Kilroy Realty Corp (KRC) 2023 Q1 法說會逐字稿

Good afternoon, and thank you for attending today's Kilroy Realty Corporation First Quarter 2023 Earnings Conference Call. My name is Daniel, and I will be the moderator for today's call. (Operator Instructions)

下午好，感謝您參加今天的 Kilroy Realty Corporation 2023 年第一季度收益電話會議。我叫丹尼爾，我將擔任今天電話會議的主持人。 （操作員說明）

It is now my pleasure to hand the conference over to our host, Bill Hutcheson, Senior Vice President of Investor Relations and Capital Markets. Bill, you may now proceed.

現在我很高興將會議交給我們的主持人，投資者關係和資本市場高級副總裁 Bill Hutcheson。比爾，你現在可以繼續了。

Thank you. Good morning, everyone. Thank you for joining us. On the call with me today are John Kilroy, our Chairman and CEO; Justin Smart, our President; Rob Paratte, our Chief Leasing Officer and Senior Adviser to the Chairman; and Eliott Trencher, our CIO and CFO.

謝謝。大家，早安。感謝您加入我們。今天與我通話的是我們的董事長兼首席執行官 John Kilroy；我們的總裁 Justin Smart； Rob Paratte，我們的首席租賃官兼董事長高級顧問；和我們的首席信息官兼首席財務官 Eliott Trencher。

At the outset, I need to say that some of the information we will be discussing during this call is forward-looking in nature. Please refer to our supplemental package for a statement regarding the forward-looking information on this call and in the supplemental. This call is being telecast live on our website and will be available for replay for the next 8 days, both by phone and over the Internet. Our earnings release and supplemental package have been filed on a Form 8-K with the SEC, and both are also available on our website.

首先，我需要說明的是，我們將在本次電話會議中討論的一些信息具有前瞻性。請參閱我們的補充包，了解有關本次電話會議和補充文件中前瞻性信息的聲明。此電話會議正在我們的網站上直播，未來 8 天將通過電話和互聯網重播。我們的收益發布和補充包已通過 8-K 表格提交給美國證券交易委員會，兩者也可在我們的網站上找到。

John will start the call with our first quarter highlights. And then Eliott will discuss our financial results and provide you with our updated guidance. Then we'll be happy to take your questions. John?

約翰將以我們第一季度的亮點開始通話。然後 Eliott 將討論我們的財務結果並為您提供最新的指導。那麼我們很樂意回答您的問題。約翰？

Thank you, Bill. Hello, everyone, and thanks for joining us.

謝謝你，比爾。大家好，感謝您加入我們。

First and foremost, while we're seeing strong signs in the economy and remain optimistic, we would like to acknowledge that we are still facing cyclical and secular headwinds. The macro environment today, I think I defined as -- it just lacks certainty. Sentiment is challenged in financial stocks, such as Silicon Valley Bank and the crisis that's created -- relates thereto continue to dominate headlines in many areas. From a real estate perspective, we have seen the implications of the current economic backdrop translate into near-term obstacles.

首先也是最重要的是，雖然我們看到了強勁的經濟跡象並保持樂觀，但我們要承認我們仍然面臨週期性和長期的逆風。今天的宏觀環境，我想我定義為——它只是缺乏確定性。矽谷銀行等金融股的情緒受到挑戰，與之相關的危機繼續佔據許多領域的頭條新聞。從房地產的角度來看，我們已經看到當前經濟背景的影響轉化為近期障礙。

There has been a reduction of liquidity in the investment sales market, downward pressure on leasing fundamentals as tenants delay space requirement decisions and a pullback in financing and investment activity within the banking and venture capital community. However, despite these macroeconomic challenges, we are proud to announce that we delivered strong quarter and record FFO per share. Eliott will go through the quarter in more detail when he gets to his remarks.

投資銷售市場的流動性減少，租賃基本面面臨下行壓力，因為租戶推遲了空間需求決策，以及銀行和風險投資界的融資和投資活動回落。然而，儘管存在這些宏觀經濟挑戰，我們還是自豪地宣布，我們交付了強勁的季度業績和創紀錄的每股 FFO。埃利奧特將在談到他的言論時更詳細地介紹這個季度。

Shifting to our markets, we would like to highlight encouraging trends and what we see -- are seeing with our boots on the ground in each of our regions. As we discussed on prior calls, physical occupancy in our portfolio continues to trend up and the share of job postings that are remote has been trending down. Austin and San Diego continue to lead the way with respect to physical occupancy with over 70% at quarter end. These markets continue to edge closer to pre-pandemic levels.

轉向我們的市場，我們想強調令人鼓舞的趨勢和我們所看到的——我們在每個地區的實地看到的。正如我們在之前的電話會議上討論的那樣，我們投資組合中的實際入住率繼續呈上升趨勢，而遠程職位發布的比例一直呈下降趨勢。奧斯汀和聖地亞哥在實際入住率方面繼續領先，季度末超過 70%。這些市場繼續接近大流行前的水平。

San Francisco, a region which admittedly has been lagging in regards to return to office saw its highest quarterly increase of over 6% in physical occupancy since the start of the pandemic. The widespread return to office announcements from top tech firms have translated to noticeable increases in physical occupancy in our San Francisco portfolio, and we expect this trend to continue.

舊金山是一個公認在重返辦公室方面落後的地區，自大流行開始以來，該地區的實體入住率季度增幅最高，超過 6%。頂級科技公司廣泛宣布重返辦公室，這已轉化為我們舊金山投資組合的實際入住率顯著增加，我們預計這一趨勢將繼續下去。

Los Angeles and Seattle both saw positive physical occupancy trends during the quarter, increasing to approximately 50% and 40%, respectively. This reflects another encouraging update for our markets, and we anticipate this trend to accelerate as more return to office mandates are implemented.

洛杉磯和西雅圖在本季度都出現了積極的實際入住率趨勢，分別增加到約 50% 和 40%。這反映了我們市場的另一個令人鼓舞的更新，我們預計隨著更多重返辦公室的要求的實施，這一趨勢將加速。

The antidotes back up our portfolio data. Recently, JPMorgan told senior bankers to be in the office 5 days a week, Amazon, 3-day-a-week policy is set to begin next month and others are following suit. Many companies are realizing the inefficiencies of remote work and are starting to demand change. As Amazon's CEO, Andy Jassy, wrote in his recent shareholder letter, we've become convinced that collaborating and inventing is easier and more effective when we're working together and learning from one another. And I can tell you, at Kilroy, we feel exactly the same way. The actions of these companies and others, a cross section of business sectors, including Apple, Disney, Starbucks, Deloitte , Capital One and many others, highlight the long-term importance of the office in increasing productivity and enhancing collaboration and culture.

解毒劑支持我們的投資組合數據。最近，摩根大通告訴高級銀行家每週工作 5 天，亞馬遜每週 3 天的政策將於下個月開始，其他人也在效仿。許多公司都意識到遠程工作的低效率，並開始要求改變。正如亞馬遜首席執行官安迪·賈西 (Andy Jassy) 在他最近的股東信中所寫的那樣，我們已經確信，當我們一起工作並相互學習時，合作和發明會更容易、更有效。我可以告訴你，在 Kilroy，我們的感受完全一樣。這些公司和其他公司（包括 Apple、迪士尼、星巴克、德勤、Capital One 和許多其他公司）的跨行業行動，凸顯了辦公室在提高生產力、加強協作和文化方面的長期重要性。

As return to office continues and companies have real data to support the power of in-person work, our portfolio is well positioned to capitalize on the resurgence of demand and flight to quality dynamics. As evidenced, since the end of the fourth quarter, we signed approximately 338,000 square feet of leases with an average term of approximately 5 years. In many of those, we had no CapEx.

隨著重返辦公室的繼續，公司擁有真實數據來支持面對面工作的力量，我們的產品組合處於有利地位，可以利用需求的複蘇和對質量動態的追求。有證據表明，自第四季度末以來，我們簽署了約 338,000 平方英尺的租約，平均期限約為 5 年。在其中許多項目中，我們沒有資本支出。

In Austin, we signed another lease at Indeed Tower for 20,000 square feet with a national wealth management firm, bringing our occupancy to 74%. We have had great touring activity in the building and demand for space in Indeed Tower has increased over the last couple of quarters, which we expect to turn into good news.

在奧斯汀，我們與一家國家財富管理公司在 Indeed Tower 簽訂了另一份 20,000 平方英尺的租約，使我們的入住率達到 74%。在過去的幾個季度中，我們在大樓內進行了精彩的巡迴演出，對 Indeed Tower 空間的需求有所增加，我們預計這會變成好消息。

We have also executed notable leases across our Bay Area and San Diego portfolios. In San Diego, we leased a 65,000 square foot new lease with MediaTek USA and a 25,000 square foot renewal with Intrepid Studios. In the Bay Area, we leased a 50,000 square foot new lease with Reddit and a 65,000 square-foot renewable renewed with 23andMe.

我們還在我們的灣區和聖地亞哥投資組合中執行了顯著的租賃。在聖地亞哥，我們與 MediaTek USA 租賃了 65,000 平方英尺的新租約，並與 Intrepid Studios 續約了 25,000 平方英尺。在灣區，我們通過 Reddit 租賃了 50,000 平方英尺的新租約，並通過 23andMe 續約了 65,000 平方英尺的可再生租約。

In addition, innovation continues to happen in our markets. The ecosystems on the West Coast took many decades to build and continue to have all the ingredients for success. Engineering, computer science, and medical students are attracted to world-class universities like Stanford, Cal Berkeley and UCSD. The most prestigious venture capital funds are headquartered in Menlo Park and the biggest technology companies in the world are based in San Francisco in Silicon Valley. This recipe results in the formation of new innovative companies such as fintech, social media, self-driving cars and, more recently, artificial intelligence.

此外，我們的市場不斷創新。西海岸的生態系統花了幾十年的時間才建立起來，並繼續具備成功的所有要素。斯坦福大學、加州大學伯克利分校和加州大學聖地亞哥分校等世界一流大學吸引了工程學、計算機科學和醫學專業的學生。最負盛名的風險投資基金總部設在門洛帕克，世界上最大的科技公司都位於矽谷的舊金山。這個配方導致了新的創新公司的形成，例如金融科技、社交媒體、自動駕駛汽車以及最近的人工智能。

The Bay Area, in particular, has been the birthplace of many of these businesses, and AI is no exception as over 40% of AI companies are based in the region. While it's still early days in this translating to demand for office, the bigger takeaway is innovative companies still want to be in the city, in San Francisco Bay Area.

尤其是灣區，是許多此類企業的發源地，人工智能也不例外，超過 40% 的人工智能公司都位於該地區。雖然現在還處於轉化為辦公需求的早期階段，但更大的收穫是創新公司仍然希望進入舊金山灣區的城市。

Moving on to Life Science. There continues to be long-term themes that have prevailed, which bear mentioning. 2013 marked the beginning of a 10-year run, which radically shaped Life Science as we see it today. The critical driving factors that define this burgeoning industry included aging population, improved FDA approval processes, rapid M&A activity and the availability of funding to catalyze research and development activities.

轉向生命科學。仍然有一些長期主題盛行，值得一提。 2013 年標誌著 10 年運行的開始，它從根本上塑造了我們今天所看到的生命科學。定義這個新興行業的關鍵驅動因素包括人口老齡化、改進的 FDA 審批流程、快速的併購活動以及促進研發活動的資金可用性。

After record years of venture capital funding in 2021 and 2022, these funds still maintain large levels of dry powder with some deals getting done, but not all at the clip we have recently witnessed. That said, we believe increased capital will eventually be deployed as business conditions improve and will provide a powerful boost to the Life Science ecosystem.

在 2021 年和 2022 年創紀錄的風險投資融資之後，這些基金仍保持大量幹火藥，並完成了一些交易，但並非所有交易都達到我們最近看到的速度。也就是說，我們相信增加的資本最終將隨著業務條件的改善而得到部署，並將為生命科學生態系統提供強大的推動力。

The acceleration of technological advances within the Life Science space is creating breakthroughs, pushing the frontier of what can be accomplished. Sciences such as gene therapies, mRNA and immunotherapy are in the midst of rapid change that will redefine the art of what is possible. Also, we believe the convergence of artificial intelligence and technology companies focused in the Life Science space will move the needle even further. These types of hybrid companies are in their infancy and have yet to fully mature.

生命科學領域技術進步的加速正在創造突破，推動可以實現的前沿。基因療法、mRNA 和免疫療法等科學正處於快速變化之中，這將重新定義可能的藝術。此外，我們相信專注於生命科學領域的人工智能和科技公司的融合將進一步推動這一趨勢。這些類型的混合型公司處於起步階段，尚未完全成熟。

Kilroy has high conviction in the underlying long-term life science fundamentals and will play the long game as we increase our exposure to the sector. As a reminder, Life Science will make up more than 20% of our NOI after KOP Phase 2 delivers. And over time, we expect this number to grow to over 30% as we develop and leased future Life Science projects.

Kilroy 對潛在的長期生命科學基本面充滿信心，並將在我們增加對該行業的敞口時進行長期遊戲。提醒一下，在 KOP 第 2 階段交付後，生命科學將占我們 NOI 的 20% 以上。隨著時間的推移，隨著我們開發和租賃未來的生命科學項目，我們預計這一數字將增長到 30% 以上。

Zooming out to our platform and current mentality, we at Kilroy have built a company that is positioned for both offense and defense. This is not accomplished overnight, but has been a core principle of our strategy spanning across cycles. As we sit here today, Kilroy has one of the strongest balance sheets in our sector, headlined by a moderate leverage profile, robust liquidity and limited term debt maturities. Our portfolio is young and modern comprised of high-quality, well-located assets that we believe will prove to be resilient over time.

縮小到我們的平台和當前的心態，我們在 Kilroy 建立了一家定位為進攻和防守的公司。這不是一蹴而就的，而是我們跨週期戰略的核心原則。當我們今天坐在這裡時，Kilroy 擁有我們行業中最強大的資產負債表之一，其特點是槓桿率適中、流動性強勁和期限有限的債務到期。我們的投資組合年輕而現代，由優質、位置優越的資產組成，我們相信隨著時間的推移，這些資產將被證明具有彈性。

Lastly, the management team at Kilroy is cycle tested, managing through periods of economic uncertainty and has a proven ability to take advantage of market conditions as they unfold. We remain opportunistic -- or rather opportunistic in our ability to create value for our shareholders as we have done through previous cycles over time.

最後，Kilroy 的管理團隊經過了周期測試，在經濟不確定時期進行管理，並證明有能力在市場形勢發展時利用它們。我們仍然是機會主義的——或者更確切地說，我們在為股東創造價值的能力方面是機會主義的，就像我們在過去的周期中所做的那樣。

As we think about how to move through the current downturn, I would like to share with you how we have positioned the company in this current environment. In previous downturns, Kilroy has emerged stronger. A case in point, the steps we took during the great financial crisis of 2008, 2009, led to a total transformation of the company. We enhanced the quality of our assets and pursue product expansion in new high-growth markets, creating significant value for our shareholders.

在我們考慮如何度過當前的低迷時期時，我想與您分享我們如何在當前環境中定位公司。在之前的低迷時期，基爾羅伊變得更加強大。一個典型的例子是，我們在 2008 年和 2009 年的金融危機期間採取的措施導致了公司的全面轉型。我們提高了資產質量，並在新的高增長市場尋求產品擴張，為我們的股東創造了巨大的價值。

And we are not done yet. We are focused on the following actions to ensure that we emerge from the current downturn in a place of strength. Maintaining a strong balance sheet and opportunistically evaluating alternative sources of capital to further enhance our already significant liquidity position, providing certainty to our tenant base in today's environment. Prospective tenants are increasingly evaluating landlord capabilities and financial strength.

我們還沒有完成。我們專注於以下行動，以確保我們從當前的低迷中脫穎而出。保持穩健的資產負債表並適時評估替代資本來源，以進一步增強我們本已重要的流動性頭寸，為當今環境下的租戶基礎提供確定性。準租戶越來越多地評估房東的能力和財務實力。

In essence, tenants want to know that their landlords have the financial capacity to fulfill their needs and obligations while being able to provide an exceptional level of service.

從本質上講，租戶想知道他們的房東有經濟能力滿足他們的需求和義務，同時能夠提供卓越的服務水平。

Positioning our assets to be top-tier choices when the time comes for tenants to making leasing decision is another important focus. If there are 20 choices in the market, or there may be more, we intend to be one of the top 3, tightening our focus on driving organizational efficiencies and reducing our capital spend where appropriate and positioning the company for its next 2010 moment. Periods of change always present opportunities, and we intend to be opportunistic when the time is right.

當租戶做出租賃決定時，將我們的資產定位為頂級選擇是另一個重要的重點。如果市場上有 20 個選擇，或者可能有更多，我們打算成為前 3 名之一，加強我們對提高組織效率的關注，並在適當的時候減少我們的資本支出，並為公司在 2010 年的下一個時刻做好準備。變革的時期總會帶來機遇，我們打算在適當的時候投機取巧。

In summary, our strategy is based upon maintaining best-in-class real estate, disciplined capital allocation, a fortress balance sheet and the team to execute. We have adhered to this principle -- rather to the simple effective approach over multiple cycles which has given us the ability to play defense on the downside while maintaining the wherewithal to be opportunistic when it makes sense.

總而言之，我們的戰略基於維持一流的房地產、嚴格的資本配置、穩固的資產負債表和執行團隊。我們堅持這一原則——而不是在多個週期中採用簡單有效的方法，這使我們能夠在不利的一面進行防禦，同時在合理的時候保持必要的機會主義。

And lastly, as I'm sure you all saw, last month, I announced my retirement effective at the end of the year. 2023 marks my 28th year as CEO of Kilroy Realty and 54th with the company, and including its predecessor. I've dedicated my career to Kilroy, and I'm pleased to be able to retire with the company, having the best portfolio amongst our peers, an impressive capital allocation track record, a solid balance sheet and, very importantly, a deep and talented team. I'm confident we all have -- that we have the pieces in place to continue executing at the level investors have come to expect from Kilroy and, as a significant shareholder, I'm incredibly invested in the continued success of the company.

最後，我相信你們都看到了，上個月，我宣布我將於年底退休。 2023 年是我擔任 Kilroy Realty 首席執行官的第 28 年，也是在該公司（包括其前身）工作的第 54 年。我將我的職業生涯獻給了 Kilroy，我很高興能夠在公司退休，在我們的同行中擁有最好的投資組合，令人印象深刻的資本配置記錄，穩健的資產負債表，非常重要的是，一個深刻而有才華的團隊。我相信我們所有人都有——我們已經準備就緒，可以繼續按照投資者對 Kilroy 的期望水平執行，作為一名重要股東，我對公司的持續成功投入了難以置信的資金。

That completes my remarks, and I'll turn it over to Eliott.

我的發言到此結束，我將把它交給艾略特。

Thank you, John.

謝謝你，約翰。

FFO was $1.22 per share in the first quarter, the highest quarterly FFO in the company's history. This is up roughly $0.05 net from the prior period, mainly due to a full quarter of revenue from Indeed's lease in Austin.

第一季度 FFO 為每股 1.22 美元，是公司歷史上最高的季度 FFO。這比上一期間淨增加了大約 0.05 美元，這主要是由於 Indeed 在奧斯汀的租賃收入佔整個季度的收入。

Our results included both positive and negative nonrecurring items, which more or less offset each other. On a same-store basis, the first quarter cash NOI was up an impressive 16%. This includes roughly $12 million of tenant restoration payments tied to 2 properties. Excluding this nonrecurring revenue, same-store NOI would have been up about 9%. The strong same-store is due to free rent burn off at Phase 1 of KOP in South San Francisco and higher parking income.

我們的結果包括正面和負面的非經常性項目，它們或多或少地相互抵消。在同店基礎上，第一季度現金 NOI 增長了 16%，令人印象深刻。這包括與 2 處房產相關的大約 1200 萬美元的租戶恢復付款。剔除這一非經常性收入，同店 NOI 將增長約 9%。強勁的同店是由於南舊金山 KOP 第一階段的免費租金燃燒和更高的停車收入。

GAAP same-store NOI is up roughly 2% after adjusting for the nonrecurring items. At the end of the quarter, our stabilized portfolio was roughly 90% occupied and 92% leased. The decrease from the prior quarter was due to previously disclosed move-outs, including DIRECTV's downsizing in El Segundo. Leasing spreads in the quarter were negative 4% on a cash basis, driven by one lease in San Francisco. If we were to exclude this lease, spreads would have been up approximately 8% on a cash basis.

在針對非經常性項目進行調整後，GAAP 同店 NOI 上漲了約 2%。在本季度末，我們穩定的投資組合大約有 90% 被佔用，92% 被出租。與上一季度相比下降是由於先前披露的搬遷，包括 DIRECTV 在 El Segundo 的裁員。本季度的租賃利差按現金計算為負 4%，主要受舊金山一項租約的推動。如果我們排除該租約，按現金計算的利差將上漲約 8%。

Net debt to first quarter annualized EBITDA remained about 6x. I want to emphasize that we have no debt maturities until December of 2024 and limited interest rate exposure with over 90% of our debt fixed. As John mentioned in his remarks, our liquidity remains strong at $1.6 billion, which is comprised of $330 million in cash, $170 million in future term loan proceeds and $1.1 billion of capacity on our line of credit. One modeling note, during the last week of the quarter, we drew down $150 million in term loan proceeds in accordance with the terms of the agreement. So the first quarter interest expense run rate needs to be adjusted if you were trying to use that as a starting point to project the balance of the year.

第一季度年化 EBITDA 的淨債務保持在 6 倍左右。我想強調的是，我們在 2024 年 12 月之前沒有到期的債務，並且利率敞口有限，我們 90% 以上的債務都是固定的。正如約翰在講話中提到的那樣，我們的流動性仍然強勁，達到 16 億美元，其中包括 3.3 億美元的現金、1.7 億美元的未來定期貸款收益和 11 億美元的信貸額度。一個模型說明，在本季度的最後一周，我們根據協議條款提取了 1.5 億美元的定期貸款收益。因此，如果您試圖以此為起點來預測年度餘額，則需要調整第一季度的利息支出運行率。

Our capital requirements for the remainder of the year are $325 million to $425 million of development spend. Obligations for 2024 include a $425 million debt maturity in December plus any additional development costs. Our net liquidity is robust, but we will not hesitate to enhance it should attractive opportunities present themselves.

我們今年剩餘時間的資本要求是 3.25 億美元至 4.25 億美元的開發支出。 2024 年的債務包括 12 月到期的 4.25 億美元債務加上任何額外的開發成本。我們的淨流動性很強，但如果有吸引力的機會出現，我們會毫不猶豫地增加它。

Before discussing guidance, I wanted to point out some additional disclosure in our supplemental. On Pages 14 through 16, we point out the 4 properties not in the same-store pool. Consistent with our long-standing policy, we add properties to the same-store pool once they have been in the stabilized portfolio for a full calendar year. So these 4 properties will all go in at the beginning of 2024. As of the first quarter of 2023, the same-store pool represented 93% of our stabilized square footage.

在討論指南之前，我想在我們的補充文件中指出一些額外的披露。在第 14 到 16 頁，我們指出了不在同店池中的 4 個屬性。根據我們的長期政策，一旦物業在穩定的投資組合中持續了整整一個日曆年，我們就會將其添加到同店池中。因此，這 4 個物業將在 2024 年初全部投入使用。截至 2023 年第一季度，同店池占我們穩定面積的 93%。

Now let's discuss our 2023 guidance. As always, no acquisitions are forecasted, and we continue to expect dispositions to be between 0 and $200 million. Our roughly 50,000 square foot Life Science redevelopment at 4690 Executive Drive in San Diego was fully leased to Sorrento Therapeutics. However, they recently filed for bankruptcy and rejected the lease. As a result, the building is now projected to enter our stabilized portfolio in 2024.

現在讓我們討論我們的 2023 年指南。與往常一樣，沒有預測收購，我們繼續預計處置在 0 到 2 億美元之間。我們位於聖地亞哥 4690 Executive Drive 的大約 50,000 平方英尺的生命科學重建項目已全部出租給 Sorrento Therapeutics。然而，他們最近申請破產並拒絕了租約。因此，該建築現在預計將在 2024 年進入我們的穩定投資組合。

We anticipate drawing down the remaining $170 million from our term loan over the next 2 quarters. As I previously mentioned, development spend for the remainder of the year is expected to be $325 million to $425 million. When factoring in the roughly $75 million of spend in the first quarter, the full year estimate of $400 million to $500 million represents about a 10% decline in spend compared to our original projections. There's no change to our expectations for same-store cash NOI, which is projected at 0% to 2%, or average occupancy, which is projected to be between 86.5% and 88%.

我們預計在接下來的兩個季度內從我們的定期貸款中提取剩餘的 1.7 億美元。正如我之前提到的，今年剩餘時間的開發支出預計為 3.25 億美元至 4.25 億美元。考慮到第一季度大約 7500 萬美元的支出，全年 4 億至 5 億美元的估計表明與我們最初的預測相比，支出下降了約 10%。我們對同店現金 NOI 的預期沒有變化，預計為 0% 至 2%，或平均入住率，預計在 86.5% 至 88% 之間。

We anticipate additional G&A costs of $8 million to $14 million from contractual obligations tied to the accelerated vesting of shares in connection with an executive retirement. Outside of this, there is no change to our G&A estimates.

我們預計與高管退休相關的加速股份歸屬相關的合同義務將產生 800 萬至 1400 萬美元的額外 G&A 成本。除此之外，我們的 G&A 估算沒有變化。

In summary, our original FFO guidance for 2023 was $4.40 to $4.60 with a midpoint of $4.50 per share. While most of our underlying assumptions are unchanged, we are updating our range to reflect the onetime G&A cost of approximately $0.10 at the midpoint. This brings our updated range between $4.30 and $4.50, with a midpoint of $4.40. Were it not for the G&A adjustment, our FFO guidance would have been unchanged.

總之，我們最初對 2023 年的 FFO 指導是 4.40 美元至 4.60 美元，中點為每股 4.50 美元。雖然我們的大部分基本假設沒有改變，但我們正在更新我們的範圍以反映中點大約 0.10 美元的一次性 G&A 成本。這使我們的更新範圍介於 4.30 美元和 4.50 美元之間，中點為 4.40 美元。如果不是 G&A 調整，我們的 FFO 指導將保持不變。

To provide further clarity, guidance implies average quarterly FFO of roughly $1.06 per share for the balance of the year or $0.16 lower than the first quarter. To bridge the gap on the $0.16, we subtract net $0.10 due to lower 2023 occupancy, which factors in our move-outs and move-ins including our West 8th move-out in Seattle which is effective at the end of April. We then subtract $0.06 for various other items, most notably the nonrecurring G&A costs and higher interest expense from the remaining draws on our term loan.

為了進一步明確，指引意味著今年剩餘時間的平均季度 FFO 約為每股 1.06 美元，比第一季度低 0.16 美元。為了彌合 0.16 美元的差距，我們減去 0.10 美元的淨額，因為 2023 年的入住率較低，這是我們遷出和遷入的因素，包括我們在西雅圖的 West 8th 遷出，該遷出將於 4 月底生效。然後，我們從其他各種項目中減去 0.06 美元，最顯著的是非經常性 G&A 成本和我們定期貸款剩餘提款中更高的利息支出。

In terms of sequencing throughout the year, the second quarter will be higher than the third and fourth quarters given 1 month of Amazon and the projected timing of drawing down the balance of the term loan.

從全年順序來看，考慮到亞馬遜1個月的時間以及預計提取定期貸款餘額的時間，第二季度將高於第三和第四季度。

That completes my remarks. Now we will be happy to take your questions. Daniel?

我的發言到此結束。現在我們很樂意回答您的問題。丹尼爾？

(Operator Instructions) The first question comes from Nick Yulico of Scotiabank.

（操作員說明）第一個問題來自豐業銀行的 Nick Yulico。

First question is just maybe you could talk a little bit more about leasing traction right now in South San Francisco? And if we should think about for Phase 2 there, Oyster Point, could that be a longer leasing time frame now? And I guess, also from -- just from a sort of NOI commencement possibility, if you could just remind us, let's say, if you got a lease done at some point this year, what -- when would be the earliest you'd start commencing some NOI on that?

第一個問題是，也許你現在可以多談談南舊金山的租賃牽引力？如果我們應該考慮那裡的第 2 階段，Oyster Point，現在可以延長租賃期限嗎？而且我想，同樣來自 - 只是從某種 NOI 開始的可能性，如果你能提醒我們，比方說，如果你在今年的某個時候完成了租約，什麼時候 - 你最早會在什麼時候開始對此進行一些 NOI？

Sure, Nick. This is Rob Paratte. Let me give you a backdrop on South San Francisco. First of all, just to remind everyone, we have 3 buildings, about 863,000 square feet, under construction. The buildings were purposely designed for Life Science, but they can accommodate single users as well as multi-tenant.

當然，尼克。這是羅伯·帕拉特。讓我給你介紹一下南舊金山的背景。首先提醒大家，我們有3棟樓，約863,000平方呎，正在興建中。這些建築專為生命科學而設計，但它們可以容納單個用戶和多租戶。

With the current situation with SVB and just the general economy, decision-making has slowed down, no doubt. Deal size has gotten smaller but right now, in the market, there are 36 requirements that total about 2.3 million square feet. And I would say that's off from about 3.7 million square feet prior to some of these negative economic headwinds that we've had.

毫無疑問，鑑於 SVB 和整體經濟的現狀，決策制定已經放緩。交易規模變小了，但目前市場上有 36 項需求，總面積約為 230 萬平方英尺。我想說的是，在我們遇到一些負面的經濟逆風之前，這大約有 370 萬平方英尺。

Right now, we expect deal size, as I said, to be smaller. So I think probably average size right now is about 65,000 feet. Our floors are 44,000 feet. Some of the space that's in the market right now is a single floor is only 20,000 feet. So for us, we can accommodate 44,000 feet on 1 floor or 1.5 floors for a larger tenant in the 60,000-foot range. That makes it much more efficient for the tenant.

現在，正如我所說，我們預計交易規模會更小。所以我認為現在的平均尺寸可能約為 65,000 英尺。我們的樓層高度為 44,000 英尺。現在市場上的一些空間單層只有 20,000 英尺。因此，對於我們來說，我們可以在 1 層或 1.5 層為 60,000 英尺範圍內的更大租戶提供 44,000 英尺的空間。這使得它對租戶來說更有效率。

So we've always looked at the project. I don't -- we never really anticipated that we would lease all 3 buildings to one single user. We market that way, of course, we go elephant hunting. But this is really going to be a multi-tenant floor by floor sort of block and tackle game. But there are large tenants in that market and continue to be despite what you may read in the headlines.

所以我們一直在關注這個項目。我沒有——我們從來沒有真正預料到我們會將所有 3 座建築物出租給一個用戶。我們以這種方式進行營銷，當然，我們去狩獵大象。但這實際上將是一個逐層的多租戶塊和鏟球遊戲。但該市場中有大量租戶，而且儘管您可能在頭條新聞中讀到過，但這種租戶數量仍在繼續。

So -- the other thing I'd say is that there is more sublease space on the market. Again, that's sort of -- and I'm looking at sublease space that's spread between Sierra Point and Oyster Point. And you know Oyster Point is really the Main and Main of the market. And that sublease space, again, is characterized -- some of it's very usable. But again, it's 18,000 feet, 20,000 feet, no significant contiguous blocks of space in the market.

所以——我要說的另一件事是市場上有更多的轉租空間。同樣，這有點——我正在研究 Sierra Point 和 Oyster Point 之間的轉租空間。而且你知道 Oyster Point 確實是市場的主要和主要市場。再次，轉租空間的特點是——其中一些非常有用。但同樣，它是 18,000 英尺、20,000 英尺，市場上沒有重要的連續空間塊。

So long story short, things will take longer but there are deals out there. And even with the VC funding environment, Silicon Valley Bank wasn't the only lender to the venture capital world, there's a lot of private equity including Blackstone and others that have moved into the space. So although funding has slowed down, I think everyone is just -- as John has said numerous times on our calls, you don't have to make a decision today, you won't make it.

長話短說，事情會花更長的時間，但那裡有交易。即使在 VC 融資環境下，矽谷銀行也不是風險投資領域的唯一貸款人，包括 Blackstone 和其他公司在內的許多私募股權已經進入該領域。因此，儘管資金已經放緩，但我認為每個人都只是 - 正如約翰在我們的電話中多次說過的那樣，你今天不必做出決定，你不會做出決定。

With regard -- Nick, this is John speaking, specifically to does it change our stabilization dates, just to remind everybody, that there's 3 buildings, they sort of stagger a little bit -- but the first building is scheduled to be completed as shell in mid-'24 and they sort of roll after that, the other 3. And then it's a year thereout from those dates that we anticipate stabilization pursuant to our pro forma. We don't see anything at this point that changes those. I mean, obviously, we'll update if we do, but we think those are probably still pretty good dates.

關於--尼克，我是約翰，特別是為了改變我們的穩定日期，只是提醒大家，有 3 座建築，它們有點錯開--但第一座建築計劃作為空殼完成在 24 年中期，他們在那之後有點滾動，另外 3 個。然後從那些日期開始的一年，我們預計根據我們的備考穩定。我們目前沒有看到任何改變這些的東西。我的意思是，很明顯，如果我們這樣做，我們會更新，但我們認為這些日期可能仍然很不錯。

Okay. Just second question is on this idea of maintaining the strong balance sheet, looking at evaluating some alternative sources of capital. Maybe just talk a little bit more about what that could look like? And what's going to drive that decision making? Is it -- it ends up being a slower leasing process at Kilroy Point as you consider asset sales just to raise some more liquidity as maybe the NOI gets delayed there? Or just how we should think about potential sales, JVs, types of assets you're thinking about? And what would be the reason to do that?

好的。第二個問題是關於維持強勁資產負債表的想法，著眼於評估一些替代資本來源。也許只是多談談它看起來像什麼？什麼會推動該決策？是嗎 - 它最終成為 Kilroy Point 的較慢租賃過程，因為您認為資產出售只是為了增加一些流動性，因為 NOI 可能會在那裡延遲？或者我們應該如何考慮潛在的銷售、合資企業、您正在考慮的資產類型？這樣做的原因是什麼？

Well, as you know, we have a tremendous amount of liquidity and a great balance sheet and very little debt that's coming due. Eliott can give you the specifics. But we're going to remain flexible as we always do. We purposefully built the company to make sure that we have plenty of liquidity and a great balance sheet if we ended up with headwinds. And we do have headwinds. And I've always said that we're going to play offense, but we got to first -- in order to play offense, you've got to be able to play defense. So I think we're really well positioned. We don't feel like we have our backs against the wall on any of that.

好吧，正如你所知，我們擁有大量的流動資金和良好的資產負債表以及很少的到期債務。 Eliott 可以為您提供詳細信息。但我們將一如既往地保持靈活性。我們有目的地建立這家公司，以確保我們在遇到逆風時擁有充足的流動性和良好的資產負債表。我們確實有逆風。我一直說我們要進攻，但我們必須首先——為了進攻，你必須能夠防守。所以我認為我們的定位非常好。我們不覺得我們在任何事情上都背靠牆。

And as things sort of sort themselves out, we think that there'll be a much better functioning debt market which will help the buyer market. As you know, last year, we decided not to proceed with some of the disposition activity that we had forecast just because we felt the pricing would be better if we waited. So do you want to cover Eliott? I mean in terms of potential sources, there's a lot.

隨著事情逐漸解決，我們認為將會有一個運作更好的債務市場，這將有助於買方市場。如您所知，去年，我們決定不繼續進行我們預測的一些處置活動，只是因為我們覺得如果我們等待，定價會更好。那麼你想報導艾略特嗎？我的意思是就潛在來源而言，有很多。

Yes. And Nick, just to add to that, what we were trying to convey is -- we feel really good about where we are liquidity-wise, but that doesn't mean we're just going to sit here and wait, right? The way that we've gotten to this position is by being opportunistic. We didn't have to raise the term loan last year. We saw what we thought was an attractive opportunity, and we pursued it. And that's our mentality this year as well is that we don't feel compelled to do anything. But as we evaluate our alternatives, if there is something that's appealing and that could be on the secured side, that could be on the unsecured side, that could be on the sales side or the venture side. If we see something that we think is attractive, it helps the long-term situation for the company, we'll first do it.

是的。尼克，補充一點，我們試圖傳達的是——我們對我們在流動性方面的處境感到非常滿意，但這並不意味著我們只是坐在這裡等待，對吧？我們達到這個位置的方法是投機取巧。去年我們不必提高定期貸款。我們看到了我們認為是一個有吸引力的機會，並且我們追求它。這也是我們今年的心態，我們不覺得有必要做任何事情。但是當我們評估我們的備選方案時，如果有什麼東西是有吸引力的並且可能在有擔保的方面，那可能在無擔保的方面，那可能在銷售方面或風險方面。如果我們看到我們認為有吸引力的東西，它有助於公司的長期狀況，我們會首先去做。

Just one last one. John, you've -- I think you outlined very well -- and congratulations on the retirement. You outlined the reasons why you decided to retire. But I guess I'm just wondering the consideration to make that announcement before lining up the successor? Maybe you could just outline some of the thinking on that.

只是最後一個。約翰，你——我認為你概述得很好——祝賀你退休了。您概述了您決定退休的原因。但我想我只是想知道在安排繼任者之前是否考慮發布該公告？或許你可以概述一下對此的一些想法。

Yes. Well, at the Board level, we talked about this a lot. The reality is that you can -- unless you have a specific individual that you have designated to be internally or externally for the person, you can wait. If you're going to go through a process, it's going to get out. It just is going to get out. There's nothing that doesn't get out today. Probably the fastest way to get something around is tell somebody it's a secret.

是的。好吧，在董事會層面，我們討論了很多。事實是你可以——除非你有一個特定的人，你已經指定為這個人的內部或外部，你可以等待。如果你要經歷一個過程，它就會消失。它只是要出去。今天沒有什麼不能出去的。可能最快的方法就是告訴別人這是一個秘密。

And so our view is we want to be very transparent. We have some great candidates internally. We may find some great candidates externally, in order for that process to go about efficiently, it means that we want our senior management team to be involved in it, whatnot. And it's just -- we came to the conclusion that it was best practices to be transparent. So that's what we did. And we want to make sure we have plenty of time to go through the process and whatnot.

所以我們的觀點是我們希望非常透明。我們內部有一些很棒的候選人。我們可能會在外部找到一些優秀的候選人，為了讓這個過程高效地進行，這意味著我們希望我們的高級管理團隊參與其中，等等。這只是 - 我們得出的結論是，保持透明是最佳做法。這就是我們所做的。我們想確保我們有足夠的時間來完成這個過程等等。

And if you'd come to know anything about Kilroy, we cannot tell it like it is and we can tell as early as we think it's appropriate to do so. And once I've made my decision, basically, it was time to tell people. And it's always kind of better [swing], what's a great time to leave? It's -- for me, I have a lot of things, as I put forth in my letter, that I want to do in my life, including sport and whatnot. I got a bunch of grandchildren. I see them about once a year. They all live in different countries. And so I want to spend some time. And I think this is a good process.

如果你想了解有關 Kilroy 的任何信息，我們不能按原樣告訴它，我們會在我們認為合適的時候儘早告訴你。一旦我做出決定，基本上就是告訴人們的時候了。而且它總是更好[搖擺]，什麼是離開的好時機？這是——對我來說，正如我在信中所說，我有很多事情想在我的生活中做，包括運動等等。我有一群孫子。我大約一年見一次。他們都住在不同的國家。所以我想花點時間。我認為這是一個很好的過程。

The next question comes from the line of Georgi Dinkov of Mizuho.

下一個問題來自 Mizuho 的 Georgi Dinkov。

Could you please walk us through non-move-out in the next 12 months? And in terms of your top tenants with expirations in '24 and '25, do you see any early termination risk?

您能否介紹一下未來 12 個月內的非搬遷情況？就 24 年和 25 年到期的頂級租戶而言，您是否看到任何提前終止的風險？

So this is Eliott. We've touched on a few of the top -- of the known move-outs and we'll highlight the major ones. We've got Amazon that we've talked about at West 8th that's moving out in the second quarter. We talked about Pac-12 that's moving out in the Bay Area in the third quarter. And then Riot, which is still TBD is a fourth quarter expiration.

這就是艾略特。我們已經談到了一些最重要的——已知的搬遷，我們將重點介紹主要的搬遷。我們在 West 8th 討論過的亞馬遜將在第二季度搬出。我們談到了第三季度在灣區搬出的 Pac-12。然後 Riot 仍然是 TBD 是第四季度到期。

In 2024, we have 2 move-outs over 100,000 feet, both of which are TBD in terms of how those play out, and we have none in 2025 over 100,000.

2024 年，我們有 2 次移動超過 100,000 英尺，兩者的結果如何都待定，而 2025 年我們沒有超過 100,000 英尺的移動。

Great. And just one more question on Austin. Given the high sublet space, do you see any downside risk in terms of early terminations?

偉大的。還有一個關於奧斯汀的問題。鑑於高轉租空間，您是否認為提前終止有任何下行風險？

Austin, our building is brand-new and all the leases that -- either just started or will start when the tenant improvements are done, and there's no termination, right? So I don't see any termination risk at all. I might point out that I didn't in my comments -- this is John speaking, by the way, is that we've been exceeding our pro forma rents quite substantially there. So I think all systems are go for Indeed Tower.

奧斯汀，我們的大樓是全新的，所有的租約——要么剛剛開始，要么在租戶改善完成後開始，而且沒有終止，對吧？所以我根本看不到任何終止風險。我可能會指出我沒有在我的評論中 - 順便說一下，這是約翰所說的是我們在那裡已經大大超過了我們的預計租金。所以我認為所有系統都適用於 Indeed Tower。

The next question comes from John Kim of BMO.

下一個問題來自 BMO 的 John Kim。

John, congratulations on building a great real estate company. I was wondering if you could discuss how involved you plan to be going forward with Kilroy, if you plan to remain as chairman? And any characteristics you could share as far as your preference for a successor?

約翰，恭喜你建立了一家偉大的房地產公司。我想知道如果您打算繼續擔任董事長，您是否可以討論您計劃如何參與 Kilroy？就您對繼任者的偏好而言，您可以分享任何特徵嗎？

Somebody smarter than me. I'm always a smart alec, you know that. So John, I can't get into the search and all the rest. Some of the candidates might be in this room. And -- my old thing about team and teamwork has been pretty transparent, whether it's been in the sailings that I was successful in or whether it's in an enterprise like Kilroy is that one of the benefits you have when you have a strong team that works well together is you can talk about who might be the next leader, whether it be from the inside or out, [got the good] opinions and it makes a stronger process. And so more to come on that.

比我聰明的人。我一直是個聰明的亞歷克，你知道的。所以約翰，我無法進入搜索和其他所有內容。一些候選人可能在這個房間裡。而且 - 我關於團隊和團隊合作的舊事一直非常透明，無論是在我成功的航海中還是在像 Kilroy 這樣的企業中，當你擁有一支強大的團隊時，你所獲得的好處之一就是總之，你們可以討論誰可能成為下一任領導者，無論是來自內部還是外部，[得到好的]意見，這會形成一個更強大的過程。還有更多的事情要做。

As regards to my continued involvement. I mean, I'm Chairman, I'm going to continue to be on the Board and so forth. I'm a big shareholder. I have a big mouth. So I'll probably talk to people here and there. We'll probably get a few inquiries occasionally. Ask me whether I think this is the right thing or the wrong thing, and I'm open to all that.

至於我的繼續參與。我的意思是，我是董事長，我將繼續留在董事會，等等。我是大股東。我有一張大嘴巴。所以我可能會在這里和那裡與人們交談。我們可能偶爾會收到一些詢問。問我我認為這是對的還是錯的，我對此持開放態度。

But that kind of remains to be seen. I do believe that -- we've got a great management team, and I think about, again, back to my sailings analogy, when I was doing all my ocean racing and I was captain of the boat, I was a watch captain. I had another watch captain, always listened to what they had to say. But sometimes, I overruled them and I would come up on deck and I could tell it made him feel a little bit edgy because it's kind of hard to have 2 captains on deck at the same time. And you got to trust people. And I think we have a really terrific team of people here that have worked really well together. And it's the ultimate in collaboration. So I'm available, but I'm pretty confident. A lot of the decisions that get made here, it may ultimately come down sometimes to me making the final decision. But generally, they're arrived at pretty quickly by mostly consensus.

但這種情況還有待觀察。我確實相信——我們有一個很棒的管理團隊，我再次想到我的航海比喻，當我參加所有的海洋比賽並且我是船長時，我是一名值班船長。我有另一個值班隊長，總是聽他們說什麼。但有時，我否決了他們，我會出現在甲板上，我可以看出這讓他感覺有點急躁，因為同時有 2 名船長在甲板上有點困難。你必須信任別人。而且我認為我們這裡有一支非常棒的團隊，他們在一起工作得非常好。這是協作的極致。所以我有空，但我非常有信心。很多在這裡做出的決定，有時最終可能會歸結為我做出最終決定。但總的來說，他們很快就達成了共識。

Okay. To clarify, you're not necessarily going to stay on as chairman?

好的。澄清一下，你不一定要繼續擔任董事長？

I don't know, I'm Chairman for now. Do I at some point decide that, that's not the right thing or whatever? I don't know. I mean, I haven't gotten there yet. It's -- I'm going to do what is in the best interest of Kilroy.

我不知道，我現在是主席。我是否在某個時候決定，那不是正確的事情或其他什麼？我不知道。我的意思是，我還沒有到那兒。這是——我將做符合 Kilroy 最大利益的事情。

On the Sorrento space, I just wanted to ask if there was anything unique about that build out that would make it difficult to lease or re-lease quickly? Or if something like that, that's almost ready to move in is attractive to tenants in the marketplace today?

關於索倫托空間，我只是想問一下，該建築是否有任何獨特之處會導致難以快速租賃或重新租賃？或者，如果類似的東西，幾乎準備好搬進來，對當今市場上的租戶有吸引力嗎？

John, this is Rob Paratte again. So the Sorrento space, just to frame it a little bit, is in the UTC submarket. And as you've heard us talk about before, UTC has both technology and life science. And this project, in particular, was renovated with a Life Science use in mind. We are doing some upgrades. It was an existing assets. So we're doing some upgrades like the lobbies and some of the exterior and mechanical systems. We haven't gotten control of the space yet. But we think it's very marketable and we -- because we haven't started TIs and that sort of thing, we can go either way.

約翰，我又是羅伯·帕拉特。所以 Sorrento 空間，只是稍微構建一下，在 UTC 子市場中。正如您之前聽到我們談論的那樣，UTC 擁有技術和生命科學。特別是這個項目，在考慮到生命科學用途的情況下進行了翻新。我們正在進行一些升級。這是一項現有資產。所以我們正在做一些升級，比如大堂和一些外部和機械系統。我們還沒有控制空間。但我們認為它非常有市場，而且我們 - 因為我們還沒有開始 TI 之類的事情，所以我們可以選擇任何一種方式。

And I think one thing I'd remind you of also is that, as you've seen before, whether it's our exchange project or others, they can play both ways. They can accommodate life science or they can accommodate tech and tech frankly, loves the robust systems that life science requires.

我想我還要提醒您的一件事是，正如您之前所見，無論是我們的交流項目還是其他項目，它們都可以發揮作用。他們可以適應生命科學，也可以坦率地適應技術和技術，喜歡生命科學所需的強大系統。

(Operator Instructions) The next question comes from the line of Caitlin Burrows of Goldman Sachs.

（操作員說明）下一個問題來自高盛的 Caitlin Burrows。

Maybe just on pricing back in November, you mentioned an estimate of like 10% to 15% mark-to-market across the portfolio. So just wondering if you could give your latest view on that and also clarify whether that assumes flat market rents going forward?

也許只是在 11 月的定價中，你提到了整個投資組合按市值計價的估計值約為 10% 至 15%。所以只是想知道您是否可以就此發表您的最新觀點，並澄清這是否假設未來市場租金持平？

Caitlin, it's Eliott. We're between 5% and 10% today. And if you think about the difference between then and now, we've had rent bumps in our leases, and we've signed leases that, in the large part, were rolling up. So that's where we stand today versus then. We have no future growth assumed in that number. That's a snapshot of where we are right now.

凱特琳，是艾略特。我們今天在 5% 到 10% 之間。如果你想一想過去和現在的區別，我們的租約中出現了租金波動，而且我們簽署的租約在很大程度上是滾動的。這就是我們今天與那時的立場。我們沒有假設該數字的未來增長。這是我們現在所處位置的快照。

Okay. And then maybe separately on the dividend. I mean some peers have reduced suspended or commented that they could cut if the environment persists or weakens. So could you just comment on how you feel about the Kilroy current dividend coverage and under what scenario Kilroy could consider modifying the dividend?

好的。然後可能單獨分紅。我的意思是，一些同行已經減少了暫停或評論說，如果環境持續或減弱，他們可能會減少。那麼，您能否評論一下您對 Kilroy 當前的股息覆蓋範圍的看法，以及在什麼情況下 Kilroy 可以考慮修改股息？

So our payout ratio is quite low. We think our dividend is very well covered. And obviously, we have requirements to pay out a certain portion of taxable income. So while ultimately this is a Board decision, we're comfortable with where we are today.

所以我們的支付率很低。我們認為我們的股息得到了很好的保障。顯然，我們有要求支付一定部分的應稅收入。因此，雖然最終這是董事會的決定，但我們對今天的狀況感到滿意。

The next question comes from Michael Griffin of Citi.

下一個問題來自花旗銀行的邁克爾格里芬。

First, congrats John on a great career. Pleasure working with you. Maybe starting on leasing, going to Rob. It looked like leasing was down in the quarter, but second gen lease was up, think last quarter, fell on the leasing. Cash rent spreads look down, the retention ratio is a bit low, I think Eliott talked about in the last quarter. Maybe give us a sense of what the expectations for this are? For the remainder of the year, Rob, I think you talked about it a little bit in the prepared remarks, but any additional color around leasing activity would be helpful.

首先，祝賀約翰取得了偉大的職業生涯。很高興與您合作。也許從租賃開始，然後去找 Rob。看起來本季度的租賃量有所下降，但第二代租賃量有所上升，想想上個季度，租賃量有所下降。現金租金利差向下看，保留率有點低，我想 Eliott 在上個季度談到過。也許讓我們了解對此的期望是什麼？在今年餘下的時間裡，Rob，我想你在準備好的評論中談到了一點，但任何關於租賃活動的額外色彩都會有所幫助。

Sure. Let me touch on a few things. What I would say big picture, Michael, is that we're in this great rebalancing right now. We've gone from a very employee sort of dominated market to one where it's now pushed back to the employer, meaning power leverage is back to the employer. And so you see this across the board with companies bringing their employees back to work. That rebalance is underway, and it's going to take time to settle out. But in San Francisco, since you were last out there, there's a marked change once again in terms of the numbers of people downtown, and that's just by analogy. And our parking garages are full. So you have that going on.

當然。讓我談談一些事情。邁克爾，我要說的是大局，我們現在正處於這個偉大的再平衡中。我們已經從一個由員工主導的市場轉變為現在被推回到雇主手中的市場，這意味著權力槓桿又回到了雇主手中。因此，您可以在公司讓員工重返工作崗位的情況下全面看到這一點。這種重新平衡正在進行中，需要時間才能解決。但在舊金山，自從你上次去那里後，市中心的人口數量再次發生了顯著變化，這只是類比。我們的停車場已滿。所以你有這樣的事情發生。

And I'd like to focus a little bit of this on San Francisco because it has been so beat up in the press and some of it is justified. But San Francisco is still a thriving city, and it has a very strong attraction to young educated workers in the market. Right now, there's approximately 152 tenants in the market with a total demand of about 3.3 million square feet.

我想把重點放在舊金山，因為它在媒體上受到瞭如此大的打擊，其中一些是有道理的。但舊金山仍然是一個繁榮的城市，對市場上年輕的受過教育的工人具有非常強的吸引力。目前，市場上大約有 152 個租戶，總需求量約為 330 萬平方英尺。

Now that's down obviously from the high in 2019 where that might have been 8 million square feet. But I want to point that out just because people have a sense that everyone is sitting on the sidelines, and that's -- that's not the case. Of those 152, 120 of them are active and 32 of those are pending, meaning they're in -- close to getting a lease executed.

現在這明顯低於 2019 年的高點，當時可能是 800 萬平方英尺。但我想指出這一點，只是因為人們覺得每個人都在觀望，而事實並非如此。在這 152 個中，有 120 個處於活動狀態，其中 32 個處於待定狀態，這意味著它們即將執行租約。

A lot of the activity in San Francisco is generated by AI. And I think that while AI companies have made headlines, I don't think it's appreciated. The majority of AI companies founded since 2020 are located in San Francisco. And this has resulted, as John said, in the Bay Area, or San Francisco specifically, being home to 40% of the AI companies out there in the U.S., and those companies are producing the most research papers on the topic and variations of AI. So I think AI is just one segment of where innovation and creativity and what we're all known for in the United States in terms of entrepreneurial spirit are going to go.

舊金山的許多活動都是由 AI 生成的。而且我認為，雖然 AI 公司已經成為頭條新聞，但我認為它並沒有受到讚賞。 2020 年以來成立的大多數人工智能公司都位於舊金山。正如約翰所說，這導致灣區，特別是舊金山，成為美國 40% 的人工智能公司的所在地，這些公司正在就人工智能的主題和變體發表最多的研究論文.所以我認為人工智能只是創新和創造力以及我們在美國以企業家精神而聞名的領域之一。

In our other markets like Seattle, I guess I'd say that other markets are going to react in different ways, meaning some will recover quicker than others. San Francisco has a lot of space to clear, sublease space, et cetera. Seattle less so, but Seattle also has a really vibrant scientific technology market.

在西雅圖等我們的其他市場，我想我會說其他市場會以不同的方式做出反應，這意味著有些市場會比其他市場恢復得更快。舊金山有很多空間可以清理、轉租空間等等。西雅圖不那麼重要，但西雅圖也有一個真正充滿活力的科技市場。

And I'd finish with this point which, for quite a few years, Hollywood had very muted activity in terms of leasing. And right now on the space that we have in Hollywood, we've had more activity there, more -- and we have more activity than we have space available. And so it just shows that in a diversified geographic portfolio like Kilroy has, it's not all down and it's not all up. You have just different dynamics going at any given time.

我要結束這一點，在相當長的一段時間裡，好萊塢在租賃方面的活動非常低調。現在，在我們好萊塢的空間上，我們在那裡進行了更多的活動，更多——我們的活動比我們可用的空間還要多。所以它只是表明，在像 Kilroy 這樣的多元化地理投資組合中，它並沒有全部下降，也沒有全部上升。您在任何給定時間都有不同的動態。

I just want to pipe in here, Michael, and thanks for the comments. It's really a tale of 2 cities, so to speak. We've been talking about and others have talked about the differential between premier product and nonpremier, the flight to quality and so forth. Last week, a bunch of us met with all our management teams, a matter of fact, the entire offices in each region over the last 6, 7 days.

我只想在這裡插話，邁克爾，謝謝你的評論。可以這麼說，這真的是兩個城市的故事。我們一直在談論，其他人也一直在談論優質產品和非優質產品之間的區別、對質量的追求等等。上週，我們一群人會見了我們所有的管理團隊，事實上，在過去的 6、7 天裡，每個地區的整個辦公室。

And what I was just blown away from in San Francisco is we reported -- I think it was probably the fourth quarter -- or rather -- yes, fourth quarter call, that the difference between post Labor Day and pre-Labor Day was just extraordinary, that there were so many -- so many more people back to work. The utilization rates have gone up quite a bit. The traffic has gone up, et cetera, et cetera.

我剛剛在舊金山震驚的是我們報導了——我認為這可能是第四季度——或者更確切地說——是的，第四季度電話會議，勞動節後和勞動節前的區別只是非同尋常，有這麼多——更多的人重返工作崗位。使用率上升了不少。流量增加了，等等，等等。

Well, there's been another quantum jump, frankly, in San Francisco and Seattle and certain areas of L.A. since that last call, over the last 3 months, that is. And it literally I couldn't get into our parking structure, where our office is and we have a big parking structure there in San Francisco the other day. It was totally full. The lobby was totally full. The elevators were up and down. People were all over the place, looking at Salesforce Tower next door in their lobby from where my offices is, it was the same thing there, the same thing over 350 and you just see so many more people.

好吧，坦率地說，自從上次通話以來，在過去 3 個月裡，舊金山和西雅圖以及洛杉磯的某些地區又發生了一次量子躍遷。從字面上看，我無法進入我們辦公室所在的停車場，前幾天我們在舊金山有一個大型停車場。它完全是滿的。大廳裡滿滿的。電梯上下。人們到處都是，從我辦公室所在的大廳看隔壁的 Salesforce Tower，那裡是同一件事，同樣的事情超過 350，而且你看到的人更多。

Now we still have homeless problems. We still have prime problems. We still have a bunch of other problems. Those are being chipped away at. But there's some really positive things going on with people coming back to work. And it's going to be, I think, materially -- and I think there's another quantum jump ready to occur over the next 3 months or so with the big announcements like Amazon up in Seattle and some of the others in the Bay Area of getting back to work.

現在我們仍然有無家可歸的問題。我們仍然有主要問題。我們還有很多其他問題。那些正在被削掉。但是隨著人們重返工作崗位，確實發生了一些非常積極的事情。我認為，這將是實質性的——我認為在接下來的 3 個月左右，隨著像亞馬遜在西雅圖和其他一些在灣區回歸的重大公告，另一個量子躍遷準備好發生上班。

Now contrast that with San Diego, which is, in most cases, booming, and often when we were there, I mean, it's just on fire with people. So I have a feeling, particularly in the Premier properties where people want to be, that we're going to see some material improvements in this whole thing about return to office.

現在將它與聖地亞哥進行對比，在大多數情況下，聖地亞哥正在蓬勃發展，而且當我們在那裡時，我的意思是，它只是對人們著火。因此，我有一種感覺，尤其是在人們想要的 Premier 物業中，我們將看到關於重返辦公室的整個事情有一些實質性的改進。

But I would also say, on the other side, the tale of 2 cities. There are a lot of buildings that are just going to have problems. When I was in San Francisco, I was walking around in certain areas where we haven't invested and it was a wholly different world in terms of much fewer people walking around, garages that weren't full and nobody in the lobbies. And I think that's what you're going to see more and more, and we've been forecasting that for some period of time.

但另一方面，我還要說 2 個城市的故事。有很多建築物會出現問題。當我在舊金山的時候，我在我們沒有投資的某些地區四處走動，這是一個完全不同的世界，因為走動的人少得多，車庫沒有滿，大廳裡也沒有人。我認為這就是你會越來越多地看到的，我們已經預測了一段時間。

Just a quick follow-up on Seattle. John or Rob, any update on West 8th with Amazon there? I think the lease expired this month. I just didn't see any news about it. So anything you can comment would be helpful.

只是對西雅圖的快速跟進。 John 或 Rob，有關於 West 8th 和 Amazon 的最新消息嗎？我想租約本月到期。我只是沒有看到任何關於它的消息。因此，您可以評論的任何內容都會有所幫助。

Michael, I don't want to comment on Amazon specifically, but we -- I think as we pointed out on either at NAREIT or different meetings, we literally, the week of January 1, we had a group up in Seattle, John, Justin, Smart and others, and we evaluated the West 8th project from a -- what do we need to do, if anything, to refresh it. And after that meeting, we've come back with a program that we think is really going to put the project -- kind of it's already a great location and great project, great bones, but we're going to modernize a few areas that we think are going to be really attractive to tenants.

邁克爾，我不想具體評論亞馬遜，但我們——我認為正如我們在 NAREIT 或不同的會議上指出的那樣，我們從字面上看，1 月 1 日那一周，我們在西雅圖有一個小組，約翰， Justin、Smart 和其他人，我們從一個角度評估了 West 8th 項目——我們需要做什麼（如果有的話）來更新它。在那次會議之後，我們提出了一個我們認為真正會實施該項目的計劃——它已經是一個很棒的位置和很棒的項目，很棒的骨頭，但我們將對一些區域進行現代化改造我們認為對租戶來說真的很有吸引力。

We've already had -- since we've announced the fact that we're going to be doing some renovations, we've had several tours and inquiries coming up. So we're very busy right now in terms of generating, renderings and imagery to help sell the story of what West 8th will become.

我們已經 - 自從我們宣布我們將進行一些翻新之後，我們已經進行了幾次巡迴演出和詢問。因此，我們現在正忙於生成、渲染和圖像，以幫助宣傳 West 8th 將變成什麼樣子的故事。

And again, I'll remind you, it's situated in just at the Denny Regrade, which is on the border of South Lake Union, where all the technology companies are, not just Amazon. So we feel good about it.

再一次，我要提醒你，它就位於 Denny Regrade，它位於 South Lake Union 的邊界，那裡是所有科技公司的所在地，而不僅僅是亞馬遜。所以我們對此感覺很好。

Great. And then just one follow-up. I know I'm breaking the 2-question rule, so apologies. The Google announcement down the Peninsula, San Jose, the pause on the mega campus. Is there any benefit maybe in your Menlo or I think the Mountain View assets is pretty fully leased, but any benefit you can maybe have from them pausing that?

偉大的。然後只是一個跟進。我知道我違反了 2 個問題的規則，所以很抱歉。谷歌宣佈在半島、聖何塞、大型園區暫停。您的 Menlo 是否有任何好處，或者我認為 Mountain View 資產已完全出租，但您可以從他們那裡獲得任何好處暫停嗎？

Well, I don't know if specifically it will help Kilroy, in any instance, I can tell you. But any time people don't proceed with new development generally is good for existing product, right. Just because it doesn't rob others or whatever. So I know more about some of these companies' plans, and I can share or we do.

好吧，我不知道它是否對 Kilroy 特別有幫助，無論如何，我可以告訴你。但任何時候人們不進行新開發通常對現有產品都有好處，對吧。就因為不搶別人甚麼的。所以我對其中一些公司的計劃了解得更多，我可以分享或者我們可以分享。

I was with a major tech executive yesterday and last evening for dinner. And -- there definitely is a -- I think it's a very healthy view coming out, which is we don't need to own everything ourselves. We don't need to develop everything all at once. We really need to demonstrate to the market that we're serious about cost containment and so forth. And if people delay major facilities, then it probably means the people that were going to go in there are going to stay somewhere else or go somewhere else.

昨天和昨晚我和一位主要的技術主管共進晚餐。而且 - 肯定有一個 - 我認為這是一個非常健康的觀點，即我們不需要自己擁有一切。我們不需要一次開發所有的東西。我們真的需要向市場證明我們對成本控制等問題是認真的。如果人們延誤了主要設施，那麼這可能意味著打算進入那裡的人將留在其他地方或去其他地方。

The next question comes from the line of Blaine Heck of Wells Fargo.

下一個問題來自富國銀行的 Blaine Heck。

Just a couple of quick ones for me. We noticed that Riot Games upcoming lease expiration increased in size by about 30,000 square feet. Can you talk about the situation there? What caused that change? And any color on the likelihood of renewal or move out at that space?

對我來說只是幾個快速的。我們注意到 Riot Games 即將到期的租賃面積增加了約 30,000 平方英尺。能談談那裡的情況嗎？是什麼導致了這種變化？在那個空間更新或搬出的可能性有什麼顏色嗎？

Yes, Blaine, this is Eliott. So just on the 30,000 feet, nothing actually changed there. If you look at our lease expiration schedules in '20 and '21, there's no uptick. We clarified the footnote. Last quarter, we called out the major piece of Riot lease . They have a few smaller suites that are part of that. So we just wanted to clarify to be a little bit more inclusive with the number.

是的，布萊恩，這是艾略特。所以就在 30,000 英尺的高度，那裡實際上沒有任何變化。如果您查看我們在 20 年和 21 年的租約到期時間表，就會發現沒有任何上漲。我們澄清了腳註。上個季度，我們宣布了 Riot 租約的主要部分。他們有一些較小的套房是其中的一部分。所以我們只是想澄清一下，讓數字更具包容性。

And Blaine, this is Rob. In terms of Riot, I'm not going to be real specific, but they are in space actively using it, and it's too early. They don't expire until November of this year, so more to come.

布萊恩，這是羅伯。就 Riot 而言，我不會具體說明，但他們正在太空中積極使用它，現在還為時過早。它們要到今年 11 月才會過期，以後還會有更多。

Okay. That's helpful. And then, Eliott, I think you talked about parking income being one of the drivers behind the strong same-store results. Can you just talk about that a little bit more? Was the parking income higher than your original expectations this quarter? And how should we think about that income trending for the rest of the year?

好的。這很有幫助。然後，艾略特，我想你談到了停車收入是強勁同店業績背後的驅動因素之一。你能再多談談嗎？本季度停車收入是否高於您原先的預期？我們應該如何考慮今年剩餘時間的收入趨勢？

Yes, it was both higher than our expectation and higher than last year. And I think that, that's a testament to what John said in his prepared remarks that we're just seeing better physical occupancy. So it's our hope that as that continues, we continue to benefit on the parking side as well.

是的，它既高於我們的預期，也高於去年。我認為，這證明了約翰在他準備好的發言中所說的，我們只是看到更好的實際入住率。因此，我們希望隨著這種情況的繼續，我們也將繼續在停車方面受益。

The next question comes from [Jay Haskett] of Evercore ISI.

下一個問題來自 Evercore ISI 的 [Jay Haskett]。

I'm just curious if you could provide a little bit of color on the Austin market and just any interest you're seeing at Indeed Tower. I saw maybe a little bit of progress this quarter in terms of leasing but any part of that would be great.

我只是想知道您是否可以提供一點關於奧斯汀市場的顏色以及您在 Indeed Tower 看到的任何興趣。我看到本季度在租賃方面可能取得了一些進展，但其中的任何部分都會很棒。

Sure. This is Rob again. As we've said before, the beauty of the Indeed Tower that we have in the CBD is that, that part of town attracts not only tech but finance, insurance, professional services firms and all of our leasing. Other than Indeed most of our leasing has been in those categories. We're very pleased with the activity we have. Some of it is taking a little longer to get signed off on. But we're going to do well and there are other tenants in the market. There are, as of yesterday, another big tenant popped up. I'm not sure they're a CBD tenant, but Austin continues to attract companies that are not located there and the companies that are in Austin are, I would say, being cautious about taking new space, but the conversations we've had indicate that they want to bring more people to that market.

當然。這又是羅布。正如我們之前所說，我們在 CBD 擁有的 Indeed Tower 的美妙之處在於，城鎮的那一部分不僅吸引了科技公司，還吸引了金融、保險、專業服務公司和我們所有的租賃公司。除了 Indeed，我們的大部分租賃都屬於這些類別。我們對我們的活動非常滿意。其中一些需要更長的時間才能簽署。但我們會做得很好，市場上還有其他租戶。截至昨天，又出現了另一位大租戶。我不確定他們是 CBD 的租戶，但奧斯汀繼續吸引不在奧斯汀的公司，我想說，在奧斯汀的公司對占用新空間持謹慎態度，但我們進行的對話表示他們希望將更多人帶到該市場。

So -- I would summarize to say we're really happy with where we are, both in terms of rents, lease-up and what we have in the pipeline.

所以——我想總結一下，我們對我們所處的位置非常滿意，無論是在租金、租賃還是我們正在準備的東西方面。

The flight to quality -- this is John, the flight to quality is alive and well in Austin as well. Some of the deals we've done are people that had much lower rents in older buildings. And they just decided it didn't work for their workforce. They needed to step up. We've got a bunch of that in the hopper. But every time there is a bank crisis or whatever, people just say, well, let's go get some more authorities. So some of these things have been approved by senior management 2 or 3 times, and it just takes a while. It's a little frustrating from our standpoint, but we've got a lot of paper we're exchanging and it's -- that building is amazing, and it's drawn a really great crowd. The retail or the restaurant situation there, we've come to -- we haven't completed the documentation, but we've come to a deal with one of the best restaurant operators. And the other thing is like this is just amazing. It's exactly our clientele.

對質量的追求——這是約翰，對質量的追求在奧斯汀也很活躍。我們所做的一些交易是那些在舊建築中租金低得多的人。他們只是認為這對他們的員工不起作用。他們需要挺身而出。我們在漏斗裡有一堆。但每次發生銀行危機或其他什麼時，人們都會說，好吧，讓我們去獲得更多的權威。所以這裡面有些東西已經高層批准了2、3次了，只是需要一段時間而已。從我們的角度來看，這有點令人沮喪，但我們已經交換了很多文件——那座建築太棒了，它吸引了很多人。我們已經了解那裡的零售或餐廳情況——我們還沒有完成文件，但我們已經與最好的餐廳經營者之一達成協議。另一件事就像這樣真是太神奇了。這正是我們的客戶。

I was -- as I said, we were there last week, last Thursday and Friday and Austin is -- I know some other stuff I can't share with you, but I think it's all -- most of it's pretty much, I think, understood. The number of companies that are looking to come to Austin right now is breathtaking. I mean it's breathtaking.

我是——正如我所說，我們上週、上週四和周五都在那裡，奧斯汀是——我知道一些我不能和你分享的其他事情，但我認為這就是——大部分都是差不多的，我想了想，明白了。現在希望來到奧斯汀的公司數量驚人。我的意思是它令人嘆為觀止。

That's helpful. And then just one quick follow-up question. I think on the last call, you mentioned that Indeed Tower is going to be placed into the portfolio in the fourth quarter, am I remembering that correctly?

這很有幫助。然後只是一個快速的後續問題。我想在上次電話會議上，您提到 Indeed Tower 將在第四季度加入投資組合，我沒記錯嗎？

That's right.

這是正確的。

The next question comes from Camille Bonnel of Bank of America.

下一個問題來自美國銀行的 Camille Bonnel。

Curious to get your latest thoughts on the transaction market and views on pricing for office. We understand there's a lot going on in the negotiation process, but we're seeing more headlines out there about bids for assets valuing office anywhere from 20%, 50% to 80% down from pre-pandemic levels, particularly in the West Coast market. So just given that many of these transactions are still pending, I wanted to get your perspective on how much we should really be reading into this?

想知道您對交易市場的最新想法和對辦公定價的看法。我們知道談判過程中發生了很多事情，但我們看到更多關於資產估值辦公室投標的頭條新聞比大流行前水平下降了 20%、50% 到 80%，尤其是在西海岸市場.因此，鑑於其中許多交易仍未決，我想听聽您對我們真正應該對此進行多少解讀的看法？

Well, this is John. I made it pretty clear in my comments at the various conferences and our public things that around 70%, as we calculated of the office stock in the United States is either obsolete or soon to be obsolete. And if something is trading, I haven't heard of anything trading at 80% off. But if you've got a lousy building and nobody wants it, and it's vacant, it may not be worth anything, maybe worth what the land value is less the demo cost. And so I can't really comment without specifics.

嗯，這是約翰。我在各種會議和我們的公共事務中的評論中非常清楚地表明，根據我們計算的美國辦公室存量，大約 70% 已經過時或即將過時。如果有東西在交易，我還沒有聽說過有 80% 折扣的交易。但是，如果你有一棟破爛的建築，沒人想要它，而且它是空置的，它可能一文不值，也許值得土地價值減去演示成本。所以我不能在沒有具體細節的情況下發表評論。

In terms of the valuations being down, well, that's always going to happen when you have interest rates go up, if cap rates go up and so forth. So I would say, yes, values are down. There's no -- there's not the degree of a functioning market that we'd like to see, and that won't really be there other than for high-quality stuff until the interest rates sort themselves out and availability of debt and so forth sorts itself out.

就估值下降而言，當利率上升、資本化率上升等等時，這種情況總是會發生。所以我會說，是的，價值下降了。沒有 - 沒有我們希望看到的運作市場的程度，並且除了高質量的東西之外不會真正存在，直到利率自行解決和債務可用性等等自己出來。

Having said that, I think that if you are on the high-quality asset at a great location, whatever, it's off, it's going to be off a lot less. Then if you are at the other end of the spectrum, which are -- you're not in the right location or you don't have the right quality of building or a combination of both, there's just a whole bunch of stuff that's come on the market that's -- that people have tried to put on the market, we wouldn't even look at it. It was a stinker, it's the best at times, and it's even worse today.

話雖如此，我認為如果你在一個很棒的位置上擁有高質量的資產，無論如何，它會關閉，它會關閉很多。然後，如果你處於光譜的另一端，也就是——你沒有在正確的位置，或者你沒有合適的建築質量，或者兩者兼而有之，那麼就會出現一大堆東西在市場上——人們試圖投放市場，我們甚至都不會看它。它很臭，有時是最好的，而今天更糟。

There have been some assets that people have wanted to trade. I can't speak too specifically because we signed an NDA when we looked at some of the stuff. There are reasonably good assets and good markets and whatnot, but they had specific issues related to them with way too much CapEx or whatever, and they were big and they didn't get a bid that was satisfactory and they pulled them off the market. Well, that's going to happen, too.

有些資產是人們想要交易的。我不能說得太具體，因為我們在查看某些內容時簽署了 NDA。有相當好的資產和好的市場等等，但他們有與他們相關的具體問題，比如資本支出太多或其他什麼，而且他們很大，他們沒有得到令人滿意的出價，他們將他們撤出市場。好吧，那也會發生。

In terms of price discovery, until there's some really -- some volume of transactions Camille, I just think it's -- you kind of guess. I wouldn't read too much into it other than directionally, if you -- if it's an older building, and old doesn't necessarily mean bad. There's some great buildings, if you look at New York, like Vornado's post office project they leased to Meta. I mean that's a classic case of an older building that fit a company's needs beautifully. It's fabulously improved. It's a great, great asset as an example.

在價格發現方面，直到有一些真正的 - 一些交易量 Camille，我只是認為它 - 你有點猜測。如果你 - 如果它是一座較舊的建築，那麼除了方向性之外，我不會過多地了解它，而舊並不一定意味著不好。如果你看看紐約，那裡有一些很棒的建築，比如他們租給 Meta 的 Vornado 郵局項目。我的意思是，這是一個非常適合公司需求的舊建築的經典案例。它得到了驚人的改進。這是一個很好的例子。

But if you happen to have an asset that is like a lot of stuff in some of the cities that was built back in the '60s and '70s with lower ceiling heights and lousy elevators and you really can't improve things, you've got a wasting asset. And so it's a problem. And then we also have the issue of -- for those that have a lot of project-level debt, and they have short-term -- short-terms remaining on their debt, they always have a problem. For example, say, you have a big building, you have a tenant and you're going to put up $50 million in CapEx, and it's a good deal. But you have 2 years left on your loan. And if your loan was at an interest rate that's significantly lower than today's replacement loan, then do you put up the $50 million? You'd probably say "We need to renegotiate."

但是，如果你碰巧擁有一項資產，就像一些建於 60 年代和 70 年代、天花板高度較低、電梯很糟糕的城市中的很多東西，而你真的無法改善這些東西，你已經得到了浪費的資產。所以這是一個問題。然後我們還有一個問題——對於那些有大量項目級債務的人來說，他們的債務是短期的——短期債務，他們總是有問題。例如，假設您有一棟大建築物，您有一個租戶，您將投入 5000 萬美元的資本支出，這是一筆划算的交易。但是你的貸款還剩 2 年。如果您的貸款利率遠低於今天的替代貸款利率，那麼您會支付 5000 萬美元嗎？你可能會說“我們需要重新談判”。

So there's a lot of stuff that's going on. Older product that's going to -- that's falling in value, higher interest rates, which confuse the debt market and so forth and then folks that have too much debt. And we don't have debt, much debt at the property level at all. We have really good assets that are really young. And we think we're pretty well positioned. So a lot of this stuff is going to be noisy.

所以有很多事情正在發生。較舊的產品將 - 價值下降，利率上升，這會混淆債務市場等等，然後是負債過多的人。而且我們沒有債務，根本沒有財產層面的債務。我們擁有非常年輕的非常好的資產。我們認為我們的定位非常好。所以很多這樣的東西都會很吵。

I appreciate the color there. And on a separate topic, it was touched on a bit earlier around the sublease space you see in the market. But could you talk about what that activity is within the portfolio? And has there been any material pickup in any of your markets over the quarter?

我欣賞那裡的顏色。在一個單獨的主題上，它較早地涉及您在市場上看到的轉租空間。但是你能談談投資組合中的活動嗎？本季度您的任何市場是否有任何材料回升？

Yes. We have -- Camille, this is Rob. We have about -- and this is available sublease space in our entire portfolio. It's just under about 1.5 million square feet. And again, what we found is that the best sublease space in any market is going quickly. So for example, 350 Mission last year, Salesforce is subleasing both to Yelp and to Sephora. That space moved quickly, and that's what you're going to see.

是的。我們有-- Camille，這是Rob。我們有大約 - 這是我們整個投資組合中的可用轉租空間。它不到 150 萬平方英尺。再一次，我們發現任何市場上最好的轉租空間都在迅速消失。例如，去年的 350 Mission，Salesforce 正在轉租給 Yelp 和絲芙蘭。那個空間移動得很快，這就是你將要看到的。

Sort it's tacking off what John has said earlier, when you look at a market like Seattle, 82% of the leasing that happened in Seattle in the quarter was Class A space, while the Class B space struggles. So you're just going to keep seeing that trend. And that quality sublease space will burn off quickly and then we'll be going back to more direct space that's Class A in the market over time.

排序它解決了約翰之前所說的，當你看看像西雅圖這樣的市場時，本季度西雅圖發生的租賃中有 82% 是 A 級空間，而 B 級空間則在掙扎。所以你只會繼續看到這種趨勢。那個高質量的轉租空間將很快被燒毀，然後我們將隨著時間的推移回到市場上更直接的 A 級空間。

One of the problems with the sublease space and that's not to say that these things are positive. I mean the reality is sublease space is a bit tricky. Let's say, a tenant has -- I don't know, 500,000 feet -- make it 100,000 feet, make it easy. 100,000 square feet of direct obligation, and they have 3 years left, 5 years left on their lease, and they have options to renew and you have a tenant comes in, you're subleasing it for 20,000 square feet, and they want options to renew. Well, the primary tenant, the sub-lessor is not going to say, well, I can give you options to renew and obligate themselves to exercise an obligation to -- create an obligation to exercise their own option.

轉租空間的問題之一併不是說這些事情是積極的。我的意思是現實是轉租空間有點棘手。比方說，一個租戶 - 我不知道，500,000 英尺 - 讓它成為 100,000 英尺，讓它變得容易。 100,000 平方英尺的直接義務，他們還有 3 年，還有 5 年的租約，他們可以選擇續約，你有一個租戶進來，你以 20,000 平方英尺的價格轉租，他們想要選擇更新。好吧，主要租戶，轉租人不會說，好吧，我可以給你續約的選擇權，並讓他們自己有義務行使自己的選擇權——創造一個義務來行使他們自己的選擇權。

So depending upon a particular building, not just the quality of it, but the structure of the lease that the primary tenant has with the landlord, it can trip people up. If it's ready-to-go space and you're looking for something for fairly short term and you can get it cheap, that's a great deal for somebody. But it's generally more complicated than that.

因此，取決於一棟特定的建築物，不僅取決於它的質量，還取決於主要租戶與房東的租約結構，它可能會絆倒人們。如果它是現成的空間並且您正在尋找相當短期的東西並且您可以便宜地買到它，那麼這對某些人來說是一筆不小的數目。但它通常比這更複雜。

The next question comes from Tayo Okusanya of Credit Suisse.

下一個問題來自瑞士信貸的 Tayo Okusanya。

Let me add my congratulations about your retirement, John, and I can bet we'll still be hearing much more from you going forward. My question has to do more with the occupancy guidance for the year. I'm just trying to understand what's going into that number, whether it's just the new and move out and whether there's some type of buffer in that number for kind of anything else that may be coming? And I ask that in the context of trying to understand what your watch list looks like today, just kind of given some of the incremental challenges in the tech and biotech industries right now.

約翰，讓我對你的退休表示祝賀，我敢打賭，我們今後仍會聽到更多關於你的消息。我的問題更多地與當年的入住指南有關。我只是想了解該數字中的內容，它是否只是新的和搬出的，以及該數字中是否有某種類型的緩衝區用於可能出現的其他任何事情？我問這個是在試圖了解你的觀察名單今天的情況下，只是考慮到目前科技和生物技術行業面臨的一些漸進挑戰。

Tayo, it's Eliott. So similar to what we talked about last quarter, the occupancy guidance factors in the move-outs and the move-ins that we projected and the big ones are the ones that we've talked about earlier about Amazon, Pac-12, et cetera. We do have some move-ins. Those are weighted towards the later part of the year. So as we think about the average occupancy, so we dropped a little bit in the first quarter. We expect to drop more in the second quarter because that's when Amazon will happen. It gets a little bit steadier in the back half of the year. But as we think about the average, that's really what's driving it.

泰約，是艾略特。與我們上個季度討論的內容非常相似，我們預測的遷出和遷入的入住率指導因素以及我們之前談到的關於亞馬遜、Pac-12 等的大因素.我們確實有一些入住。這些都是在今年下半年加權的。因此，當我們考慮平均入住率時，我們在第一季度有所下降。我們預計第二季度會下降更多，因為屆時亞馬遜將出現。它在今年下半年變得更加穩定。但當我們考慮平均值時，這才是真正的驅動力。

And then in terms of your second question on the watch list, the majority of our watch list is still concentrated around retail tenants although we have seen a modest uptick in kind of our office and life science tenants, it still makes up a pretty small part of the overall portfolio, though.

然後關於您在觀察名單上的第二個問題，我們的大部分觀察名單仍然集中在零售租戶身上，儘管我們看到辦公室和生命科學租戶的數量略有增加，但它仍然只佔很小的一部分不過，在整個投資組合中。

But is there any factoring of some of those things terminating this year, like the Sorrento example, like the stuff like that, that's maybe on the watch list and ultimately become move-out? Do you have no provision for stuff like that?

但是，今年終止的某些事情是否有任何因素，例如索倫託的例子，例如類似的東西，可能在觀察名單上並最終搬出？你沒有準備這樣的東西嗎？

No. I mean we -- obviously, there's a range of outcomes, but we don't project watch list tenants leaving the portfolio.

不，我的意思是我們 - 顯然，有一系列結果，但我們不會預測觀察名單上的租戶離開投資組合。

The next question comes from Dylan Burzinski of Green Street.

下一個問題來自 Green Street 的 Dylan Burzinski。

Just curious because I know base rents have been able to hold base rents over the last several years. So just given that availability rates across most of your markets are rising and leasing backdrop is likely weakening, do you see a scenario playing out where we actually start to see pressure on base rents in 2023?

只是好奇，因為我知道基本租金在過去幾年中一直能夠保持基本租金。因此，鑑於你們大多數市場的可用率都在上升，租賃背景可能會減弱，你是否看到一種情況正在發生，我們實際上開始看到 2023 年基本租金的壓力？

Yes. This is John speaking. I think that's a good question. It's to be played out for sure. The concessions can change the amount of TI you put up, things like net effective rents, will they deteriorate? That's probably likely if we continue to see this thing persist. But against that backdrop, that's also a question of how much availability is there.

是的。我是約翰。我認為這是一個很好的問題。肯定要演出來的。優惠可以改變您提供的 TI 數量，例如淨有效租金，它們會惡化嗎？如果我們繼續看到這件事持續存在，那很有可能。但在這種背景下，這也是一個問題，即有多少可用性。

And so, having gone through this for a long time in my life, I'd always say that more availability is not generally a good thing unless you're a tenant. On the other hand, we have this other factor that has become so important, which is it's all about the people and being able to attract and retain the right people. It's becoming more binary. This building fits and I'll pay up for it, and this building even though it's cheap, I don't want it. And that's always been a factor amongst different qualities or locations.

因此，在我生命中經歷了很長時間之後，我總是說，除非您是租戶，否則更多的可用性通常不是一件好事。另一方面，我們還有另一個變得如此重要的因素，那就是人，以及能夠吸引和留住合適的人。它變得更加二進制。這棟樓合適，我會付錢買的，這棟樓雖然便宜，但我不想要。這一直是不同品質或地點之間的一個因素。

But now it's become a much bigger factor with regard to just what people want for their student body. I mentioned in my prepared remarks that we want to be one of the 3 or 4 different buildings that are shown. If you've got 20 vacant -- or 20 possibilities or 50 possibilities or 100 possibilities or whatever it is in the market, people -- as Rob has mentioned in prior quarters' calls, you're not going to go to all those buildings. You're going to 2 or 1, 2 or 3, and you want to make sure that you've got the presence, whether it's your outside areas, your lobby areas, your common areas, if you have conference centers or gyms or things like that, you really want to present yourself well so people could see that it's a plug and play, and that's what we do really well. So we really are -- we feel that we're going to continue to do well.

但現在它已經成為人們對學生群體的需求的一個更重要的因素。我在準備好的發言中提到，我們希望成為所示的 3 或 4 座不同建築之一。如果你有 20 個空缺 - 或者 20 個可能性或 50 個可能性或 100 個可能性或市場上的任何東西，人們 - 正如 Rob 在前幾個季度的電話中提到的那樣，你不會去所有這些建築物.你要去 2 或 1、2 或 3，你想確保你的存在，無論是你的外部區域、你的大堂區域、你的公共區域，如果你有會議中心或健身房或其他東西就像那樣，你真的很想展示自己，這樣人們就能看到它是即插即用的，而這正是我們做得很好的地方。所以我們真的 - 我們覺得我們會繼續做得很好。

How it plays out on rates, I don't know. I've seen less resistance to paying higher rates in this last year or two than I had anticipated. I can't tell you if that holds.

它如何影響利率，我不知道。在過去的一兩年裡，我發現支付更高利率的阻力比我預期的要小。我不能告訴你這是否成立。

That's helpful. And then just maybe one bigger picture one because I think in the last several conference calls, you guys have mentioned AI as a potential positive for San Francisco leasing activity. But I guess just from looking at what the technology will be used for, right, the displacement of white-collar jobs, could it also be viewed as a potential risk to future office demand?

這很有幫助。然後可能只是一個更大的圖景，因為我認為在最近的幾次電話會議中，你們都提到人工智能對舊金山的租賃活動具有潛在的積極意義。但我想，僅從這項技術的用途來看，對吧，白領工作的取代，它是否也被視為對未來辦公需求的潛在風險？

Yes. I think you're right. I think that takes a long time. And I'm not an expert in this area, I have a lot of friends that are. And some of them are extremely well known in the space. And it seems to me that -- and again, I'm not an expert. I think what's going to happen is back office kind of things are going to be decimated. Anything that's mostly processed in that brain is going to be materially impacted. That's what's going to happen first.

是的。我想你是正確的。我認為這需要很長時間。我不是這方面的專家，我有很多朋友都是。其中一些在該領域非常有名。在我看來——再說一次，我不是專家。我認為將要發生的是後台辦公室之類的事情將被摧毀。任何主要在大腦中處理的事情都會受到實質性影響。這就是首先要發生的事情。

And you can get into all kinds of questions about AI, about its potential for reducing the workforce and creating a new level -- a higher level of what's considered full employment, maybe high level of unemployed. You can get in all kinds of moral discussions about it as well, which I don't want to do. But the nature of technology is it's disruptive. If you want to make money from it, you figure out how to utilize it. And if you're in the real estate business, you figure out how you present yourself as a property of choice. How big it's going to be? I don't know, but everything I hear is it's going to be huge. It's so early, how do you know?

你可以提出關於人工智能的各種問題，關於它減少勞動力和創造新水平的潛力——更高水平的充分就業，也許是高失業率。你也可以參與關於它的各種道德討論，我不想這樣做。但技術的本質是它具有破壞性。如果你想從中賺錢，你就會想辦法利用它。如果您從事房地產業務，您會弄清楚如何將自己展示為首選財產。它會有多大？我不知道，但我聽到的一切都是巨大的。這麼早，你怎麼知道的？

And Dylan, this is Eliott. One thing that I'd add to that is when you look at a lot of the innovation that has come from places like the Bay Area, you could argue that some of that should have displaced jobs, white-collar jobs as well. And what in turn -- what often winds up happening is it just makes it more efficient for people and allows them to innovate in different ways, right? And so if you think about AI helping somebody code or an engineer, right? That engineer can be a lot more productive. And now the realm of options or possibilities that they can innovate has grown exponentially, that allows for a greater multiplier effect. So it could actually really go the other way where it helps more innovation, more company growth, et cetera.

迪倫，這是艾略特。我要補充的一件事是，當你看到許多來自灣區等地的創新時，你可能會爭辯說，其中一些應該取代工作，包括白領工作。反過來 - 經常發生的事情只是讓人們更有效率並允許他們以不同的方式進行創新，對吧？因此，如果您考慮 AI 幫助某人編寫代碼或幫助工程師，對嗎？那個工程師可以更有效率。現在，他們可以創新的選擇或可能性領域呈指數級增長，從而產生更大的乘數效應。因此，它實際上可以真正走另一條路，幫助更多的創新、更多的公司發展等等。

Well, that's exactly what's happened over the last 20 years. All these technologies that came along that we're going to put everybody out of work and so forth actually went the other way and they become the biggest consumers of space, right, and the biggest hires. If I knew the answer to that question, I'd be investing on a different area.

嗯，這正是過去 20 年發生的事情。所有這些出現的技術，我們會讓每個人都失業，等等，實際上是相反的，他們成為空間的最大消費者，對，和最大的僱員。如果我知道這個問題的答案，我就會在不同的領域進行投資。

Thank you. There are currently no additional questions registered at this time. So I will pass the conference back over to Mr. Hutcheson for any closing remarks.

謝謝。目前沒有其他問題登記在這個時候。因此，我會將會議轉回給 Hutcheson 先生，聽取任何閉幕詞。

Daniel, thank you for your assistance today, and thank you, everyone, for joining us. We appreciate your continued interest in Kilroy.

丹尼爾，感謝你今天的幫助，感謝大家加入我們。感謝您對 Kilroy 的持續關注。

And with that, we will conclude today's conference call. Thank you for participating. You may now disconnect your lines.

至此，我們將結束今天的電話會議。感謝您的參與。您現在可以斷開線路。