完成出租、達到滿租。

John Guinee, Stifel.

John Guinee，Stifel。

A couple comments. I can't remember at the IPO, what the status was of your Virginia Beach Town Center high-rise but it is sitting at about 64% leased. Is there just no demand for that location any more or is there a favored submarket that is more in vogue in your part of the world? That's one question. And then the second question is you're buying a bunch of commodity grocery anchored retail, remind us again what you like about those assets.

兩點評論。我不記得在 IPO 時，你們維吉尼亞海灘 Town Center 的高樓辦公案當時的狀態如何，但現在出租率大約 64%。是那個地點已經沒有需求了嗎？還是你們那邊有某個更受青睞、比較流行的次市場？這是第一個問題。第二個問題是，你們買了不少以超市為主力店（grocery anchored）的標準化零售資產，請再提醒我們一次，你們喜歡這類資產的原因是什麼？

Fist on your first question, I was hoping that someone would ask that question with regard to the Town Center at Virginia Beach. First let me say, as I said before on previous conference calls, that new high-rise that we put up was designed to give us some flexibility and some vacant space due to the fact that for nearly a decade, we essentially had zero space at Town Center, so we programmed there an extra 100,000 square feet in order to soak up that demand. Secondly, as I've said before, rent at Town Center are a solid 20% above the surrounding markets, perhaps 20% above the entire MSA and as such a vast majority of companies are not going to pay the freight to come here. So it takes a special user to want to pay for that address.

先回答你的第一個問題，我一直希望有人能就維吉尼亞海灘 Town Center 提出這個問題。首先我要說，正如我在之前的電話會議中提過，我們新建的那棟高樓，是為了提供一些彈性與可用的空置面積；因為將近十年來，Town Center 基本上幾乎沒有空置空間，所以我們在規劃時額外增加了 10 萬平方英尺，以吸收那樣的需求。其次，如我之前也說過，Town Center 的租金比周邊市場高出紮實的 20%，甚至可能比整個都會統計區（MSA）高出約 20%；因此，絕大多數公司不會願意為了進駐這裡而支付那樣的成本。所以必須是特定的使用者，才會願意為這個地址付費。

Thirdly, what I'm happiest about and glad that you asked the question for, is that we've seen a noticeable uptick in activity over the last quarter. In fact, there's probably more activity on the office side than we've seen in the last couple years. I hope that's indicative of what might be coming, what might be brewing in the economy, but I know it's indicative of what's happening here. We look forward - we're in lease negotiations on four different tenants are that would substantially take up the remaining space in Town Center and, of course, not done till it's done. We look forward to updating you on that soon.

第三點，也是我最開心、也很高興你問到的：我們在上一季看到活動量明顯回升。事實上，辦公端的活動可能比我們過去一兩年看到的都還多。我希望這能反映經濟可能正在醞釀、可能即將出現的變化，但我知道這至少反映了我們這裡正在發生的事。我們期待——目前正與四個不同的租戶進行租約談判，若能成交，將能大幅消化 Town Center 剩餘的空間；當然，沒簽成之前都不算數。我們期待很快向各位更新進展。

With regard to your second question, I'm not sure that I would refer to our acquisitions as commodity-based retail and, of course, it depends on your definition of that, if all that we were looking at was the credit of the anchors and the term of the leases, then I might agree with you that those could be characterized as run-of-the-mill centers. What we look for is well located stores with high volume sales, again as I've said in the past over nearly 40 years now, we've seen that while there isn't any real estate that's completely bulletproof, grocery anchored centers with high sales stay full. Where it's been a strategy for a long, long time, is going to continue to be a strategy that will resolve itself even further in the coming years.

至於你的第二個問題，我不確定我會把我們的收購稱為「標準化」零售；當然也取決於你怎麼定義。如果我們看的只有主力店的信用狀況與租約年期，那我可能會同意你，這些確實可以被形容為一般常見的購物中心。但我們尋找的是地點優越、銷售額高的店舖。再一次，如我過去近 40 年來一直說的：雖然沒有任何不動產是完全刀槍不入的，但以超市為主力店、且銷售額高的購物中心通常能維持滿租。這是一個長期以來的策略，也會持續是策略，而且在未來幾年會更加被驗證。

As you know, John, we are not a fan of holding on to suburban office, we're not a fan of [Barden] variety multi-family, those things have their ups and downs and that's why you see us weed them out of the portfolio and at opportune times, but grocery anchored high sales volume stores stand that test of time.

如你所知，John，我們不喜歡長期持有郊區辦公資產，我們也不喜歡持有 [Barden] 類型的多戶住宅；那些資產有起有落，所以你會看到我們在適當時機把它們從投資組合中剔除。但以超市為主力店、且銷售量高的店舖型資產，經得起時間考驗。

Rob Stevenson, Janney Montgomery Scott LLC.

Rob Stevenson，Janney Montgomery Scott LLC。

Well, when you look at the development page I guess it's 17 of the supplemental on the stuff that's either delivered not stabilized or still under development or in the mezz and the JVs and everything, what's the sort of blended stabilized yield that you're expecting on that capital deployment today.

嗯，當你看開發那一頁——我想是補充資料第 17 頁——那些已交付但尚未穩定、仍在開發中、或在夾層（mezz）以及合資（JVs）等項目，針對今天這些資本投入，你們預期的加權平均穩定化收益率（blended stabilized yield）大概是多少？

Thanks, Rob, that's a good question. As you know there is a couple of different product types in there. So I'm not quite sure of the mix. But whereas as the quality of the products increases, obviously the returns decrease. What we are focusing on is the significant spread we told you that we aim for 20% between wholesale and retail. Right now, that pipeline is weighed towards multifamily, which obviously drags you into the lower end of the scale. For instance, on Harbor Point, we're seeing cap rates there in Baltimore transactions believe it not in the low fives, and even saw one couple months ago in high fours and we're well north of 20% over that.

謝謝，Rob，這是個好問題。如你所知，裡面有幾種不同的產品類型，所以我不太確定其組合。不過，產品品質越高，回報率通常就越低。我們聚焦的是我們跟各位說過的顯著利差：我們目標是在批發與零售之間維持 20% 的差距。目前那條管線偏向多戶住宅（multifamily），這顯然會把整體拉到較低的區間。舉例來說，在 Harbor Point，我們看到巴爾的摩的交易資本化率（cap rates）——你可能不相信——在 5% 出頭，甚至幾個月前還看到一筆在 4% 高段，而我們的水準比那高出遠超過 20%。

But as a blended average, the more multi-family that we're going to have in the pipeline, the more we are going to skew down into the sevens as opposed to when we have more office and retail in that pipeline to just skew into the eights, so there is a fairly tight range and again what we have to be mindful of is our cost of capital and so what you may see as we've alluded to a number of times is that some of those might be monetized rather than brought on board in order to reap that benefit that we may not get paid for in the stock price, as everybody on the phone knows, as the largest shareholder we have to look through that lens before we could add things to our portfolio because we like them.

但若以加權平均來看，管線裡多戶住宅越多，我們就越會往 7% 的區間傾斜；相對地，當管線裡辦公與零售占比更高時，就會更偏向 8% 的區間。因此整體範圍其實相當緊。再者，我們必須留意的是我們的資金成本（cost of capital）。所以你可能會看到——我們也多次提到——其中一些資產可能會選擇變現（monetized）而不是納入持有，以便收割那個利益；因為如同電話上的各位都知道的，股價可能不會為此給我們相應的估值。作為最大股東，我們在把喜歡的資產納入投資組合之前，必須先用這個角度來衡量。

Okay and then where are you guys in terms of current occupancy at Hopkins Village, I think it was basically 78% or so at September 30. Has that moved up since then and then how should we be thinking about this as going forward, is this more like the student housing asset where if you miss the semester you're stuck with a lower occupancy for a period of time or is this just typical market rate apartments where you can continue to build even once the semester starts?

好的，那你們目前在 Hopkins Village 的現有入住率大概是多少？我記得 9 月 30 日大約是 78% 左右。之後有再上升嗎？另外，往後我們應該怎麼看待這件事——這比較像學生宿舍資產，若錯過學期就會在一段時間內卡在較低入住率；還是這只是一般市價公寓，即使學期開始後仍可持續拉升入住率？

Yeah, again great question, appreciate, that gives us an opportunity to make sure everybody has a good understanding on the phone. That project is a venture with Johns Hopkins University and its purpose is for junior and senior housing. The occupancy is hanging right around that - it hasn't grown appreciably after the start of the semester. We wouldn't expect that it is going to grow appreciably other than the retail rents all coming online until we'll have a pickup in January, but I wouldn't expect as we said on our last call, wouldn't expect full stabilization until late next summer.

是的，再次感謝這個問題，這也讓我們有機會確保電話上的每位都能充分理解。那個專案是與約翰霍普金斯大學（Johns Hopkins University）的合資案，目的在於提供大三、大四學生的住宿。入住率大致就維持在那個水準——學期開始後並沒有明顯成長。我們也不預期會有顯著提升，除了零售租金會陸續到位之外；要到 1 月才會有一波回升。但正如我們上次電話會議所說，我不預期要到明年夏末才會完全穩定（stabilization）。

And then just lastly, how should we be thinking about dispositions over the next 6 months to a year, call it, meaning there's not much left in the office portfolio to harvest. I know that some of the stuff was recently delivered, so you got REIT rules around that. Is there stuff in the portfolio at this point where you're looking at it and saying, the time to monetize it is next 6 to 9 months or a year or are we basically looking at equity funding for 2017 largely coming through the ATM?

最後一個問題，未來 6 個月到 1 年左右，我們應該如何看待資產處分（dispositions）？也就是說，辦公室投資組合裡可變現的已經不多。我知道有些資產是最近才交付，所以會受到 REIT 規則的限制。那麼目前投資組合中，是否有你們正在評估、認為未來 6 到 9 個月或 1 年是變現時點的資產？還是說 2017 年的股權資金來源大致會主要透過 ATM 來完成？

Again, another great question, there are a few things in our portfolio we're looking at strongly as we've alluded to before, which we have two state office buildings in the portfolio that frankly will be monetized at the appropriate time. Some of our centers, kind of, going back to John's question, some of our older centers are performing well. But what we're seeing out in the marketplace still is a compression on cap rates in what we consider to be maybe not commodity retail, but not the all-stars in our portfolio. So you could see us recycle some of those older centers in the coming year.

同樣是個好問題。我們投資組合中確實有幾項資產正在積極評估，正如我們先前提過的——我們組合裡有兩棟州政府辦公大樓，坦白說會在適當時機變現。我們的一些購物中心——回到 John 的問題——一些較老的中心表現良好。但我們在市場上看到的是，我們認為屬於「非大宗（commodity）零售、但也不是我們組合裡的明星資產」的那一類，資本化率（cap rates）仍在被壓縮。因此，你們可能會看到我們在未來一年回收（recycle）其中一些較老的中心。

Bill Crow, Raymond James Financial.

Bill Crow，Raymond James Financial。

First of all, maybe the opposite end of Guinee's question earlier, you're selling office to buy the retail, just to bullet point it, why is it that you want to get out of suburban office? We're reading a lot more reports about Suburban B office starting to outperform, so just kind of your thesis on that?

首先，可能是和 Guinee 先前問題相反的一端：你們賣辦公室去買零售。用條列式簡單問一下，你們為什麼想退出郊區辦公室？我們讀到更多報告指出郊區 B 級辦公室開始表現優於預期，所以想請你們談談背後的投資論點（thesis）。

I appreciate that. Again it really kind of comes from the school of hard knocks. Remember our markets, we're dealing in secondary markets, secondary markets land is not at a premium, when you have suburban office, you really essentially have - and, of course, I'm speaking in broad generalities here, what we've seen over 3.5 decades is that you don't have much of a barrier to entry. And while we're really pleased with the 10-year and 15-year leases that we get at the outset, we've seen that once those things roll over, it's very difficult to maintain the rents and even if you can maintain the rents, you've got a huge outlay of TI in order to attract that new tenant. And you are at risk because it's barely easy again in secondary markets for someone that throw up a building next door and draw your tenants. So it's been our experience over a long, long period of time that those things have their greatest value essentially the day that you deliver. That's worked for us for a very long time. I would not want to get caught up in believing that there is significant upside in B assets in suburban markets.

謝謝。我想這真的來自於「吃過苦頭」的經驗法則。記得我們的市場——我們主要在次級市場（secondary markets）運作；在次級市場，土地並不稀缺。當你持有郊區辦公室時，本質上你就會面臨——當然我在這裡是概括性地說——我們在 35 年的經驗中看到，你幾乎沒有什麼進入門檻（barrier to entry）。雖然我們對一開始能簽到 10 年、15 年的租約很滿意，但我們也看到，一旦這些租約到期重談（roll over），要維持租金非常困難；即便能維持租金，你也需要投入大量的租戶裝修（TI）成本來吸引新租戶。而且你承擔的風險是：在次級市場，別人在隔壁蓋一棟樓把你的租戶吸走，實在太容易了。所以我們長期的經驗是，這類資產的最大價值基本上就在交付（deliver）的那一天。這個策略對我們很長一段時間都有效。我不希望自己陷入一種想法：認為郊區市場的 B 級資產會有顯著上行空間。

Appreciate the answer. One final question from me, you talked about the construction lending environment tightening, I think we may be touched on that last quarter as well. Is there any difference between your three asset classes or regionally as far as the availability and cost of money?

感謝回答。我最後一個問題：你提到建築融資環境正在收緊，我想上季也有提到。就資金可得性與資金成本而言，你們三種資產類別之間或在區域上，有沒有任何差異？

I will let Mike answer that.

我讓 Mike 來回答。

So recently, [he was] gone out on the multi-family. So we haven't gone out anything here recently on the retail and office but the feedback I'm getting is that it's tightening up across all of the product types. These new [HPCR REIT] ranks that are coming through are really changing the capital requirements of the banks, so the change in our pricing and loan to cost development.

最近我們在多戶住宅（multi-family）方面有去做融資。所以近期在零售和辦公室方面沒有再去做，但我收到的回饋是，各類產品型態都在收緊。這些新出來的 [HPCR REIT] 規範/等級要求正在改變銀行的資本要求，因此也影響到我們的定價以及開發案的成本貸款比（loan-to-cost, LTC）。

Craig Kucera, Wunderlich Securities.

Craig Kucera，Wunderlich Securities。

Just a follow-up on the last question, I know you mentioned that you see it tightening up across the board, but are you seeing any difference in the type of projects that are coming to market. You know maybe a little bit more pure play, multi-family or retail but maybe mixed use because it's just more moving parts, a little tougher for a bank to maybe underwrite.

延續上一題，我知道你提到整體都在收緊，但你是否看到進入市場的專案類型有任何差異？例如可能更多是純多戶住宅或零售，但混合用途（mixed use）因為環節更多，對銀行來說承作/核貸（underwrite）可能更難一些。

I wouldn't say that Craig, we've seen lenders are significantly wary of multi-family across the board. As you all know, there's been a huge boom in multi-family construction and so a lot of these guys regardless of how good the project is, simply have full portfolios of construction loans on other projects in a particular market. I think that combined with the high-risk loans that the regulators are basically foisting on the banks with regard to real estate lending has led them to bring loan dollars into the 60% range where, a couple of years ago, if we said multi-family, then you were looking at a 75% loan. Overall, I think that's really good for the market and the economy for the I guess the right thing for the wrong reasons, if you will, and because it will cause things to slowdown in some of these projects that really shouldn't get built perhaps won't, but in the meantime we're the beneficiary, have a lot of people bringing their projects our way.

Craig，我不會這麼說。我們看到放款機構對多戶住宅整體都非常謹慎。各位都知道，多戶住宅建設出現了大幅繁榮，因此很多放款方不管專案多好，在某個市場裡他們的建築貸款組合可能已經在其他專案上滿額了。我認為這再加上監管機構在不動產放款方面基本上要求銀行承擔的高風險貸款（high-risk loans），導致他們把放款金額拉回到約 60% 的區間；而幾年前，如果我們說是多戶住宅，你可能還能拿到 75% 的貸款。整體而言，我覺得這對市場和經濟其實是好事——可以說是「因錯誤的理由做了正確的事」——因為這會讓一些本來也許不該被興建的專案放慢甚至不會被蓋出來；同時我們也成為受益者，很多人把他們的專案帶來給我們。

Craig, let me just also add, when we are talking this, we're talking about construction loans and not the stabilized assets, it's a different lending environment that's stabilized versus construction.

Craig，我再補充一下：我們在談的是建築貸款（construction loans），不是已穩定營運的資產（stabilized assets）。穩定資產與建築期的放款環境是不同的。

I would add one more comment to that to dovetail into a topic from another question, that another benefit that we're enjoying from having these local, what I'll label, are site-specific developers bringing us development opportunities on the JV development platform side is that as Lou mentioned, we can cherry pick the best of those opportunities throughout the Mid-Atlantic and Southeast and sort of the extent that construction lenders only have room for one or a few remaining projects in a particular submarket, we're able to take advantage of this in some cases two plus years of work that our development partner has done locally and see that opportunity in that marketplace, which allows us in what is an increasingly competitive construction loan environment to be able to secure those construction loans albeit in maybe a our LTC than we have been seeing in the past, we still are finding access to those construction dollars because of those attractive opportunities.

我再補充一點，呼應另一個問題的主題：我們從這些在地、我稱之為「基地/專案特定（site-specific）」的開發商那裡，透過合資（JV）開發平台帶來開發機會，另一個我們正在享受的好處是——如 Lou 所說——我們可以在中大西洋與東南部各地挑選（cherry pick）最好的機會。某種程度上，當建築放款機構在某個次級市場只剩下一個或少數幾個專案的額度時，我們就能利用這點；在某些情況下，我們能承接開發夥伴在當地投入兩年以上的工作成果，看到該市場的機會。這使得我們在建築貸款環境日益競爭的情況下，仍能取得建築貸款；即便我們的成本貸款比（LTC）可能比過去看到的更低，我們仍能因為這些具吸引力的機會而取得建築資金。

And following up on that, are you - if someone has put in two, three years into a project, are you seeing any opportunities where there may be some distress, maybe developers have been caught midstream and are little bit surprised and now have maybe over extended themselves and maybe you can get even a better deal than you might normally be able to get?

延續這點，如果有人已經在一個專案上投入兩、三年，你們是否看到一些可能出現壓力（distress）的機會？也許有些開發商在進行到一半時被市場變化打個措手不及，現在可能過度擴張（over extended），因此你們可能拿到比平常更好的條件？

That's definitely happening out there. If we think about, if we started working in 2014 to bring a project to bear in 2016, then you definitely had a different expectation when you started, so yeah. And again, where we want to be opportunistic without being piggish, if you will, this Company was built on relationships, we get first shot and a lot of these projects because of our longevity and the fairness with which we treat people, so you're not going to see us rake a partner over the coal, but at the same time, obviously that puts us in a very good position to make a very good deal.

外面確實正在發生這種情況。若我們想想看：如果我們在 2014 年開始推動一個專案，目標在 2016 年落地，那你在起步時的預期肯定不同，所以是的。再者，我們希望把握機會但不想太貪——如果你這麼說的話——這家公司是建立在關係之上；因為我們的資歷以及對人的公平對待，我們常常能優先看到很多專案。所以你不會看到我們把合作夥伴「往死裡壓榨」，但同時，這顯然也讓我們處在一個非常有利的位置，去做成一筆非常好的交易。

Laura Engel, Stonegate Capital Partners.

Laura Engel，Stonegate Capital Partners。

Wondered if on the Town Center next phase, it's under development, if you could tell us I know it's just anchored tenants, not yet announced, if you could tell us a little bit about how that mix of tenants compares to what is already there, how the preleasing compares to what you've seen historically and then maybe I guess any kind of lessons learned, having been there for a while and really done the majority of the development, what's going bring them the most success in getting that property online and what you think as far as anything of the stabilization rates compared to historical rates? Thanks.

想請教一下關於 Town Center 下一階段的部分，目前正在開發中；如果可以的話，能否跟我們說明一下——我知道目前只是主力店承租戶（anchor tenants），尚未對外公布——能否談談該承租戶組合與現有組合相比如何、預租（preleasing）情況與你們過往歷史相比如何；另外，或許也想請你分享一些經驗教訓：你們在那裡已經做了一段時間、也完成了大部分開發，什麼因素最能幫助該物業順利上線並取得最大成功？以及就穩定化（stabilization）速度/比率而言，與歷史水準相比你們怎麼看？謝謝。

Sure. And thanks for the question. When you guys want to start talking about Town Center, these guys keep nudging me that when will you shut up because I get really excited about what we're doing there, the anchors that we have been reticent to make announcements yet, basically want to be much closer to their store opening before they unveil. But I can tell you it's the same type of lifestyle center tenants that we've endeavored to attract, the anthropologies in West Elms, Brooks Brothers of the world. So you'll see that it's in that same ilk, well known international names. I tell you, it's brought - this whole project has brought a tremendous amount of excitement at Town Center from the standpoint of how quickly it is going to stabilize. It's right in the - for those of you who are somewhat familiar with Town Center, it's right in the centre of Town Center as opposed on the periphery. It's right next to the public plaza that's become the gathering place for the townspeople.

當然，謝謝你的提問。每次你們想談 Town Center，這些人就一直推我說你什麼時候才要閉嘴，因為我一談到我們在那裡做的事情就特別興奮。至於我們一直比較保守、尚未宣布的主力店，基本上他們希望等到更接近店面開幕時才對外揭露。不過我可以告訴你，這會是我們一直努力吸引的同類型生活風格中心（lifestyle center）承租戶——像是 Anthropologie、West Elm、以及 Brooks Brothers 這類品牌。所以你會看到它屬於同一個調性，都是知名的國際品牌。我跟你說，從穩定化速度的角度來看，整個專案在 Town Center 引發了非常大的興奮感。它位在——對於稍微熟悉 Town Center 的各位——它是在 Town Center 的正中心，而不是在邊緣地帶；而且就在那個已成為居民聚會場所的公共廣場旁邊。

And so it's going to be highly visible, highly desirable and we've had some great absorption rates on our retail and our apartments to-date. The Encore apartments are already in the high-90s and I expect that there's a waiting list for the type of apartments that we're building on this block. So I expect that's going to stabilize very quickly. While we have a couple of leases with the people I just mentioned, we're in LOI negotiations essentially for the rest of the space. There's going to be some rework involved. I guess is something else we want to get out there. We're going to have to move some tenants around in the retail under the Cosmopolitan Apartments to make room for some other co-tenants that we really want. We're going to be moving a couple of the local shops. And when we put together our 2017 guidance, our expectation is much like when we built 4525 that we're going to see some loss of occupancy in the Cosmopolitan while that construction is going on, at least while it's in full swing. But again, temporary blip for much greater good.

因此它會非常醒目、非常搶手；而且截至目前，我們的零售與公寓去化（absorption）表現都很不錯。Encore 公寓的出租率已經在 90% 高段，我預期我們在這個街區興建的這類公寓會有等候名單。所以我預期它會非常快就達到穩定化。雖然我們已經和我剛提到的那些品牌簽了幾份租約，但其餘空間基本上都在進行意向書（LOI）談判。這裡還有一點我們想說明：會需要做一些重新調整。我們必須在 Cosmopolitan Apartments 下方的零售區把一些承租戶移動位置，為我們非常想要引進的其他共租戶（co-tenants）騰出空間。我們會移動幾家在地店家。當我們提出 2017 年指引時，我們的預期很像當年我們興建 4525 時的情況：在 Cosmopolitan 進行施工期間，尤其是施工全面展開時，我們會看到一定程度的入住率下滑。但同樣地，這只是短暫的波動，為了更大的長期利益。

My other questions have been answered, so I will hop back in the queue but appreciate all the good information and congrats on the successful quarter.

我其他問題都已經得到解答了，所以我先回到排隊序列裡；但很感謝你們提供這麼多有用資訊，也恭喜本季表現亮眼。

Paul Puryear, Raymond James Financial.

Paul Puryear，Raymond James Financial。

Would really like to get some more color on your construction company. The profitability there and I would assume you're getting cost pressure, if you could comment on that and are you able just to pass that through?

我很想更深入了解你們的營造公司：那邊的獲利能力如何？我也假設你們正面臨成本壓力；能否請你評論一下？以及你們是否能把這些成本壓力轉嫁出去？

Yes. Great question, Paul. I appreciate it. May I tell you, you guys will make me talk forever here. Some of you know I came up through that, that company is still near and dear to my heart. Paul, we're not seeing any pressure on the profitability on that company essentially because of the way we do business. This is much different than traditional construction. Our guys are not out there trying to be the low bid on a project. Our people get hired to help an owner develop a project when he hires an architect, then he hires a contractor and watch those two together to ultimately come up with the best product he can for a reasonable price in a very short timeframe. Therefore, it's not incumbent upon us to put a hard number on the project until essentially we have the entire thing subcontracted. So, long answer to a short question, essentially everything is pass through. Now, it's still the construction business and there's still some risk, obviously, you can have subcontractors go out on here in the middle of a project. So we have a extremely well oiled wedding machine to keep that to a minimum. As Mike mentioned, that backlog is well over a couple of hundred million dollars. For the third or fourth year in a row, our expectation as of 2017 is going to once again be at the higher end of the range. And it also it begs the question why not expand it? Well, it's not really expandable. We really like the idea of that company bringing in $4 million, $5 million every year. The kind of work that it gets, it gets from a couple of handfuls of clients that understand the value of hiring a contractor upfront because that's where the money is saved through the design process. But it doesn't scale up well and frankly, we have as much benefit in having those guys work for us in controlling our costs and schedules as well as involved in these joint ventures. As we've said before, this mezzanine lending program that we have, we wouldn't have it if we didn't have our construction company on site basically monitoring the process and prosecuting the construction. So it's a multi-headed monster for us that happens to be very lucrative on [the side].

是的。Paul，這個問題問得很好，謝謝你。老實說，你們會讓我在這裡講個沒完。有些人知道我就是從那一行一路做上來的，那家公司到現在仍然是我非常在意、也很有感情的。Paul，我們基本上沒有看到那家公司獲利能力受到任何壓力，主要是因為我們的商業模式。這和傳統營造很不一樣；我們的人不是在外面拚最低標。我們被聘用，是在業主聘請建築師之後，再聘請承包商，然後我們協助業主把這兩方整合起來，最終在很短的時間內、以合理的價格做出他能做到的最佳產品。因此，在我們把整個案子幾乎都完成分包（subcontracted）之前，我們不需要先對專案報出一個硬性的總價。所以，長話短說，基本上所有成本都是可轉嫁（pass-through）的。當然，這畢竟還是營造業，仍然有一些風險；例如分包商可能在專案進行到一半時倒閉。所以我們有一套非常成熟、運作順暢的機制，把這種情況降到最低。正如 Mike 提到的，我們的在手訂單（backlog）遠超過數億美元。連續第三或第四年，我們對 2017 年的預期將再次落在區間的高端。這也會引出一個問題：那為什麼不擴張？其實它不太能擴張。我們很喜歡那家公司每年帶來 400 萬到 500 萬美元的收益。它接到的案子，主要來自少數幾個客戶，他們理解提前聘請承包商的價值，因為在設計過程中就能省下成本。但這種模式不太容易規模化；坦白說，讓這些人為我們工作，在控制成本與工期，以及參與這些合資案方面，帶給我們的好處同樣很大。正如我們之前說過的，如果沒有我們的營造公司在現場基本上監督流程並推進施工，我們也不會有這個夾層融資（mezzanine lending）計畫。所以對我們而言，這是一個多頭並進的體系，而且碰巧在[旁邊]也非常賺錢。

Thanks for that and then the cost pressure?

謝謝你的說明，那成本壓力呢？

We're seeing a lot of cost pressure across the board in a number of different markets. I tell you it's kind of interesting to look at as you wonder why in a flat economy and where commodity prices have essentially gone down for the last several years, why are we getting the cost pressure. And the biggest reason that we see is that there is a dearth of subcontractors out there to do complex high rise type work. A lot of them went away in the great recession and they largely have not come back. You've seen a few articles in the Wall Street Journal talking about how difficult it is to get glass on high rise these days. That's really a manpower thing and so not sure when that resolves itself. So for our third party clients, they know what's going on and can react accordingly. For our development business, it's kind of interesting, again as you guys know, we don't throw up buildings and help to lease them, we do projects with cities and with well-heeled anchor tenants and basically it becomes back to a pass through. And when we're doing a public-private partnership, we do our forecasting on what costs are going to be? That basically just means there needs to be more participation from the city or the university or whoever our public partner is. The same thing when we get a or when we get an engagement from one of our grocery anchors who ask us to go somewhere and build a building for them, they understand what that price is going to be. So while we'd rather not see rising prices but we're well equipped to take care of them.

我們在多個市場都看到相當大的成本壓力。我跟你說，這其實挺有意思：在經濟平緩、而且大宗商品價格過去幾年基本上都在下滑的情況下，你會想為什麼成本還在上升。我們看到最大的原因是：市場上能做複雜高層（high rise）工程的分包商非常稀缺。很多在大衰退時期退出了，而且大多沒有回來。你也看過《華爾街日報》的一些文章在談，現在高樓要做玻璃幕牆有多困難；那其實是人力問題，所以不確定何時能解決。對我們的第三方客戶而言，他們知道正在發生什麼，也能相應調整。對我們的開發業務來說，情況也很有意思：如各位所知，我們不是隨便蓋樓然後幫忙出租；我們是和城市、以及資金雄厚的主力承租戶一起做專案，基本上又回到可轉嫁（pass-through）的模式。當我們做公私合營（public-private partnership）時，我們會預測成本會是多少；這基本上意味著城市、或大學、或任何公共合作夥伴需要投入更多。同樣地，當我們接到某個雜貨主力店（grocery anchor）的委託，請我們到某個地方替他們蓋一棟樓時，他們也理解那個價格會是多少。所以，雖然我們不希望看到價格上漲，但我們有很好的能力去因應。

Paul, this is Eric. I would add one thing to Lou's comments. The other thing that we, obviously, don't know the answer to but we're discussing and keeping an eye on is how that cost pressure out there on the construction cost side might manifest itself in the context of the construction lender pull back we're seeing and that impact on your number of deals that get done. So we're keeping an eye on that and, obviously, a very interested party.

Paul，我是 Eric。我想在 Lou 的評論上補充一點。另一件我們當然還不知道答案、但正在討論並密切關注的事情是：營造成本端的成本壓力，可能會如何在我們看到的建築貸款機構收縮（construction lender pull back）的背景下顯現出來，以及這對最終能完成的交易數量會造成什麼影響。我們正在持續關注，而且顯然我們也是非常關切的利害關係人。

Yep, sounds like somebody needs to raise the rents.

是啊，聽起來好像有人需要調漲租金了。

Exactly.

沒錯。

Going back to the discussion on leasing at Virginia Beach Office, last quarter I think you commented that B rents - B space in Norfolk was filling. Could you just give us some more color on that, the rate that it's filling, how much lease rates are going up and how that affects the leasing at Virginia Beach. And I guess as part of that, are you holding rate at Virginia Beach?

回到關於維吉尼亞海灘辦公室（Virginia Beach Office）租賃的討論，上季我記得你提到諾福克（Norfolk）的 B 級租金——B 級空間正在被消化。你能否再多補充一些細節：消化速度如何、租金上漲幅度有多大，以及這對維吉尼亞海灘的租賃有何影響？另外作為其中一部分，你們在維吉尼亞海灘是否仍維持租金不變？

Great question, Paul. We're seeing some great success in downtown Norfolk because of late [Axis] very recently reported that with the companies that have chosen to relocate in some of those older buildings that we talked about, they have brought in over 2,000 jobs over the last 18 months. As a matter of fact, they're setting up training stations so that a lot of these people, a lot of the locals will be able to get those jobs as opposed to the people coming in from the area and, of course, there will be some of that as well.

好問題，Paul。我們在諾福克市中心看到非常好的成果，因為最近 <Axis> 才剛報告，選擇搬遷到我們談到的那些較老建築的公司，在過去 18 個月帶來了超過 2,000 個工作機會。事實上，他們正在設立訓練站，讓很多人、很多當地居民能夠取得這些工作，而不是由外地人進來取得；當然也會有一部分是外地人。

So it's a great benefit for the region to have those buildings full. There's also been one of the major high rises in downtown that is (inaudible) it's like 40 years old is now being converted into multi-family. So it's another few 100,000 of square feet that's taken off the market. So again, we applaud their success. We're hopeful that there are going to be one end of the light rail lines that's going to come to Town Center. But in any respect, it's good for the region. In terms of what it does in for our rent, it's not much one way or another. We are holding rates, the lease that we did we talked about last quarter in 4525 was a [$2,750] rent. The four tenants that we're talking with now, that I mentioned, are all going to be in the high-20s. So we're not budging. If you think about it, it would not be wise for us to try and dive and fill these buildings not when you have another 700,000 square feet that ultimately is going to roll over. And then [squeeze a hug] with you, the 110 tenants here enjoy the exclusivity that we've been able to maintain. So we're going to stay there with that, like I said activity has been robust and I look forward to having significant increases in occupancy over the next couple of quarters. Long answer to a short question, I hope I caught it all. Does that get you?

所以，讓那些建築滿租對整個區域是很大的利多。市中心也有一棟主要的高樓（聽不清）大概有 40 年樓齡，現在正被改建成多戶住宅（multi-family）。因此又有幾十萬平方英尺的面積退出市場。總之，我們為他們的成功喝采。我們也希望輕軌其中一端的路線能延伸到 Town Center。不過無論如何，這對區域都是好事。至於這對我們租金的影響，其實差異不大。我們目前維持租金水準；我們上季提到在 4525 簽的那份租約，租金是 <[$2,750]>。我們現在正在洽談、我剛提到的那四個租戶，租金都會落在 20 多元的高段。所以我們不會讓步。你想想看，當還有另外 700,000 平方英尺最終會到期轉租（roll over）時，我們現在若為了填滿而降價並不明智。而且坦白說，這裡的 110 個租戶也享受我們一直維持的稀缺性與獨特性。所以我們會維持這個策略；如我所說，活動一直很熱絡，我也期待未來幾季入住率會顯著提升。用很長的回答回應一個簡短的問題，希望我都涵蓋到了。這樣有回答到你嗎？

Yes, you did, except for the rate of increase in B rents, if you have a number that would be helpful.

有的，除了 B 級租金的上漲幅度；如果你有數字會很有幫助。

Yes. I don't have the number. I would tell you that those B rents are still B low. For instance, one of the prizes that they got was a big commitment from ADP, which I think is around 800 jobs, 150 some odd thousand square feet. The city had to kick in significant money to help, that was a huge economic development department list where they competed with a number of competing cities in order to get that. So I wouldn't think and, gosh, now I am speculating, and I shouldn't but I wouldn't think that there was any material increase in what happened. Now you would imagine with the successes that they've had were all supply and demand, the remaining space that's in downtown Norfolk, you would imagine you'd be able to start getting a bit of a premium and those rents will start to creep up.

有。我沒有那個數字。我會說那些 B 級租金仍然偏低。舉例來說，他們拿到的其中一個成果是 ADP 的大額承諾，我想大約是 800 個工作、15 萬多平方英尺。市政府必須投入相當多的資金協助；那是經濟發展部門的一個重大案子，他們為了拿下它與多個城市競爭。所以我不認為——唉，我現在是在推測，我不該這樣——但我不認為租金有出現任何實質性的上升。不過你可以想像，隨著他們的成功，供需作用下，諾福克市中心剩餘的空間，你會覺得應該能開始拿到一些溢價，租金也會逐步上升。

Yes. I'm sure we can drag it down. Thank you. Good color.

是的。我相信我們可以把它挖出來。謝謝，資訊很有幫助。

John Guinee, Stifel.

John Guinee，Stifel。

Great. A quick follow-up. Refresh on memory as to when you raised the dividend last and by how much? And then the second question is if you look at your guidance, it implies a $0.22 to $0.24 fourth quarter FFO, I think. And that seems like a little [stint] if you raise your dividend a penny about the same time your FFO is only $0.22 or $0.24. Can you walk us through those two issues?

很好。我有個快速追問。請幫我回憶一下你們上一次調高股利是什麼時候、調高了多少？第二個問題是，若看你們的指引，我認為它暗示第四季 FFO 約為 0.22 到 0.24 美元。若你們同時把股利提高 1 美分，而 FFO 只有 0.22 或 0.24，看起來有點 <[stint]>。你能帶我們梳理一下這兩個議題嗎？

Yes. I'll start it now and then turn it over to Mike. So for the last two years, we raised the dividend by coincidently $0.04 in the first quarter of the subsequent year. So that was in I want to say February of 2015 as well as February of 2014. Mike.

可以。我先說明，然後交給 Mike。過去兩年，我們都在次年第一季把股利提高了（巧合地）0.04 美元。也就是我想是在 2015 年 2 月，以及 2014 年 2 月。Mike。

Yes, John. On the guidance, so, year-to-date we are at $0.77 at normalized and our range goes up to $1.01. So surely we're not showing the same run rate as we've had this past quarter. But part of that is the effect of using the ATM this past year, as it was talked about, we've ramped that up quite a bit and raised $50 million on the ATM, that all things being equal the share count going up, it's going to bring down the fourth quarter earnings a little bit.

好的，John。關於指引：截至目前（year-to-date），我們的常態化（normalized）是 0.77 美元，而我們的區間上限到 1.01 美元。所以我們當然不是呈現與上一季相同的運行水準（run rate）。但其中一部分原因是今年使用 ATM 的影響；如先前所談，我們把 ATM 的規模拉高不少，透過 ATM 募了 5,000 萬美元。在其他條件相同下，股數增加會讓第四季每股盈餘略為下降。

Remember that in the past quarter, we had $20 million on the ATM and you have 2 million shares go out the door as well for this property that we're looking forward to talking to you about. So that obviously had a bit of delusion. But as Mike said, we've had strong AFFO growth this year. We expect that to continue and so we feel real good about that dividend coverage.

請記得在上一季，我們透過 ATM 募了 2,000 萬美元，而且也有 200 萬股發行出去，用於我們很期待跟各位談的那個物業。所以那顯然帶來了一些稀釋。不過如 Mike 所說，今年我們的 AFFO 成長很強勁，我們預期會持續，因此我們對股利覆蓋率（dividend coverage）感到非常有信心。

There are no further question at this time. I would like to turn the call back over to Mr. Haddad for any closing comments.

目前沒有其他問題。我想把電話交回給 Haddad 先生，請他做結語。

Guys, thanks for all your attention and the great questions. Look forward to updating you soon on some of the things that we talked about. And have a great day.

各位，謝謝大家的關注以及很棒的提問。我們期待很快就我們談到的一些事項向各位更新。祝大家有美好的一天。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

今天的電話會議到此結束。您現在可以掛線。感謝您的參與，祝您有美好的一天。