Equity Commonwealth (EQC) 2023 Q3 法說會逐字稿

Good morning, and thank you for joining this call to discuss Equity Commonwealth's results for the quarter ending September 30, 2023, and provide an update on the company. (Operator Instructions) As a reminder, this conference is being recorded.

早安，感謝您參加本次電話會議，討論 Equity Commonwealth 截至 2023 年 9 月 30 日的季度業績，並提供公司的最新資訊。 （操作員指示）謹此提醒，本次會議正在錄製中。

Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of federal securities laws. Please refer to the section titled Forward-Looking Statements in the press release issued yesterday, as well as the section titled Risk Factors in the company's annual report on Form 10-K and quarterly reports on Form 10-Q for subsequent quarters for a discussion of factors that could cause the company's actual results to differ materially from any forward-looking statements.

請注意，本次電話會議中討論的某些事項可能構成聯邦證券法含義內的前瞻性陳述。請參閱昨天發布的新聞稿中“前瞻性陳述”部分，以及公司10-K表年報和後續季度10-Q表季度報告中“風險因素”部分的討論可能導致公司實際結果與任何前瞻性陳述存在重大差異的因素。

The company assumes no obligation to update or supplement any forward-looking statements made today. The company posts important information on its website at www.eqcre.com, including information that may be material. A portion of today's remarks on the company's quarterly earnings also include certain non-GAAP financial measures. Please refer to yesterday's press release and supplemental containing the company's -- in the company's results for a reconciliation of non-GAAP measures to the company's GAAP financial measures.

該公司不承擔更新或補充今天所做的任何前瞻性陳述的義務。本公司在其網站 www.eqcre.com 上發布重要訊息，包括可能重要的資訊。今天有關公司季度收益的部分評論還包括某些非公認會計準則財務指標。請參閱昨天的新聞稿和補充資料，其中包含公司業績中的非公認會計原則措施與公司公認會計原則財務措施的調節表。

On the call today, we have David Helfand, Chair of our Board, President and CEO; David Weinberg, COO; and Bill Griffiths, CFO. With that, I'll turn the call over to David Weinberg.

今天的電話會議由董事會主席、總裁兼執行長 David Helfand 主持。大衛‧溫伯格，營運長；和財務長比爾‧格里菲斯 (Bill Griffiths)。這樣，我會將電話轉給大衛溫伯格。

Good morning, everyone. Thanks for joining us. I'll review the company's results for the quarter as well as provide an update on our investment activities. For the quarter, same-property NOI decreased 68% and same-property cash NOI was 6.6% lower compared to last year, both primarily due to a decrease in average commenced occupancy and increase in pre-leasing demolition costs.

大家，早安。感謝您加入我們。我將回顧公司本季的業績，並提供我們投資活動的最新情況。本季度，與去年相比，同物業 NOI 下降 68%，同物業現金 NOI 下降 6.6%，這主要是由於平均開工入住率下降和預租拆除成本增加所致。

At our properties in the quarter, we signed 54,000 square feet of new leases and renewals. Rents on those leases were down 1.8% on a cash basis and up 6% on a GAAP basis. As of September 30, leased occupancy was 80.8% and commenced occupancy was 79.9%. In terms of leasing, we continue to see a range of deals, with some tenants giving back space, some looking for short-term extensions and others more comfortable committing to term.

本季度我們的物業簽署了 54,000 平方英尺的新租約和續約合約。這些租賃的租金以現金計算下降了 1.8%，以公認會計準則計算則上漲 6%。截至9月30日，租賃入住率為80.8%，開工入住率為79.9%。在租賃方面，我們繼續看到一系列交易，有些租戶回饋空間，有些租戶尋求短期延期，而有些租戶則更願意承諾租期。

Turning to the balance sheet. We have approximately $2.1 billion of cash or roughly $19.61 per share and no debt. The interest rate we earn on our cash has increased as the Fed has moved rates, and we are currently earning roughly 5.5% compared to 3.2% a year ago. With the Fed's continued rate increases over the past year, our interest income has grown from $15 million in the third quarter 2022 to $29 million in the third quarter 2023.

轉向資產負債表。我們擁有約 21 億美元現金，即每股約 19.61 美元，沒有債務。隨著聯準會調整利率，我們的現金利率增加，目前我們的收入約為 5.5%，而一年前為 3.2%。隨著聯準會過去一年的持續升息，我們的利息收入從2022年第三季的1,500萬美元成長到2023年第三季的2,900萬美元。

Regarding share buybacks, through the end of last week, we have purchased 3 million shares year-to-date for $56.7 million at an average price of $18.78. Since we began buying back stock in 2015, we have repurchased a total of 25.4 million shares for an aggregate of $652 million at an average dividend adjusted price of $17.63. We currently have $93.3 million of remaining capacity. Touching on our REIT status, we expect to qualify as a REIT in 2024.

關於股票回購，截至上週末，我們以 5,670 萬美元的價格購買了年初至今的 300 萬股股票，平均價格為 18.78 美元。自 2015 年開始回購股票以來，我們已回購了總計 2,540 萬股股票，總金額為 6.52 億美元，股利調整後的平均價格為 17.63 美元。我們目前剩餘產能為 9,330 萬美元。談到我們的 REIT 身份，我們預計在 2024 年獲得 REIT 資格。

Turning to the capital markets. Transaction volumes remain down across all asset classes. Owners do not want to transact at today's pricing and lenders are often willing to work with their borrowers. Nonetheless, we believe it is different today. With the 10-year rate around 5% and the credit markets continuing to be challenged, owners are under more pressure and have fewer options. Given these conditions, we are more optimistic that our patience and discipline will be rewarded.

轉向資本市場。所有資產類別的交易量均維持下降。業主不想按照目前的定價進行交易，而貸方往往願意與借款人合作。儘管如此，我們相信今天的情況有所不同。由於 10 年期利率約為 5%，且信貸市場持續面臨挑戰，業主面臨更大的壓力，選擇也更少。考慮到這些條件，我們更加樂觀地認為，我們的耐心和紀律將會得到回報。

While we evaluate a range of asset classes, we still prefer the industrial and residential sectors, and continue to work hard to find a compelling investment opportunity.

雖然我們評估了一系列資產類別，但我們仍然更喜歡工業和住宅領域，並繼續努力尋找引人注目的投資機會。

With that, David, Bill and I are happy to take your questions.

大衛、比爾和我很樂意回答你們的問題。

(Operator Instructions) Our first question comes from the line of Craig Mailman with Citi.

（操作員說明）我們的第一個問題來自花旗銀行的 Craig Mailman。

This is Seth Bergey on for Craig. I just wanted to ask you about your appetite for additional share buybacks at this juncture.

我是賽斯伯吉 (Seth Bergey) 替補克雷格 (Craig)。我只是想問您此時對額外股票回購的興趣。

Seth, it's Bill. Our approach to share buybacks is that we just -- we take a prudent approach to it. We look at cash. We say it's $19.60 a share roughly. Net of the preferreds, it's $18.48. And really, we engage in the buybacks when we feel like there's a compelling discount on the stock.

賽斯，是比爾。我們對股票回購的態度是－我們採取謹慎的態度。我們看現金。我們說大約是每股 19.60 美元。扣除優先股後，價格為 18.48 美元。事實上，當我們覺得股票有令人信服的折扣時，我們就會參與回購。

Great. And then, I guess, just you mentioned in your prepared remarks, looking at transactions in the industrial and residential space, how are you thinking about return hurdles for those asset classes just given the movement in rates?

偉大的。然後，我想，剛才您在準備好的發言中提到，考慮到工業和住宅領域的交易，考慮到利率的變動，您如何考慮這些資產類別的回報障礙？

Well, we're mindful of where rates are and we think it's reflected real time as we look at the public company pricing, which is always informative. As we've said in the past, we look at returns relative to the risk we're taking, and that is informed by rates as you referenced. So it's difficult to specify a specific rate without knowing the risk. But I'd say, we're cognizant of where the treasury yield is, the impact it's having on pricing and the impact it's having as we value and underwrite opportunities.

嗯，我們很注意利率的情況，我們認為當我們查看上市公司的定價時，它會即時反映出來，而上市公司的定價總是能提供豐富的資訊。正如我們過去所說，我們會考慮相對於我們所承擔的風險的回報，這是由您提到的利率決定的。因此，在不了解風險的情況下很難指定特定的利率。但我想說，我們認識到國債殖利率在哪裡，它對定價的影響，以及它對我們評估和承銷機會的影響。

(Operator Instructions) Ladies and gentlemen, I'm seeing no other questions at this time. I'll turn the floor back to Mr. Weinberg for final comments.

（操作員說明）女士們先生們，我目前沒有看到其他問題。我將請溫伯格先生徵求最後意見。

Thank you for joining us today.

感謝您今天加入我們。

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。