Equity Commonwealth (EQC) 2024 Q2 法說會逐字稿

Good morning, and thanks for joining this call to discuss Equity Commonwealth's results for the quarter ending June 30, 2024, and 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 2024 年 6 月 30 日的季度業績以及公司的最新情況。（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.

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」部分以及本公司10-K表年度報告和隨後季度的10-Q表季度報告中「風險因素」部分。

For discussion of factors that could cause the company's actual results to materially differ from any forward-looking statements. The company assumes no obligation to update or supplement any forward-looking statements made today.

用於討論可能導致公司實際結果與任何前瞻性陳述有重大差異的因素。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。

The company posts important information on its website at www.eqcre.com, including information that may be material. The portion of today's remarks regarding the company's quarterly earnings also include certain non-GAAP financial measures.

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評論部分還包括某些非公認會計準則財務指標。

Please refer to yesterday's press release and supplemental containing the company's results for reconciliation of these non-GAAP measures to the company's GAAP financial results. On the call today are David Helfand, President and CEO; David Weinberg, COO; and Bill Griffiths, CFO.

請參閱昨天的新聞稿和包含公司績效的補充資料，以了解這些非公認會計原則措施與公司公認會計原則財務績效的調節。今天參加電話會議的是總裁兼執行長 David Helfand；大衛‧溫伯格，營運長；和財務長比爾‧格里菲斯 (Bill Griffiths)。

With that, I will turn the call over to David Helfand.

這樣，我會將電話轉給大衛·赫爾芬德。

Thank you. Good morning, everyone. Thank you. Good morning, everyone. Thanks for joining us. Rather than spend time on the company's results for the quarter, the details of which are covered in our earnings release and other filings, I'd like to provide a general update on our business.

謝謝。大家早安。謝謝。大家早安。感謝您加入我們。我不想花時間討論公司本季的業績（其詳細資訊已在我們的收益發布和其他文件中介紹），而是想提供有關我們業務的一般更新資訊。

As we discussed on last quarter's call, we have been evaluating potential investment opportunities in an effort to create long-term value for shareholders. After working through our pipeline, we have been unable to consummate a compelling transaction.

正如我們在上個季度的電話會議上所討論的那樣，我們一直在評估潛在的投資機會，以努力為股東創造長期價值。在完成我們的管道後，我們無法完成一項引人注目的交易。

As a result, our Board of Trustees has determined that it's advisable and in the best interest of our shareholders to proceed with the wind down of our operations and liquidation of our assets in order to maximize value for shareholders.

因此，我們的董事會決定，繼續結束我們的業務並清算我們的資產，以實現股東價值最大化，這符合我們股東的最佳利益。

The key gating factor in the wind down will be the timing of the sale of our four remaining properties. We disclosed last quarter that we had initiated the process to sell three of our four assets. Those properties, 1250 H in Washington DC and our two assets in Austin are currently being marketed for sale.

關閉的關鍵控制因素將是出售我們剩餘的四處房產的時間。我們上季披露，我們已啟動出售四項資產中的三項的程序。這些房產，即華盛頓特區的 1250 H 和我們在奧斯汀的兩處資產，目前正在出售。

While our team is focused on achieving the best execution, it is important to understand that current market conditions for selling office assets are uniquely challenging. Transaction volume for the first six months of the year was the lowest since 2010 and down 75% from pre-COVID levels.

雖然我們的團隊致力於實現最佳執行，但重要的是要了解當前銷售辦公資產的市場狀況具有獨特的挑戰性。今年前六個月的交易量是 2010 年以來的最低水平，比新冠疫情爆發前的水平下降了 75%。

Moreover, debt availability for office assets is scarce and when available is priced at double-digit coupons. Given the market environment, it's difficult to estimate both the timing and the proceeds from these sales. We're hopeful that the dispositions will generate proceeds in excess of our $234 million net book value for the assets.

此外，辦公資產的可用債務很少，而且可用時的票面價為兩位數。考慮到市場環境，很難估計這些銷售的時間和收益。我們希望這些處置所產生的收益將超過我們 2.34 億美元的資產帳面淨值。

As it relates to the timing for the wind down, we expect to file a preliminary proxy by mid-September, recommending that our shareholders approve a plan of sale and liquidation. The proxy will be subject to review by the SEC and depending on the length of that process, we anticipate holding the shareholder vote no later than December. We also expect to begin marketing for sale our Denver asset, 1225 Seventeenth Street in early September with closing contingent on shareholder approval of the plan of sale.

由於這涉及關閉的時間，我們預計將在 9 月中旬之前提交初步委託書，建議我們的股東批准出售和清算計劃。該委託書將接受 SEC 的審查，根據該過程的時間長短，我們預計不遲於 12 月舉行股東投票。我們也預計在 9 月初開始行銷出售我們的丹佛資產（第十七街 1225 號），成交取決於股東批准銷售計畫。

The plan of sale require the affirmative vote of two thirds of our outstanding common shares to be approved. Assuming the plan of sale is approved by our shareholders, the next steps will be the redemption of the Series D preferred and distribution to shareholders of substantially all of our cash. Then once the remaining assets are sold, we expect to distribute the remaining proceeds shortly thereafter.

出售計劃需要獲得我們已發​​行普通股三分之二的讚成票才能獲得批准。假設出售計畫獲得股東批准，下一步將是贖回 D 系列優先股並向股東分配幾乎所有現金。然後，一旦剩餘資產出售，我們預計很快就會分配剩餘收益。

This will likely be the last distribution of material value. We will then commence the NYSE delisting and SEC deregistration processes and various other administrative tasks with the goal of substantially winding down the Company by the end of the second quarter of 2025.

這可能是物質價值的最後分配。然後，我們將啟動紐約證券交易所退市和美國證券交易委員會 (SEC) 註銷程序以及各種其他行政任務​​，目標是在 2025 年第二季末大幅關閉該公司。

We continue to expect to qualify as a REIT in 2024 and 2025. While we don't have all the answers today and timing is uncertain, we are focused on executing the wind down process as efficiently as possible and we will continue to communicate with shareholders regarding our progress.

我們仍然預計在 2024 年和 2025 年獲得 REIT 資格。雖然我們今天還沒有得到所有答案，而且時間也不確定，但我們專注於盡可能有效地執行結束流程，並將繼續與股東就我們的進展進行溝通。

We appreciate the support we have received from our shareholders and want to acknowledge the hard work and dedication of the EQC team.

我們感謝股東的支持，並感謝 EQC 團隊的辛勤工作和奉獻精神。

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)

（操作員說明）

Craig Mailman, Citi

克雷格‧梅爾曼，花旗銀行

Thanks. It's Nick Joseph here with Craig. So appreciate the new news and the update on the process. So maybe just starting with the 3 assets being marketing. Can you just talk through where those are in the process? I know the timing is uncertain, and I appreciate your comments on the debt capital markets, but just kind of buyer interest, pricing expectations and where each of those three stand right now?

謝謝。我是尼克約瑟夫和克雷格。因此，請欣賞新消息和流程更新。所以也許只是從行銷這三個資產開始。您能談談這個過程中的具體情況嗎？我知道時機還不確定，我很欣賞你對債務資本市場的評論，但只是買家興趣、定價預期以及這三者目前的情況？

Hi, Nick. It's David. I'll take that one. So the sales of those three assets commenced in May. And unlike in the past, given the current market conditions that David described, it's just taking longer. So I'd say we're at the point now we're trying to gauge buyer interest. However, given the makeup of bidders and interested parties in the current environment as opposed into the past, it's harder to predict the timing and execution, so we're learning as we go, and we'll know more later.

嗨，尼克。是大衛。我會接受那個。因此，這三項資產的出售於五月開始。與過去不同的是，考慮到大衛所描述的當前市場狀況，這只是需要更長的時間。所以我想說，我們現在正試著衡量買家的興趣。然而，考慮到當前環境下的投標人和利益相關方的組成與過去不同，預測時間和執行變得更加困難，因此我們正在不斷學習，稍後我們會了解更多。

Thanks. And then just for the Denver asset, is there anything unique about that asset that maybe we'll have a trade sooner rather than later? How do you think about it versus the three that are being marketed right now will have a different profile.

謝謝。那麼就丹佛資產而言，該資產是否有什麼獨特之處，也許我們會盡快進行交易？您如何看待它與目前正在銷售的三種產品相比將具有不同的特徵。

Well, it has a different profile. So those three that are being marketed now or at least kind of in the 55% to 70% or B to B+ properties. So they we're going to attract one set of buyers. Denver asset currently is leased in the mid 80s as a great asset, it's Class A.

嗯，它有不同的配置。因此，現在正在銷售的這三種產品，或至少是 55% 到 70% 或 B 到 B+ 的房產。因此，我們將吸引一組買家。丹佛資產目前在 80 年代中期作為 A 級資產出租。

So it should attract more interest from more traditional larger buyers. The wildcard there is in this environment, it is 700,000 square feet and they're just few comps for assets of that size. For me to kind of have a feel for how that's going to play out.

因此，它應該會吸引更多傳統大型買家的興趣。在這種環境下，通配符是 70 萬平方英尺，而對於這種規模的資產來說，他們只是少數幾個比較。讓我對事情的結果有一定的了解。

Thanks. And then just as you think about the liquidation costs, is there an estimate, what the wind-down will cost all in?

謝謝。然後，當您考慮清算成本時，是否有一個估計，清算的全部成本是多少？

Hey Nick, it's Bill. We disclosed last quarter of $0.40 to $0.50 per share range. We're still comfortable with that. And I think there'll be more information forthcoming on that in the proxy.

嘿尼克，我是比爾。我們揭露了上季每股 0.40 美元至 0.50 美元的區間。我們對此仍然感到滿意。我認為代理中將會提供更多相關資訊。

And then maybe just finally on G&A costs as the wind-down occurs, will there be any change to comp and overhead through the liquidation date?

最後，隨著清算的發生，最終的一般管理費用是否會在清算日期之前發生任何變化？

We don't expect it to be.

我們不希望如此。

So is the 2Q run rate a good run rate for the next two quarters at least?

那麼，第二季的運行率至少對於接下來的兩個季度來說是一個良好的運行率嗎？

Sounds about. Right.

聽起來有關。正確的。

Great. Appreciate the time and all the color. Thank you.

偉大的。珍惜時間和所有的色彩。謝謝。

(Operator Instructions)

（操作員說明）

This concludes our question-and-answer session. I would like to turn the floor back over to David Helfand for closing comments.

我們的問答環節到此結束。我想把發言權交還給大衛·赫爾凡德（David Helfand）以供結束評論。

Thank you for your time today. We look forward to speaking to you and giving you more information as we gain it. Thank you.

感謝您今天抽出時間。我們期待與您交談並在獲得更多資訊後為您提供更多資訊。謝謝。

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

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。