City Office REIT Inc (CIO) 2023 Q3 法說會逐字稿

Good morning and welcome to the City Office REIT Third Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. (Operator Instructions) It's my pleasure to introduce to you Tony Maretic, the company's Chief Financial Officer, Treasurer and Corporate Secretary.

早安，歡迎參加 City Office REIT 2023 年第三季財報電話會議。 （操作員說明）謹此提醒，本次電話會議正在錄音。 （操作員說明） 我很高興向您介紹公司財務長、財務主管兼公司秘書 Tony Maretic。

Thank you, Mr. Maretic. You may begin.

謝謝你，馬里蒂克先生。你可以開始了。

Good morning. Before we begin, I would like to direct you to our website at cioreit.com where you can view our Third Quarter Earnings Press Release and Supplemental Information Package. The Earnings Release and Supplemental Package both include a reconciliation of non-GAAP measures that will be discussed today to their most directly comparable GAAP financial measures.

早安.在我們開始之前，我想引導您訪問我們的網站 cioreit.com，您可以在其中查看我們的第三季收益新聞稿和補充資訊包。收益發布和補充方案均包括非公認會計原則指標的調節，今天將討論這些指標與其最直接可比較的公認會計原則財務指標。

Certain statements made today that discuss the company's beliefs or expectations or that are not based on historical fact may constitute for-looking statements within the meaning of the federal securities laws. Although the company believes that these expectations reflected in such for-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved.

今天發表的某些討論公司信念或期望的聲明或並非基於歷史事實的聲明可能構成聯邦證券法含義內的前瞻性聲明。儘管公司認為此類前瞻性陳述中反映的這些預期是基於合理的假設，但我們不能保證這些預期將會實現。

Please see the for-looking statements disclaimer in our third quarter earnings press release and the company's filings with the SEC for factors that could cause material differences between for-looking statements and actual results. The company undertakes no obligation to update any for-looking statements that may be made in the course of this call.

請參閱我們第三季財報新聞稿中的前瞻性陳述免責聲明以及該公司向美國證券交易委員會提交的文件，以了解可能導致前瞻性陳述與實際結果之間存在重大差異的因素。該公司不承擔更新本次電話會議期間可能做出的任何前瞻性陳述的義務。

I'll review our financial results after Jamie Farrar, our Chief Executive Officer, discusses some of the quarter's operational highlights. I will now turn the call over to Jamie.

在我們的執行長 Jamie Farrar 討論本季的一些營運亮點後，我將回顧我們的財務表現。我現在將把電話轉給傑米。

Good morning and thanks for joining today. As we move into the end of the year and look ahead to 2024, the office environment continues to experience both encouraging trends and macro headwinds. We anticipate the macro environment next year will continue to be challenging with a higher for longer interest rate environment and potential economic weakness. Despite that, we believe there will be subsets of the office sector that are going to perform well.

早安，感謝您今天的加入。進入年底並展望 2024 年，辦公環境繼續經歷令人鼓舞的趨勢和宏觀阻力。我們預計明年的宏觀環境將持續充滿挑戰，利率環境長期較高，且經濟潛在疲軟。儘管如此，我們相信辦公部門的某些子集會表現良好。

I'll highlight where we believe that is going to be and the decisions that we are making to optimally position ourselves. While the last few years have been less predictable than in the past, some clear leasing trends have become apparent. New vintage buildings have dominated leasing despite representing a relatively small percentage of the entire office stock.

我將重點介紹我們認為未來的發展方向以及我們為實現最佳定位所做的決定。儘管過去幾年的情況比過去更難以預測，但一些明顯的租賃趨勢已經變得顯而易見。儘管新的老式建築在整個辦公大樓存量中所佔比例相對較小，但仍主導著租賃。

JLL's recent market research confirms this. Their data identifies that newly constructed office buildings delivered in 2015 or later have been winning most of the net absorption over the past three years. We believe tenants' clear preference for premium quality space will continue to support this trend. Not surprisingly, future supply of new development has and will continue to dramatically taper given the sector's uncertainty and a lack of equity and debt capital.

仲量聯行最近的市場研究證實了這一點。他們的數據顯示，2015 年或之後交付的新建辦公大樓在過去三年中贏得了大部分淨吸收量。我們相信租戶對優質空間的明顯偏好將繼續支持這一趨勢。毫不奇怪，鑑於該行業的不確定性以及股權和債務資本的缺乏，未來新開發案的供應已經並將繼續大幅減少。

Outside of projects already under construction, we expect limited delivery of premium new competitive buildings in the near to medium term. The combination of these two trends, concentration of demand at the top part of the market along with slowing new construction should result in rising rental rates and strong operating fundamentals at this top segment of the market. City office is positioned to benefit as these trends play out.

除了已經在建的項目之外，我們預計在中短期內將交付有限的優質新的有競爭力的建築。這兩種趨勢的結合，需求集中在市場的頂部，加上新建築的放緩，應該會導致該市場頂部的租金率上升和強勁的營運基本面。隨著這些趨勢的發展，市政府將受益。

Our three most recent acquisitions are top of market buildings with new construction, great locations, and leading amenities. The terraces in Dallas, Preston Center delivered in 2017 and is 100% occupied. Block 23 in downtown Phoenix delivered in 2019 and is now 95% occupied with two well positioned vacancies that we expect to lease. And our two-building block 83 property in Raleigh delivered in 2019 and 2021 and is 86% occupied with additional leases under negotiation and strong tour activity.

我們最近收購的三棟建築都是市場頂級建築，擁有新建築、優越的地理位置和領先的設施。達拉斯普雷斯頓中心的露台於 2017 年交付，目前已 100% 入住。鳳凰城市中心的 23 號街區已於 2019 年交付，目前 95% 的入住率是兩個位置優越的空置，我們預計將出租。我們位於羅利的 83 號樓兩棟建築於 2019 年和 2021 年交付，目前 86% 已入住，額外租約正在談判中，旅遊活動也很活躍。

These three assets are perfectly suited in today's leasing market and represent a very significant percentage of our overall value. With rental rates for this category of properties likely to continue to grow, these are exactly the sort of assets that you want to own now and for the long term. Despite sector challenges, we expect these premium new construction buildings will continue to lease up and availability of vacant space within this category will diminish.

這三種資產非常適合當今的租賃市場，並占我們整體價值的很大一部分。隨著此類房產的租金可能會繼續上漲，這些正是您現在和長期想要擁有的資產。儘管面臨產業挑戰，我們預計這些優質新建建築將繼續出租，且此類別的空置空間將會減少。

This supply reduction should lead to greater demand for the next highest quality tier of properties. This includes buildings that are extremely well located in great cities and have been recently renovated to a very high standard with amenities. The rental rates for this category of property are currently at a significant discount to new vintage buildings. We expect that as the premium buildings become unable to accommodate tenants, rental rate and demand growth will shift to this category.

這種供應的減少應該會導致對下一個最高品質等級的房產的更大需求。這包括位於大城市的地理位置優越且最近經過翻新、配備設施的高標準的建築。目前，此類房產的租金比新建的老式建築有很大折扣。我們預計，隨著優質建築無法容納租戶，租金和需求成長將轉向此類別。

Within our own portfolio, these views have shaped our strategy to position ourselves for winning occupancy. We've either been investing capital in or about to make enhancements to this category of buildings that we own. This includes renovation programs and advancing ready to lease spec suites. Across our portfolio, we have a number of examples within this category. Park Tower is a renovated building that we transformed in downtown Tampa.

在我們自己的投資組合中，這些觀點塑造了我們為贏得入住而定位的策略。我們已經在投資或即將對我們擁有的此類建築進行改進。這包括翻新計劃和推進準備租賃的規格套房。在我們的產品組合中，我們有許多此類別的範例。公園大樓是我們在坦帕市中心改造的一棟翻新建築。

The Square is a fully renovated asset in an incredible location in Old Town Scottsdale. The Square in Scottsdale has been fully renovated and has achieved strong and consistent tenant demand. City Center in downtown St. Petersburg is a fabulous waterfront location. We're finalizing our plans to launch a major repositioning. 5090 is well located in Phoenix's Camelback Corridor. We've initiated a major upgrade that will complete mid-next year.

The Square 是一座經過全面翻修的資產，位於斯科茨代爾老城區的絕佳位置。斯科茨代爾的 Square 已全面翻新，並實現了強勁且持續的租戶需求。聖彼得堡市中心的市中心是一個絕佳的海濱位置。我們正在敲定啟動重大重新定位的計畫。 5090 地理位置優越，位於鳳凰城的駝背走廊 (Camelback Corridor)。我們已經啟動了一項重大升級，將於明年年中完成。

Pima Center located in North Scottsdale is undergoing a transformational repositioning right now. We've already seen a pickup in leasing demand from the improvements at Pima Center and will further benefit from the new amenities as the adjacent $80 million entertainment development under construction completes. Bottom line, we see opportunities for outperformance and value creation despite the challenges in certain subsets of the office sector.

位於北斯科茨代爾的皮馬中心目前正在進行轉型重新定位。我們已經看到皮馬中心的改善工程帶來了租賃需求的回升，並且隨著鄰近的耗資 8,000 萬美元的娛樂開發項目竣工，我們將進一步受益於新的設施。最重要的是，儘管辦公產業的某些子集面臨挑戰，但我們仍然看到了表現出色和創造價值的機會。

On a separate note, we enhanced our supplemental financial information package to include additional detail for our leases with WeWork, given their recent filings and restructuring. In total, WeWork leases 177,000 square feet at our three top-tier properties that I discussed earlier in Raleigh, Dallas, and Phoenix.

另請注意，鑑於 WeWork 最近提交的文件和重組情況，我們增強了補充財務資訊包，其中包含了與 WeWork 的租賃的更多詳細資訊。 WeWork 總共在我們之前討論過的位於羅利、達拉斯和鳳凰城的三個頂級物業租賃了 177,000 平方英尺的面積。

WeWork's Raleigh and Dallas operations at our buildings appear to be well occupied. The Phoenix location opened approximately one year ago and is still in a lease-up mode with lower occupancy levels. None of our three leases were listed for rejection on WeWork's November 7, filing. All three locations are open and operating and current on rent through the end of October.

WeWork 位於羅利和達拉斯的辦公大樓似乎已被佔用。鳳凰城店大約一年前開業，目前仍處於租賃模式，入住率較低。在 WeWork 11 月 7 日提交的文件中，我們的三份租約都未列入拒絕拒絕名單。所有三個地點均已開放並運營，目前正在出租直至 10 月底。

Despite this, we've been preparing for any potential scenario that could unfold at WeWork. Fortunately, WeWork leases at our most desirable assets and locations. Each of the three properties is newly constructed in a flagship type location for WeWork. In the event they vacated any of these locations, we already have strong interest from leading co-working operators and are ready to move quickly.

儘管如此，我們一直在為 WeWork 可能出現的任何潛在情況做好準備。幸運的是，WeWork 租賃了我們最理想的資產和地點。這三處房產均是在 WeWork 的旗艦型地點新建的。如果他們騰出這些地點，我們已經引起了領先的共同工作業者的強烈興趣，並準備迅速採取行動。

Alternatively, we have the option of pivoting to leasing to conventional tenants, given the demand for premium buildings. Bottom line, while these challenges may create some short-term disruptions, our premium locations and phenomenal buildings preserves our strong position.

或者，考慮到對優質建築的需求，我們可以選擇轉向向傳統租戶租賃。最重要的是，雖然這些挑戰可能會造成一些短期幹擾，但我們的優越地理位置和非凡建築卻保持了我們的強勢地位。

Moving to our results for the quarter, they were in line with our expectations. During the quarter, we executed 119,000 square feet of new and renewal leases, with a 3.1% increase in renewal cash rents versus expiring rents. This follows the industry trend that despite negative absorption, face rental rates have continued to rise, driven by top-tier and renovated assets.

轉向我們本季的業績，它們符合我們的預期。本季度，我們執行了 119,000 平方英尺的新租約和續租租約，續租現金租金與到期租金相比增加了 3.1%。這遵循了行業趨勢，即儘管吸收量為負，但在頂級和翻新資產的推動下，面租率持續上升。

We also had another quarter of positive same-store cash NOI growth and achieved a 2.2% increase over the prior year quarter. Year-to-date, same-store cash NOI increased by 4.2% as compared to the same period in the prior year. Consistent with our previous messages, we continue to see tenants wanting pre-built space that can be quickly occupied with no construction build-out uncertainty.

我們的同店現金 NOI 又實現了一個季度的正成長，比去年同期成長了 2.2%。年初至今，同店現金 NOI 較去年同期成長 4.2%。與我們先前的消息一致，我們繼續看到租戶想要預先建造的空間，這些空間可以快速佔用，而沒有建築擴建的不確定性。

As a result, we've been focused on ramping up our spec suite inventory. We've increased our spec suite inventory from 54,000 square feet as of June 30 to 92,000 square feet as of September 30. We have an additional 67,000 square feet that is either under construction or planned for the balance of 2023 and 2024, with active leasing conversations occurring at many of these locations.

因此，我們一直致力於增加我們的規格套件庫存。我們已將規格套件庫存從6 月30 日的54,000 平方英尺增加到截至9 月30 日的92,000 平方英尺。我們還有67,000 平方英尺正在建設中或計劃在2023 年和2024 年餘下時間進行租賃，並正在積極租賃對話發生在許多這樣的地點。

Currently, we're exchanging proposals for or in final lease negotiations on six spec suites, totaling approximately 27,000 square feet. As we head into year-end in 2024, our team remains focused on driving leasing activity and creating value for shareholders. While office REIT stocks continue to trade at steep discounts, we believe the quality of our portfolio and our focus on creating value will reward shareholders over the long term.

目前，我們正在就六套規格套房交換提案或進行最終租賃談判，總面積約為 27,000 平方英尺。隨著 2024 年底的到來，我們的團隊仍然專注於推動租賃活動並為股東創造價值。雖然辦公室房地產投資信託基金股票繼續以大幅折扣交易，但我們相信，我們投資組合的品質和我們對創造價值的專注將在長期內回報股東。

I look forward to providing further updates on our progress, and we'll hand the call over to Tony Maretic to discuss our financial results.

我期待提供有關我們進展的進一步更新，我們將把電話轉給托尼·馬里蒂克討論我們的財務業績。

Thanks, Jamie. Our net operating income in the third quarter was $26.6 million, which is $800,000 lower than the amount we reported in the second quarter. This decrease is attributable to the deconsolidation of 190 office center during the second quarter, slightly lower occupancy, and higher operating expenses quarter-over-quarter. We reported core FFO of $13.7 million, or $0.34 per share. This was $500,000 lower than in the second quarter for the same reasons that NOI was lower, offset by slightly lower G&A in the quarter.

謝謝，傑米。我們第三季的淨營業收入為 2,660 萬美元，比第二季報告的金額減少了 80 萬美元。這一下降歸因於第二季度 190 個辦公中心的拆分、入住率略有下降以及營運費用較上季上升。我們報告的核心 FFO 為 1,370 萬美元，即每股 0.34 美元。這比第二季度減少了 50 萬美元，原因與 NOI 較低的原因相同，但被本季度 G&A 略有下降所抵消。

Our third quarter AFFO was $6.3 million, or $0.15 per share, which resulted in a well-covered dividend this quarter. The largest impact to AFFO was a $1.5 million tenant improvement at our Denver Tech property for a 37,000 square foot tenant who renewed their lease in 2022 for an additional 11 years. We also continue to invest in ready-to-lease spec suites and vacancy conditioning, which is a key part of our business plan.

我們第三季的 AFFO 為 630 萬美元，即每股 0.15 美元，這使得本季度的股息得到了充分支付。對 AFFO 影響最大的是我們的 Denver Tech 物業為 37,000 平方英尺的租戶提供了 150 萬美元的租戶改善，該租戶於 2022 年續簽了 11 年的租約。我們也繼續投資於可出租的規格套房和空置條件，這是我們業務計劃的關鍵部分。

The total investment in spec suites and vacancy conditioning in the third quarter was $800,000, or $0.02 per share. Moving on to some of our operational metrics, our third quarter same-store cash NOI change was positive 2.2%, or $500,000 higher as compared to the third quarter of 2022. Block 83 in Raleigh and Park Tower in Tampa had the largest year-over-year increases due to slightly higher occupancy and free rent in the prior year comp period as a result of signed leases. For 2023 in total, we are tracking towards a 3% to 4% increase in same-store cash NOI.

第三季規格套件和空缺調節的總投資為 800,000 美元，即每股 0.02 美元。轉向我們的一些營運指標，我們第三季的同店現金 NOI 變化為正值 2.2%，比 2022 年第三季度高出 500,000 美元。羅利的 Block 83 和坦帕的 Park Tower 同比增長幅度最大- 由於簽署租約，上一年比較期的入住率和免費租金略有增加，導致年度成長。 2023 年，我們預計同店現金 NOI 將成長 3% 至 4%。

Our portfolio occupancy ended the quarter at 85.4%, including 51,000 square feet of signed leases that have not yet commenced, our occupancy was 86.3% as of quarter end. Our total debt as of September 30, was $671 million. Our net debt, including restricted cash to EBITDA, was 6.5 times. During the third quarter, we were successful in completing the renewal of two property loans that were set to mature in September and October.

截至本季末，我們的投資組合入住率為 85.4%，其中包括尚未開始的 51,000 平方英尺已簽署租賃，截至季末，我們的入住率為 86.3%。截至 9 月 30 日，我們的總債務為 6.71 億美元。我們的淨債務（包括 EBITDA 的限制性現金）為 6.5 倍。第三季度，我們成功完成了兩筆原定於9月和10月到期的房地產貸款的續約。

The loans at our FRP collection and Carillon Properties in Florida were both extended for five years to 2028. In connection with the extensions, we entered into five-year swap agreements, effectively fixing the interest rates for each loan at approximately 7%. Our next loan maturity is a non-recourse property loan at our Cascade Station property in Portland, which has a principal balance of $21 million and matures in May 2024.

我們的 FRP 收藏品和佛羅裡達州 Carillon Properties 的貸款都延長五年至 2028 年。為了延長期限，我們簽訂了為期五年的掉期協議，有效地將每筆貸款的利率固定在約 7%。我們的下一個貸款到期是波特蘭 Cascade Station 房產的無追索權房產貸款，該貸款本金餘額為 2,100 萬美元，將於 2024 年 5 月到期。

In December 2022, we recorded an impairment in that asset's value that effectively rolled off our equity value, and we have begun discussions with that lender. Portland continues to be a challenging market, and without some form of material loan concessions, it is difficult to justify investing further equity into this asset today.

2022 年 12 月，我們記錄了該資產價值的減值，這實際上降低了我們的股權價值，我們已開始與該貸方進行討論。波特蘭仍然是一個充滿挑戰的市場，如果沒有某種形式的實質貸款優惠，今天很難證明對這項資產進行進一步股權投資是合理的。

Lastly, as of September 30, we had over $90 million of undrawn authorized on our credit facility. We also had cash and restricted cash of $52 million as of quarter end. That concludes our prepared remarks, and we will open up the line for questions. Operator?

最後，截至 9 月 30 日，我們的信貸額度已授權未提取金額超過 9,000 萬美元。截至季末，我們還擁有 5,200 萬美元的現金和限制性現金。我們準備好的發言到此結束，我們將開放提問專線。操作員？

Thank you. (Operator Instructions) Likely of questions today comes from Robert Stevenson Janney. But can I say please ask your question?

謝謝。 （操作員說明）今天的問題很可能來自羅伯特·史蒂文森·詹尼。但我可以說請問你的問題嗎？

Thank you. Good morning, everybody. Jamie, how are you approaching the WeWork bankruptcy? I mean, some office owners just want to rip the Band-Aid off and get the space back and think they can do better than what WeWork wants in terms of new rates and without the risk that it just implodes at some point.

謝謝。大家早安。 Jamie，您對 WeWork 破產有何看法？我的意思是，一些辦公室業主只是想撕掉創可貼，重新獲得空間，並認為他們可以在新費率方面做得比 WeWork 想要的更好，而且不用擔心它在某個時候崩潰的風險。

Sounds like from your commentary that they have not put these back to you yet, but I assume that eventually they'll be coming to you to try to renegotiate. How do you approach that at this point, given that these are three of your top assets rather than assets along the bottom?

從你的評論看來，他們還沒有把這些還給你，但我認為他們最終會來找你嘗試重新談判。鑑於這是您的三個頂級資產而不是墊底的資產，您現在如何處理這個問題？

Thanks for the question, and you've hit the nail on the head. WeWork are trying to get concessions from all landlords. They've publicly stated that, and I guess it really comes down to the position that you're in as a landlord. We think WeWork are excellent operators. It sounds like they're making headway on solving their balance sheet issues and exiting some locations that have been a drag, but bottom line, we care about maximizing our own position, and we're in a good spot overall.

謝謝你的提問，你說得一針見血。 WeWork 正在努力爭取所有房東的讓步。他們已經公開聲明了這一點，我想這實際上取決於您作為房東的立場。我們認為 WeWork 是優秀的營運商。聽起來他們在解決資產負債表問題和退出一些一直拖累的地區方面取得了進展，但最重要的是，我們關心的是最大化我們自己的地位，而且我們總體上處於一個良好的位置。

We've got three fabulous locations. As I said in my prepared marks, the Raleigh and Dallas locations are doing extremely well. Phoenix is a little lighter, given they just reopened it about a year ago, and so from our position, we've been focused on getting our alternatives ramped up, and that could be moving to another co-working operator. It could be leasing the space directly, and the analysis we've been doing is, despite what direction we go, we think we can do the same or better in terms of rent.

我們擁有三個絕佳的地點。正如我在準備好的標記中所說，羅利和達拉斯地點的表現非常好。鳳凰城的情況要輕一些，因為他們大約一年前才重新開放，因此從我們的立場來看，我們一直專注於增加我們的替代方案，這可能會轉移到另一個共享辦公室運營商。它可以直接租賃空間，我們一直在做的分析是，無論我們朝哪個方向發展，我們認為我們可以在租金方面做得相同或更好。

If we ultimately end up having a switch, which may happen, may not, we don't know, there'll be a period of ramping back up, and then we'll get to the same or better spot. We're being pragmatic about it, Rob. I think we've got fabulous locations that WeWork probably don't want to give up, and it sounds like they're doing the right moves on their side to position themselves for success, so we're going to play it out and keep all of our options open.

如果我們最終最終進行轉變（這可能會發生，也可能不會，我們不知道），將會有一段時間的回升，然後我們會到達相同或更好的位置。我們對此很務實，羅布。我認為我們擁有 WeWork 可能不想放棄的絕佳地點，而且聽起來他們正在採取正確的行動來為自己的成功做好準備，因此我們將繼續努力並保持我們所有的選擇都是開放的。

Okay, that's helpful. Tony, any incremental known move-outs over the next 24 months from last quarter?

好的，這很有幫助。托尼，自上季度以來，未來 24 個月內是否有已知的增量搬遷？

Really no update in that respect. The same ones we talked about before, I can review it really quickly. We have four tenants that are greater than 30,000 square feet that are set to expire over the next 12 months, two of which total 84,000 square feet are at our Cascade station in Portland, which are known move-outs. Those are the only known move-outs we have. We have a couple of other larger tenants that--we're optimistic on renewals for.

在這方面確實沒有更新。我們之前討論過的內容相同，我可以很快複習。我們有四個租戶，面積超過30,000 平方英尺，預計將在未來12 個月內到期，其中兩個總面積為84,000 平方英尺的租戶位於我們位於波特蘭的Cascade 站，這些租戶已被稱為遷出區。這些是我們唯一已知的遷出情況。我們還有其他幾個較大的租戶，我們對續約持樂觀態度。

Okay. When do you guys expect to come to a decision or a final process on Cascade station? Is that sometime here in the fourth quarter? Is that likely to be sometime in early '24 as the debt expires? How should we be thinking about that?

好的。你們預計什麼時候在 Cascade 站上做出決定或最終程序？那是在第四季的某個時候嗎？這可能是在 24 年初債務到期的某個時間嗎？我們該如何思考這個問題？

We engaged in discussions with the lender a number of months ago, and they're ongoing, so it's hard for us to say exactly when that's going to transpire.

幾個月前，我們與貸方進行了討論，而且討論仍在進行中，因此我們很難確切地說出何時會發生。

Okay. And then, Tony, the 700 and some thousands of free rent in the quarter, how does that look in terms of the fourth quarter and as we migrate into early '24? Is that dropping off? Are there new leases of magnitude that you guys have signed over the last few months that'll continue to have you in that three quarters of $1 million to $1 million of free rent, or is that burning down closer to de minimis levels?

好的。然後，托尼，本季 700 美元和數千美元的免費租金，從第四季度以及我們進入 24 年初來看，情況如何？就這麼掉下來了嗎？你們在過去幾個月簽署的新租約是否會繼續為你們提供四分之三的 100 萬至 100 萬美元的免費租金，或者是否已經接近最低水平？

I would expect that you'll still see the free rent line item continue. By Q4, you'll may see a little bit of a burndown. Some of it of the free rent is at some properties that are known to be burning off, but not a material movement in that direction.

我希望您仍會看到免費租金訂單項目繼續存在。到第四季度，您可能會看到一些燃盡。其中一些免費租金存在於一些已知正在燒毀的房產中，但並沒有朝這個方向發生實質移動。

So, Rob, if we do what we're striving to do, which is really drive a lot of occupants here and growth, which is going to drive cash flow, that's going to keep free rent elevated for a bit because virtually all deals have some component of free rent. That's a good thing, which is typically at the front end.

所以，羅布，如果我們做我們正在努力做的事情，這確實會帶動這裡的許多住戶和增長，這將推動現金流，這將使免費租金保持在一定水平，因為幾乎所有交易都已經免費租金的一部分。這是一件好事，通常是在前端。

Okay. And to that point, what have you guys spent thus far in '23 on the spec suite program, and how much are you guys likely to spend in '24, given your comments about continuing to expand that program? How should we be thinking about that?

好的。到目前為止，你們在 23 年在規格套件計劃上花了多少錢？考慮到你們對繼續擴展該計劃的評論，你們在 24 年可能會花多少錢？我們該如何思考這個問題？

Yeah, sure. So, we made some significant headway in 2023. Year-to-date, we spent just over $4 million. I just mentioned it's about $800,000 in Q3. So, I think the best way to think about it is Q4 will probably be in that million-dollar range, and you probably expect that same trend to continue throughout 2024.

好，當然。因此，我們在 2023 年取得了一些重大進展。年初至今，我們的支出剛剛超過 400 萬美元。我剛剛提到第三季約 80 萬美元。因此，我認為最好的思考方式是第四季度可能達到 100 萬美元的範圍，並且您可能會預計同樣的趨勢將持續到 2024 年。

Okay. Thanks, guys. That's all for me. Have a great day.

好的。多謝你們。這就是我的全部。祝你有美好的一天。

Thanks a lot.

多謝。

Thank you. Our next question today comes from Barry Oxford Colliers. Barry, your line is open. Please go ahead.

謝謝。今天我們的下一個問題來自巴里牛津高力公司。巴里，你的電話接通了。請繼續。

Great. Thanks, guys. On the same store, NOI, Tony, it looked like you had a pretty nice reduction in expenses. Was there one particular thing that was driving that, and would we look for that to continue?

偉大的。多謝你們。在同一家商店，NOI，托尼，看起來你們的開支減少得相當不錯。是否有一個特定的因素在推動這一趨勢，我們是否會尋求這種趨勢繼續下去？

Good question, Barry. That was a little bit of anomaly if you're looking at the year-to-date in that pool. If anything, operating expenses are remaining. There are still inflation challenges, so I would expect to be flat to increasing moderately going forward.

好問題，巴里。如果你查看該池中今年迄今為止的數據，這有點反常。如果有的話，那就是剩下的營運費用。通膨挑戰仍然存在，因此我預計未來通膨將持平或溫和成長。

Okay. What caused the occupancy in the same store to drop just a little bit?

好的。是什麼原因導致同一家店的入住率略有下降？

The occupancy we had, in terms of the quarter, the largest move-out we had was at Papago Tech. We had a 34,000-square-foot tenant vacate at the beginning of July.

就本季而言，我們的入住率最大的搬遷是在 Papago Tech。七月初，我們有一個 34,000 平方英尺的租戶騰出。

Leasing was a little slower in Q3. We see, as of right now, a few leases post-quarter end have been done, and we're seeing it pick up a bit, so we're feeling better about that, particularly at our best properties.

第三季租賃略有放緩。我們看到，截至目前，季度末後的一些租賃已經完成，而且我們看到它有所回升，所以我們對此感覺更好，特別是在我們最好的房產上。

Right. Great. Great. Jamie, question for you. I would imagine you're still looking at acquisitions. Are distressed opportunities starting to hit the market, where you'd be like, gosh, if I can get my hands on that building and rehab it, I know it'll be the best building in that sub-market, and I can lease it up?

正確的。偉大的。偉大的。傑米，問你一個問題。我想你仍在考慮收購。陷入困境的機會是否開始進入市場，你會想，天啊，如果我能拿到那棟建築並對其進行修復，我知道它將是該子市場中最好的建築，而且我可以租賃起來了嗎？

We're staying active and looking at opportunities. I think it's still quite early, Barry. I think what you're seeing generally is a lot of lenders playing ball with owners, and that's delaying transactions being forced out. You're also seeing virtually zero availability of debt if you're acquiring assets. That just means if you don't have to sell, you're knocked right now. I think that's going to continue. My guess is it starts to change in 2024. You'll start to see more activity.

我們保持活躍並尋找機會。我認為現在還為時過早，巴里。我認為你通常會看到很多貸方與業主合作，這導致交易被推遲而被強制退出。如果您要收購資產，您還會發現可用債務幾乎為零。這只是意味著，如果你不必出售，那麼你現在就被淘汰了。我認為這種情況將會持續下去。我的猜測是 2024 年情況會開始改變。您將開始看到更多的活動。

Do you think it's going to be the banks that will eventually drive that?

您認為銀行最終會推動這一趨勢嗎？

I think that's the number one decision. (multiple speakers)

我認為這是首要決定。 （多個發言者）

Yes.

是的。

Okay, guys. Thanks for the time.

好吧，夥計們。謝謝你的時間。

Thanks, Barry.

謝謝，巴里。

Thanks, Barry.

謝謝，巴里。

Yep.

是的。

Thank you. Our next question today comes from Upal Rana from KeyBank. Upal, your line is open. Please go ahead.

謝謝。今天我們的下一個問題來自 KeyBank 的 Upal Rana。烏帕爾，您的線路已開通。請繼續。

Hey, thanks for taking my question. Just real quickly for me, I was wondering, are you in any kind of appeal processes with any municipalities that may help reduce property tax heading into next year?

嘿，謝謝你回答我的問題。對我來說很快，我想知道，您是否正在與任何市政當局進行任何形式的上訴程序，以幫助減少明年的財產稅？

Yeah. Generally, we appeal every year, virtually every property, so the answer is yes. We're hoping that as more and more transactions happen and values come down, that we're going to see some reductions there in 2024. I'd say we haven't really had that much in savings so far, but I think that's going to be a line item as we go forward that hopefully starts moving in our direction a bit.

是的。一般來說，我們每年都會對幾乎所有房產提出上訴，所以答案是肯定的。我們希望，隨著越來越多的交易發生和價值下降，我們將在 2024 年看到一些減少。我想說，到目前為止，我們還沒有真正節省那麼多，但我認為這就是隨著我們的前進，這將成為一個項目，希望能開始朝著我們的方向發展。

Okay. Great. You highlighted some of the moving pieces on occupancy. There's known move-outs and move-ins that may offset each other where occupancy could stay flat or head into the rest of the year. As we look into 2024 and possibly what might happen with Cascade Station, is there any kind of sense on where occupancy could trend heading into 2024?

好的。偉大的。您強調了入住率方面的一些變化。已知的遷出和遷入可能會相互抵消，入住率可能會保持不變或進入今年剩餘時間。當我們展望 2024 年以及 Cascade Station 可能發生的情況時，對於 2024 年入住率的趨勢是否有任何意義？

Yeah. We'll be giving our full guidance, obviously, in February, but looking at where levels are today, Cascade Station is one that we're expecting some known move-outs there. If you exclude that property, then we're effectively expecting the guidance to come out pretty flat.

是的。顯然，我們將在二月給出全面的指導，但看看今天的水平，我們預計喀斯喀特站會出現一些已知的撤出。如果您排除該屬性，那麼我們實際上預計指導結果將相當平穩。

Okay. Got it. And just one last one is, how are the conversations with some of the lenders in order to extend out these loans? Was there a fee that you paid? What was that? How do you feel confident about some of the maturities that are coming up next year?

好的。知道了。最後一個問題是，為了延長這些貸款，與一些貸款人的對話進展如何？您支付過費用嗎？那是什麼？您對明年到期的一些債券有何信心？

Yeah, sure. I can answer that question. In terms of the two deals that we completed during the quarter, the execution there was effectively not materially different than when we first did those loans seven years ago. 275 basis over, normal kind of fee. There are pressures, banks to charge more fees, which we can maybe expect going forward, but there was nothing too unusual for that.

好，當然。我可以回答這個問題。就我們在本季完成的兩筆交易而言，執行情況實際上與七年前我們首次發放這些貸款時沒有太大不同。 275以上，正常收費。銀行面臨著收取更多費用的壓力，我們也許可以預期這種情況會持續下去，但這並沒有什麼太不尋常的。

If we look forward to 2024, beyond Cascade, Central Fairwinds is the next maturity in June of 2024. That loan is with the exact same lender that we just executed those two extensions this quarter. We have just started discussions on that. We've ordered an appraisal as part of that process. I'm hopeful that we can get similar execution on that one.

如果我們展望 2024 年，除了 Cascade 之外，Central Fairwinds 的下一個到期日是 2024 年 6 月。這筆貸款的貸方與我們本季度剛剛執行的兩次延期的貸款方完全相同。我們剛開始對此進行討論。作為該過程的一部分，我們已下令進行評估。我希望我們能在這方面獲得類似的執行力。

And then looking further out, the only other one we have on a property level loan is FRP Ingenuity Drive. That is at the end of December 2024. We still have more than a year out, but nonetheless, we have started discussions on a possible extension of the maturity date. A little early to comment further, but I'm hoping to give an update next quarter on that one.

然後再進一步看，我們擁有的唯一另一項財產級貸款是 FRP Ingenuity Drive。那是 2024 年 12 月底。我們還有一年多的時間，但儘管如此，我們已經開始討論是否可能延長到期日。現在進一步發表評論還為時過早，但我希望在下個季度提供有關該問題的最新資訊。

And then only other comment I really want to make is that we still do have two completely unencumbered properties, Block 83 and Raleigh, which we acquired for $330 million in December 2021, as well as City Centre in downtown St. Pete, that are also sources of additional liquidity if needed in the future.

我真正想說的唯一一點是，我們仍然擁有兩處完全不受阻礙的房產，即我們於 2021 年 12 月以 3.3 億美元收購的 Block 83 和羅利，以及聖彼得堡市中心的 City Center，它們也是未來需要時的額外流動來源。

Okay, got it. Thanks for the time.

好，知道了。謝謝你的時間。

Thank you. You're welcome.

謝謝。不客氣。

Thank you. (Operator Instructions) Our next question today comes from Bill Crow from Raymond James. Bill your line is open. Please proceed.

謝謝。 （操作員說明）今天我們的下一個問題來自 Raymond James 的 Bill Crow。帳單顯示您的線路已開通。請繼續。

Great. Thank you. Good morning. Did you say you signed the lease with WeWork in Phoenix a year ago?

偉大的。謝謝。早安.您是說您一年前與鳳凰城的 WeWork 簽訂了租約嗎？

So, no, that was acquired or signed before we acquired the property. WeWork opened that location, I think, right before COVID, and so they closed it as soon as COVID happened, and they reopened it approximately one year ago. So, it was back in that ramp-up mode of building their occupancy.

所以，不，這是在我們收購該房產之前收購或簽署的。我認為，WeWork 在新冠疫情發生之前就開設了該地點，所以新冠疫情發生後他們就關閉了該地點，並在大約一年前重新開放。因此，他們又回到了增加入住率的上升模式。

Perfect. Okay. Yeah, I misunderstood. Broadly speaking, are we still seeing tenants downsize renewals?

完美的。好的。是的，我誤會了。從廣義上講，我們是否仍然看到租戶縮減續約規模？

I think it really depends asset by asset, Bill. So, we've been in this almost four years, and so the average lease term in many of our markets is around five. In some of the newer buildings, seven to ten. So, we've hit quite a few of the vacates or right-sizing over the last few years. There's still a number to go, and the big ones really are more in the suburban properties.

我認為這確實取決於資產，比爾。所以，我們已經度過了近四年的時間，因此我們許多市場的平均租賃期限約為五年。在一些較新的建築中，有七到十個。因此，在過去幾年中，我們已經完成了相當多的空缺或規模調整。還有很多待售，而且大型的確實更多是在郊區的房產。

I'd say the more urban assets have a higher utilization. People are back and generally using it at a pretty high level. So, those conversations, we're not seeing as many of the downsizes in kind of big suburban locations, and I'm talking across the industry where corporate America really hasn't forced the workforce back an masse. That's where you're seeing a lot more downsizing and vacating.

我想說城市資產越多，利用率越高。人們又回來了，並且普遍以相當高的水平使用它。因此，在這些對話中，我們並沒有看到大型郊區地區出現如此多的裁員，而且我說的是整個產業，美國企業界確實沒有迫使勞動力大量回流。這就是你會看到更多的裁員和騰出的地方。

Yeah. Okay. Then finally for me, I kind of like the progression you laid out about the premier buildings and then tenants being forced into what's called less than trophy buildings as the trophy buildings fill up. I'm just wondering how it feels like that's a process that's going to take a number of years to play out at this point. Is that a fair way to think about it?

是的。好的。最後對我來說，我有點喜歡你對頂級建築的進展，然後當獎杯建築填滿時，租戶被迫進入所謂的低於獎杯的建築。我只是想知道現在這個過程需要幾年才能完成，感覺如何。這是一個公平的思考方式嗎？

I think, Bill, if you look at all the absorption, the net absorption over the last kind of couple years is all in that top tier, right? And if you look at occupancy levels of those, they're filling up, and so development pipeline is basically coming to a halt, and those are still being demanded.

我想，比爾，如果你看看所有的吸收量，過去幾年的淨吸收量都在頂級，對嗎？如果你看看這些建築的入住率，你會發現它們正在被填滿，因此開發管道基本上已經停止，而這些建築的需求仍然存在。

And so, as tenants roll, they're generally wanting to upgrade their space, and that's going to fill up. I think 2024, you're going to start to see the benefit in really well-located assets that have been renovated, that have a great feel, and that's where we're planning to be, not with all of our properties, but a good segment of our properties match that.

因此，隨著租戶的增加，他們通常希望升級他們的空間，而空間將會被填滿。我認為到 2024 年，您將開始看到位置優越的資產的好處，這些資產經過翻新，感覺很棒，這就是我們計劃的目標，不是我們所有的房產，而是一個我們的大部分房產都符合這一點。

But help me understand the supply in a market like Dallas or Phoenix. I mean, they've seen a lot of supply, and it's all been Class A properties. Is that just done now, or do we still have more deliveries to go?

但請幫我了解達拉斯或菲尼克斯等市場的供應情況。我的意思是，他們已經看到了大量的供應，而且都是 A 級房產。是現在才完成，還是我們還有更多的交付要做？

There's still some underway. Phoenix, I think, actually, the most recent one just delivered. I'm not sure what's left there. I don't think there's a lot. Dallas, Goldman's doing their kind of dedicated tower in uptown, so that's going to get done. There's a handful of others, but right now, it doesn't pencil for new development, and you can't get the capital for it. And so, you're going to always see a little bit, but I think that's going to come to a grinding halt until the economics kind of get back in balance, which, for us, is a good thing.

還有一些正在進行中。鳳凰城，我想，實際上，最近的一個剛剛交付。我不確定那裡還剩下什麼。我不認為有很多。在達拉斯，高盛正在住宅區建造他們的專用塔樓，所以這將會完成。還有一些其他的，但現在，它並沒有用於新的開發，而且你也無法獲得它的資金。所以，你總是會看到一點，但我認為這將會戛然而止，直到經濟恢復平衡，這對我們來說是一件好事。

Yeah. Perfect. That's it for me. Thank you.

是的。完美的。對我來說就是這樣。謝謝。

All right. Thanks, Bill.

好的。謝謝，比爾。

Thanks, Bill.

謝謝，比爾。

Thank you. There are no further questions on the line, so I'd like to hand back to Jamie for any closing remarks.

謝謝。線路中沒有其他問題了，所以我想將結束語交還給傑米。

We look forward to updating you on our progress next quarter, and thank you for joining. Goodbye.

我們期待向您通報下季的最新進展，並感謝您的加入。再見。

That concludes today's conference call, everybody. Thank you very much for joining. You may now disconnect your lines.

各位，今天的電話會議到此結束。非常感謝您的加入。現在您可以斷開線路。