City Office REIT Inc (CIO) 2023 Q4 法說會逐字稿

Good morning, and welcome to the City Office REIT Inc, fourth quarter 2023 earnings conference call. (Operator Instructions) As a reminder, this conference call is being recorded. (Operator Instructions) It is now my pleasure to introduce you to Tony Maretic, the company's Chief Financial Officer, Treasurer, and Corporate Secretary. Thank you, Mr. Maretic. You may.

早安，歡迎參加 City Office REIT Inc 2023 年第四季財報電話會議。（操作員說明）謹此提醒，本次電話會議正在錄音。（操作員說明） 現在我很高興向您介紹公司財務長、財務主管兼公司秘書 Tony Maretic。謝謝你，馬里蒂克先生。您可以。

Good morning. Before we begin, I'd like to direct you to our website at cioreit.com, where you can view our fourth quarter earnings press release and supplemental information package. The earnings release and supplemental package both included a reconciliation of non-GAAP measures that will be discussed today to their most directly comparable GAAP financial measures.

早安.在開始之前，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四季度收益新聞稿和補充資訊包。收益發布和補充方案都包括今天將討論的非公認會計原則指標與最直接可比較的公認會計原則財務指標的調節。

Certain statements made today that discuss the company's beliefs or expectations or that are not based on historical fact may constitute forward-looking statements within the meaning of the federal securities laws. Although the Company believes that these expectations reflected in such forward-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 forward-looking statements disclaimer in our fourth quarter earnings press release and the Company's filings with the SEC for factors that could cause material differences between forward-looking statements and actual results. The Company undertakes no obligation to update any forward-looking statements that may be made in the course of this call, 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.

請參閱我們第四季度收益新聞稿中的前瞻性聲明免責聲明以及公司向 SEC 提交的文件，以了解可能導致前瞻性聲明與實際結果之間存在重大差異的因素。本公司不承擔更新本次電話會議過程中可能做出的任何前瞻性陳述的義務。在我們的執行長傑米·法勒(Jamie Farrar) 討論本季度的一些營運亮點後，我將審查我們的財務業績。我現在將把電話轉給傑米。

Good morning and thanks for joining today. On this call, I'd like to touch on several topics First, a look back at our performance in 2023. Then an overview on the state of the office market and last updates on our progress and focus areas for 2024. Overall, 2023 was in line with our expectations. Our core FFO per share ended the year at $1.39, which was within the guidance range we set at the beginning of 2023.

早安，感謝您今天的加入。在這次電話會議上，我想談幾個主題。首先，回顧一下我們2023年的表現。然後概述辦公市場的狀況以及我們 2024 年進展和重點領域的最新更新。整體而言，2023 年符合我們的預期。截至年底，我們每股核心 FFO 為 1.39 美元，處於我們在 2023 年初設定的指導範圍內。

Our performance led to dividend coverage for the year with a total AFFO payout ratio of 66%. Operationally, we executed 599,000 square feet of new and renewal leasing throughout the year. Our pipeline of leasing prospects gained considerable momentum as the year progressed. In the fourth quarter, we executed 109,000 square feet of new leases, which was the highest level of any quarter in 2023.

我們的業績導致了今年的股息覆蓋率，AFFO 總股息率為 66%。在營運方面，我們全年執行了 599,000 平方英尺的新租賃和續租租賃。隨著這一年的進展，我們的租賃前景管道獲得了相當大的發展勢頭。第四季度，我們執行了 109,000 平方英尺的新租賃，這是 2023 年任何季度的最高水準。

The average term of those leases was a healthy eight years. Our occupancy also ended the year approximately where we expected it to land and we achieved 3% same-store cash NOI growth for 2023 as compared to the prior year last during 2023, we renewed two property loans for five years. Each which was a success in an otherwise challenging financing market. And I'll use this as a transition to provide an update on the state of the office market. There continue to be headwinds in certain areas and promising green shoots in others.

這些租約的平均期限為八年。今年我們的入住率也大致達到了我們預期的水平，與前一年相比，我們在2023 年實現了3% 的同店現金NOI 增長，在2023 年期間，我們將兩筆房地產貸款續簽了五年。每一項都在充滿挑戰的融資市場中取得了成功。我將以此為過渡，提供辦公市場的最新狀況。某些領域仍面臨阻力，而有些領域則有望出現新芽。

On the challenging side, the investment sales market continues to be very slow across the office market. In 2023, sales volumes was down 57% year over year within the limited transactions that closed many were aided by seller financing or assumable debt. Debt capital also continues to be effectively frozen for new originations with lenders seeking to reduce their office sector exposure.

充滿挑戰的一面是，整個辦公室市場的投資銷售市場仍然非常緩慢。2023 年，在有限的交易中，銷量年減了 57%，其中許多交易是在賣方融資或可承擔債務的幫助下完成的。債務資本也繼續被有效凍結，以供貸方尋求減少其辦公部門的風險敞口。

We're closely monitoring these trends and remain in active dialogue with our own lending relationships on the side of positive trends. The corporate pressure on employees to return to the office continues to gather momentum. Major companies, including employers such as Google, Meta salesforce and Amazon, to name a few, have all shifted their policies towards more consistent in-office collaboration.

我們正在密切關注這些趨勢，並在積極趨勢方面與我們自己的貸款關係保持積極對話。公司要求員工重返辦公室的壓力繼續加大。主要公司，包括Google、Meta salesforce 和亞馬遜等雇主，都已將其政策轉向更一致的辦公室合作。

Having employees attending the office a minimum of three days a week, which appears to be a common current policy should bolster overall space needs and benefit high-quality office assets. We believe these trends will further strengthen throughout 2024.

讓員工每周至少在辦公室工作三天，這似乎是一項常見的現行政策，應該會增加整體空間需求，並有利於高品質的辦公資產。我們相信這些趨勢將在 2024 年進一步加強。

Another helpful change is the rapid slowdown in new construction. Q4 2023 had the least amount of ground broken for new office buildings in over 20 years according to JLL, the projects that are breaking ground are generally build to suit or pre-leased with almost no new spec projects underway. This will help shift the supply demand balance as obsolete buildings get removed from inventory without being replaced. Subleasing is also moderating with Q4 starting to indicate an equilibrium or decrease of sublease availability across many office markets relating to leasing trends.

另一個有益的變化是新建築的快速放緩。根據仲量聯行的數據，2023 年第四季新辦公大樓破土動工量是 20 多年來最少的，破土動工的項目通常是為了適應或預租而建造的，幾乎沒有新的規格項目在建。這將有助於改變供需平衡，因為廢棄的建築物將被從庫存中移除而不被替換。轉租也在放緩，第四季開始顯示許多辦公市場與租賃趨勢相關的轉租可用性達到平衡或減少。

The flight to quality trend continues, which benefits our portfolio. According to JLL Research, 60% of total vacancy is concentrated in just 10% of buildings. Leasing demand continues to be highest for well-located premier buildings that have amenities and ready to lease space. That leads us to our update on our progress so far in 2024, the leasing momentum that we experienced in the fourth quarter carried over into 2024.

追求品質的趨勢仍在繼續，這有利於我們的產品組合。根據 JLL Research 的數據，總空置率的 60% 集中在 10% 的建築物中。對於位置優越、設施齊全、可隨時出租空間的優質建築，租賃需求仍然最高。這讓我們對 2024 年迄今的進展進行了更新，我們在第四季度經歷的租賃勢頭延續到了 2024 年。

Today, we're actively pursuing a leasing pipeline that exceeds 200,000 square feet of note last year, larger corporate user lease discussions were less frequent with most of last year's activity in the small to medium size sweet range. Within our current pipeline, we are in active lease negotiations with four companies that average over 40,000 square feet per lease.

今天，我們正在積極尋求去年超過 20 萬平方英尺的租賃管道，較大的企業用戶租賃討論較少，去年的大部分活動都在中小型甜蜜範圍內。在我們目前的管道中，我們正在與四家公司進行積極的租賃談判，平均每個租賃面積超過 40,000 平方英尺。

The return of these larger corporate tenants has a positive development, which has the potential to reaccelerate leasing results. Our leasing pipeline is in part driven by our spec suite and renovation programs that we've been focused on for the last two years. We currently have 84,000 square feet of built spec suites in our inventory with 19,000 square feet under construction or planned to commence in 2024, combined with renovations such as our Puma Center property and Phoenix.

這些大型企業租戶的回歸有正面的發展，有可能重新加速租賃績效。我們的租賃管道部分是由過去兩年我們一直關注的規格套件和翻新計劃推動的。目前，我們的庫存中有 84,000 平方英尺的已建規格套房，其中 19,000 平方英尺正在建設或計劃於 2024 年動工，加上我們的 Puma 中心物業和鳳凰城等翻修工程。

These investments are allowing us to compete for a larger share of leasing across our markets as a status update on we work they continue to operate in bankruptcy. As a reminder, at year end, we had three work leases at our newest and best properties on our last call we highlighted that we were Raleigh and Dallas operations in our buildings appear to be performing well from an occupancy standpoint.

這些投資使我們能夠在整個市場上競爭更大的租賃份額，作為我們在破產情況下繼續運營的工作的最新狀態。提醒一下，到年底，我們在上次通話中在我們最新和最好的房產上簽訂了三份工作租約，我們強調，從入住率的角度來看，我們在羅利和達拉斯的建築業務似乎表現良好。

However, their Phoenix location at Block 23 had lower occupancy as it was still in a lease-up phase having been opened for just over a year. Block 23 is an incredible newly constructed building that is one of the top properties in Phoenix, we did not come to terms with we worked on a lease restructuring and the Block 23 lease was rejected. Effective February 7. City Office holds a $1 million letter of credit as additional security for this lease, which is being drawn and applied against our costs and lost income.

然而，位於鳳凰城第 23 號街區的門市入住率較低，因為開業僅一年多，仍處於租賃階段。Block 23 是一座令人難以置信的新建築，是鳳凰城的頂級房產之一，我們沒有達成協議，我們進行了租賃重組，並且 Block 23 的租約被拒絕了。2 月 7 日生效。市政府持有 100 萬美元的信用證作為該租賃的額外擔保，該信用證正在用於支付我們的成本和收入損失。

As discussed on our last call, we've been working with other co-working operators to rebrand this location. In the event of a we work departure, we continue to keep all of our options open, but are in late-stage negotiations with another high-quality co-working operator, we are working at this location back so quickly, we will provide further details on our next call.

正如我們上次電話會議中所討論的，我們一直在與其他共同工作業者合作，重塑該地點的品牌。如果我們工作離開，我們將繼續保留所有選擇，但正在與另一家優質聯合辦公運營商進行後期談判，我們很快就會在這個地點工作，我們將提供進一步的服務我們下次通話的詳細信息。

In terms of collection of rent from, we were they withheld January and February rent payments at Block 23 and the terraces as part of their lease negotiation tactics in response, we immediately initiated litigation. Ultimately, we will have now agreed to repay these overdue amounts by the end of February in exchange for us dropping our litigation.

在收取租金方面，我們發現他們作為租賃談判策略的一部分扣留了 23 號街區和露台 1 月和 2 月的租金，我們立即提起訴訟。最終，我們現在同意在二月底之前償還這些逾期款項，以換取我們放棄訴訟。

Bottom line, we remain very confident in our position our Block 83 terraces and Block 23 properties are three of the most desirable office assets in the entirety of Raleigh, Dallas and Phoenix. Irrespective of what happens with we work, these are incredible new buildings and are exactly what tenants want to lease today.

最重要的是，我們對自己的地位仍然非常有信心，我們的 Block 83 排屋和 Block 23 物業是整個羅利、達拉斯和鳳凰城最令人嚮往的三個辦公室資產。無論我們的工作發生什麼，這些都是令人難以置信的新建築，也正是租戶今天想要租賃的。

With that, I'll turn to our outlook for the balance of 2024. Tony will provide more detail, but in broad strokes, we have several focus areas. First, we remain focused on executing new leasing and driving occupancy. Related to that, we will further our spec suite and property renovation programs to optimally position our spaces for success. We believe the timing of these enhancements aligns with market demands.

接下來，我將談談我們對 2024 年的展望。托尼將提供更多細節，但總的來說，我們有幾個重點領域。首先，我們仍然專注於執行新的租賃和提高入住率。與此相關，我們將進一步推進我們的規格套件和物業翻新計劃，以優化我們的空間定位，以取得成功。我們相信這些增強功能的時機符合市場需求。

Second, we continue to prioritize maintaining liquidity, protecting capital and addressing debt maturities in a prudent manner. And last, our DNA as a company has always been to uncover creative ways to unlock value at our properties. And in 2024, we're looking to advance a few promising projects while these initiatives remain at an earlier stage, we've been focused on finding ways to advance shareholder value.

二是繼續以維持流動性、保護資本、審慎因應債務到期為重點。最後，我們作為一家公司的基因始終是探索創意的方法來釋放我們的房產價值。到 2024 年，我們希望推進一些有前途的項目，雖然這些舉措仍處於早期階段，但我們一直致力於尋找提高股東價值的方法。

With that, I'll hand the call over to Tony to discuss our financial results and guidance in more detail.

接下來，我會將電話轉交給東尼，更詳細地討論我們的財務表現和指導。

Thanks, Jamie. Our net operating income in the fourth quarter was $26.9 million, which is $300,000 higher than the amount reported in the third quarter fourth quarter NOI was impacted by two offsetting accounting transactions. First, we wrote off $1.4 million in straight-line rent receivables and above-market lease amortization related to the we work lease at Block 23.

謝謝，傑米。我們第四季的淨營業收入為 2,690 萬美元，比第三季報告的金額高出 30 萬美元。第四季 NOI 受到兩項抵銷會計交易的影響。首先，我們沖銷了 140 萬美元的直線應收租金和與 23 號街區工作租賃相關的高於市場水平的租賃攤銷。

Also during the quarter, the Company recognized $1.5 million of income due to the reversal of an accrued liability for a tenant improvement reimbursement that was no longer owed as the claim period had expired. The net impact of these two transactions was an increase to NOI of $100,000. We reported core FFO of $13.5 million or $0.33 per share for the fourth quarter. This was $200,000 lower than the third quarter as slightly higher G&A and interest costs offset higher NOI.

同樣在本季度，公司確認了 150 萬美元的收入，這是由於租戶改善補償的應計負債被沖銷，由於索賠期已過，該負債不再被欠下。這兩筆交易的淨影響是 NOI 增加了 10 萬美元。我們報告第四季度核心 FFO 為 1,350 萬美元，即每股 0.33 美元。這比第三季減少了 20 萬美元，因為略高的一般管理費用和利息成本抵消了較高的 NOI。

Our fourth quarter AFFO was $9.3 million or $0.23 per share, which resulted in a well-covered dividend this quarter. The largest impacts to AFFO were costs related to our you're ready to lease spec suites and vacancy conditioning program, which are key parts of our business plan. The total investment in spec suites and vacancy conditioning in the fourth quarter was $900,000 or $0.02 per share.

我們第四季度的 AFFO 為 930 萬美元，即每股 0.23 美元，這使得本季度的股息得到了充分支付。對 AFFO 影響最大的是與我們的「您已準備好租賃規格套房」和空缺調節計劃相關的成本，這是我們業務計劃的關鍵部分。第四季規格套件和空缺調節的總投資為 900,000 美元，即每股 0.02 美元。

Moving on to some of our operational metrics, our fourth quarter same-store cash NOI change was negative 0.5% or 1$00,000 lower as compared to the fourth quarter of 2022. Same-store cash NOI grew by 3% for the year ended December 31, 2023 as compared to the prior year. 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.

轉向我們的一些營運指標，我們第四季的同店現金 NOI 變化為負 0.5%，比 2022 年第四季低 1 美元。截至 2023 年 12 月 31 日止年度，同店現金 NOI 較前一年成長 3%。羅利的 Block 83 和坦帕的 Park Tower 同比增幅最大，原因是去年比較期間的入住率略有上升，並且由於簽署了租約而獲得了免費租金。

Our retention rate in the quarter was 21%, which was significantly impacted by the 70,000 square feet of lease departures at our Portland properties alone during the quarter, consistent with JLL's market research that Jamie mentioned, the vacancy we have experienced in our portfolio is concentrated in a smaller subset of our properties.

本季我們的保留率為21%，這受到本季波特蘭物業70,000 平方英尺租賃終止的顯著影響，這與Jamie 提到的仲量聯行市場研究一致，我們的投資組合中經歷的空缺集中在在我們財產的較小子集中。

Our portfolio occupancy ended the quarter at 84.5%, including 114,000 square feet of signed leases that have not yet commenced. Our occupancy was 86.5% as of quarter-end. Our total debt as of December 31 was $670 million. Our net debt, including restricted cash to EBITDA was 6.6 times. We had over $90 million of undrawn authorized on our credit facility. We also had cash and restricted cash of $43 million as of quarter-end.

截至本季末，我們的投資組合入住率為 84.5%，其中包括 114,000 平方英尺已簽署但尚未開始的租賃。截至季末，我們的入住率為 86.5%。截至 12 月 31 日，我們的總債務為 6.7 億美元。我們的淨債務（包括限制性現金）為 EBITDA 的 6.6 倍。我們的信貸額度已授權超過 9000 萬美元的未提取金額。截至季末，我們還擁有 4,300 萬美元的現金和限制性現金。

As far as our debt maturities in 2024, we had four scheduled maturities for a total of $102 million. The first, we have talked about on prior calls. In May, the $21 million non-recourse property loan at our casket station property in Portland will mature in December 2022. We recorded an impairment in that asset's value that effectively wrote off our equity value. We are in continued discussions with that lender. Portland continues to be a challenging market and without some form of material loan modifications.

就 2024 年的債務到期而言，我們有四個預定到期日，總計 1.02 億美元。第一，我們在之前的電話中已經討論過。5 月份，我們位於波特蘭的棺材站房產的 2,100 萬美元無追索權房產貸款將於 2022 年 12 月到期。我們記錄了該資產價值的減值，這實際上沖銷了我們的股權價值。我們正在與該貸方繼續討論。波特蘭仍然是一個充滿挑戰的市場，並且沒有某種形式的重大貸款修改。

It is difficult to justify investing further equity into this asset today at Central fair winds, we have a property loan with a $16 million principal balance that matures in June this is the same lender that we successfully renewed to property loans in mid-2023 at FRP Ingenuity drive.

今天很難證明在Central fair Winds 對這項資產進行進一步股權投資是合理的，我們有一筆本金餘額為1600 萬美元的房地產貸款，將於6 月到期，這與我們於2023 年中期在FRP成功續簽房地產貸款的貸款人是同一家貸方匠心驅動。

There is a property loan with a balance of $16 million that matures at the end of the year in December. We are currently working on an early extension there. Last, we have a $50 million corporate term loan with our line of credit banks that matures in September. Similarly, we have initiated discussions and expect to provide an update next quarter.

有一筆餘額為 1600 萬美元的房地產貸款將於年底 12 月到期。我們目前正在那裡進行早期擴展。最後，我們向信用銀行提供了一筆 5,000 萬美元的企業定期貸款，將於 9 月到期。同樣，我們已經啟動了討論，並預計在下個季度提供更新。

Changing gears to guidance. We have introduced a new full year 2024 guidance in our fourth quarter press release. I'll walk through a few of the key points. We have assumed no acquisitions for the year. And if we have included $21 million of dispositions. This $21 million reflects our Cascade station property in Portland and our assumption unless we are able to achieve material loan modifications, that property would likely be a disposition to the lender related to our industry assumptions for debt that is floating rate.

換檔至引導。我們在第四季新聞稿中引入了新的 2024 年全年指引。我將介紹幾個關鍵點。我們假設今年沒有收購。如果我們包括 2100 萬美元的處置。這2100 萬美元反映了我們在波特蘭的Cascade 車站財產，以及我們的假設，除非我們能夠實現重大貸款修改，否則該財產可能會成為與我們對浮動利率債務的行業假設相關的貸款人的處置。

We have assumed flat interest rates and have not baked in any potential reference rate decreases in 2024. Our G&A range is $14.5 million to $15.5 million for 2024. This is the same range we had for the prior year. The result of our assumptions is a core FFO per share range of $1.18 to $1.22.

我們假設利率不變，並且沒有考慮 2024 年任何潛在的參考利率下降。2024 年，我們的一般管理費用範圍為 1,450 萬至 1,550 萬美元。這與我們去年的範圍相同。我們的假設結果是每股核心 FFO 範圍為 1.18 美元至 1.22 美元。

Our projected 2024 core FFO is approximately $6 million lower than our 2023 actual core FFO. We are expecting interest expense to increase by approximately $3 million year over year due to higher rates on property-level debt renewals and a higher average balance on our credit facility.

我們預計 2024 年核心 FFO 將比 2023 年實際核心 FFO 低約 600 萬美元。由於財產級債務更新率較高以及我們的信貸額度平均餘額較高，我們預計利息支出將比去年同期增加約 300 萬美元。

Cascade station occupancy declines year over year and assume disposition lower leverage, but also result in a $2 million reduction to core FFO in 2024 as compared to 2023. Last, approximately $1 million of that reduction relates to the assumption on the former. We workspace at our Block 23 property. We have assumed no income in 2024 with this operation.

級聯站佔用率逐年下降，並假設處置槓桿率較低，但也導致 2024 年核心 FFO 與 2023 年相比減少 200 萬美元。最後，大約 100 萬美元的減少與前者的假設有關。我們的工作場所位於 23 號街區。我們假設這項業務到 2024 年不會產生收入。

But forecast to return to a similar monthly revenue stream beginning in 2025. If we complete the pending transaction with the replacement co-working operator, we will revisit these assumptions in the quarters ahead. As the results solidify, we refer you to the material assumptions and considerations set forth in our earnings release for further details.

但預計從 2025 年開始，每月收入流將恢復到類似水準。如果我們完成與替代共享辦公室營運商的待定交易，我們將在未來幾季重新審視這些假設。隨著結果的鞏固，我們建議您參閱我們的收益報告中提出的重大假設和考慮因素，以了解更多詳細資訊。

That concludes our prepared remarks, and we will open up the line for questions. Operator?

我們準備好的發言到此結束，我們將開放提問專線。操作員？

(Operator Instructions) Upal Rana, KeyBanc Capital Markets.

（操作員說明）Upal Rana，KeyBanc 資本市場。

Great. Thank you. Good morning. Out there stating the question. Thanks for all the detail from the debt in the and the assets that you provided. I was just curious on Cascade station house, the on marketability of the asset, any conversation you have with potential buyers? Or is this really like your probably give the asset back to a lender?

偉大的。謝謝。早安.在那裡陳述問題。感謝您提供的債務和資產的所有詳細資訊。我只是對 Cascade 站房、資產的適銷性感到好奇，您與潛在買家有什麼對話嗎？或者這真的就像您可能將資產返還給貸方一樣嗎？

Yes.

是的。

Thanks for the question. So we did launch a marketing process kind of mid last year. And Portland has just been probably the most challenging market we have and one of the tougher in the entire country. So we did not have any prospects that were close to where the debt level is and that hasn't changed. So I think absent any sort of material concessions from the lender that make it logical for us to put more money in that will be one that transitions back to the lender and we cancel the debt.

謝謝你的提問。所以我們確實在去年年中啟動了行銷流程。波特蘭可能是我們所擁有的最具挑戰性的市場，也是全國最困難的市場之一。因此，我們沒有任何接近債務水準的前景，而且這一點也沒有改變。因此，我認為，如果貸方沒有做出任何實質讓步，使我們有理由投入更多資金，那麼我們就會將資金轉回貸方，然後我們取消債務。

Okay, got it. And how is that going to be impacting your occupancy this year, just given the trajectory of when you expect occupancy to be somewhat up by the end of next year of this year and the I'm assuming that's going to have some sort of impact in driving a little bit of the occupancy on guidance.

好，知道了。這將如何影響您今年的入住率，考慮到您預計到今年年底入住率會有所上升，我假設這將對您今年的入住率產生某種影響駕駛一點點引導上的佔用率。

It's a fairly small impact because the asset is really small to 128,000 feet. So it in our own forecasting, no, we think it will exit our results kind of mid this year. So at the end of the year, there would be a slight uptick from that. But that's not the real driver of the improvement. It really is from getting leasing done.

這是一個相當小的影響，因為資產非常小，只有 128,000 英尺。因此，根據我們自己的預測，不，我們認為它將在今年年中退出我們的業績。因此，到今年年底，這一數字將會略有上升。但這並不是改進的真正驅動力。這確實是從完成租賃開始的。

Okay, got it. And then from your same-store cash NOI, you expect to be flat this year compared to 3% last year on you walk us through some of the moving pieces that's impacting the growth.

好，知道了。然後，根據您向我們介紹的一些影響成長的動態因素，您預計今年的同店現金 NOI 與去年的 3% 持平。

Yes. So we're showing effectively flat for 2024. And so the drivers are it's a they are same-store number is a cash number. And so we are on cascade. We talked about there are some departures there that will impact results in Q1 and Q2 until if we do transfer to the lender.

是的。因此，我們的 2024 年業績實際上持平。所以司機們是他們的同店號碼是現金號碼。所以我們處於級聯狀態。我們談到，在我們確實轉移給貸方之前，有一些偏離將影響第一季和第二季的結果。

So that will have a negative impact on results. And then offsetting that would be the new leasing. We have 114,000 square foot of leases that haven't taken occupancy. They will take occupancy in 2024. Some of them have free rent periods and will have no impact. But finally or parts of the year, it will start factoring into the numbers to offset the negatives to kind of end the year effectively flat.

所以這會對結果產生負面影響。然後抵消這將是新的租賃。我們還有 114,000 平方英尺的租約尚未入住。他們將於 2024 年入住。其中一些有免租期，不會有任何影響。但最終或在今年的部分時間，它將開始考慮到這些數字，以抵消負面影響，從而使今年年底基本持平。

So Upal, Jamie again. So the one thing and I can't stress enough is the leasing pipeline really has improved and our own views when you look at free rent and build out periods, there's not going to be much impact to our cash flow in 2024 from that. But we see that really establishing and pushing 2025 and beyond.

烏帕爾，又是傑米。因此，我無法強調的一件事是，租賃管道確實有所改善，而且我們自己的觀點是，當你考慮免租金和擴建期限時，這不會對我們 2024 年的現金流產生太大影響。但我們看到這確實會確立並推動 2025 年及以後的發展。

Okay. Got it. And then just one last one for me is you mentioned the you're seeing some momentum on the leasing side. I wanted to was I was curious, where is that really coming from into the size industry or location.

好的。知道了。對我來說，最後一個問題是您提到您在租賃方面看到了一些動力。我想知道，我很好奇，這個規模產業或地點真正來自哪裡。

So it's a mixture one market that was quite slow last year was Phoenix, a mix of it's a great city. But on the leasing side, it really did slow down and any discussions we're having in 2023, we're really usually in the small suite size that's changed in that. As I mentioned, kind of for discussions that we're having right now above 40,000 feet.

所以這是一個混合體，去年成長緩慢的市場是鳳凰城，它是一個偉大的城市。但在租賃方面，它確實放緩了，我們在 2023 年進行的任何討論，我們通常都會在小型套房尺寸中進行更改。正如我所提到的，這有點像我們現在在 40,000 英尺以上的討論。

Each two of those are in Phoenix, and we're in lease negotiations on both and we're advancing and so we feel pretty good about that. So it's really diverse. But I'd say your best markets, right of those four that were in negotiation, two are in Phoenix ones in Orlando ones, in Raleigh. And so our top markets continue to perform really well.

其中兩個都在鳳凰城，我們正在就這兩個項目進行租賃談判，並且正在取得進展，因此我們對此感覺非常好。所以它真的很多樣化。但我想說的是，在正在談判的四個市場中，最好的市場中有兩個在鳳凰城、奧蘭多、羅利。因此，我們的頂級市場繼續表現良好。

Okay, guys, thanks for all of the answers.

好的，夥計們，感謝所有的答案。

Our pleasure.

我們的榮幸。

Thanks, Upal.

謝謝，烏帕爾。

Barry Oxford, Colliers.

巴里牛津，高力國際。

Great. Thanks, guys. Jamie, on the Workspace out in Phoenix, does it have to be on another? We worked like tenants because of the way the special space is built out. But if somebody wanted the space or would it just costs too much money too. So we have it to a normal tenant.

偉大的。多謝你們。Jamie，在鳳凰城的工作區，是否必須在另一個工作區？由於特殊空間的建造方式，我們像租戶一樣工作。但如果有人想要這個空間，或是會花太多錢。所以我們把它交給了普通租戶。

So we've explored both Barry and again, we just got the space back a couple of weeks ago. If you I know you don't like I can get a nominal fee yes, it's phenomenally built out. So there's logic to transitioning that into a co-working operation because the money's predominantly already been spent. But could you transition to a corporate tenant? Absolutely. We just think the logical thing to do in this particular case is to continue as it will work.

所以我們已經探索了巴里，並且幾週前我們剛剛拿回了空間。如果你知道你不喜歡我可以得到像徵性的費用是的，它的建造非常驚人。因此，將其轉變為共享辦公業務是合乎邏輯的，因為錢大部分已經花掉了。但你能轉型為企業租戶嗎？絕對地。我們只是認為在這種特殊情況下，合乎邏輯的做法是繼續下去，因為它會發揮作用。

Okay. That makes sense. That makes sense. Then from a big picture, Jamie, given that you guys are carrying some of that high debt? Does it make sense or look, Barry, I can't make the math work selling into this environment to sell some assets reduce your leverage. But are you just saying, look, I can't get the prices that I need to make that a viable game plan at this particular junction.

好的。這就說得通了。這就說得通了。那麼從大局來看，傑米，考慮到你們背負著一些高額債務？這是否有意義，或者看起來，巴里，我無法在這種環境下進行數學計算，以出售一些資產來降低你的槓桿率。但你只是說，看，我無法獲得在這個特定路口制定可行的遊戲計劃所需的價格。

We've had a lot of success, no recycling assets in the past. And I guess what I'd say is there are very few buyers and one of the toughest parts is it's almost impossible to get new debt financing. So the transaction that you are seeing in the market right now, a percentage of them are lenders who are foreclosing and trying to get some recovery.

我們取得了許多成功，但過去沒有回收資產。我想我想說的是買家很少，最困難的部分之一是幾乎不可能獲得新的債務融資。因此，您現在在市場上看到的交易中，有一部分是取消抵押品贖回權並試圖獲得一些恢復的貸方。

And the other is sellers who are able to carry vendor take-back financing at a low rate. And so if one of those two isn't there really isn't a lot of buyers. So and it's an option, Barry. And I guess I'd say in my prepared remarks, I made a comment about no, we're trying to explore ways of creating value.

另一個是能夠以低利率進行供應商回收融資的賣家。因此，如果這兩者之一不存在，那麼買家就不會很多。所以這是一個選擇，巴里。我想我會在我準備好的演講中說，我的評論是“不”，我們正在努力探索創造價值的方法。

We do have a few conversations going on there very early stage with unique buyers, whether they're strategic buyers, owner users who are going to owner-occupier. It's early stage. But if we can find something that works for everyone.

我們確實在早期階段就與獨特的買家進行了一些對話，無論他們是戰略買家、即將成為自住業主的業主用戶。現在還處於早期階段。但如果我們能找到適合每個人的東西。

We're absolutely open to that, but it's got to work for us. And so yes, I think that will flesh out. We haven't assumed any of those in our guidance. This year, but it's not lost on us that that could be a good source of liquidity if values are compelling.

我們對此絕對持開放態度，但它必須對我們有用。是的，我認為這將會充實起來。我們的指導中沒有假設任何這些。今年，但我們並沒有忘記，如果價值具有吸引力，這可能是個很好的流動性來源。

Right. And Jamie, I would imagine if somebody's going to assume the mortgage that has to be mortgage with term. If you don't have really enough term on it, then you get up they're going to recognize pretty quickly. You're transferring your problem to me.

正確的。傑米，我想如果有人要承擔必須是有期限抵押貸款的抵押貸款。如果你沒有足夠的術語，那麼你站起來他們很快就會認出。你把你的問題轉移給我。

I think that's fair. Yes. And in all cases are mortgages assumable. So it just becomes very complex. And I think that's why until the debt markets open up a bit more, you're going to see very muted activity, which means from our standpoint, where do we focus to drive value? We focus on getting leasing done that's going to drive cash flow which enhances your ability to borrow against it and enhances your ability to drive your cash flow back to the mothership.

我認為這是公平的。是的。在所有情況下都可以承擔抵押貸款。所以它變得非常複雜。我認為這就是為什麼在債務市場進一步開放之前，你會看到非常平靜的活動，這意味著從我們的角度來看，我們應該把重點放在哪裡來推動價值？我們專注於完成租賃，這將推動現金流，從而增強您的抵押借款能力，並增強您將現金流帶回母艦的能力。

Right, right. That makes Okay, guys, appreciate the time. Thanks very much.

是的是的。好吧，夥伴們，珍惜這段時光。非常感謝。

That concludes the Q&A portion of today's call. I'll now hand go back over to Jamie Farrar for any final remarks.

今天電話會議的問答部分到此結束。現在我將把最後的評論交給傑米法勒。

Thanks for joining today. As always, please feel free to reach out if you have any follow-up questions. Goodbye.

感謝您今天加入。一如既往，如果您有任何後續問題，請隨時與我們聯繫。再見。

That concludes today's City Office Q4 2023 earnings conference call. You may now disconnect your lines.

今天的市府 2023 年第四季財報電話會議到此結束。現在您可以斷開線路。