Kilroy Realty Corp (KRC) 2023 Q4 法說會逐字稿

Hello, everyone, and welcome to the KRC 4Q '23 Earnings Conference Call. My name is Emily, and I'll be facilitating your call today. (Operator Instructions)

大家好，歡迎參加 KRC 23 年第四季財報電話會議。我叫艾米麗，今天我將為您接聽電話。 （操作員說明）

I will now turn the call over to our host, Bill Hutcheson, Senior Vice President, Investor Relations and Capital Markets. Please go ahead.

我現在將把電話轉給我們的主持人、投資者關係和資本市場高級副總裁比爾·哈奇森 (Bill Hutcheson)。請繼續。

Thank you, Emily. Good morning, everyone, and thank you for joining us. On the call with me today are Angela Aman, our CEO; Justin Smart, our President; Rob Paratte, our Chief Leasing Officer; and Eliott Trencher, our CIO and CFO.

謝謝你，艾米麗。大家早安，感謝您加入我們。今天與我通話的是我們的執行長 Angela Aman；賈斯汀·斯馬特，我們的總裁； Rob Paratte，我們的首席租賃長；以及我們的資訊長和財務長 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 webcast live on our website and will be available for replay for the next 8 days, both by phone and over the Internet.

首先，我需要說的是，我們在這次電話會議中討論的一些資訊本質上是前瞻性的。請參閱我們的補充資料包，以了解有關本次電話會議和補充資料中前瞻性資訊的聲明。本次電話會議正在我們的網站上進行網路直播，並將在接下來的 8 天內透過電話和網路進行重播。

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.

我們的收益發布和補充方案已以 8-K 表格的形式向 SEC 提交，也可在我們的網站上取得。

Angela will start the call with a strategic overview and quarterly highlights, Justin will review our in-process development pipeline and Eliott will discuss our financial results and provide our 2024 guidance. Then we will be happy to take your questions. Angela?

Angela 將首先介紹策略概述和季度亮點，Justin 將審查我們正在進行的開發流程，Eliott 將討論我們的財務表現並提供 2024 年的指導。那麼我們將很樂意回答您的問題。安吉拉？

Thanks, Bill. I'm happy to join you today on my first call as CEO of Kilroy. I want to start by thanking John Kilroy on behalf of everyone on this platform for his visionary leadership of this company over many years in various real estate cycles.

謝謝，比爾。今天，我很高興與大家一起參加我作為 Kilroy 執行長的第一次電話會議。首先，我想代表這個平台上的每個人感謝約翰·基爾羅伊（John Kilroy）多年來在各個房地產週期中對這家公司的富有遠見的領導。

John has built a premier portfolio in the most dynamic innovation-driven markets in the country while also creating an organization capable of meeting and exceeding the high expectations of our diverse tenant base. I'm honored to be stepping into this role and excited about what the future holds for Kilroy.

約翰在國內最具活力的創新驅動市場中建立了一流的產品組合，同時也創造了一個能夠滿足並超越我們多元化租戶群的高期望的組織。我很榮幸能夠擔任這個角色，並對基爾羅伊的未來感到興奮。

I spent my first 2 weeks getting to know the team here in our Los Angeles headquarters while also getting out to see our assets and meet our regional teams, starting with Seattle and San Francisco. And I'd like to share a few takeaways from my first 11 days on the job.

我在前兩週的時間裡了解了洛杉磯總部的團隊，同時也出去參觀了我們的資產並會見了我們的區域團隊（從西雅圖和舊金山開始）。我想分享我入職前 11 天的一些收穫。

First, our West Coast geographic markets are feeling better with more energy and vibrancy than has been seen in the post-pandemic period. The underlying data backs this up. Activity levels in our markets as measured by foot traffic, public transit usage and domestic travel and tourism have all trended up significantly over the course of 2023.

首先，我們的西海岸地理市場感覺比疫情後時期更有活力和活力。基礎數據支持了這一點。以人流、公共交通使用率以及國內旅遊和旅遊業衡量的市場活動水準在 2023 年均呈現顯著上升趨勢。

Second, while the office market is and will remain challenging in the near term, our portfolio is focused and well positioned to respond to tenant needs that continue to change and evolve. Employees are back in the office, but their expectations have changed. Offices need to be more than efficient. They need to be effective at enhancing productivity and driving collaboration and results. Kilroy's well-located, high-quality amenitized portfolio can meet these demands and in the process, capture outsized market share throughout what is likely to be an extended recovery in this space.

其次，雖然辦公室市場在短期內仍然充滿挑戰，但我們的投資組合專注並處於有利地位，可以滿足不斷變化和發展的租戶需求。員工們回到了辦公室，但他們的期望改變了。辦公室需要的不僅僅是高效率。他們需要有效提高生產力並推動協作和成果。 Kilroy 地理位置優越的高品質便利設施產品組合可以滿足這些需求，並在此過程中，在該領域可能長期復甦的過程中佔據巨大的市場份額。

Third, Kilroy has made the strength of tenant relationships a key priority and it's abundantly clear that the trust that has been built by this team over time has tangible economic value, particularly at this point in the cycle. I have been extraordinarily impressed by the talent embedded in every function across this organization which has only been confirmed by the tenants I have had an opportunity to interact with over the last 2 weeks. We have each described our external-facing teams in leasing, development and construction and asset and property management as proactive, responsive flexible and creative. The team's reputation in the industry is unmatched, and they are and will continue to be a key contributor to our ability to outperform going forward.

第三，基爾羅伊將加強租戶關係作為首要任務，而且很明顯，該團隊隨著時間的推移建立的信任具有切實的經濟價值，特別是在周期的這個階段。該組織各個職能部門的人才給我留下了極其深刻的印象，這一點只有我在過去兩週有機會與之互動的租戶才得到證實。我們每個人都將我們在租賃、開發和建設以及資產和物業管理方面面向外部的團隊描述為積極主動、反應靈敏、靈活且富有創造力。該團隊在行業中的聲譽是無與倫比的，他們現在並將繼續成為我們未來超越競爭對手的關鍵貢獻者。

All of these key takeaways are underscored by the company's fourth quarter leasing activity, where we signed approximately 590,000 square feet of leases, which represent the company's highest quarterly leasing volume since 2019. Notable fourth quarter highlights include 2 Bay Area leases signed for a combined 210,000 square feet to a Fortune 500 technology company and a highly regarded international law firm.

該公司第四季度的租賃活動突顯了所有這些關鍵要點，我們簽署了約590,000 平方英尺的租賃合同，這是公司自2019 年以來最高的季度租賃量。第四季度值得注意的亮點包括簽署了2 個灣區租賃合同，總面積為210,000 平方英尺。平方英尺的財富 500 強科技公司和備受推崇的國際律師事務所。

For the full year 2023, we leased approximately 1.3 million square feet with an average lease term of approximately 6 years. This too represented the highest annual leasing volume since 2019. We are pleased to say this momentum has continued in early 2024, as we executed a 77,000 square foot lease extension with Riot Games in January for a portion of their space in West L.A.

2023 年全年，我們租賃了約 130 萬平方英尺，平均租約約 6 年。這也代表了自2019 年以來的最高年度租賃量。我們很高興地說，這種勢頭在2024 年初仍在持續，因為我們於1 月份與Riot Games 就其位於西洛杉磯的部分空間執行了77,000 平方英尺的延期租約。

Before I turn the call over to Justin and Eliott, I'd like to make a few comments on our strategy going forward. Kilroy has always defined its 3 core pillars as high-quality properties, strategic capital allocation and a fortress balance sheet. I can assure you that I am equally committed to each of these pillars which represent the best path towards navigating challenging market environments and capturing outsized growth opportunities during a more favorable market environment.

在將電話轉給賈斯汀和艾略特之前，我想對我們未來的策略發表一些評論。 Kilroy 始終將其三大核心支柱定義為優質物業、策略資本配置和堡壘資產負債表。我可以向您保證，我同樣致力於這些支柱中的每一個，它們代表了應對充滿挑戰的市場環境並在更有利的市場環境中抓住巨大成長機會的最佳途徑。

Over the coming years, we'll be focused on maintaining the quality of this portfolio by understanding and staying ahead of creeping functional obsolescence in this space, while growing our exposure to premier office, life science and mixed-use assets through our robust development platform or through strategic acquisitions, when and only if they make sense. We will be prudent and thoughtful with every dollar of capital we are entrusted with and will remain focused on driving appropriate and compelling risk-adjusted returns. The same core pillars that have guided Kilroy's strategy in the past will guide us going forward as we take a fresh look at external and internal opportunities to drive growth and create value for all stakeholders. Justin?

在未來的幾年裡，我們將專注於透過了解並保持領先於該領域逐漸出現的功能過時來維持該產品組合的質量，同時透過我們強大的開發平台增加我們對優質辦公室、生命科學和混合用途資產的接觸或透過策略性收購，當且僅當它們有意義時。我們將謹慎、深思熟慮地對待我們所委託的每一美元資本，並將繼續專注於推動適當且令人信服的風險調整回報。當我們重新審視外部和內部機會以推動成長並為所有利益相關者創造價值時，過去指導基爾羅伊策略的相同核心支柱將引導我們前進。賈斯汀？

Thank you, Angela. As of the end of the fourth quarter, our in-process development totaled approximately $1.1 billion, down from the third quarter due to the delivery of Indeed Tower in Austin. There's roughly $440 million left to fund in the development pipeline, most of which is related to the second phase of our Kilroy Oyster Point Life Science Development in South San Francisco. As you may have noticed, the stabilization date for the second phase of Kilroy Oyster Point is now estimated to be the fourth quarter of 2025. The updated time line is a result of scheduling revisions to the construction of the garage and amenities.

謝謝你，安吉拉。截至第四季末，由於奧斯汀 Indeed Tower 的交付，我們的在建開發總額約為 11 億美元，較第三季有所下降。開發管道中還剩下約 4.4 億美元的資金，其中大部分與我們位於南舊金山的 Kilroy Oyster Point 生命科學開發計畫的第二階段有關。您可能已經注意到，Kilroy Oyster Point 第二階段的穩定日期目前預計為 2025 年第四季。更新的時間表是對車庫和設施建設計劃進行修改的結果。

In conjunction with the revised time line, the anticipated cost for this project now reflects the additional carry costs that will be incurred during the revised construction period. We continue to be excited about the quality and the competitiveness of our Kilroy Oyster Point project. We believe it's one of the most compelling life science projects in the country. The physically attractive waterside campus setting with unparalleled views and world-class amenities differentiate the campus from others, and we are confident that many prospective tenants will find it every bit as appealing as Cytokinetics and Stripe did in Phase 1.

結合修訂後的時間表，該項目的預期成本現在反映了修訂後的施工期間將產生的額外運輸成本。我們繼續對 Kilroy Oyster Point 項目的品質和競爭力感到興奮。我們相信這是該國最引人注目的生命科學計畫之一。物理上有吸引力的水邊校園環境、無與倫比的景觀和世界一流的設施使校園與眾不同，我們相信許多潛在租戶會發現它與 Cytokinetics 和 Stripe 在第一階段所做的一樣有吸引力。

On a related note, we are thrilled to see the recent progress Cytokinetics made with positive data from a Phase III trial of its heart disease drug, aficamten, which has resulted in a near doubling of their market cap. Cytokinetics has a 20-year history in public markets and a strong drug pipeline, and we look forward to a long relationship with them at Kilroy Oyster Point.

與此相關的是，我們很高興看到 Cytokinetics 最近的進展，其心臟病藥物 aficamten 的 III 期試驗取得了積極的數據，該藥物的市值幾乎翻了一番。 Cytokinetics 在公開市場擁有 20 年的歷史和強大的藥物管道，我們期待與他們在 Kilroy Oyster Point 建立長期合作關係。

With respect to our future development pipeline, we do not anticipate starting any new developments in 2024. We intend to continue advancing entitlements and design on all projects -- on all pipeline projects in order to maximize future optionality.

關於我們未來的開發管道，我們預計不會在 2024 年開始任何新的開發項目。我們打算繼續推進所有項目的權利和設計——所有管道項目，以最大限度地提高未來的選擇性。

With that, I will turn the call over to Eliott.

這樣，我就把電話轉給艾略特。

Thank you, Justin. I'm pleased to report that the fourth quarter was a very strong conclusion to the year.

謝謝你，賈斯汀。我很高興地向大家報告，第四季是今年的一個非常有力的結論。

Fourth quarter FFO was $1.08 per share and included roughly $0.05 of rental income reversals, the majority of which was tied to one tenant in the Bay Area. Adjusting for this, FFO was roughly flat from last quarter. For the full year, FFO was $4.62 per share, which was the second best year in the history of the company and more than 5% better than our original guidance after adjusting for the previously disclosed CEO transition costs.

第四季 FFO 為每股 1.08 美元，包括約 0.05 美元的租金收入逆轉，其中大部分與灣區的一名租戶有關。對此進行調整後，FFO 與上季基本持平。全年 FFO 為每股 4.62 美元，這是公司歷史上第二好的一年，在調整之前披露的 CEO 過渡成本後，比我們最初的指導值高出 5% 以上。

On a same-store basis, fourth quarter cash NOI was down about 1% due to lower occupancy year-over-year. GAAP same-store NOI was down roughly 10.5% due to the previously mentioned rental income reversals. For the full year, cash same-store NOI was up roughly 4.5% or approximately 350 basis points better than our original guidance.

以同店計算，由於入住率年減，第四季現金 NOI 下降約 1%。由於前面提到的租金收入逆轉，GAAP 同店 NOI 下降了約 10.5%。全年現金同店 NOI 成長約 4.5%，比我們最初的指導高出約 350 個基點。

At the end of the quarter, our stabilized portfolio was 85% occupied and 86.4% leased. The decrease from the prior quarter was due to a lease expiration in Los Angeles as well as the inclusion of Indeed Tower in the stabilized portfolio. As a reminder, Indeed Tower entered the stabilized portfolio in December, which included approximately 265,000 square feet of unoccupied space. As a result, we are no longer capitalizing any interest, operating expense or real estate tax costs for the property.

截至本季末，我們穩定的投資組合已佔用 85%，已出租 86.4%。較上一季下降的原因是洛杉磯的租約到期以及 Indeed Tower 納入穩定投資組合。提醒一下，Indeed Tower 於 12 月進入穩定投資組合，其中包括約 265,000 平方英尺的閒置空間。因此，我們不再將該財產的任何利息、營運費用或房地產稅成本資本化。

Turning to the balance sheet. Net debt to fourth quarter annualized EBITDA was approximately 6.4x. During the quarter, we repurchased roughly $7 million of our December 2024 bonds at a discount, which when added to our debt repurchases in the third quarter, brings the total amount repurchased to roughly $20 million. As a result, our remaining 2024 December maturity is now approximately $405 million.

轉向資產負債表。淨債務佔第四季度年化 EBITDA 的比例約為 6.4 倍。在本季度，我們以折扣價回購了約 700 萬美元的 2024 年 12 月債券，加上第三季度的債務回購，回購總額約為 2,000 萬美元。因此，我們 2024 年 12 月剩餘的到期期限現在約為 4.05 億美元。

Subsequent to quarter end, we raised $400 million of 12-year unsecured bonds at a coupon of 6.25%, representing our first bond deal since late 2021. We've been patiently monitoring conditions in the fixed income market and as benchmark rates and spreads tightened in late 2023, we decided to opportunistically accelerate our capital raising plans.

季度末後，我們以6.25% 的票面利率籌集了4 億美元的12 年期無擔保債券，這是我們自2021 年底以來的第一筆債券交易。我們一直在耐心監控固定收益市場的狀況以及基準利率和利差收緊2023年底，我們決定趁機加快融資計畫。

We were thrilled by the outcome and the support we received from our fixed income investors. We intend to use the proceeds to proactively pay down a portion of our term loan, fund our 2024 development needs and bolster our liquidity to be ready for compelling opportunities should they arise.

我們對結果以及固定收益投資者的支持感到非常興奮。我們打算利用所得款項主動償還部分定期貸款，為我們 2024 年的發展需求提供資金，並增強我們的流動性，以便為出現的引人注目的機會做好準備。

We currently have $2.2 billion of available liquidity comprised of $1.1 billion of cash and marketable securities and $1.1 billion available on our line of credit. Our projected uses of capital for the year are between $800 million and $900 million, broken down as follows: $600 million of debt paydowns and $200 million to $300 million of development spend.

我們目前擁有 22 億美元的可用流動資金，其中包括 11 億美元的現金和有價證券以及 11 億美元的可用信用額度。我們預計今年的資金用途在 8 億至 9 億美元之間，細分如下：6 億美元用於償還債務，2 億至 3 億美元用於發展支出。

Now let's discuss 2024 guidance. No acquisitions or dispositions or forecasts, though we will remain opportunistic on both fronts. As Justin mentioned, no new development starts are projected for 2024 and as previously highlighted, total development spend during the year is anticipated to be $200 million to $300 million, a reduction of over $100 million at the midpoint compared to 2023 levels.

現在讓我們討論 2024 年指導。沒有收購、處置或預測，但我們將在這兩方面保持機會主義。正如Justin 所提到的，預計2024 年不會有新的開發項目啟動，並且如前所述，今年的總開發支出預計為2 億至3 億美元，與2023 年的水平相比，中位數減少超過1 億美元。

G&A is expected to be between $72 million and $80 million. Straight-line rent is anticipated to be approximately 0 for the full year, a decline from roughly $8.5 million in 2023. Average occupancy is expected to be 82.5% to 84%, a 175 basis point decrease at the midpoint from the fourth quarter.

一般管理費用預計在 7,200 萬至 8,000 萬美元之間。預計全年直線租金約為 0，較 2023 年的約 850 萬美元有所下降。平均入住率預計為 82.5% 至 84%，較第四季中點下降 175 個基點。

As previously discussed, in 2024, we have 2 expirations over 100,000 square feet that total approximately 290,000 square feet. We anticipate both tenants moving out and getting the majority of that space back.

如前所述，到 2024 年，我們將有 2 個超過 100,000 平方英尺的土地到期，總面積約為 290,000 平方英尺。我們預計兩個租戶都會搬出並收回大部分空間。

Cash same-store NOI is projected to be between negative 4% and 6%. The decrease from 2023 is due to lower occupancy year-over-year and the impact of approximately $12 million of restoration income we received in the first half of 2023.

現金同店 NOI 預計為負 4% 至 6%。與 2023 年相比下降的原因是入住率同比下降以及我們在 2023 年上半年收到的約 1200 萬美元的修復收入的影響。

In summary, our 2024 FFO guidance is projected to range between $4.10 and $4.25 with a midpoint of approximately $4.18 or a quarterly average of $1.04 which is $0.04 below the $1.08 we achieved this quarter.

總而言之，我們 2024 年 FFO 指引預計在 4.10 美元至 4.25 美元之間，中點約為 4.18 美元，即季度平均值 1.04 美元，比我們本季度實現的 1.08 美元低 0.04 美元。

The FFO bridge from the fourth quarter of 2023 to the 2024 quarterly average can be broken down as follows: add $0.05 to adjust for the reserves in the fourth quarter of 2023, to track $0.025 for lower occupancy, which includes the impact of move-ins and move-outs in both the fourth quarter of 2023 and those anticipated in 2024, subtract $0.03 for higher interest and operating expenses associated with Indeed Tower, which, as discussed, came into the stabilized portfolio in December, subtract $0.04 from a combination of higher interest expense, predominantly due to the January bond deal and lower interest income related to lower projected reinvestment rates on our significant cash balance, subtract $0.01 due to an increase in the expected share count related to the previously disclosed CEO transition, and add back $0.02 from lower G&A.

從 2023 年第四季到 2024 年季度平均值的 FFO 橋樑可細分如下：添加 0.05 美元以調整 2023 年第四季度的準備金，以追蹤較低入住率的 0.025 美元，其中包括搬入的影響以及2023 年第四季和2024 年預期的遷出，因與Indeed Tower 相關的較高利息和營運費用減去0.03 美元，正如所討論的，Indeed Tower 在12 月進入穩定投資組合，從較高的組合中減去0.04 美元利息支出，主要是由於1 月份債券交易以及與我們大量現金餘額的預計再投資率較低相關的利息收入減少，減去0.01 美元，因為與之前披露的CEO 換屆相關的預期股份數量增加，並加上0.02 美元較低的一般行政費用。

To conclude, we are pleased we were able to outperform our expectations in 2023 while also finding ways to further enhance our balance sheet and liquidity profile. None of this could be done without the excellent team we have at Kilroy.

總而言之，我們很高興能夠在 2023 年超越我們的預期，同時也在尋找進一步改善我們的資產負債表和流動性狀況的方法。如果沒有基爾羅伊優秀的團隊，這一切都是不可能完成的。

As we start 2024, we believe we are well positioned to build on this momentum and continue to execute at the high standard our stakeholders have come to expect. That completes my remarks.

在 2024 年伊始，我們相信我們已做好充分準備，能夠鞏固這一勢頭，並繼續按照利害關係人期望的高標準執行。我的發言到此結束。

Now we will be happy to take your questions. Emily?

現在我們很樂意回答您的問題。艾米麗？

(Operator Instructions) The first question today comes from Camille Bonnel with Bank of America Merrill Lynch.

（操作員說明）今天的第一個問題來自美銀美林的 Camille Bonnel。

Could we start with any new themes that you're seeing in the leasing pipeline since the start of the year, whether it be size requirements, types of tenants or markets?

我們能否從今年年初以來您在租賃管道中看到的任何新主題開始，無論是規模要求、租戶類型還是市場？

Sure. Camille, this is Rob Paratte. Let me give you a backdrop of what's happening in our regions. What I'm going to talk about is also happening nationally in select markets. Although we all know the macroeconomic trends for office continue to be challenging, there are some really positive things that happened in Q4 and that are leading into Q1 of '24. For example, Walmart signed a 720,000 square foot lease in Silicon Valley. As Angela mentioned, our 2 leases totaling 210,000 square feet in Silicon Valley. And one of those leases was the fifth largest in 2023. In San Francisco, Anthropic, OpenAI and Hive all led to record leasing in San Francisco at 1.6 million square feet for the quarter which is above the pre-pandemic 2019 average of about 1.2 million. In Bellevue, Washington, this past week, a 450,000 square foot lease was signed with Pokemon, a gaming company and another 120,000 square feet in -- with TikTok.

當然。卡米爾，這是羅布·帕拉特。讓我向您介紹一下我們地區正在發生的事情的背景。我要談論的事情也在全國範圍內的特定市場發生。儘管我們都知道辦公大樓的宏觀經濟趨勢仍然充滿挑戰，但第四季度發生了一些真正積極的事情，這些事情正在進入 24 年第一季。例如，沃爾瑪在矽谷簽署了 72 萬平方英尺的租賃合約。正如安吉拉所提到的，我們在矽谷的兩處租約總面積為 210,000 平方英尺。其中一個租賃量是2023 年第五大租賃量。在舊金山，Anthropic、OpenAI 和Hive 都導致舊金山本季租賃面積達到創紀錄的160 萬平方英尺，高於2019 年大流行前約120 萬平方英尺的平均租賃量。上週，在華盛頓州貝爾維尤，與遊戲公司 Pokemon 簽署了 45 萬平方英尺的租約，並與 TikTok 簽署了另外 12 萬平方英尺的租約。

So I think that gives you a good perspective on what's happening in our markets. What we're seeing in our spillover in the Q1 -- excuse me, for stumbling, is that we have good activity at West 8th, for example, where -- we're exchanging paper with 2 different prospects. We're seeing continued activity at Kilroy Oyster Point. I would say my comments about Oyster Point aren't much different than last quarter. However, tour activity has maintained steady and there appears to be a more positive view on the VC funding world, and that will spill into demand eventually. There's usually about a 6- to 9-month gap between VC funding and tenants needing space.

所以我認為這可以讓您更好地了解我們市場上正在發生的事情。我們在第一季的溢出效應中看到的——請原諒，因為絆腳石，我們在 West 8th 有很好的活動，例如，在那裡——我們正在與 2 個不同的潛在客戶交換紙張。我們看到基爾羅伊牡蠣角 (Kilroy Oyster Point) 的活動仍在繼續。我想說我對 Oyster Point 的評論與上個季度沒有太大不同。然而，旅遊活動保持穩定，人們對創投領域的看法似乎更加積極，最終將影響需求。創投資金和租戶需要空間之間通常有大約 6 到 9 個月的差距。

Lastly, I'd say that in Austin, we have, we continue to attract some of the best law firms and financial services firms in the country. We recently signed a lease with Orrick, Herrington & Sutcliffe, the San Francisco-based law firm, and we're seeing some more activity from firms like that, which I can't go into.

最後，我想說，在奧斯汀，我們繼續吸引全國最好的律師事務所和金融服務公司。我們最近與總部位於舊金山的奧睿律師事務所 (Orrick, Herrington & Sutcliffe) 簽署了一份租約，我們看到這類公司開展了更多活動，但我無法透露。

I think the last data point I'd give you is that in San Diego, we're talking to 3 different tenants that have expansionary plans in our project.

我想我給你的最後一個數據點是，在聖地牙哥，我們正在與 3 個不同的租戶交談，他們在我們的專案中製定了擴張計劃。

So overall, it feels better. I'm still cautiously optimistic because this won't be a straight line and it will ebb and flow, but things feel much better than they did Q1 of last year.

所以整體來說感覺比較好。我仍然持謹慎樂觀的態度，因為這不會是一條直線，它會潮起潮落，但情況感覺比去年第一季要好得多。

I could just kind of summarize, pull some of that together. I would just say, if you heard my prepared remarks, we had a very strong fourth quarter from a leasing activity perspective, which certainly carried over into Q1, which we're very encouraged by. As Eliott highlighted, we're obviously facing some significant move-outs in 2024, that's going to weigh on occupancy. But I think the trajectory we've got on leasing feels really good, and we're hopeful we can meet, if not exceed the expectations we laid out last night.

我可以簡單地總結一下，把其中的一些放在一起。我只想說，如果您聽到了我準備好的講話，從租賃活動的角度來看，我們第四季度的表現非常強勁，這肯定會延續到第一季度，我們對此感到非常鼓舞。正如 Eliott 所強調的那樣，我們顯然將在 2024 年面臨一些重大搬遷，這將對入住率造成壓力。但我認為我們在租賃方面的發展軌跡感覺非常好，我們希望能夠達到（即使不能超越）我們昨晚設定的期望。

And so just expanding on the leasing pace for the year. Are you expecting it to be at a similar run rate as what you've seen in fourth quarter in terms of what's baked into guidance because your implied occupancy outlook does seem to indicate a weaker retention than the 50% average you've been achieving?

所以只是擴大了今年的租賃速度。您是否預計第四季度的運行率會與您在指導中看到的情況類似，因為您隱含的入住率前景似乎表明保留率低於您所實現的 50% 平均水平？

Yes. So Camille, this is Eliott. We're not going to speak to what is in guidance in terms of leasing signed and that's generally because -- if you think about the timing of when leases are signed and how they impact the average occupancy, it tends to be pretty back-end weighted. And so it will have more of a 2025 impact on occupancy versus 2024.

是的。卡米爾，這是艾略特。我們不會談論簽署租賃方面的指導內容，這通常是因為——如果你考慮簽署租賃的時間以及它們如何影響平均入住率，它往往是相當後端的加權。因此，與 2024 年相比，2025 年對入住率的影響更大。

And in terms of the color, Rob, if there's anything you want to add?

關於顏色，Rob，您還有什麼要補充的嗎？

It's just hard to predict, Camille. I mean the large amount of leasing in San Francisco, it's hard to predict whether there's more of that. There are some larger transactions in the pipeline. I would just characterize it as big tenants had been on the sideline for quite a few, I would say, quarters and now we're starting to see activity across our markets, in the larger size ranges.

這很難預測，卡米爾。我的意思是舊金山的租賃量很大，很難預測是否還會有更多。目前還有一些規模較大的交易正在進行中。我只是將其描述為大租戶已經觀望了好幾個季度，現在我們開始看到整個市場的活動，尺寸範圍更大。

Appreciate it. It is a very challenging market. Just final question from my end and shifting gears a bit. You have a substantial amount of liquidity even accounting for the upcoming maturities and development spend. So when you look towards the opportunities to allocate this capital today, where does the dividend fit in this context?

欣賞它。這是一個非常具有挑戰性的市場。這是我的最後一個問題，並且稍微改變態度。即使考慮到即將到來的到期日和開發支出，您也擁有大量的流動性。那麼，當您今天尋找分配這些資本的機會時，股息在這種情況下適合什麼？

Well, you can see that from what we've done this year, we've kept our dividend at the current levels. It's something that the Board evaluates annually. Right now, we're comfortable where those levels -- with where those levels are and as we get into 2024, we'll make a judgment at that time as to whether the dividend -- whether the current dividend level is appropriate, whether it needs to be adjusted in up or down.

嗯，你可以看到，從我們今年所做的事情來看，我們將股息保持在當前水平。這是董事會每年評估的。現在，我們對這些水平感到滿意——當我們進入2024年時，我們將在那時對股息是否做出判斷——當前的股息水平是否合適，是否合適需要向上或向下調整。

Our next question comes from Daniel Tricarico with Scotiabank.

我們的下一個問題來自豐業銀行的 Daniel Tricarico。

It's Nick Yulico here. Maybe first question on the guidance. Eliott, if you could just touch a little bit more on the occupancy and how to think about the phasing of the occupancy through the year? And then whether there's anything else that's a meaningful known expiration where there's -- you're not retaining a tenant or it's a downsizing like what happened with the Riot games?

我是尼克尤利科。也許是關於指導的第一個問題。艾略特，您能否多談談入住率以及如何考慮全年入住率的分階段？然後，是否有其他任何有意義的已知到期情況——您沒有保留租戶，或者像 Riot 遊戲那樣進行裁員？

Yes. Nick, there are obviously a lot of moving pieces in terms of our occupancy, but the easiest way to think about it is starting at the fourth quarter and going to the midpoint of our range, that's about a 175-basis-point decline on the 17 million square feet in our portfolio that comes out to about 300,000 square feet. We outlined the 2 large move-outs, which total about 300,000 square feet. There will be other moving pieces beyond that, nothing over 100,000 square feet. And as we think about the range, our ability to backfill some of those other smaller move-outs is what gives us confidence in the range and the better we do, the higher in the range we end up.

是的。尼克，就我們的入住率而言，顯然有很多變化，但最簡單的思考方法是從第四季度開始，一直到我們範圍的中點，這大約是去年同期下降了 175 個基點。我們的投資組合中有1700 萬平方英尺，實際面積約30 萬平方英尺。我們概述了 2 個大型搬遷項目，總面積約為 30 萬平方英尺。除此之外，還會有其他活動，但面積不會超過 10 萬平方英尺。當我們考慮這個範圍時，我們回填其他一些較小的移出的能力使我們對這個範圍充滿信心，我們做得越好，我們最終得到的範圍就越高。

Okay. Great. And then Angela, congrats on the new role. Maybe just a question in terms of how you're viewing the company and what your approach is going to be? You talked about some of the strategy staying the same, but I guess I'm wondering early thoughts on how you're thinking about balancing future investments, whether it's starting a new development or if there's an acquisition that pops up that's attractive versus a leasing focus for the portfolio given there's so much leasing still to do to get back to a more stabilized occupancy? Just any early thoughts on how you're thinking about balancing those 2 items?

好的。偉大的。然後安吉拉，祝賀你擔任新角色。也許只是一個關於您如何看待公司以及您的方法是什麼的問題？您談到了一些保持不變的策略，但我想我想知道您如何考慮平衡未來投資的早期想法，無論是開始新的開發，還是出現比租賃更有吸引力的收購鑑於仍有大量租賃工作要做才能恢復更穩定的入住率，投資組合的重點是什麼？關於您如何平衡這兩項的早期想法？

Yes. Thanks, Nick. I would just say I'm incredibly excited about the opportunity in front of us. There are obviously challenges in the sector and the space, but I'm very convicted that this platform, given we have a premier portfolio, an impeccable reputation in the industry, an incredibly talented team of people and a really excellent track record of capital allocation that we'll be able to not only sort of weather through some of these challenges, but really outperform and take advantage of the opportunities that some of this disruption creates -- which really gets kind of the heart of your question about capital allocation and how we should think about that going forward.

是的。謝謝，尼克。我只想說我對我們面前的機會感到非常興奮。這個行業和領域顯然存在挑戰，但我非常確信這個平台，因為我們擁有一流的投資組合、在行業中無可挑剔的聲譽、一支非常有才華的團隊以及非常出色的資本配置記錄我們不僅能夠應對其中一些挑戰，而且能夠真正超越並利用一些這種顛覆所創造的機會——這確實是你關於資本配置以及如何進行資本配置的問題的核心我們應該繼續思考這個問題。

I don't think -- obviously, we have a big development pipeline in front of us now as we complete Kilroy Oyster Point 2. We have a lot of opportunities embedded in the future development pipeline, and I'm going to be spending a lot of time with Justin and Eliott and the rest of the team to really understand what those opportunities look like and where we have sort of the most outsized opportunities to create value for shareholders already embedded within what the company owns and controls.

我不認為——顯然，當我們完成 Kilroy Oyster Point 2 時，我們面前有一個龐大的開發管道。未來的開發管道中包含很多機會，我將花費一個我們花了很多時間與賈斯汀和艾略特以及團隊的其他成員一起真正了解這些機會是什麼樣的，以及我們在哪裡擁有最大的機會為已經嵌入公司擁有和控制的股東創造價值。

As it relates to transaction activity in the market and how we might evaluate that, we're at a point right now where there just hasn't been much activity and many data points to sort of key into. We're going to continue to watch how that evolves over time. And I do believe, and I would underscore this again, I said earlier, said in my prepared remarks, that there will be real opportunities that come out of this disruption. But not everything that trades is going to be an opportunity for Kilroy.

由於它與市場中的交易活動以及我們如何對其進行評估有關，因此我們現在所處的階段是沒有太多的活動和許多數據點可以進行排序。我們將繼續觀察它如何隨著時間的推移而演變。我確實相信，我會再次強調這一點，我之前說過，在我準備好的發言中說過，這種破壞將會帶來真正的機會。但並非所有交易都會成為基爾羅伊的機會。

I already talked a lot about sort of the idea of creeping functional obsolescence in the space and how we really need to be keyed in on maintaining the quality of this portfolio. And so there are going to be things that trade that have distressed sort of flapped on them. And not all of -- not everything that trades at sort of distressed pricing is going to be compelling for this company, given the focus on quality.

我已經談過很多關於該領域功能逐漸過時的想法，以及我們真正需要如何保持這個產品組合的品質。因此，有些交易會受到一些困擾。考慮到對品質的關注，並不是所有以某種廉價定價交易的東西都會對這家公司有吸引力。

And so we'll wait and see how things play out. As Camille sort of noted earlier, we have a tremendous amount of liquidity and we're in a really good place from a balance sheet perspective. So I think we need to be patient. We continue -- need to continue to evaluate the market and how things are trending. But I think there are going to be some really interesting and exciting opportunities on the other side of this.

所以我們將拭目以待，看看事情會如何發展。正如卡米爾之前指出的那樣，我們擁有大量的流動性，從資產負債表的角度來看，我們處於一個非常好的位置。所以我認為我們需要有耐心。我們需要繼續評估市場以及事情的趨勢。但我認為另一方面將會有一些非常有趣和令人興奮的機會。

Our next question comes from Steve Sakwa with Evercore ISI.

我們的下一個問題來自 Evercore ISI 的 Steve Sakwa。

Welcome, Angela. I know you're not going to go through -- Eliott, I know you sort of gave a few pieces on the occupancy. It just seems to us as we kind of try to look at the ranges. It's very difficult for us at least to get to the very low end of the range, unless you've really got almost no new leasing commencing or you have an exceptionally low retention rate on the space that's not a known move-out. So you could assume it's kind of close to 0 which seems abnormally low or you can put no new leasing, which again would seem abnormally low. Just I guess, can you just help us sort of understand what are the really big swing factors to get to kind of the low end of the occupancy? And I guess, some of the better drivers or kind of retention rate or new leasing that might get you to the high end?

歡迎，安吉拉。我知道你不會經歷——艾略特，我知道你提供了一些關於入住的資訊。在我們看來，這只是我們試圖觀察範圍。至少對我們來說，達到這個範圍的最低端是非常困難的，除非你真的幾乎沒有新的租賃開始，或者你對未知搬出的空間的保留率極低。所以你可以假設它接近 0，這看起來異常低，或者你可以不進行新的租賃，這又看起來異常低。我想，您能否幫助我們了解一下達到入住率低端的真正大的波動因素是什麼？我想，一些更好的驅動程式或某種保留率或新的租賃可能會讓你達到高端？

Yes, Steve, I think you hit it on the head, right? The 2 swing factors are what is the retention on some of the balance of the portfolio and then how well do we do in backfilling that and how timely are we? I think that's the other factor to consider.

是的，史蒂夫，我想你擊中了你的頭，對吧？兩個波動因素是投資組合中部分餘額的保留情況，以及我們在回填該餘額方面做得如何以及我們的及時性如何？我認為這是另一個需要考慮的因素。

So to the extent that we have a lot of leasing success in the back half of the year, as I mentioned earlier, that helps in 2025. But as we think about the 2024 average, it's not all that meaningful. So if we're at the lower end of the range, you can assume that the new leasing is pretty light and the retention is pretty low. I think that's fair.

因此，正如我之前提到的，我們在今年下半年取得了許多租賃成功，這對 2025 年有所幫助。但當我們考慮 2024 年的平均值時，這並沒有那麼有意義。因此，如果我們處於該範圍的下限，您可以假設新的租賃量相當輕，保留率也相當低。我認為這是公平的。

Yes. Look, we're going to be hyper focused this year on making sure that we are doing everything we possibly can from a leasing perspective to not just get our share of the market but really to get an outsized share of activity that's happening across all of our markets. And that's true across the stabilized portfolio, it's also very true in the development pipeline as well. So retention is lower this year as Eliott sort of highlighted in his remarks about the 2 large move-outs. It's just naturally going to bring retention down a little bit, and we need to make that up with leasing.

是的。聽著，今年我們將高度專注於確保我們從租賃的角度盡一切努力，不僅要獲得我們的市場份額，而且要真正獲得在所有領域發生的活動的巨大份額。我們的市場。在整個穩定的投資組合中都是如此，在開發管道中也是如此。因此，今年的保留率較低，正如艾略特在他關於兩次大規模遷出的言論中所強調的那樣。這自然會降低保留率，我們需要透過租賃來彌補。

Okay. And maybe on the G&A front, I realize with John's retirement and Angela coming in, it's not a one-for-one on the dollar side. So there is cost savings. I think it was a bit more than maybe we had envisioned. So can you maybe just walk through some of the moving pieces on G&A? And are there other things to possibly still look at on a go-forward basis with kind of the run rate?

好的。也許在一般行政費用方面，我意識到隨著約翰的退休和安吉拉的加入，這在美元方面並不是一對一的。因此可以節省成本。我認為這比我們想像的要多一些。那麼可以簡單介紹一下《G&A》中的一些感人片段嗎？是否還有其他事情需要在未來的基礎上考慮運行率？

Yes. So I think the easiest way to think about it is when you think about our 2023 number and take out all of the nonrecurring items tied to some of the transition costs, you get to kind of the high $70 million range. So the midpoint of our guidance in 2024 is a few million dollars below that. So we continue to look for efficiencies in all parts of the organization. There really isn't one area in particular that is getting outsized impact from this and it's just us trying to be efficient in a time where we think that's the appropriate thing to do.

是的。因此，我認為最簡單的考慮方法是，當您考慮 2023 年的數字並剔除與某些過渡成本相關的所有非經常性項目時，您將獲得 7000 萬美元的高額範圍。因此，我們 2024 年指導的中位數比該數字低數百萬美元。因此，我們繼續尋求組織各部門的效率。實際上沒有一個特別的領域受到了這一影響，只是我們在我們認為適當的時候努力提高效率。

Yes. I mean I'll just add to that. Obviously, I'm only 2 weeks in, and I'm really still getting my arms around the organization and how it's structured and how work flows across -- across different departments and different disciplines. So I still have a lot of work to do to get up to speed. But I will say we are going to be, as Eliott just highlighted, as efficient as we possibly can be from a G&A perspective. It's not just about the absolute number in G&A, though. It's also about how every dollar of G&A we have is being allocated within the company. And we really need to make sure that all of the earlier questions about sort of what our primary objectives are for this year that we're making sure that we have all the resources we need in leasing and development and those functions of the company to meet or exceed the goals we've laid out for the year.

是的。我的意思是我會補充一下。顯然，我才剛上任兩週，但我仍然在了解組織的結構以及工作如何在不同部門和不同學科之間流動。所以我還有很多工作要做才能跟上進度。但我想說，正如艾略特剛才所強調的那樣，從一般行政費用的角度來看，我們將盡可能提高效率。不過，這不僅僅是關於一般管理費用的絕對數字。這也關係到我們每一美元的一般管理費用如何在公司內部分配。我們確實需要確保所有早期關於我們今年的主要目標是什麼的問題，我們確保我們擁有租賃和開發以及公司的這些職能所需的所有資源來滿足或超越我們今年制定的目標。

Our next question comes from Michael Griffin with Citigroup.

我們的下一個問題來自花旗集團的麥可‧格里芬。

Maybe just touching back on the leasing environment for a minute and I realize you're not going to give formal guidance kind of around the number. But do you think that the sustained recovery in leasing activity has legs? Was this more of a one-off quarter? I know you noted in the release, it was the largest leasing velocity since I think 2019, but how should we view it in terms of more sustainable from a leasing perspective?

也許只是回顧一下租賃環境，我意識到您不會就這個數字提供正式的指導。但您認為租賃活動的持續復甦有持續性嗎？這更像是一次性的季度嗎？我知道您在新聞稿中指出，這是自 2019 年以來最大的租賃速度，但從租賃的角度來看，我們應該如何看待它更具可持續性？

Michael, this is Rob. I think, again, you have to look at it, as I said earlier, it's not going to be a linear progression or straight line. What I would say that's changed from the pandemic. Because during the pandemic, companies were thinking they may not need office space, and we saw some of that. Today, companies are resolved to the fact that they need office space and so now the question is how much? And so what you're seeing is the same thing in '20, shorter-term lease extensions while companies really rationalized the return to office with their employees and the mandates that they've put in pace. So I think that it does have legs. I just am cautiously optimistic that it's -- I don't feel that it's going to be quarter-to-quarter in the same magnitude that I highlighted earlier.

邁克爾，這是羅布。我想，你必須再次審視它，正如我之前所說，它不會是線性進展或直線。我想說的是，這已經隨著大流行而改變了。因為在疫情期間，公司認為他們可能不需要辦公空間，我們看到了其中的一些情況。如今，公司已經意識到他們需要辦公空間，所以現在的問題是需要多少辦公空間？因此，你在 20 世紀 20 年代看到的是同樣的情況，短期租約延期，而公司確實合理化了員工的重返辦公室以及他們所製定的要求。所以我認為它確實有腿。我只是謹慎樂觀地認為，我認為每季的變化幅度不會像我之前強調的那樣。

Got you. that's helpful.

明白你了。這很有幫助。

(inaudible) I just said the year could end up a good year, just like '23 did. It just -- it's early in the quarter.

（聽不清楚）我只是說今年可能會是美好的一年，就像 23 年那樣。只是——現在還處於本季初。

Got you. That's helpful. And then maybe just sticking on demand that you're seeing. Rob, you talked about some of the legal demand that's really driving leasing, I think, particularly and often for the more tech-focused markets, I mean, how much do those traditional sectors have to sort of step in to fill the void of tech leasing? Or do you see some of those bigger tech firms coming back to the market and taking space?

明白你了。這很有幫助。然後也許只是堅持您所看到的需求。羅布，你談到了一些真正推動租賃的法律需求，我認為，特別是對於更注重技術的市場來說，我的意思是，這些傳統行業必須介入多少才能填補技術的空白租賃？或者您看到一些較大的科技公司重返市場並佔據一席之地？

So we'll use San Francisco and, I think, Seattle as examples. 35% of the leasing that I mentioned and 35% roughly of the demand that we see coming up is related to AI, and there's a higher proportion of that of executed leases. It's around 40% that are a combination of AI and different tech. So we see that as a trend that's really escalated because the average, for example, the average size of a tech tenant in San Francisco is -- or AI tenant was 5,000 feet in the beginning of Q1 '23. It's now up to 15,000 feet, and that is taking out those large AI leases that I mentioned.

因此，我們將使用舊金山和西雅圖作為例子。我提到的 35% 的租賃以及我們看到的大約 35% 的需求與人工智慧相關，並且已執行的租賃比例更高。大約 40% 是人工智慧和不同技術的結合。因此，我們認為這種趨勢確實在升級，因為在 23 年第一季初，舊金山的科技租戶或人工智慧租戶的平均規模為 5,000 英尺。現在高度已達到 15,000 英尺，這已經消除了我提到的那些大型人工智慧租約。

So I think that you have about 35% of the transaction volume happening in San Francisco and roughly in Seattle being from tech, another 35% is from financial services, law firms, et cetera, professional services.

因此，我認為舊金山和西雅圖大約有 35% 的交易量來自科技業，另外 35% 來自金融服務、律師事務所等專業服務。

Our next question comes from Blaine Heck with Wells Fargo.

我們的下一個問題來自富國銀行的 Blaine Heck。

I was hoping you guys could give us an update on the mark-to-market in each of your markets and whether you've seen any change in that metric recently, especially in Los Angeles, where you guys have a pretty large proportion of your expirations this year?

我希望你們能給我們提供每個市場的按市值計價的最新信息，以及你們最近是否看到該指標有任何變化，特別是在洛杉磯，你們在那裡擁有相當大的比例今年過期了？

Blaine, so plus or minus, across the portfolio, we're about 5% below market. And -- the only region that is sort of outsized relative to the others is Austin where we're in the double digits, call it 20-ish percent below market. The others are kind of around that plus or minus 5%. L.A. specifically, it's about flat.

Blaine，所以在整個投資組合中，無論正負，我們都比市場價格低約 5%。而且，唯一比其他地區規模更大的地區是奧斯汀，我們的銷售額為兩位數，比市場低 20% 左右。其他的都在正負5%左右。具體來說，洛杉磯的情況基本上持平。

Great. Second question, can you talk about the tenant or tenants that were moved to cash accounting? Just a little bit more color on those specific situations and what drove that shift and maybe the outlook for that tenant or those tenants?

偉大的。第二個問題，您能談談轉為現金會計的租戶嗎？只是對這些具體情況以及推動這種轉變的因素以及該租戶或這些租戶的前景有更多的了解嗎？

Yes. So it was, as we said, predominantly one tenant in the Bay Area. We do an analysis and evaluation every single quarter on the collectibility of future rents. And in this instance, we deemed it was appropriate to convert them to a cash basis. I will say they are current on their rent. And so that's how we kind of came to the conclusion that we came to.

是的。因此，正如我們所說，主要是灣區的一個租戶。我們每季都會對未來租金的可收回性進行分析和評估。在這種情況下，我們認為將它們轉換為現金基礎是合適的。我會說他們正在支付租金。這就是我們得出的結論的方式。

Okay. And prospects for retaining them? Any color you can give there?

好的。留住他們的前景如何？你能給那裡什麼顏色嗎？

Our expectation is that they're going to continue to pay rent in 2024.

我們的預期是他們將在 2024 年繼續支付租金。

All right. That's helpful. Last question for me. Can you guys just give an update and maybe Angela can chime in on your thoughts on share repurchases just given where the stock is trading and whether those might be an attractive alternative use of funds as you guys remain on the sidelines with respect to acquisitions and additional development?

好的。這很有幫助。對我來說最後一個問題。你們能否提供最新情況，也許安吉拉可以插話一下你們對股票回購的想法，只要考慮到股票的交易地點，以及這些是否可能是一種有吸引力的資金替代用途，因為你們對收購和額外的交易仍持觀望態度發展？

Yes. Thanks. I'll take a crack at it, and Eliott can certainly jump in here.

是的。謝謝。我會嘗試一下，艾略特當然可以加入這裡。

But we're going to look at everything and the full sort of menu of opportunities available to us from a capital allocation perspective, buybacks are certainly one of those alternatives. But buybacks will have to compete for capital with all of the other investment opportunities we have today, either embedded in the portfolio or the opportunities we think are going to emerge over the next couple of years.

但我們將從資本配置的角度審視一切以及我們可用的全部機會，回購無疑是其中之一。但回購必須與我們今天擁有的所有其他投資機會爭奪資本，無論是嵌入投資組合還是我們認為未來幾年將出現的機會。

I'd also just underscore, obviously, we've got tremendous liquidity like we've hit on a few times, so we've got lots of capacity to be able to allocate capital over the next few years, I think, in a smart way. But we're also always going to do that, whether it's buybacks or whether it's development or whether it's acquisitions we see in the market in a way that protects the balance sheet.

我還想強調，顯然，我們擁有巨大的流動性，就像我們幾次遇到的那樣，因此我認為，我們有足夠的能力在未來幾年內分配資本聰明的方式。但我們也總是會這樣做，無論是回購、開發或我們在市場上看到的以保護資產負債表的方式進行的收購。

Our next question comes from John Kim with BMO.

我們的下一個問題來自 BMO 的 John Kim。

Congratulations, Angela. My first question is on KOP 2. Any commentary you could provide on the additional amenities and parking space that you're adding to the property? And also just the impact of higher cost and I guess the softer market, new supply, what that will have on your development yields?

恭喜你，安琪拉。我的第一個問題是關於 KOP 2 的。對於您要添加到酒店的額外便利設施和停車位，您有何評論？還有成本上升的影響，我猜市場疲軟，新供應，這會對您的開發收益產生什麼影響？

Yes. John, this is Justin. The schedule for the project was affected by utilities that ran through the center of the project. If you can imagine pipes and conduits, full of gas, electric, power and telephone. They all had to be relocated, including the reconstruction of the street before we could get to the project. And the utility companies are notoriously slow at the best of times. And despite scheduling for their work plus contingency, they took far longer. So what the net effect is, is that the work that went on top or was scheduled to go on top of the utilities had to be delayed. So it meant the corner of the parking structure couldn't start exactly as we had scheduled and the amenities took longer. So the net effect is another 6 months.

是的。約翰，這是賈斯汀。此專案的進度受到貫穿專案中心的公用設施的影響。如果你能想像充滿天然氣、電力、電力和電話的管道和管道。他們都必須搬遷，包括重建街道，然後我們才能開始專案。眾所周知，公用事業公司即使在最好的情況下也行動緩慢。儘管他們的工作安排加上意外事件，但他們花費的時間卻要長得多。因此，最終的影響是，在公用事業之上進行的或計劃在公用事業之上進行的工作不得不推遲。因此，這意味著停車場的一角無法完全按照我們計劃的那樣啟動，並且設施需要更長的時間。所以淨效應是另外 6 個月。

Right. I'll just jump in here. I'd say I toured the project last week with Justin and Rob and the rest of the team, and I just want to echo everything Justin said in his prepared remarks. I really think this is an outstanding product with unparalleled amenities. And I am really excited about the long-term prospects, not only for Phase 2, but for potential future phases at KOP as well.

正確的。我就跳到這裡。我想說，上週我與賈斯汀、羅布以及團隊其他成員一起參觀了該項目，我只想回應賈斯汀在他準備好的演講中所說的一切。我真的認為這是一款出色的產品，擁有無與倫比的便利設施。我對長期前景感到非常興奮，不僅是第二階段，還有 KOP 未來可能的階段。

From a leasing standpoint, we obviously have work to do there. But I would just underscore, I think the biggest piece of feedback we've received from tenants that have requirements in the market today. It's just that our project isn't ready yet. And many of the tenants looking and taking space right now are looking to take space in the very near term. So I think our product is resonating with the demand that's in the market, we just need to finish construction, but I'm hopeful we'll have leasing progress on KOP 2 as we move through this year.

從租賃的角度來看，我們顯然還有很多工作要做。但我想強調的是，我認為我們從當今市場上有要求的租戶那裡收到了最大的回饋。只是我們的專案還沒準備好。許多現在尋找並佔用空間的租戶都希望在短期內佔用空間。因此，我認為我們的產品與市場需求產生了共鳴，我們只需要完成施工即可，但我希望今年 KOP 2 的租賃工作能夠取得進展。

Timing wise, do you think the leasing will be -- something will be announced this year?

從時間上來說，您認為今年會宣布租賃事宜嗎？

We're going to work really hard, yes. Everybody is focused on it.

我們會非常努力地工作，是的。每個人都專注於它。

Okay. My second question is how we should think about NOI margins going forward? In the fourth quarter, it ended at 68.2%. There was what we thought was an unexpected decline in property taxes. I'm not sure if that's recurring, but also with your guidance of 400 basis point decline in occupancy, how should we think about margins in 2024?

好的。我的第二個問題是我們應該如何考慮未來的 NOI 利潤率？第四季收在68.2%。我們認為財產稅出現了意外下降。我不確定這種情況是否會重複出現，但根據您對入住率下降 400 個基點的指導，我們應該如何考慮 2024 年的利潤率？

Yes. So there are 2 parts. This is Eliott, John. So the property tax that you referenced was a reimbursement -- a refund that we got on real estate taxes, which -- most of which gets passed through. So the net impact to us was not meaningful in the quarter, which is why we did not call it out. It obviously does impact the margins, as you mentioned. I think the right way to think about our margins going forward is if you look at the 2023 margins and then adjust for the fact that we're going to have lower occupancy, as our occupancy gets lower, that negatively impacts our margins.

是的。所以有 2 個部分。這是艾略特，約翰。因此，您提到的財產稅是一種報銷——我們從房地產稅中獲得的退款，其中大部分都得到了轉嫁。因此，本季對我們的淨影響沒有意義，這就是我們沒有指出這一點的原因。正如您所提到的，這顯然確實會影響利潤率。我認為考慮我們未來利潤率的正確方法是，看看2023 年的利潤率，然後根據我們的入住率將下降的事實進行調整，因為我們的入住率下降，這會對我們的利潤率產生負面影響。

The next question comes from Dylan Burzinski with Green Street Advisors.

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

I guess, just wanted to touch on sort of expectations for net effective rent growth or potential further decline in net effective rents as we think about 2024?

我想，只是想談談我們對 2024 年淨有效租金成長或淨有效租金可能進一步下降的預期？

Dylan, are you talking about Kilroy specific or market specific? Because I think it's hard to tell every transaction is going to be different.

Dylan，您是在談論特定於基爾羅伊的產品還是特定於市場的產品？因為我認為很難說每筆交易都會有所不同。

Yes, maybe just market level, broad across the footprint, right? Are you still expecting, given where market occupancies are, further degradation in (inaudible) further pressure on concessions or maybe we start to see face rents finally start to trickle down?

是的，也許只是市場層面，廣泛的足跡，對吧？考慮到市場佔有率，您是否仍預期（聽不清楚）進一步減讓壓力會進一步惡化，或者我們可能會開始看到面租最終開始下降？

Yes. I would say that, again, if you tier the market and really look at what the premium space is in almost every market, that space is what's commanding a premium. And so in San Francisco, for example, net effective rents are up substantially from where they were in 2019. Another way to look at it is of the -- of the vacancy that's in the market like Seattle, over 35% of that is in buildings that are 20 years or older. And so newer construction, including the Pokemon deal that I mentioned are commanding premium rents. So it's just -- it's just going to be a function of the transaction, the credit of the tenant, and it's also going to be a function of the market that it's in and where that market is at that given time.

是的。我想說，如果你對市場進行分層，並真正了解幾乎每個市場的溢價空間，你會發現該空間就是溢價空間。以舊金山為例，淨有效租金較 2019 年大幅上漲。另一種看待這個問題的方式是，西雅圖等市場的空置率超過 35%已有 20 年或以上歷史的建築物。因此，包括我提到的寶可夢交易在內的新建築正在收取高額租金。所以它只是——它只是交易的函數，租戶的信用，它也將是它所在的市場以及該市場在特定時間的位置的函數。

Yes, I think that's -- I think Rob is really hitting on the right point here, which is, I sort of referred to it as creeping functional obsolescence in my prepared remarks, but you've heard it referred to by this company and others over time as a flight to quality, winners and losers, the haves and have nots. You're really going to see that bifurcation continue in a pretty meaningful and significant way. So I'd just caution against looking at the market overall data in any of these markets as a read-through to the quality portfolios like Kilroy.

是的，我認為——我認為羅佈在這裡確實擊中了正確的觀點，也就是說，我在我準備好的發言中將其稱為“緩慢的功能過時”，但你已經聽過這家公司和其他公司提到它隨著時間的推移，隨著品質的變化，贏家和輸家，富人和窮人。你真的會看到這種分歧以一種非常有意義和重要的方式繼續下去。因此，我只是警告不要將這些市場的整體數據作為對基爾羅伊等優質投資組合的通讀。

And did I hear you right, you're saying that for Kilroy's quality portfolio, net effective rent today are higher than they were pre-COVID?

我沒聽錯吧，你是說對於基爾羅伊的優質投資組合來說，今天的淨有效租金高於新冠疫情之前的水平？

No. I think...

不，我認為...

Even given the significant rise in concessions?

即使優惠大幅增加？

No, I said that in a city like San Francisco, the premium tier space that's left has a lower availability rate, but it's also commanding higher rents than pre-pandemic.

不，我說過，在舊金山這樣的城市，剩餘的優質空間的可用率較低，但其租金也比大流行前更高。

Got it.

知道了。

General (inaudible).

一般（聽不清楚）。

That's helpful. I guess just sort of pivoting over to comments regarding one of the earlier questions just on tenants realizing they need space, but trying to figure out how much space they need. In your discussions with tenants as they're touring or signing leases. I mean any sense for sort of what density you're looking at today versus pre-COVID?

這很有幫助。我想只是轉向對早期問題之一的評論，只是租戶意識到他們需要空間，但試圖弄清楚他們需要多少空間。在租戶遊覽或簽署租約時與他們進行討論。我的意思是，你現在看到的密度與新冠疫情之前的密度相比有什麼意義嗎？

Yes, it's less dense than pre-COVID. I mean part of what employers -- probably the most critical thing that employers are trying to do is create a space that's really comfortable and attractive to people coming back to work. So that you're seeing a lot more collaborative space, open space and that sort of thing.

是的，它的密度比新冠疫情之前還要低。我的意思是雇主所做的一部分——可能雇主正在努力做的最重要的事情是創造一個對重返工作崗位的人來說真正舒適和有吸引力的空間。所以你會看到更多的協作空間、開放空間等等。

So we use -- we still use a threshold of about 1 to 200, 1 to 250. Getting significantly below that is pretty uncomfortable. And you're also seeing it sort of -- you're spread out in more space. So it's sort of an interesting trend to watch. But as an example, you're not seeing hoteling being very well received in almost any industry. And that was always sort of seen as a way to use less space and put more people in space.

所以我們仍然使用大約 1 到 200、1 到 250 的閾值。明顯低於這個閾值是非常不舒服的。你也會看到——你分散在更多的空間。所以這是一個值得關注的有趣趨勢。但舉個例子，你並沒有看到酒店業在幾乎所有行業都受到很好的歡迎。這總是被視為一種使用更少空間並將更多人安置在太空中的方法。

Yes. And that's really what I was hitting on in some of my comments about that space doesn't have to just be efficient anymore. It really has to be effective at driving productivity. People need to be able to be as productive in the office as they are at home from a quiet perspective, being able to put their head down and work. And so I think that's driving some of the trends that Rob really highlighted.

是的。這確實是我在一些評論中所強調的，即空間不再需要變得有效率。它確實必須有效地提高生產力。人們需要能夠在辦公室裡像在家一樣有效率地安靜地工作，能夠低頭工作。因此，我認為這正在推動 Rob 真正強調的一些趨勢。

The next question comes from Upal Rana with KeyCorp.

下一個問題來自 KeyCorp 的 Upal Rana。

Congrats on the new role, Angela. Eliott, thanks for providing the color on the office trajectory for this year. Do you feel that occupancy could bottom out this year and begin to grow again in '25? You only have about 4% expirations next year and you don't have any of your top tenants expiring next year either. So I want to get a better sense on that as well.

恭喜你獲得新角色，安琪拉。艾略特，感謝您為今年的辦公室軌跡提供了色彩。您是否認為入住率可能會在今年觸底並在 25 年再次開始成長？明年只有大約 4% 的租戶到期，而且您的頂級租戶也沒有任何明年到期。所以我也想對此有更好的認識。

Yes. So I appreciate the question, and we're certainly not prepared to talk about 2025 guidance today. That said, I think that you hit on a good point that the backdrop is better in 2025 than it is in 2024 and as Angela mentioned, this is top priority for the company, leasing space and doing everything we can to ensure that the trajectory is a good one.

是的。所以我很欣賞這個問題，我們今天當然不准備談論 2025 年指導。也就是說，我認為你說得很好，2025 年的背景比 2024 年更好，正如安吉拉所提到的，這是公司的首要任務，租賃空間並盡一切努力確保發展軌跡一個很好的。

Okay. Got it. And then wanted to get a little update on Indeed Towers. It seems to be about 20% left to lease up there and I wanted to get a sense on what the leasing pipeline looks like for that project.

好的。知道了。然後想了解 Indeed Towers 的一些最新情況。那裡似乎還剩下 20% 左右可供出租，我想了解一下該項目的租賃管道是什​​麼樣的。

Sure. In Q3 and Q4, we talked about how the summer, particularly when we were hitting temperatures of 115 or so on a daily basis, really curtailed touring activity, and it's really picked up a lot since the holidays. So we have a pipeline we feel good about. And as I mentioned earlier, to one of the questions, we're seeing sort of the same tenant mix we've seen before, which are really high-end professional services, law firms, financial services. We're seeing some tech. So the market has really sort of turned the corner in terms of at least our activity and people see it as sort of a dwindling asset, meaning we don't have space. Ultimately, we don't have a lot of space left. So back to flight to quality.

當然。在第三季度和第四季度，我們討論了夏季，特別是當我們每天氣溫達到 115 度左右時，旅遊活動確實減少了，而且自假期以來旅遊活動確實增加了很多。所以我們有一個讓我們感覺良好的管道。正如我之前提到的，對於其中一個問題，我們看到的租戶組合與我們之前看到的相同，都是高端專業服務、律師事務所、金融服務。我們看到了一些技術。因此，至少就我們的活動而言，市場確實已經發生了轉變，人們將其視為一種不斷減少的資產，這意味著我們沒有空間。最終，我們已經沒有太多空間了。那麼回到飛行質量。

Our next question comes from Caitlin Burrows with Goldman Sachs.

我們的下一個問題來自高盛的凱特琳·伯羅斯。

Congrats again, Angela, on the new role at the new company. Maybe just to follow up -- maybe just to follow up on the earlier comments that the West 8th activity was moving forward. Could you talk about leasing activity more broadly in Seattle and then specifically how tenant interest has trended at West 8th and kind of whether the improvements you planned at the property are completed by now and how they're being received?

再次恭喜安吉拉在新公司擔任新職務。也許只是為了跟進——也許只是為了跟進之前關於西八號活動正在推進的評論。您能否更廣泛地談談西雅圖的租賃活動，然後具體談談 West 8th 的租戶興趣趨勢如何，以及您計劃對該物業進行的改進現在是否已完成以及收到的情況如何？

Sure, Caitlin. This is Rob again. Let me just talk about -- I'll split our 2 markets. So Bellevue activity for us is quite strong. Net rents have held very well in that market despite sublease space from some large tech users. And as I mentioned, this Pokemon and TikTok deals are meaningful for that market. The central CBD of Seattle is a little bit slower. We don't have any assets in that submarket. South Lake Union, where we do have assets and Fremont, specifically, we have fairly decent activity. So -- and we're seeing a mix, but I'd say predominantly, it's tech but they're also professional services looking in the market.

當然，凱特琳。這又是羅布。讓我談談－我將分割我們的兩個市場。因此，貝爾維尤的活動對我們來說相當強勁。儘管一些大型科技用戶轉租了空間，但該市場的淨租金仍然保持良好。正如我所提到的，Pokemon 和 TikTok 的交易對該市場來說意義重大。西雅圖中央商務區稍微慢一點。我們在該子市場沒有任何資產。南湖聯盟，我們在那裡確實擁有資產，而弗里蒙特，具體來說，我們有相當不錯的活動。因此，我們看到了一種混合，但我想說，主要是技術，但它們也是市場上尋找的專業服務。

West 8th has just commanded a lot of attention based on the amenities and the mix of amenities that we're refreshing and upgrading in the facility. And as you know and you've heard us talk about, it's all about flight to quality and amenities for tenants. And so we have childcare on-site. We're doing a tenant lounge. We have an outdoor deck that's one of the largest in the city. And all of this -- all the amenities there are really thought through from a tenant perspective, they're not left over space somewhere in the building that we put a gym in, for example. So that is translating into tour activity and paper being exchanged with tenants right now.

由於我們正在更新和升級設施的設施和設施組合，West 8th 剛剛引起了很多關注。如您所知，並且您已經聽我們談論過，這一切都與為租戶提供優質和便利設施有關。所以我們有現場托兒所。我們正在做一個租戶休息室。我們有一個室外露台，是城裡最大的露台之一。所有這一切——那裡的所有便利設施都是從租戶的角度真正考慮到的，例如，它們不會在我們放置健身房的建築物中的某個地方留下空間。因此，這正在轉化為旅遊活動以及現在與租戶交換的文件。

Yes. I toured West 8th my first week at the company. And I would say I'm just really excited about the plans that have been developed for that asset. We're not complete with the redevelopment work yet there or the upgrades, but I think it is certainly going to resonate very, very well, and I look forward to walking through with many of you once it's complete.

是的。我在公司的第一周就參觀了 West 8th。我想說，我對為該資產制定的計劃感到非常興奮。我們還沒有完成重建工作或升級工作，但我認為它肯定會引起非常非常好的共鳴，我期待在完成後與你們中的許多人一起完成。

Got it. And then maybe, Eliott, you mentioned earlier how the 2 large lease expirations for '24 are now both expected to move out and Kilroy gets the majority of the space back. So just wondering if you could clarify if you're getting all of the space back or not? And then any details you could share maybe for kind of why they're leaving, where they're going or what you think those decisions could suggest bigger picture for office needs?

知道了。艾略特，你之前提到過，24 年的兩個大型租約到期現在預計都會搬出，而基爾羅伊則收回了大部分空間。所以只是想知道您是否可以澄清您是否收回了所有空間？然後你可以分享一些細節，例如他們離開的原因、他們要去哪裡，或是你認為這些決定可以為辦公室需求提供更大的前景？

Yes. There is a small portion of the space where we've backfilled -- we've backfilled some of it to another tenant. So that's why it is not the entirety of the space. And then Rob, if you want...

是的。我們回填了一小部分空間——我們已將其中一些回填給另一個租戶。這就是為什麼它不是整個空間的原因。然後羅布，如果你願意的話…

Yes. Some of it's consolidation. And some of it is -- a lot of companies are trying to go through a pretty massive cultural change in terms of revamping themselves for the -- for going forward. And so sometimes moving to a new location and starting fresh is easier than trying to do that in-house. So...

是的。其中一些是整合。其中一些是——許多公司正在嘗試進行相當大規模的文化變革，以自我改造——以求前進。因此，有時搬到新地點並重新開始比嘗試在內部進行更容易。所以...

Our next question comes from P Abramowitz with Jefferies.

我們的下一個問題來自傑弗里斯的 P Abramowitz。

Just one of the emerging themes from the industry and some of your peers this quarter is taking advantage of potentially partners or lenders that kind of are looking to trim office exposure right now. So could you talk about, generally, are you seeing any signs of that in your markets? In terms of deals that are being marketed or conversations you're having and how that could potentially play into your plans for capital allocation?

本季該行業和一些同行的新興主題之一就是利用潛在的合作夥伴或貸方，這些合作夥伴或貸方目前正在尋求削減辦公室風險。那麼您能否談談您在您的市場中是否看到了任何這種跡象？就正在行銷的交易或正在進行的對話而言，這可能如何影響您的資本配置計劃？

Yes, sure. So as we've kind of surveyed the market, I think of the 2 dynamics you touched on, the lender 1 is what we've seen a little bit more of. We don't have a lot of partners. We have 1 -- we have 2 partners. We're very happy with our relationship with both of those partners.

是的，當然。因此，當我們對市場進行調查時，我想到了您提到的 2 個動態，貸方 1 是我們看到的更多的內容。我們沒有很多合作夥伴。我們有 1 - 我們有 2 個合作夥伴。我們對與這兩個合作夥伴的關係感到非常滿意。

So on the lender side, there have been a few instances of lender facilitated sales. I'd say they're more the exception than the rule from what we've seen so far and for us, as Angela mentioned, the focus on quality is of utmost importance. And in these types of situations, the quality has not been something that has been -- that warrants additional consideration for us. And so we have not spent a material amount of time on those deals.

所以在貸款方方面，也出現過一些貸款方促成銷售的例子。我想說，從我們迄今為止所看到的情況來看，它們更多的是例外，而不是規則，對我們來說，正如安吉拉所提到的，對品質的關注是最重要的。在這些類型的情況下，品質並不值得我們額外考慮。因此，我們沒有在這些交易上花費大量時間。

Got it. And then just on the tenant side, I think you have a lease with 23andMe at Oyster Point. They've been in the news for just some issues there and potentially pulling back on the drug development side of their business. Are they in your watch list? And I guess, just generally, could you talk about just potentially the tenant watch list for life science in general?

知道了。然後就租戶而言，我認為您與 23andMe 在 Oyster Point 簽訂了租約。他們只是因為一些問題而出現在新聞中，並可能會撤回其藥物開發的業務。他們在您的觀察名單中嗎？我想，一般來說，您能否談談生命科學領域潛在的租戶觀察名單？

Yes, I'm sure you can appreciate. We can't talk about what tenants are or are not on the watch list. So what we do is we continuously evaluate both tenants' credit history, how current they are on rents, what the trajectory of their business looks like and making assessment on what the appropriate accounting treatment is for every tenant. It's a very robust process, and we go through it every single quarter.

是的，我相信你會欣賞的。我們不能談論哪些租戶在觀察名單上，哪些不在觀察名單上。因此，我們所做的就是不斷評估兩個租戶的信用記錄、他們的租金狀況、他們的業務軌跡，並評估每個租戶的適當會計處理方式。這是一個非常穩健的過程，我們每季都會經歷一次。

We have seen a big picture. We've seen a slight tick up in the watch list. We're kind of in the low to mid-single digits as a percentage of ABR. The -- by and large, the quantity of tenants are more retail-related that make up the majority of the watch list, but there are certainly some office and life science tenants on there as well.

我們看到了一幅大圖。我們看到觀察名單略有增加。我們在 ABR 中所佔的百分比處於中低個位數。總的來說，租戶的數量與零售相關，佔觀察名單的大部分，但當然也有一些辦公室和生命科學租戶。

The next question comes from Michael Carroll with RBC.

下一個問題來自加拿大皇家銀行的麥可卡羅爾。

Yes. And I just wanted to congratulate Angela on the new job. And I believe that you answered this earlier, but the Kilroy Oyster Point construction delay, is that prohibiting tenants from wanting to take down space? Or can tenants still lease space in the property, is just that they'll be without the parking garage and some of the amenities in the meantime?

是的。我只是想祝賀安吉拉獲得新工作。我相信你之前已經回答過這個問題，但是基爾羅伊牡蠣角施工延遲，是否會阻止租戶想要佔用空間？或者租戶仍然可以租用房產中的空間嗎？只是他們同時沒有停車場和一些便利設施？

This is Justin. You can appreciate that Oyster Point is a big project. It's 900,000 square feet. There's a lot of details that need to come together before a building is ready, including the amenities, the garage and other site work that has been delayed. So net-net, we think and we are very confident that we can deliver the project within the revised time line and the first building will be delivered late 2024, stabilizing '25.

這是賈斯汀。你可以體會到 Oyster Point 是一個大專案。面積為 90 萬平方英尺。在建築物準備就緒之前，需要整合許多細節，包括設施、車庫和其他已推遲的現場工作。因此，我們認為並且非常有信心能夠在修改後的時間表內交付該項目，第一座建築將於 2024 年末交付，從而穩定「25」。

Michael, the comment also is that for demand that's in the market where a lease has expired or is expiring, that is if somebody needs space right away, we're not ready -- we're not able to have them physically occupy it. But that is changing rapidly. We're having our lab space that we're building in Building F will be ready this spring and that has created quite a bit. That's one of the reasons our activity has remained steady. So yes, we could sign leases and will sign leases. And that's a natural -- what Justin is talking about a natural occurrence and development and tenants and landlords work together in order to get the occupancy date pinned down.

邁克爾，評論還指出，對於租約已到期或即將到期的市場需求，即如果有人立即需要空間，我們還沒有準備好 - 我們無法讓他們實際佔用它。但這種情況正在迅速改變。我們在 F 樓建造的實驗室空間將於今年春天準備就緒，這已經創造了相當多的成果。這是我們的活動保持穩定的原因之一。所以，是的，我們可以簽署租約，並且將會簽署租約。這是很自然的——賈斯汀所說的自然發生和發展，租戶和房東共同努力確定入住日期。

Okay. Then that's helpful. And then I guess, what type of demand are you seeing at Oyster Point? I guess what's the breakout between life science and potentially tech demand? And are you seeing any AI type demand that possibly veering away from the city proper to South San Francisco? Or is that type of demand just kind of still staying in the city?

好的。那麼這很有幫助。然後我想，您在 Oyster Point 看到什麼類型的需求？我想生命科學和潛在技術需求之間的突破是什麼？您是否看到任何人工智慧類型的需求可能從市區轉向南舊金山？或者說這種需求仍然停留在城市？

So again, these buildings are purpose-built life science. They do work for tech. We've seen a smattering of interest from tech since Stripe located there. One thing I'd keep in mind is that AI and life science are actually coming together quite rapidly because AI is able to help life science producers process massive amounts of data and also simulate drug trials and speed things to market. So we're really expecting that there's going to be from big pharma as well as start-ups, a lot of AI involved in the life science industry. But we're not -- we haven't seen the people leaving San Francisco, for example, to come to Oyster Point.

再說一次，這些建築是專門為生命科學建造的。他們確實為科技工作。自從 Stripe 定居以來，我們已經看到了科技界的一些興趣。我要記住的一件事是，人工智慧和生命科學實際上正在快速融合，因為人工智慧能夠幫助生命科學生產者處理大量數據，還可以模擬藥物試驗並加快產品上市速度。因此，我們確實希望大型製藥公司和新創公司能夠將大量人工智慧技術引入生命科學產業。但我們沒有——例如，我們沒有看到人們離開舊金山來到牡蠣角。

Our next question comes from Vikram Malhotra with Mizuho.

我們的下一個問題來自 Mizuho 的 Vikram Malhotra。

Just I guess, Eliott, just to go back, I know you're not giving us kind of anticipated leasing volumes through the year. But I'm just trying to -- for both modeling and just to understand kind of the economics over a 12-, 18-month period, should we think about the gap between occupancy and the lease rate to be similar to sort of historical averages? Or perhaps what you see today, is it likely to be wider? Can you just give us a qualitative sense?

我想，艾略特，我知道你沒有給我們全年預期的租賃量。但我只是想——為了建模和理解 12 個月、18 個月期間的經濟狀況，我們是否應該考慮入住率和租賃率之間的差距與歷史平均水平相似？或者也許你今天看到的情況可能會更廣泛？您能給我們一個定性的感覺嗎？

Yes. It's probably similar today. I think it sort of depends, certainly similar today as it has been the last few years. If we went back to 2018, 2019, it was probably a little bit wider then. But I think relative to the last few years, it's been similar. And generally, it will take, call it, 4 to 6 quarters for that to totally flow through occupancy.

是的。今天大概也是類似的情況。我認為這有點取決於，今天和過去幾年肯定相似。如果我們回到2018年、2019年，那時的範圍可能會更寬一些。但我認為相對於過去幾年來說，情況是相似的。一般來說，需要 4 到 6 個季度才能完全佔用。

Got it. So through the year, you expect the gap to be over a longer-term average, that gap to be similar like 2018 -- 2017, 2018. Okay. That makes sense.

知道了。因此，全年來看，您預計差距將超過長期平均水平，差距與 2018 年、2017 年、2018 年類似。好的。這就說得通了。

On Oyster Point, I just wanted to clarify, when you said there were higher costs, I think it was like $60 million, $70 million. I'm just -- if you could just give us a bit more color, what are those costs related to? And then just on that point, any changes in expectations around rents you might get at the property?

在 Oyster Point，我只是想澄清一下，當你說成本更高時，我認為大概是 6000 萬美元、7000 萬美元。我只是 - 如果您能給我們更多的信息，這些成本與什麼相關？那麼就這一點而言，您對該房產的租金預期有任何變化嗎？

So just to clarify, which Justin mentioned in his prepared remarks, the change in cost was tied to higher carry. So as we have a longer period until we deliver, we have to carry the property longer, interest, operating expenses, et cetera, and that is the entirety of the delta. And then in terms of rents...

因此，為了澄清這一點，賈斯汀在他準備好的發言中提到，成本的變化與更高的套利有關。因此，由於我們距離交付的時間更長，我們必須持有更長的時間，包括利息、營運費用等等，這就是整個三角洲。然後在租金方面...

This is Rob. Rents have maintained very well year-over-year, both from our competitors as well as -- asking rates as well as our asking rates. So again, it's hard to pinpoint because each transaction is going to have a different set of components.

這是羅布。租金比去年同期保持良好，無論是來自我們的競爭對手還是我們的要價。同樣，很難精確定位，因為每筆交易都會有一組不同的組件。

Okay. Great. And then just last one, if I may, Angela congrats on the role. Lot of exciting things going on in office. But I'm just curious at the outset, given your experience in retail, any broad similarities or strategies that lend itself well to kind of the office space from your perspective?

好的。偉大的。最後，如果可以的話，安吉拉祝賀你獲得這個角色。辦公室裡發生了很多令人興奮的事情。但我一開始就很好奇，考慮到您在零售業的經驗，從您的角度來看，有什麼廣泛的相似之處或策略適合適合辦公空間嗎？

Yes. I mean, obviously, there are lots of similarities and lots of big differences. But just to call out a few things. I think I spent some time in my prepared remarks talking about the way this company has sort of institutionalized the tenant-relationship piece of the business. And when you think about office, particularly in a portfolio like Kilroy's versus retail, the ability to work with the same tenants that are large space users over big portfolios in different markets and really sort of create a relationship where you can make connections between that tenant and the landlords, not just in the leasing function and not just in property management after they've taken occupancy, but in construction and in legal to make the lease execution process move faster and all these things is very similar.

是的。我的意思是，顯然，兩者有很多相似之處，也有很多很大的差異。但只是想指出一些事情。我想我在準備好的演講中花了一些時間談論這家公司如何將租戶關係部分制度化。當您考慮辦公室時，尤其是在像Kilroy's 與零售這樣的投資組合中，能夠與相同的租戶合作，這些租戶是大空間用戶，而不是不同市場的大型投資組合，並且真正建立一種關係，您可以在該租戶之間建立聯繫對於房東來說，不僅在租賃職能方面，也不只是在入住後的物業管理方面，而且在建築和法律方面，以使租賃執行過程更快，所有這些事情都非常相似。

And I think I'm very pleased to see how well Kilroy has done that in the past. I think that's a big similarity between types of office leasing and types of retail leasing.

我想我很高興看到基爾羅伊過去在這方面做得有多好。我認為辦公室租賃類型和零售租賃類型之間有很大相似之處。

At the end of the day, I think whether it's retail or office or really any sector, it really is all about capital allocation. And that's true, not just in acquisitions and dispositions and development and redevelopment, but just with respect to sort of basic leasing and the types of capital we invest in these tenants, whether they're tech tenants or whether the retailers or whatever it is. And so the way you make those decisions is really pretty similar across different asset categories.

歸根究底，我認為無論是零售業、辦公業或任何產業，都與資本配置有關。確實如此，不僅在收購、處置、開發和再開發方面，而且在基本租賃和我們投資於這些租戶的資本類型方面，無論他們是科技租戶還是零售商還是其他什麼。因此，在不同的資產類別中，您做出這些決策的方式實際上非常相似。

And then the only other last thing I would say is that retail landlords, over the course of the last 15 or 20 years, have been no stranger to flight to quality and increasing functional obsolescence. And so I think there are lots of lessons there in terms of how important it is to prioritize the quality of the portfolio and to be really intellectually honest about sort of what the path and the growth trajectory looks like for specific assets or specific opportunities you're seeing in the market going forward.

最後我要說的最後一件事是，在過去 15 或 20 年裡，零售業主對追求品質和日益過時的功能並不陌生。因此，我認為其中有很多教訓，說明優先考慮投資組合的品質以及在理智上誠實地了解特定資產或特定機會的路徑和成長軌跡是多麼重要。我們看到了市場的未來。

The next question comes from Omo Okusanya with Deutsche Bank.

下一個問題來自德意志銀行的 Omo Okusanya。

First of all, Angela, congratulations. Very excited to see you upwards and onwards. Question just around guidance and FAD guidance, in particular, for anyone who wants to kind of help us think through what that could look like this year, specifically also around things like second-generation TI. And just kind of how do we kind of think about -- you've laid a pretty good groundwork for FFO, but for FAD? How do we kind of think through some of that?

首先，安琪拉，恭喜你。很高興看到你向上和向前邁進。關於指導和 FAD 指導的問題，特別是對於那些想要幫助我們思考今年可能會是什麼樣子的人，特別是圍繞第二代 TI 等問題。我們如何思考——你已經為 FFO 奠定了很好的基礎，但對於 FAD 呢？我們如何思考其中的一些？

Yes. So we touched on straight-line rent in our prepared remarks, which will be a big delta from the prior year. In terms of our FAS 141, I think the 4Q run rate is a good run rate to use, plus or minus. And then the big question is CapEx. I think that we've been sort of in that low double digits as a percentage of NOI in the last few years.

是的。因此，我們在準備好的發言中談到了直線租金，這將與前一年相比出現很大的變化。就我們的 FAS 141 而言，我認為 4Q 運行率是一個很好的運行率，無論是加減。然後最大的問題是資本支出。我認為過去幾年我們的 NOI 百分比一直處於較低的兩位數。

Our expectation is that we're higher than that this year. And we think that, that's the function of the leasing that we have done in the fourth quarter and our anticipation that there'll be more leasing to come in 2024.

我們的期望是比今年更高。我們認為，這就是我們在第四季度所做的租賃的作用，以及我們預計 2024 年將會有更多的租賃。

Okay. That's helpful. And then one more if you would indulge me. Angela, you kind of mentioned again about this idea of maintaining a high-quality portfolio, some of the lessons learned about flight to quality on the retail side, while you do not have any dispositions in your guidance for 2024, should we think -- should we be thinking about a world where there could be kind of additional dispositions in the Kilroy portfolio?

好的。這很有幫助。如果你願意的話，再來一份。安吉拉（Angela），您再次提到了維持高品質投資組合的想法，以及零售方面轉向高品質的一些經驗教訓，而您在 2024 年的指導中沒有任何部署，我們是否應該認為——我們是否應該考慮一個基爾羅伊投資組合中可能有某種額外配置的世界？

Yes. I mean I think Eliott framed it up right in his prepared remarks, which is that whether it's dispositions or acquisitions, we're going to be opportunistic on both fronts. The transaction market is very, very quiet right now. So I don't think it's prudent to bake anything into guidance. But we're going to -- I need to spend more time really evaluating the portfolio.

是的。我的意思是，我認為艾略特在他準備好的演講中正確地闡述了這一點，即無論是處置還是收購，我們都將在這兩方面都採取機會主義態度。目前交易市場非常非常平靜。因此，我認為將任何內容納入指導都是不明智的。但我們需要——我需要花更多時間來真正評估投資組合。

I think there are going to be assets we choose to sell over time because we do think that the forward growth prospects are not what we need them to be and at the standard we'd like them to be. There are also conversely going to be opportunities to sell assets that trade at amazing values as the company has done in the past that we really would look to trade because this platform, I think that's so robust, just can't add additional value to those assets.

我認為隨著時間的推移，我們將選擇出售一些資產，因為我們確實認為未來的成長前景不是我們需要的，也不是我們希望的標準。相反，也有機會出售以驚人價值交易的資產，就像該公司過去所做的那樣，我們確實希望進行交易，因為我認為這個平台非常強大，只是無法為這些資產增加額外價值資產。

So I think those 2 things kind of balance each other out over time. But as it relates to 2024, there's just not enough activity in the transaction market for us to really sort of put a pin in specific guidance on either dispositions or acquisitions.

所以我認為隨著時間的推移，這兩件事會相互平衡。但就 2024 年而言，交易市場上沒有足夠的活動讓我們真正確定有關處置或收購的具體指引。

With that, we have no further questions. I'll turn the call back to Bill for any closing remarks.

至此，我們沒有其他問題了。我會將電話轉回給比爾，讓其結束語。

Right. Well, great. Thank you, Emily, and thank you, everyone, for joining us today. We appreciate your continued interest in Kilroy Realty Corporation. Thank you.

正確的。嗯，太好了。謝謝艾米莉，也謝謝大家今天加入我們。我們感謝您對基爾羅伊房地產公司的持續關注。謝謝。

Thank you, everyone for joining us today. This concludes our call, and you may now disconnect your lines.

謝謝大家今天加入我們。我們的通話到此結束，您現在可以斷開線路了。