COPT Defense Properties (CDP) 2024 Q2 法說會逐字稿

Welcome to the COPT Defense Properties second quarter 2024 results conference call. As a reminder, today's call is being recorded.

歡迎參加 COPT Defense Properties 2024 年第二季業績電話會議。提醒一下，今天的通話正在錄音。

At this time, I would turn the call over to Venkat Kommineni, COPT Defense's Vice President of Investor Relations. Mr. Kommineni, please go ahead.

此時，我會將電話轉給 COPT Defense 投資人關係副總裁 Venkat Kommineni。Kommineni 先生，請繼續。

Thank you, Lachi. Good afternoon and welcome the COPT Defense's conference call to discuss second quarter results. With me today are Steve Budorick, President and CEO; and Anthony Mifsud, Executive Vice President and CFO.

謝謝你，拉奇。下午好，歡迎 COPT Defense 召開電話會議討論第二季業績。今天與我在一起的有總裁兼執行長 Steve Budorick；以及執行副總裁兼財務長 Anthony Mifsud。

Reconciliations of GAAP and non-GAAP financial measures that management discusses are available at our website in the results press release and presentation and in our supplemental information package.

管理層討論的 GAAP 和非 GAAP 財務指標的調節表可在我們的網站上的業績新聞稿和簡報以及我們的補充資訊包中找到。

As a reminder, forward-looking statements made during today's call are subject to risks and uncertainties which are discussed in our SEC filings. Actual events and results can differ materially from these forward-looking statements, and the company does not undertake a duty to update. Steve?

謹此提醒，今天電話會議期間所做的前瞻性陳述受到我們在 SEC 文件中討論的風險和不確定性的影響。實際事件和結果可能與這些前瞻性陳述有重大差異，本公司不承擔更新義務。史蒂夫？

Good afternoon, and thank you for joining us. Just a quick note, Britt is representing the company in an important meeting for a new opportunity that could not be rescheduled. So he will not be participating on this call and I'm covering its content this quarter.

下午好，感謝您加入我們。簡單說明一下，布里特正在代表公司參加一次重要會議，以獲得無法重新安排的新機會。因此，他不會參加這次電話會議，我將在本季介紹其內容。

Turning to our achievements. We reported strong results for the second quarter and continue to drive our outperformance for the year. FFO per share as adjusted for comparability was $0.64, $0.01 above the midpoint of guidance.

轉向我們的成就。我們報告了第二季的強勁業績，並將繼續推動我們今年的優異表現。根據可比性調整後的每股 FFO 為 0.64 美元，比指導中點高出 0.01 美元。

With this result, we've either met or exceeded guidance each quarter over the past 5.5 years. We've exceeded the midpoint, 18 of past 22 quarters, and we met the midpoint in the other four. Same property cash NOI increased 10.9% year over year in our total portfolio and 11.2% in our Defense/IT Portfolio.

根據這一結果，我們在過去 5.5 年中每個季度都達到或超過了指導目標。我們已經超越了中點，過去 22 個季度中有 18 個季度達到了中點，另外 4 個季度我們也達到了中點。相同的財產現金 NOI 在我們的總投資組合中同比增長 10.9%，在我們的國防/IT 投資組合中同比增長 11.2%。

The 2023 same property pool on stand-alone basis generated 8.3% growth. The 10.9% is the highest growth rate for our total portfolio in over a decade, and 11.2% is the highest growth in our Defense/IT Portfolio since we began reporting the segment in 2015.

2023 年，同一物業池的獨立基礎上實現了 8.3% 的成長。10.9% 是我們整個投資組合十多年來的最高成長率，11.2% 是我們的國防/IT 投資組合自 2015 年開始報告該細分市場以來的最高成長率。

We completed 985,000 square feet of total leasing, which consisted of 881,000 square feet of renewals with an 86% retention rate and 104,000 square feet of vacancy leasing. This level of vacancy leasing is an impressive result given the fact that our total portfolio was 95% leased, and our Defense/IT Portfolio was 97% leased at the beginning of the quarter.

我們完成了 985,000 平方英尺的總租賃面積，其中包括 881,000 平方英尺的續約（保留率 86%）和 104,000 平方英尺的空置租賃。鑑於本季度初我們的總投資組合 95% 已出租，而我們的國防/IT 投資組合 97% 已出租，這種空置租賃水平是一個令人印象深刻的結果。

Overall, we produced very strong operating metrics, which have exceeded our plan and allowed us to enhance our full year outlook on four key guidance metrics, including same property cash NOI growth, same property year-end occupancy, tenant retention and FFO per share as adjusted for comparability.

總體而言，我們制定了非常強勁的營運指標，超出了我們的計劃，並使我們能夠增強對四個關鍵指導指標的全年展望，包括相同的房產現金NOI 增長、相同的房產年終入住率、租戶保留率和每股FFO為了可比性進行了調整。

We increased the midpoint of 2024 FFO per share guidance again by $0.02 to $2.56, which implies nearly 6% year-over-year growth. The 2024 FFO per share growth is one of the highest forecasted growth rates in NAREIT defined office REIT sector and ranks in the 75th percentile for the entire REIT sector.

我們再次將 2024 年 FFO 每股指引中位數上調 0.02 美元，至 2.56 美元，這意味著同比增長近 6%。2024 年 FFO 每股成長率是 NAREIT 定義的辦公室 REIT 產業中最高的預測成長率之一，在整個 REIT 產業中排名第 75 位。

Turning to defense funding, there are a lot of moving pieces left to be settled, but overall, we expect a 3% to 4% year-over-year increase for the FY 2025 defense budget. Last month, the House approved the NDAA in line with President's request and this month, the Senate Armed Services Committee advanced bill, which approved an additional $25 billion over the President's request, implying roughly 3.5% year-over-year growth to a total of $860 billion.

談到國防資金，還有很多變動問題有待解決，但總體而言，我們預計 2025 財年國防預算將年增 3% 至 4%。上個月，眾議院根據總統的要求批准了《國防授權法案》，本月，參議院軍事委員會提出了一項法案，該法案在總統的要求基礎上額外批准了250 億美元，這意味著軍費總額同比成長約3.5%。

Notably, the FY 2025 budget request targets $14.5 billion to DOD cyber activities, which marks a 50% increase over the past five years. But there's a long way to go until appropriation given the upcoming election. The trend of increased investment in Defense continues, and we expect will fund the high-priority national defense missions at both we and our tenant support.

值得注意的是，2025 財年預算請求的目標是為國防部網路活動提供 145 億美元，這標誌著過去五年增加了 50%。但鑑於即將舉行的選舉，撥款還有很長的路要走。國防投資增加的趨勢仍在繼續，我們預計將在我們和租戶的支持下為高度優先的國防任務提供資金。

Now to our markets. Demand for secure space remains strong, especially given the challenges associated with the global conflicts we are witnessing and the need to boost cyber security capabilities. In this strong demand environment, we've had great success in improving lease economics by reducing concessions and Defense/IT assets with a particular focus on renewals.

現在我們的市場。對安全空間的需求仍然強勁，特別是考慮到我們正在目睹的全球衝突帶來的挑戰以及提高網路安全能力的需要。在這種強勁的需求環境中，我們透過減少特許權和國防/IT 資產（特別注重續訂），在改善租賃經濟效益方面取得了巨大成功。

We're up forming our initial forecast, which is contributing to our strong same property cash NOI growth results and our elevated outlook for the full year.

我們正在形成初步預測，這有助於我們強勁的相同房地產現金 NOI 成長結果和我們對全年的展望。

Looking at our operating portfolio. At the National Business Park, our location offers compelling advantages to defense contractors, including proximity and connectivity to the customer and interoperability with other defense contractors. These advantages driven MVP's uniquely strong operating performance. The park is 99.4% leased and generates second highest average rents per square foot in our portfolio trailing only San Antonio. Our largest available suite, is only 7,800 square feet in the entire 4.3 million square foot park.

看看我們的營運投資組合。在國家商業園區，我們的位置為國防承包商提供了引人注目的優勢，包括與客戶的鄰近性和連結性以及與其他國防承包商的互通性。這些優勢驅動了MVP獨特的強勁營運表現。公園的出租率為 99.4%，每平方英尺平均租金在我們的投資組合中排名第二，僅次於聖安東尼奧。我們最大的可用套房在整個 430 萬平方英尺的公園中僅佔 7,800 平方英尺。

In Columbia Gateway, we continue to outperform the overall market given our dominant defense IT franchise with a focus on defense cyber requirements. Our portfolios over 91% leased, including the 90,000 square feet of vacant space we acquired last quarter and is 9% higher than the market occupancy rate of 82%.

在 Columbia Gateway，我們的表現繼續跑贏整個市場，因為我們擁有主導的國防 IT 特許經營權，專注於國防網路需求。我們的投資組合超過 91% 已出租，包括我們上季度收購的 90,000 平方英尺的空置空間，比 82% 的市場入住率高出 9%。

Columbia Gateway accounted for 25% of our total vacancy leasing achieved during the first half of the year. And our activity ratio was 185% with 445,000 square feet of prospects and 240,000 square feet of availability.

Columbia Gateway 占我們上半年空置租賃總額的 25%。我們的活動率為 185%，其中前景面積為 445,000 平方英尺，可用面積為 240,000 平方英尺。

In Huntsville, our portfolio remains highly leased at 97.7%. Our activity ratios, 125% with 70,000 square feet of prospects and 55,000 square feet of availability. In Northern Virginia, our assets are concentrated in the Route 28 South Corridor and other primary defense locations. These targeted micro markets traditionally have and continue to outperform the overall market.

在亨茨維爾，我們的投資組合的出租率仍保持在 97.7% 的高水準。我們的活動率為 125%，其中前景面積為 70,000 平方英尺，可用面積為 55,000 平方英尺。在維吉尼亞州北部，我們的資產集中在 28 號公路南走廊和其他主要防禦地點。這些目標微觀市場傳統上已經並將繼續跑贏整體市場。

In terms of occupancy and rent levels as growth in defense missions is driving contractors through our advantage locations. Our portfolio is 93% leased, which marks an 80 basis points increase year over year and compares extremely favourably to the overall market, which solely 76% occupied. Our activity ratio is 50% with 105,000 square feet of prospects and 205,000 square feet of availability.

就入住率和租金水平而言，隨著國防任務的增長，承包商正在利用我們的優勢地點。我們的投資組合的租賃率為 93%，年成長 80 個基點，與僅佔 76% 的整體市場相比極為有利。我們的活動率為 50%，潛在客戶面積為 105,000 平方英尺，可用面積為 205,000 平方英尺。

And in our other segment, we're focused on driving occupancy. While deal cycle-times remain elongated. We are encouraged by the level of activity we're seeing with a nice uptick in both our leased and occupied rate sequentially, and we're achieving results as we executed 64,000 square feet of vacancy leasing during the first half of the year. This included 16,000 square feet at 2,100 L Street in D.C., which is now 92% leased and nearly 25,000 square feet of Pinnacle Towers in Tysons Corner. Our activity ratio is 80% with 410,000 square feet of prospects and 500,000 square feet of availability.

在我們的其他領域，我們專注於提高入住率。而交易週期時間仍然延長。我們對我們所看到的活動水平感到鼓舞，我們的租賃率和入住率連續上升，並且我們在今年上半年執行了 64,000 平方英尺的空置租賃，從而取得了成果。其中包括位於華盛頓特區 2,100 L Street 的 16,000 平方英尺（現已出租 92%）和位於泰森斯角的 Pinnacle Towers 近 25,000 平方英尺。我們的活動率為 80%，前景面積為 410,000 平方英尺，可用面積為 500,000 平方英尺。

Regarding vacancy leasing, we executed 104,000 square feet during the quarter, bringing the year-to-date total of 264,000 square feet, and we are on track to exceed our full year target of 400,000 square feet. Vacancy achieved year-to-date was 24% of our total available inventory at the beginning of the year and 32% of availability within our defense IT Portfolio.

關於空置租賃，我們在本季度執行了 104,000 平方英尺，使年初至今的總面積達到 264,000 平方英尺，並且我們預計將超過 400,000 平方英尺的全年目標。年初至今，空缺率占我們可用總庫存的 24%，占我們國防 IT 產品組合內可用庫存的 32%。

Renewal leasing was exceptional during both the second quarter and year-to-date. We executed 881,000 square feet of renewal leasing in the quarter. Tenant retention was an impressive 86% and Northern Virginia was a standout at 99%. Based on our performance year-to-date, we've increased the midpoint tenant retention guidance by 250 basis points to a new range of 80% to 85%. Our sector-leading retention is driven by our unique investment strategy, which I'll discuss further my wrap-up.

第二季和今年迄今的續租租賃情況都非常出色。本季我們執行了 881,000 平方英尺的續租租賃。租戶保留率達到令人印象深刻的 86%，而北維吉尼亞州的租戶保留率更是高達 99%。根據我們今年迄今的表現，我們將中點租戶保留指導提高了 250 個基點，達到 80% 至 85% 的新範圍。我們行業領先的保留率是由我們獨特的投資策略推動的，我將進一步討論我的總結。

Cash rent spreads on renewals were up 60 basis points, while GAAP rent spreads were up 7.7%, driven by annual rent increases of 2.2% with a weighted average lease term of almost four years. We continue to expect cash rent spreads will be flat at the midpoint for the full year.

續約時的現金租金利差上漲了 60 個基點，而 GAAP 租金利差則上漲了 7.7%，因為年度租金上漲 2.2%，加權平均租賃期限接近四年。我們繼續預期全年現金租金利差將持平於中點。

Our outlook for retention over the next several years continues to remain very strong. Looking back in the second quarter of 2022, we began disclosing our view of renewal leases in excess of 50,000 square feet over the next 30 months through year-end 2024. At that time, we had 25 large leases totalling 2.8 million square feet set to expire over the following 10 quarters. Since then, we've renewed 20 of those leases totalling 2.1 million square feet with a 97.5% retention ratio.

我們對未來幾年的保留前景仍然非常樂觀。回顧 2022 年第二季度，我們開始揭露對未來 30 個月至 2024 年底續租超過 50,000 平方英尺的看法。當時，我們有 25 個總面積為 280 萬平方英尺的大型租約將在接下來的 10 個季度到期。此後，我們續約了其中 20 個租約，總面積達 210 萬平方英尺，保留率高達 97.5%。

We renewed all the tenants. For two of the leases had modest contractions. That leaves five leases remaining in their pool totalling 700,000 square feet, and we expect to retain 100% of that lease space. When these five leases are renewed, our retention on the 2.8 million square foot pool will be over 98% as compared to our initial projection of over 95%.

我們更新了所有租戶。其中兩項租約出現了適度收縮。這使得其池中剩餘五個租賃空間，總面積為 700,000 平方英尺，我們預計將保留 100% 的租賃空間。當這五個租約續約時，我們對 280 萬平方英尺池的保留率將超過 98%，而我們最初的預測是超過 95%。

So on page 20 of our flip book, we expanded our large lease disclosure to include our view of large lease expirations for the next 30 months through year end 2026. In that window, we have 32 large leases expiring totalling 4 million square feet. Of those leases, nearly 75% of the annualized rental revenue comes from full buildings leased to the United States government. And recall in our 32 year history, we had 100% renewal rate on full building government leases.

因此，在翻頁書的第 20 頁上，我們擴大了大型租賃資訊揭露範圍，納入了我們對截至 2026 年底的未來 30 個月的大型租賃到期情況的看法。在此期間，我們有 32 個大型租約到期，總面積達 400 萬平方英尺。在這些租賃中，近 75% 的年化租金收入來自出租給美國政府的整棟建築。回想一下，在我們 32 年的歷史中，我們整棟大樓的政府租約的續約率為 100%。

Beyond the government leases, the pool is mostly defense contractor and data center shell leases. We expect a retention rate of over 95%, and this set of large leases expiring through year-end 2026. We're highly confident our overall tenant retention we'll remain very strong.

除了政府租賃之外，該池主要是國防承包商和資料中心空殼租賃。我們預計保留率將超過 95%，這組大型租約將於 2026 年底到期。我們非常有信心我們的整體租戶保留率將保持強勁。

Our active development pipeline totals roughly 960,000 square feet. It is 74% pre-leased and represents total cost of $381 million. We continue to expect development and acquisition leasing activity to be weighted towards the back half of the year based on the timing of those negotiations. For our three inventory buildings in development and our recently acquired Franklin center, we have combined 605,000 square feet of prospects and 340,000 square feet of available space, which equates to an activity ratio of 175%.

我們正在開發的項目總面積約為 960,000 平方英尺。該項目已預租 74%，總成本達 3.81 億美元。我們仍然預計，根據這些談判的時間表，開發和收購租賃活動將集中在今年下半年。對於我們正在開發的三座庫存建築和最近收購的富蘭克林中心，我們將 605,000 平方英尺的前景和 340,000 平方英尺的可用空間相結合，相當於 175% 的活動比率。

At MVP 400, we have 190,000 square feet of prospects at a 138,000 square feet of available space. We started this program due to the dearth of availability in the park. If we were to include this unleased building in our MVP operating portfolio, the park would still be over 96% lease. The demand for this asset is targeting an occupancy in 2025 and 2026. So we don't expect leasing progress until next year.

在 MVP 400，我們擁有 190,000 平方英尺的潛在客戶和 138,000 平方英尺的可用空間。由於公園內資源匱乏，我們開始了這個計畫。如果我們將這座未出租的建築納入我們的 MVP 營運投資組合中，該公園的租賃率仍將超過 96%。此資產的需求目標是在 2025 年和 2026 年入住。因此，我們預計租賃業務要到明年才會取得進展。

At 8,100 Rideout Road, we have a 100,000 square feet of prospects and nearly 75,000 square feet of availability. At 9,700 Advanced Gateway, we have 105,000 square feet of prospects on 40,000 square feet of availability. And finally, at the newly acquired Franklin center, we have 210,000 square feet of prospects and the nearly 90,000 square feet of availability. For these three assets, we expect to report leasing progress over the next two quarters.

在 Rideout Road 8,100 號，我們擁有 100,000 平方英尺的前景和近 75,000 平方英尺的可用面積。在 9,700 Advanced Gateway，我們擁有 105,000 平方英尺的潛在客戶和 40,000 平方英尺的可用空間。最後，在新收購的富蘭克林中心，我們擁有 210,000 平方英尺的前景和近 90,000 平方英尺的可用空間。對於這三項資產，我們預計將在未來兩個季度報告租賃進度。

Our development leasing pipeline, which we define as opportunities reconsidered 50% likely to win or better within two years or less currently stands at about 700,000 square feet. Beyond that, we're tracking over 1.6 million square feet of potential development opportunities, which should allow us to maintain a solid development pipeline in the near and medium term.

我們的開發租賃管道（我們將其定義為經過重新考慮後，有 50% 的可能性在兩年或更短時間內獲勝或更好的機會）目前約為 700,000 平方英尺。除此之外，我們正在追蹤超過 160 萬平方英尺的潛在開發機會，這將使我們能夠在中短期內保持穩固的開發管道。

And with that, I'll hand the call over to Anthony.

接下來，我會將電話轉交給安東尼。

Thank you, Steve. We reported another strong quarter with second quarter FFO per share as adjusted for comparability of $0.64, exceeding the midpoint of our guidance by $0.01. Same-property cash NOI increased 10.9% for our total portfolio and 11.2% for our Defense/IT Portfolio. The year-over-year increase was driven by a 50 basis points increase in average occupancy, lower levels of free rent concessions on renewals, the burn-off of free rent at recent developments now in service and lower net operating expenses resulting from successful real estate tax appeals primarily in Baltimore.

謝謝你，史蒂夫。我們報告了另一個強勁的季度，第二季度 FFO 每股經可比性調整為 0.64 美元，比我們指導的中位數高出 0.01 美元。我們總投資組合的相同財產現金 NOI 成長了 10.9%，國防/IT 投資組合成長了 11.2%。年比成長的推動因素包括平均入住率成長 50 個基點、續租時免費租金優惠水準較低、近期投入使用的開發項目中免費租金的消耗以及成功的實際營運帶來的淨營運費用降低。上訴主要集中在巴爾的摩。

As a result of our year-to-date achievement and our forecast for the remainder of the year. We increased the midpoint of our same-property cash NOI guidance by 150 basis points. This guidance range combined with the 50 basis point increase at the end of the first quarter, elevated the expected midpoint of growth for the year to 8%. This increase is driven by many of the same factors benefiting the quarter, namely stronger volume and economics on lease renewals, combined with lower net operating expenses resulting from real estate tax appeals and reduced weather related expenses.

這是我們今年迄今取得的成就以及我們對今年剩餘時間的預測的結果。我們將同財產現金 NOI 指引的中點上調了 150 個基點。這項指導範圍與第一季末 50 個基點的增幅相結合，將全年預期成長中點提高至 8%。這一增長是由許多使本季度受益的相同因素推動的，即租賃續約的數量和經濟性增強，加上房地產稅收上訴和天氣相關費用減少導致的淨運營費用下降。

Same-property occupancy ended the quarter at 93.5%, which is flat compared to last quarter. We expect same-property occupancy to increase towards the end of the year, and we raised the midpoint of expected year end and occupancy guidance by 250 basis points to [93.75%]. Our balance sheet continues to be strong and well positioned to navigate the current interest rate environment and take advantage of future opportunities similar to Franklin Center.

本季末同物業入住率為 93.5%，與上季持平。我們預計年底時同物業入住率將增加，並將預期年末入住率中點和入住率指引上調 250 個基點至[93.75%]。我們的資產負債表仍然強勁，能夠很好地應對當前的利率環境，並利用類似於富蘭克林中心的未來機會。

We have no significant debt maturities until March 2026. At the end of the quarter, we had over 85% of the capacity on our $600 million line of credit available and $100 million of cash on hand.

在 2026 年 3 月之前，我們沒有重大債務到期。截至本季末，我們 6 億美元的可用信貸額度和 1 億美元的庫存現金擁有超過 85% 的產能。

During the quarter, we paid off a $28 million mortgage debt maturity that was secured by three properties at Redstone Gateway. Using cash on hand, our unencumbered portfolio now represents 97% of total NOI from real estate operations.

本季度，我們還清了由 Redstone Gateway 的三處房產作為抵押的 2800 萬美元到期抵押貸款債務。使用手頭現金，我們的未支配投資組合目前佔房地產業務 NOI 總額的 97%。

We currently have no variable rate debt exposure. We expect 100% of our debt will be fixed until late 2024, as the equity component of our capital investments will be funded from cash from operations after the dividend and the debt component from our existing cash balance and subsequently from our line of credit.

我們目前沒有可變利率債務風險。我們預計 100% 的債務將在 2024 年底之前解決，因為我們資本投資的股權部分將由股息後的營運現金提供資金，債務部分將由我們現有的現金餘額以及隨後的信貸額度提供資金。

The first six months of 2024 demonstrate our ability to self-fund the equity required for investments. Year-to-date, we invested $82 million in developments and the acquisition of Franklin Center. We funded 52% of that spend with cash from operations after the dividend, which is neutral to overall leverage and the remainder with cash on hand.

2024 年前六個月證明了我們有能力自籌投資所需的股權。今年迄今為止，我們已投資 8,200 萬美元用於富蘭克林中心的開發和收購。我們用股息後的營運現金資助了其中 52% 的支出，這對整體槓桿率是中性的，其餘的則用手頭現金提供。

Our dividend payout ratio was 56% during the first half of the year and has been below 60% in each of the past four quarters. We expect the full year payout ratio will be roughly 60%. This strong payout ratio allows us to utilize the retained cash flow to help fund new investments achieved during the first six months of the year. With our first corporate quarter dividend increase, we are one of only two reach in our sector to have raised the dividend during the first half of the year, which demonstrates the confidence we have in our ability to generate strong levels of AFFO.

上半年我們的股利支付率為56%，過去四個季度每季都低於60%。我們預計全年派息率約為 60%。這種強勁的支付率使我們能夠利用保留的現金流來為今年前六個月實現的新投資提供資金。隨著我們第一個企業季度股息的增加，我們是該行業中僅有的兩家在上半年提高股息的公司之一，這表明我們對產生強勁 AFFO 水平的能力充滿信心。

With respect to guidance, we increased 2024 FFO per share for the year by $0.02 at the midpoint, implying nearly 6% growth over 2023 results. This is our second increase this year as the initial FFO per share guidance midpoint was $2.51, which we increased to $2.54 last quarter and now sits at $2.56.

在指導方面，我們將 2024 年每股 FFO 中點增加了 0.02 美元，這意味著比 2023 年業績成長近 6%。這是我們今年第二次上調，最初的 FFO 每股指引中點為 2.51 美元，上季度我們將其提高至 2.54 美元，目前為 2.56 美元。

The $0.05 guidance increase for the year is primarily driven by the increases in same-property cash NOI from the acquisition of Franklin Center and higher than expected interest income on cash balances. These items are partially offset by some GAAP NOI adjustments and slightly higher G&A expenses. We reduced the full year guidance for capital invested in development and acquisitions by $40 million at the midpoint from $260 million to $220 million, driven by the timing of our expected investments.

本年度指導值增加 0.05 美元，主要是由於收購富蘭克林中心導致的相同財產現金 NOI 增加以及現金餘額利息收入高於預期。這些項目被一些 GAAP NOI 調整和略高的 G&A 費用部分抵消。受我們預期投資時機的影響，我們將全年用於開發和收購的資本投資指引中位數減少了 4,000 萬美元，從 2.6 億美元降至 2.2 億美元。

Finally, we are establishing third quarter guidance for FFO per share as adjusted for comparability in a range of $0.63 to $0.65, which implies a slight increase in the fourth quarter. Looking forward, we continue to anticipate compound annual FFO per share growth of at least 4% between 2023 and 2026.

最後，我們正在製定每股 FFO 的第三季度指導，並根據可比性進行調整，範圍為 0.63 美元至 0.65 美元，這意味著第四季度略有增長。展望未來，我們繼續預期 2023 年至 2026 年間 FFO 每股複合年增長率至少為 4%。

With that, I'll turn the call back to Steve.

說完，我會把電話轉回給史蒂夫。

So before I get to my final remarks, I really want to drive home one of our key differentiators, which is our sector leading tenant retention rate. Year-to-date, we've delivered 83% retention. And over the past five years, we've delivered an average of 77%. Our tenant retention record delivers immense value to our shareholders, which is realized as elevated AFFO, because the capital required to attract a new tenant for our company is about 3 times capital required to renew tenants. That ratio is likely much higher for gateway office rents.

因此，在我進行最後發言之前，我真的想強調我們的關鍵區別之一，那就是我們行業領先的租戶保留率。今年迄今為止，我們的留存率達到 83%。在過去五年裡，我們的平均交付率為 77%。我們的租戶保留記錄為我們的股東帶來了巨大的價值，這透過提高 AFFO 來實現，因為為我們公司吸引新租戶所需的資本約為更新租戶所需資本的 3 倍。對於門戶辦公室租金來說，這一比率可能要高得多。

Vacancy or downtime is the cash negative event, as rents or loss and operating expenses for vacant space diminishes the bottom-line. New leasing typically involves free rent periods and that extend the negative cash flow period.

空置或停機是現金負面事件，因為空置空間的租金或損失以及營運費用會降低利潤。新租賃通常涉及免租期並延長負現金流期。

We included exhibits on page 18 and 19 of our flip book, that examined the AFFO impact and 2 million square feet of leasing, comparing a hypothetical 80% retention rate and flat change in cash rents, to an industry average 35% retention rate with 10% cash rent increases on renewal.

我們在翻頁書的第18 和19 頁上列出了展品，這些展品考察了AFFO 的影響和200 萬平方英尺的租賃，將假設的80% 保留率和現金租金的平穩變化與行業平均35%的保留率（10 美元）進行了比較。

The bottom line is higher retention scenario with zero year one rent growth, dominates a portfolio that generates a 10% increase on renewals, but is industry average retention. The high retention scenario generates $45 million or 10% more in positive cash flow as compared to the industry average scenario, even assuming some pretty optimistic retenanting periods. These exhibits drive on the cash flow strength that our portfolio is delivery and partially explains our ability to self-fund the equity component of our incremental investment on a leveraged neutral basis.

底線是第一年租金成長為零的較高保留率情景，在續約率增加 10% 的投資組合中占主導地位，但保留率僅為行業平均水平。即使假設有一些相當樂觀的保留期，與行業平均情境相比，高保留率情境也會產生 4,500 萬美元或多 10% 的正現金流。這些表現推動了我們投資組合交付的現金流強度，並部分解釋了我們在槓桿中性的基礎上自籌增量投資的股權部分的能力。

So I'll close by summarizing our key messages. We've achieved solid results during the first half of the year. Our Defense/IT segment is 96.7% increase. Year to date, we generated same-property cash NOI growth of 8.5% in our total portfolio and 9.4% in our Defense/IT Portfolio.

最後，我將總結我們的關鍵資訊。上半年，我們取得了紮實的成績。我們的國防/IT 部門成長了 96.7%。今年迄今為止，我們的總投資組合中的同資產現金 NOI 增長了 8.5%，國防/IT 投資組合中的相同資產現金 NOI 增長了 9.4%。

We increased the midpoint of 2024 guidance for same property year and occupancy, same-property cash NOI growth, and tenant retention. We executed 264,000 square feet of vacancy leasing. Year to date, our $381 million of active developments are 74% pre-leased and will contribute to NOI growth over the next few years.

我們提高了 2024 年同地產年份和入住率、同地產現金 NOI 成長和租戶保留率指引的中位數。我們執行了 264,000 平方英尺的空置租賃。今年迄今為止，我們價值 3.81 億美元的活躍開發案已預租 74%，這將有助於未來幾年 NOI 的成長。

Our liquidity is very strong, and we expect to continue to self-fund the equity component of our planned capital investments going forward. And we increased the midpoint of 2024 FFO per share guidance by another $0.02 to $2.56, which implies nearly 6% year-over-year FFO growth. This quarter's performance clearly shows the benefit of our unique investment strategy.

我們的流動性非常強勁，我們預計未來將繼續為計劃資本投資的股權部分提供資金。我們將 2024 年 FFO 每股指引的中點又上調了 0.02 美元，達到 2.56 美元，這意味著 FFO 同比增長近 6%。本季的業績清楚地表明了我們獨特的投資策略的好處。

So operator, with that, please open up the call for questions.

那麼接線員，請打開電話詢問問題。

(Operator Instructions) Richard Anderson, Wedbush Securities.

（操作員指示）理查德·安德森（Richard Anderson），韋德布希證券公司（Wedbush Securities）。

Hey, thanks. Good morning or good afternoon. So on the same-store growth profile first, you know, great job there. It's -- I guess it's there's precedence, but seems like something that you've achieved much at all in the past. But you said that the building blocks behind it, correct me if I'm wrong, essentially better than expected renewal options and lower OpEx. Is that basically and a little bit upside on occupancy in the back half of the year?

嘿，謝謝。早安或下午好。因此，首先就同店成長情況而言，你知道，這方面做得很好。我想這是有優先權的，但看起來你過去已經取得了很多成就。但你說它背後的構建模組，如果我錯了，請糾正我，本質上比預期的更新選項更好，並且運營支出更低。這基本上是下半年入住率的一點上升嗎？

That's correct.

這是正確的。

Okay. So on the vacancy leasing side that that probably doesn't have as much of an impact, if at all. There sort of a free rent component that so you don't really get same store impact from the vacancy leasing activity.

好的。因此，在空置租賃方面，這可能不會產生太大的影響（如果有的話）。有一種免費的租金成分，因此您不會真正受到空置租賃活動對同一家商店的影響。

Typically, vacancy leasing requires six to maybe even eight months of tenant improvement for we get a commencement and rent start. And even in a scenario with no free rent, it's really hard to get a deal done in the current year to contribute to that current year cash NOI.

通常情況下，空置租賃需要六到八個月的租戶改進才能啟動並開始出租。即使在沒有免費租金的情況下，今年也很難達成一筆交易來為當年的現金 NOI 做出貢獻。

So 8%, I'm just going to take a flier, maybe not sustainable on a long-term basis. Maybe you disagree, what do you think the real sort of internal firepower of this company is I know you're reiterating your 4% FFO growth, 2026. So what should investors be expecting from an organic growth point of view as we look out.

所以 8%，我只是打算搭飛機，也許無法長期持續。也許你不同意，你認為這家公司真正的內部火力是什麼？那麼，從有機成長的角度來看，投資者應該期待什麼。

Well, I think good run rates, 4% internal and then additional contributions from development.

嗯，我認為良好的運行率，4% 的內部貢獻，然後來自開發的額外貢獻。

And Steve, you mentioned the defense budget and expecting 3% to 4% for FY 2025. So talk to me remind me about how that translates into leasing. I think you've talked about this before directly to the government, it's pretty quick, but with contractors kind of takes time for it to matriculate to a leasing event, is that a fair way to look at it?

史蒂夫，您提到了國防預算，並預計 2025 財年國防預算將達到 3% 至 4%。所以跟我談談，提醒我這如何轉化為租賃。我想您之前已經直接向政府討論過這個問題，速度相當快，但是承包商需要時間才能參加租賃活動，這是一個公平的看待方式嗎？

Yeah. So if the government has additional leasing authority approved in a budget, they typically have to commit that within the fiscal year. As we all know, the appropriations tend to happen on a delayed basis because of continuing resolutions. So once again, appropriation is usually six to seven months. Following that, the US government lease action could will have to be executed.

是的。因此，如果政府在預算中批准了額外的租賃權，他們通常必須在財政年度內做出承諾。眾所周知，由於持續的決議，撥款往往會延遲進行。因此，撥款通常是六到七個月。此後，美國政府可能必須執行租賃行動。

With defense contractors, we typically experience the benefit through their ability to capture additional business through contracts. And that contract award process takes quite a bit of time off. And there's protests that need to get adjudicated. I mean, award is finalized and then that contractor can commit to additional space. So we say that tends to lag 12 to 18 months.

對於國防承包商，我們通常會透過他們透過合約獲取額外業務的能力來體驗到好處。而且合約授予過程需要相當長的時間。還有一些抗議需要裁決。我的意思是，合約確定後，承包商就可以承諾提供額外的空間。所以我們說這往往會滯後 12 到 18 個月。

Okay. And then last for me, it looks like things are going well at Franklin Center, any other hidden gems you kind of referenced acquisition potential. Some similar opportunities like that with upside under your umbrella. You've got your eyes on a few things out there, even though you're really a defense development oriented story, is there stuff out there that is interesting, at least in terms of a pipeline. Thanks.

好的。最後對我來說，富蘭克林中心的情況似乎進展順利，您提到的任何其他隱藏的寶石都有收購潛力。一些類似的機會，例如在你的保護傘下帶來的好處。你已經關注了一些事情，即使你確實是一個以國防發展為導向的故事，是否有一些有趣的東西，至少在管道方面。謝謝。

We're still looking, Rich. That's all I'd say.

我們仍在尋找，里奇。我就這麼說。

Blaine Heck, Wells Fargo.

布萊恩·赫克，富國銀行。

Great. Thanks. Good afternoon, guys. Can you talk a little bit more about the increased development leasing pipeline? I think the pipeline was up to 700,000 square feet from 500,000 square feet and the potential opportunity set increased to 1.6 million square feet from 1 million last quarter. So just curious if there are any specific tenant profiles that are driving that incremental demand? And are you seeing it in specific geographic areas or is it relatively widespread across the portfolio?

偉大的。謝謝。下午好，夥計們。能多談談增加的開發租賃管道嗎？我認為管道面積從 50 萬平方英尺增加到 70 萬平方英尺，潛在機會集從上個季度的 100 萬平方英尺增加到 160 萬平方英尺。那麼只是好奇是否有任何特定的租戶資料正在推動增量需求？您是否在特定地理區域看到了這種情況，或者在整個投資組合中是否相對普遍？

Well, there's always ins and outs on that list. But to give you an idea, last quarter, we had within the -- our pipeline, we had four key requirements that were about 500,000 square feet in total and they averaged around 36,000 square feet. This quarter, we've got 80 requirements that are about 700,000 and they're averaging about 38,000 square feet. Within that, there's expansions, consolidation discussions in new mission requirements that we're working with customers to have an ability to construct a new building to support. And then within the two year timeframe, it's really we have conversations continually and we always filter those by two years or less than 50% or greater. So we've had some discussions that are pretty encouraging, and that's about all I can really say. I would not want to give you any other profile information.

嗯，這個清單上總是有來龍去脈。但為了給你一個想法，上個季度，我們在管道中提出了四個關鍵要求，總共約 50 萬平方英尺，平均約 36,000 平方英尺。本季度，我們收到了 80 個需求，約 70 萬個，平均面積約為 38,000 平方英尺。其中，我們正在與客戶合作，就新的任務要求進行擴展、整合討論，以便有能力建造新的建築來支援這些要求。然後在兩年的時間範圍內，我們確實不斷地進行對話，並且我們總是以兩年或少於 50% 或更多的速度過濾這些對話。我們進行了一些非常令人鼓舞的討論，這就是我真正能說的。我不想向您提供任何其他個人資料資訊。

Got it. That's helpful, Steve. Just following up on the same-store NOI guidance increase, it looked like at least some, if not most of that increase was expense related. So maybe, Anthony, can you just talk through some of the components there? Are there potentially any more significant tax appeals that could change the outlook again in the second half.

知道了。這很有幫助，史蒂夫。就同​​店 NOI 指導成長的後續來看，看起來至少有一部分（如果不是大部分）成長與費用相關。安東尼，你能談談其中的一些組成部分嗎？是否有任何更重大的稅務上訴可能會再次改變下半年的前景。

And then on the weather related expenses, I'm assuming this is savings relative to kind of what you had budgeted in the first half of the year, not any expectation for lower expenses, but just wanted to confirm on that.

然後，關於與天氣相關的費用，我假設這是相對於您上半年預算的節省，而不是對費用降低的預期，但只是想確認這一點。

You're correct on all these points. The weather related expenses were experienced in the first quarter and we reported through our results for the first three months. The successful real estate tax appeal in Baltimore came through our second quarter results. We'll see some of the benefit of that going forward because that reduction will continue through the current year expense and into the future. But if you look at the total change in same property cash NOI in terms of gross dollars between the 6% original guidance and the 8%, it's about $7 million. About 30% of that is expense related and the balance is a combination of stronger renewals, lower free rent on renewals. And better economics on our leases.

你在所有這些方面都是正確的。第一季經歷了與天氣相關的費用，我們報告了前三個月的業績。巴爾的摩房地產稅上訴的成功體現在我們第二季的業績上。我們將看到這種做法的一些好處，因為這種減少將持續到今年的費用和未來。但如果你看看相同財產現金 NOI 的總變化（以總美元計）在 6% 的原始指導值和 8% 之間，則約為 700 萬美元。其中約 30% 與費用相關，其餘部分是更強的續約和較低的續約免租金的組合。我們的租賃具有更好的經濟性。

Great. Very helpful. And then, maybe just back to Steve for one more. Can you can you just talk about any additional data center opportunities that you have maybe in Northern Virginia and even potentially elsewhere. And talk about how the limited power availability might have kind of resulted -- has it resulted in a roadblock with respect to further expansion of that program? And how do you think about that going forward?

偉大的。非常有幫助。然後，也許再回到史蒂夫那裡再問一次。您能談談您在北維吉尼亞州甚至其他地方可能擁有的任何其他資料中心機會嗎？並討論有限的電力可用性可能會如何導致——它是否導致了該計劃進一步擴展的障礙？您如何看待未來的發展？

Well, I wouldn't call it a roadblock, but it might be it along traffic light. So it's clearly without available power. We've talked about this on prior calls. It's factoring in the extremely high price of land today. It's tough to move forward until we have clarity where we can match power and land and have confidence our customer would be interested in that solution.

好吧，我不會稱其為路障，但它可能是沿著交通燈的。所以很明顯沒有可用的電源。我們在之前的電話會議中已經討論過這個問題。它考慮到了當今極高的土地價格。在我們明確哪裡可以匹配電力和著陸並確信我們的客戶會對該解決方案感興趣之前，很難繼續前進。

So the power situation is no clear today, I think it was a year ago. And we await some clarity on available power and we work the market to understand what pieces of land we could buy and develop solutions. But as I said last quarter, I don't expect expansion of that program during the current calendar year in -- could be into the latter half of next year.

所以今天的電力狀況還不清楚，我想那是一年前的事了。我們等待可用電力的明確情況，並研究市場以了解我們可以購買哪些土地並開發解決方案。但正如我上季度所說，我預計該計劃在本日曆年不會擴大，可能會持續到明年下半年。

Michael Griffin, Citi.

邁克爾·格里芬，花旗銀行。

Great, thanks. Just going back to leasing for a bit, just given the high lease rate and limited vacancy in your portfolio. Is it fair to expect kind of outsized future cash re-leasing spreads or maybe greater lease escalators given the favorable supply-demand backdrop?

太好了，謝謝。考慮到您的投資組合中的高租賃率和有限的空置率，我們先回到租賃領域。在有利的供需背景下，預期未來現金再租賃利差會大幅增加，或者租賃升級幅度可能會更大，這是否公平？

And then maybe following up on that for your non-US government leases, have you been able to push leasing more for these kind of tenants?

然後，也許針對非美國政府租賃的後續行動，您是否能夠為此類租戶提供更多租賃服務？

So I think what you're seeing this year is the benefit of tighter supply and demand is manifesting itself in reduced free rent annual renewal, and that's flowing through our same office results in a pretty positive way.

因此，我認為今年您看到的是供應和需求趨緊的好處，這體現在每年免費續租的減少上，這正在以非常積極的方式流向我們同一辦公室的結果。

With regard to market rent, as we've talked about before, it's not the best metric to judge our company and because our markets are very stable. We don't get peaks. We don't get crashes with recoveries. So we -- and the internal growth in our leases tends to move about with market rent. So we get very little cash rent change on renewal and then continued growth.

關於市場租金，正如我們之前談到的，這不是判斷我們公司的最佳指標，因為我們的市場非常穩定。我們沒有達到峰值。我們不會因恢復而崩潰。因此，我們以及租賃的內部成長往往會隨著市場租金的變化而變化。因此，我們在續約和持續成長時獲得的現金租金變化很少。

So I guess to wrap it up, where we're seeing the most advantage is lower free rent concessions, which is a big boost to cash.

所以我想總結一下，我們看到最大的優勢是較低的免費租金優惠，這對現金來說是一個巨大的推動。

Great. Appreciate that color, Steve. And I'll be curious to your thoughts just on kind of the cybersecurity industry. Obviously, we saw the impact that the recent CrowdStrike outage had on things. So would you view an event like this is kind of a wait capitalize new tenants in your tenant base to invest more in cybersecurity. And I know that this is a growing portion of your portfolio. So any kind of comment you could have on the outlook for that industry would be helpful.

偉大的。欣賞這種顏色，史蒂夫。我很好奇您對網路安全產業的看法。顯然，我們看到了最近 CrowdStrike 中斷對事情的影響。因此，您是否認為這樣的活動是一種等待，讓您的租戶群中的新租戶資本化，以便在網路安全方面進行更多投資。我知道這是您投資組合中越來越大的一部分。因此，您對該行業前景的任何評論都會有所幫助。

Well, you know, it's been a great performer for us since we first started to realize the benefit of US Cyber Command being co-located at Fort Meade. I think our total cyber tenancy where we can obtain new leases that we've achieved to the divisions coming out of Cyber Command is nearing 3 million square feet in our portfolio.

嗯，你知道，自從我們第一次意識到美國網路司令部駐紮在米德堡的好處以來，它對我們來說一直表現出色。我認為我們的網路租賃總面積接近 300 萬平方英尺，我們可以從網路司令部中獲得新的租賃權。

And I say those tenants they're not contracting frequently. They're expanding. I think it's just a great fundamental set of tenants to have in your portfolio because the threat is asymmetric. It is the environment of constant innovation.

我說的是那些他們不常簽約的租戶。他們正在擴張。我認為這只是你的投資組合中的一組重要的基本租戶，因為威脅是不對稱的。這是不斷創新的環境。

The threat constantly innovates to feed -- protection. And so the protectors need to constantly innovate to protect that threat. I think you see that a little bit in the comments that we made about DoD cyber being earmarked for $14.5 billion as $13.5 billion last year. So targeted $1 billion increase has about 7.5%.

威脅不斷創新以提供保護。因此，保護者需要不斷創新來保護這種威脅。我想你在我們對國防部網路撥款 145 億美元的評論中已經看到了這一點，去年是 135 億美元。因此，10 億美元的成長目標約為 7.5%。

On a long-term basis, the Fed's compound rate, I'm pretty satisfied that we'll be well served, continues to capture the tenancy.

從長期來看，聯準會的複合利率，我很滿意我們將得到良好的服務，繼續吸引租戶。

Steve Sakwa, Evercore ISI.

Steve Sakwa，Evercore ISI。

Thanks. Good afternoon. Steve, I guess I wanted to circle back on the development kind of pipeline and the activity level that you're seeing, it's clearly very robust. And it sounds like the big property at NBP has good demand, but maybe it's a little bit early to sign. I guess what I'm trying to figure out as you know, what gets you guys to start new development projects? Is it pre-leasing is getting some of these existing projects closer to the finish line? Sounds like there's so much good demand. I'm not sure why you're not starting more projects today.

謝謝。午安.史蒂夫，我想我想回顧一下您所看到的開發類型管道和活動水平，它顯然非常強大。聽起來 NBP 的大型房地產需求量很大，但也許現在簽約還為時過早。我想我想弄清楚，正如你們所知，是什麼讓你們開始新的開發專案？預租是否讓一些現有項目更接近終點線？聽起來需求量很大。我不知道你今天為什麼不開始更多的專案。

So we tend to be pretty conservative and our commitment to new supply until we see immediate up to the satisfy what we well, we already started, we have three inventory buildings with vacancy. We see the demand as those buildings as the demand nears leases. We're already prepared and planning subsequent buildings to bring to market quickly.

因此，我們傾向於相當保守，我們對新供應的承諾，直到我們看到立即滿足我們的要求，我們已經開始了，我們有三個空置的庫存建築。當需求接近租賃時，我們將需求視為這些建築物。我們已經做好準備並計劃將後續建築快速推向市場。

For instance, at the National Business or I'm sorry, Redstone Gateway, we are ready to go to permit on our next two inventory buildings. We've already prepared the site. We're ready to start on blow great improvements and be up and call it 12 months. So we like to have past year of preparedness. So we don't want to put out too much capital at risk. So we see that demand materialize.

例如，在國家商業中心，或對不起，紅石網關，我們已經準備好為接下來的兩座庫存建築申請許可。我們已經準備好網站了。我們已準備好開始重大改進，並稱其為 12 個月。所以我們希望為過去的一年做好準備。因此，我們不想投入太多的創投。所以我們看到這種需求成為現實。

Okay, thanks. And then maybe just turning to some of the non-core assets, some of the downtown Baltimore assets. Just how are you thinking about those? I know T. Rowe Price's kind of getting set to move out of their headquarters building and move further east in Baltimore, which will create some more vacancy, which isn't too far from some of your buildings there on light and Pratt Street. So how are you thinking about either leasing on those and then ultimately the disposition of those Baltimore assets as well as 2100 L Street?

好的，謝謝。然後也許只是轉向一些非核心資產，一些巴爾的摩市中心的資產。你怎麼看待這些？我知道 T. Rowe Price 正準備搬出他們的總部大樓，搬到巴爾的摩東部更遠的地方，這將創造更多的空置，距離你們在 Light 和 Pratt 街上的一些建築物不太遠。那麼，您如何考慮租賃這些資產以及最終處置這些巴爾的摩資產以及 L 街 2100 號資產？

Well, let me take that in reverse order. So 2100 at 92% leased. The building stabilized, it has inherent value to sell. We need a capital market environment that will support a proper valuation and that really speaks to the cost of debt for a buyer and availability of debt. It's just that today. So we think we're launch ready when the market is in a position to put a figure at a proper valuation.

好吧，讓我以相反的順序來理解。所以 2100 的 92% 出租。建築物穩定後，具有內在的出售價值。我們需要一個資本市場環境來支持適當的估值，並真正說明買方的債務成本和債務的可用性。今天就是這樣了。因此，我們認為，當市場能夠對數字進行適當估值時，我們就已經準備好推出。

With regard to downtown Baltimore, yes, indeed, T. Rowe will vacate that building leaving a significant amount of vacancy. We consider that a potential significant challenge relative to our 100 Light Building, which has quite a bit of vacancy.

至於巴爾的摩市中心，是的，確實，T. Rowe 將騰出該建築，留下大量空置。我們認為，相對於我們的 100 Light 大樓而言，這是一個潛在的重大挑戰，因為該大樓有相當多的空置。

But it looks like the good news is that the owners that building, they're not very well capitalized and for them to interpreting what we've heard in the market. To get a deal, they're going to need incremental financing from a lender. I just don't think that's going to win in today's environment.

但看起來好消息是，這棟建築的業主資本不是很好，他們無法解釋我們在市場上聽到的情況。為了達成協議，他們需要從貸方獲得增量融資。我只是認為在今天的環境下這不會獲勝。

But we are laser focused on the opportunities in the market, competing well for them in getting leases reestablished in the vacancy at 100 Light and then the other two buildings complete their own kind of micro market. We have pretty good demand on both of them. I think you'll see their occupancies improve over the next two quarters.

但我們非常關注市場上的機會，在 100 Light 的空置中重新建立租賃，然後與其他兩座建築完成自己的微型市場，從而為他們提供良好的競爭。我們對它們都有很好的需求。我認為您會在接下來的兩個季度看到他們的入住率有所改善。

With regard to capital markets, again, we got to have a market where a buyer can finance an acquisition to give us a proper value before we bring to market.

就資本市場而言，我們必須擁有一個買家可以為收購融資的市場，以便在我們上市之前為我們提供適當的價值。

Okay, thanks. Just one quick follow up. On the 2100 L. Would you be willing to do any kind of seller financing on that? Obviously, capital markets are getting better and rates are coming down, but would you do seller financing on that building that effectuate a transaction sooner?

好的，謝謝。只需一個快速跟進。關於 2100 L。顯然，資本市場正在變得更好，利率正在下降，但是您會為該建築進行賣方融資以更快地完成交易嗎？

With the significant down strip, yeah.

有了顯著的下條帶，是的。

Camille Bonnel, Bank of America.

卡米爾·博內爾，美國銀行。

Hi, everyone. I appreciate that the pipeline remains robust, but I'm curious as we get closer to the elections, if you're starting to see any slowdown in decision making from your tenants or just the difference in mindset, whether that be on your vacancy or development pipeline?

大家好。我很高興管道仍然強勁，但我很好奇，隨著我們越來越接近選舉，您是否開始看到租戶的決策速度有所放緩，或者只是心態上的差異，無論是在您的空缺還是在開發管道？

Well. So it's tough to know what's inside the head of our tenants because we just don't have clarity into what their thinking is. But as long as I've been at the company have never really seen the election result in Florence, the need for lease space. It's more from our viewpoint. Contractors where we get confidence on an award win planning for the facility to verify that they're ready to move forward. It really tends to be more focused at the contractor's business. So my answer is I have no evidence that the election is influencing decisions.

出色地。所以很難知道我們的租戶腦子裡在想什麼，因為我們不清楚他們的想法是什麼。但只要我在公司工作過，就從來沒有真正看到佛羅倫斯的選舉結果，需要租賃空間。這更多是從我們的角度來看。我們對屢獲殊榮的設施規劃充滿信心，以驗證他們是否已準備好繼續前進。它確實更傾向於承包商的業務。所以我的回答是，我沒有證據顯示選舉正在影響決策。

Got it. And looking towards Redstone Arsenal, the retention there was much lower this quarter and you have a few projects under development as well as the new opportunities that you mentioned in that market. So could you expand a bit more on what's driving the move outs there?

知道了。看看紅石阿森納，本季的保留率要低得多，您有一些正在開發的項目以及您在該市場中提到的新機會。那麼能否詳細說明一下推動該地區遷移的因素？

Yeah. So the two small tenants downsize, but the largest of the non-renewals we got are reported was a contractor who we gave temporary space in one of our buildings off of Redstone Gateway. So they had time for us to build them a new building and we moved that contractor into their new building and took back swing space. So that was the bigger driver. And if you look at -- it's very small minor square footage.

是的。因此，兩個小租戶縮小了規模，但據報道，我們收到的最大的未續約者是一位承包商，我們在紅石網關附近的一棟建築中提供了臨時空間。所以他們有時間讓我們為他們建造一座新大樓，我們將承包商搬進他們的新大樓並收回週轉空間。所以這是更大的驅動力。如果你看一下——它的面積非常小。

Okay. Thanks. And lastly, can you please elaborate a bit more on the acquisition guidance update this quarter? Is it more of a timing factor of when you expect to close on the deal or has anything changed in what you're seeing in the investment market?

好的。謝謝。最後，您能否詳細說明一下本季的收購指導更新？是否更多的是您預計何時完成交易的時間因素，或者您在投資市場上看到的情況發生了什麼變化？

Our update was of our development spend. So it's really the forecast we have for just development capital and investing in our existing pipeline that's in the ground as well as the capital works we're anticipating investing in new projects later in the year.

我們的更新是我們的開發支出。因此，這實際上是我們對開發資本和現有地下管道投資以及我們預計在今年稍後投資新項目的基本工程的預測。

Peter Abramowitz, Jefferies.

彼得·阿布拉莫維茨，杰弗里斯。

Thanks. Most of my questions have been answered, but I guess just two here versus start out. I guess it's become much quieter on this front, not a tough conversation much anymore. But just wondering if you could comment on construction costs, sort of how things are trending there and how you feel relative to cost of capital and to your underwriting yields?

謝謝。我的大部分問題都已得到解答，但我想這裡只有兩個問題，而不是一開始的問題。我想這方面已經變得安靜多了，不再是一場艱難的對話。但只是想知道您是否可以對建築成本發表評論，那裡的情況趨勢如何，以及您對資本成本和承保收益率的感受如何？

So the rate of increase in construction costs has clearly abated. I would say, year to date it's pretty close to stable. We're not seeing big increases like we did over the last few years. Having said that, cost a lot more to build building today than it did three years ago. And the cost of capital is it essentially constant this year, maybe a little bit improved as we hit into the midyear. So still a challenge to get rents to support new development. And I think that has some impact on our overall ability to generate development progress. But we have not yet seen construction costs start to decrease in a more competitive environment.

因此，建築成本的成長速度明顯放緩。我想說，今年迄今為止，它非常接近穩定。我們沒有看到像過去幾年那樣的大幅成長。話雖如此，今天建造建築物的成本比三年前要高得多。今年的資本成本基本上保持不變，進入年中後可能會有所改善。因此，獲得租金來支持新開發項目仍然是一個挑戰。我認為這對我們取得發展進步的整體能力有一些影響。但我們還沒有看到建築成本在競爭更加激烈的環境中開始下降。

And then one on just the overall sort of market for your assets, have you seen any sales in the transaction market, particularly for defense contractor or government build-to-suits, particularly the BW Corridor, but overall in the portfolio. Any sales that give you a sense of cap rates and pricing for those assets in your portfolio?

然後，就您的資產的整體市場而言，您是否看到交易市場上有任何銷售，特別是國防承包商或政府定制建築，特別是 BW 走廊，但總體而言是在投資組合中。有任何銷售能讓您了解投資組合中這些資產的資本化率和定價嗎？

Nothing that I could speak to right now. There were a few acquisition opportunities we looked at over the last year that were not in the BW corridor. Where we observe the transaction and saw prices bid to a level below what we would have paid. So pretty aggressive pricing and those involve defense contractor buildings so that you have a good asset with a mission oriented defense contractor. There's still a tremendous amount of value in those assets.

我現在沒有什麼好說的。去年我們考慮了一些 BW 走廊以外的收購機會。我們觀察交易並發現價格出價低於我們願意支付的水平。因此，定價相當激進，而且涉及國防承包商建築物，因此您可以擁有任務導向的國防承包商的良好資產。這些資產仍然具有巨大的價值。

Sure. And I guess just to follow up on that, where does the pricing go from an initial cap rate perspective that precluded you from following up on going through with those.

當然。我想只是為了跟進這個問題，從初始資本化率的角度來看，定價在哪裡，這阻止了你跟進這些事情。

Well, below 8% in my recollection is closer to 7%.

嗯，在我的記憶中，低於 8% 接近 7%。

(Operator Instructions) Dylan Burzinski, Green Street.

（操作員指示）Dylan Burzinski，格林街。

Hi, guys. Thanks for taking the question. Just curious, how you guys are thinking about future occupancy growth, given that occupancy is now approaching, call it the mid-90% range? I mean, are we sort of approaching frictional vacancy levels in the portfolio today or do you guys think you can sort of move occupancy past, call it the 94%, 95% range here over the next few years?

嗨，大家好。感謝您提出問題。只是好奇，鑑於目前入住率已接近 90% 左右，你們如何看待未來的入住率成長？我的意思是，我們今天的投資組合是否正在接近摩擦性空缺水平，或者你們認為可以在未來幾年內將入住率提高到 94%、95% 的範圍？

Well, we're never satisfied with where we are and we're going to continue trying to fill every square foot, but matching the vacancy to the demand gets much tougher as you're over 95% leased. So I'd like to say we're going to continue to make some incremental progress, but it's not going to be easy.

嗯，我們永遠不會滿足於現狀，我們將繼續努力填滿每一平方英尺，但將空置率與需求相匹配變得更加困難，因為您的租賃率超過 95%。所以我想說我們將繼續取得一些漸進的進展，但這並不容易。

And then as a sort of a parallel to that, given where occupancy is today given sort of the demand drivers that you outlined on the call, are you guys -- do you guys envision yourselves being able to sort of push embedded rent bumps in leases or is that not changed at all over the last few years? And where should we expect that to sort of go in on a go-forward basis?

然後，與此類似，考慮到今天的入住率以及您在電話中概述的需求驅動因素，你們是否設想自己能夠推動租賃中嵌入的租金上漲還是過去幾年根本沒有改變？我們應該期望它在未來的基礎上會走向何方？

Well, from quarter-to-quarter those bumps will move a bit. We've had a couple quarters or they are a little higher than they are this quarter. We're always trying to push and the entirety of the profitability of that lease. So I mean, there's some trade-offs, we'll push across the board and get where we can.

嗯，每季這些波動都會有所改變。我們已經經歷了幾個季度，或者比本季度略高。我們一直在努力提高租賃的整體獲利能力。所以我的意思是，存在一些權衡，我們將全面推動並取得我們所能取得的成果。

Thank you. I will now turn the call back to Mr. Budorick for closing remarks.

謝謝。現在，我將把電話轉回給布多里克先生，讓其致閉幕詞。

Well, thank you all for joining our call. We are in our offices, so please coordinate through bank if you like, follow up call. Thanks, again for joining us.

好的，謝謝大家加入我們的電話會議。我們在辦公室，因此如果您願意，請透過銀行進行協調，跟進電話。再次感謝您加入我們。

Thank you for your participation today in the COPT Defense Properties second quarter 2024 results conference call. This concludes the presentation. You may now disconnect. Good day.

感謝您今天參加 COPT Defense Properties 2024 年第二季業績電話會議。演示到此結束。您現在可以斷開連線。再會。