Orion Properties Inc (ONL) 2023 Q4 法說會逐字稿

Greetings. Welcome to Orion Office REIT’s Fourth Quarter 2023 Earnings Call. As a reminder, this conference is being recorded.

問候。歡迎參加 Orion Office REIT 2023 年第四季財報電話會議。提醒一下，本次會議正在錄音。

I would now like to turn the call over to Paul Hughes, General Counsel for Orion. Thank you. You may now begin.

現在我想將電話轉給 Orion 總法律顧問 Paul Hughes。謝謝。現在您就可以開始了。

Thank you. Good morning, everyone. Yesterday, Orion released its financial results for the quarter and year-ended December 31, 2023, filed its Form 10-K with the Securities and Exchange Commission and posted its earnings supplement to its website. These documents are available in the Investors section of the company’s website at onlreit.com.

謝謝。大家早安。昨日，Orion 公佈了截至 2023 年 12 月 31 日的季度和年度財務業績，向美國證券交易委員會提交了 10-K 表，並在其網站上發布了收益補充報告。這些文件可在公司網站 onlreit.com 的投資者部分找到。

Certain statements made during this call are not strictly historical information and constitute forward-looking statements. These statements, which include the company’s guidance estimates for calendar year 2024 are based on management’s current expectations and are subject to a number of risks that could cause actual results to differ materially from our estimates. The risks are discussed in our earnings release as well as in our Form 10-K and other SEC filings. The company undertakes no duty to update any forward-looking statements made during this call.

本次電話會議中的某些陳述並非嚴格的歷史訊息，而是前瞻性陳述。這些聲明包括公司對 2024 年曆年的指導估計，基於管理層當前的預期，並受到多種風險的影響，這些風險可能導致實際結果與我們的估計有重大差異。我們在收益報告、10-K 表格以及其他 SEC 文件中討論了這些風險。本公司不承擔更新本次電話會議中任何前瞻性陳述的義務。

Additionally, during the conference call today, we will be discussing certain non-GAAP financial measures, such as funds from operations, or FFO, and core funds from operations or core FFO. The company’s earnings release and supplement include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure. Our presentation of this information is not a substitute for the financial information presented in accordance with GAAP.

此外，在今天的電話會議中，我們將討論某些非公認會計準則財務指標，例如營運資金或 FFO，以及核心營運資金或核心 FFO。本公司的收益報告和補充報告包括這些非 GAAP 財務指標與最直接可比較的 GAAP 指標的調整表。我們提供的這些資訊不能取代依照 GAAP 提供的財務資訊。

Hosting the call today are Paul McDowell, the company’s Chief Executive Officer; and Gavin Brandon, the company’s Chief Financial Officer. And joining us for the Q&A session are Gary Landriau, our Chief Investment Officer; and Chris Day, our Chief Operating Officer.

今天主持電話會議的是公司執行長 Paul McDowell；以及公司財務長 Gavin Brandon。參加問答環節的還有我們的首席投資長 Gary Landriau；以及我們的營運長克里斯·戴 (Chris Day)。

With that, I am now going to turn the call over to Paul McDowell.

說完這些，我現在將把電話轉給保羅·麥克道爾 (Paul McDowell)。

Good morning, everyone, and thank you for joining us on Orion Office REIT’s fourth quarter 2023 earnings call. Today, I will discuss our portfolio, performance, and operations for the fourth quarter and full year 2023, as well as our progress on executing our business strategy and our general forward outlook. Following my remarks, Gavin will review our financial results and provide our 2024 outlook.

大家早安，感謝您參加 Orion Office REIT 2023 年第四季財報電話會議。今天，我將討論我們 2023 年第四季和全年的投資組合、業績和營運情況，以及我們執行業務策略和整體前瞻性的進展。在我發言之後，加文將回顧我們的財務表現並提供 2024 年的展望。

At year-end, we owned 75 properties and six unconsolidated joint venture properties comprising 8.9 million rentable square feet that were 80.4% occupied. Adjusted for properties that are currently under agreement to be sold, our occupancy rate was 87.2%. As of December 31, 2023, the properties in the portfolio are predominantly either triple or double net leased to credit worthy tenants. As a percentage of annualized base rent as of December 31, 2023, 70.6% of our tenants were investment grade.

截至年底，我們擁有 75 處房產和 6 處非合併合資房產，可出租面積達 890 萬平方英尺，入住率為 80.4%。經對目前正在協議出售的房產進行調整後，我們的入住率為 87.2%。截至 2023 年 12 月 31 日，投資組合中的物業主要以三倍或兩倍的淨租賃方式出租給信用良好的租戶。截至 2023 年 12 月 31 日，以年化基本租金的百分比計算，我們 70.6% 的租戶屬於投資等級。

The company’s strong portfolio of assets is well diversified by tenant, tenant industry and geography. Our largest tenant by annualized base rent remains the United States Government, and our two largest tenant industries are healthcare and government, representing 15.3% and 13.9% of annualized base rent, respectively. Over 35% of our annualized base rent is derived from Sunbelt markets.

該公司強大的資產組合根據租戶、租戶行業和地理進行了多樣化。以年化基本租金計算，我們最大的租戶仍然是美國政府，我們最大的兩個租戶產業是醫療保健和政府，分別佔年化基本租金的 15.3％ 和 13.9％。我們超過 35% 的年化基本租金來自陽光地帶市場。

On an annualized base rent basis, our largest markets by state are Texas at 17.2% and New Jersey and New York at 10.2% each. Our portfolio’s weighted average lease term stayed steady at four years at year-end. During the fourth quarter, we gained some traction on renewals and new leases. We entered into a 10-year early lease renewal for 90,000 square feet in Memphis, Tennessee, where the investment grade tenants lease term will now run until year-end 2034.

以年化基本租金計算，我們最大的州市場是德州，佔 17.2%，新澤西州和紐約州各佔 10.2%。我們投資組合的加權平均租賃期限在年底保持穩定，為四年。在第四季度，我們在續約和新租約方面取得了一些進展。我們與田納西州孟菲斯市簽訂了一份為期 10 年的提前租約續約協議，租期為 90,000 平方英尺，投資級租戶的租賃期限將持續到 2034 年底。

We also secured a five-year early lease renewal at a 39,000 square foot property leased to the United States Postal Service in Minneapolis, Minnesota, where the post office’s lease term will now run until April 30, 2030. We also signed a new 10-year lease for 3,000 square feet of retail space at our Covington, Kentucky property leased primarily to the United States Government.

我們還與美國郵政局簽訂了一份為期五年的提前租約續約協議，該郵局位於明尼蘇達州明尼阿波利斯的一處 39,000 平方英尺的物業的租賃期限將持續到 2030 年 4 月 30 日。我們還簽署了一份新的為期 10 年的租約，租用位於肯塔基州卡溫頓的 3,000 平方英尺的零售空間，該物業主要租賃給美國政府。

Including these leases, during the full year 2023, we entered into new leases and lease renewals for 250,000 square feet across six different properties, as well as a lease expansion with an existing tenant covering an additional 11,000 square feet and one other property. Overall, lease terms for this activity averaged 10.6 years.

包括這些租約在內，在 2023 年全年，我們在六個不同的房產中籤訂了 250,000 平方英尺的新租約和續約協議，並且與現有租戶簽訂了租約擴展協議，涉及另外 11,000 平方英尺和另一個房產。整體而言，此項活動的租賃期限平均為 10.6 年。

Shortly after year-end, we entered into two long-term lease transactions with the United States Government, a 17-year lease renewal for 9,000 square feet have one of our Eagle Pass, Texas properties and a new 15-year lease for 86,000 had a Lincoln, Nebraska property. The United States Government will be backfilling space that is currently vacant at the Lincoln property and is expected to take occupancy in the third quarter of 2025 following landlord’s build out of the premises, at which time the Lincoln property will be fully leased to two tenants.

年底後不久，我們與美國政府達成了兩項長期租賃交易，其中一項是續簽為期 17 年的位於德克薩斯州伊格爾帕斯的一處房產，面積為 9,000 平方英尺，另一項是續簽為期 15 年的位於內布拉斯加州林肯的一處房產，面積為 86,000 平方英尺。美國政府將填補林肯地產目前空置的空間，預計在房東完成建設後於 2025 年第三季投入使用，屆時林肯房地產將全部租給兩個租戶。

All told, since the start of the fourth quarter of 2023 through yesterday, we have executed 227,000 square feet of new and renewal leases. Further, we continue to have accelerating activity on our forward leasing pipeline with more than 1 million square feet in various stages of documentation and discussion.

總而言之，自 2023 年第四季開始截至昨天，我們已經執行了 227,000 平方英尺的新租約和續約。此外，我們繼續加速推進遠期租賃計劃，目前有超過 100 萬平方英尺的土地處於不同文件記錄和討論階段。

Turning to dispositions, we remain aggressive in rightsizing our portfolio and we have made a lot of progress here. Since the spin, we have sold 17 properties, or more than 15% of the initial portfolio for a total of 1.8 million square feet with total gross proceeds of $59 million, much of which has gone to pay down debt and to repurchase shares of our common stock.

談到處置，我們仍然積極地調整我們的投資組合，並且已經取得了很大進展。自分拆以來，我們已出售了 17 處房產，佔初始投資組合的 15% 以上，總計 180 萬平方英尺，總收益為 5,900 萬美元，其中大部分用於償還債務和回購普通股。

Importantly, since the spin, we have reduced debt by more than $145 million. As we have progressed over the past year, we found it increasingly challenging to get sales accomplished, which can be seen to some degree in the declining price per square foot. Even so, in the fourth quarter, we successfully closed the sale of four non-core vacant properties representing a total of 575,000 square feet for an aggregate sales price of approximately $11.4 million.

重要的是，自分拆以來，我們已減少了超過 1.45 億美元的債務。隨著我們在過去一年中不斷進步，我們發現完成銷售變得越來越具有挑戰性，這在一定程度上可以從每平方英尺價格的下降中看出。即便如此，在第四季度，我們成功完成了四處非核心空置房產的銷售，總面積為 575,000 平方英尺，總售價約為 1,140 萬美元。

For the full year 2023, we sold six vacant properties representing a total of 849,000 square feet for an aggregate sales price of approximately $25.4 million. We also have agreements to sell seven additional properties representing 694,000 square feet for approximately $46 million and are actively reviewing selling several additional properties.

2023 年全年，我們出售了六處空置房產，總面積為 849,000 平方英尺，總售價約 2,540 萬美元。我們也達成協議，以約 4,600 萬美元的價格出售另外七處房產，總面積為 694,000 平方英尺，並且正在積極考慮出售另外幾處房產。

The properties under agreement include the six property former Walgreens campus in Deerfield, Illinois, that is expected to be redeveloped and we have had under contract to sell for the past year. While the project has experienced some delays, the buyer continues to make progress with its redevelopment plans, and we now expect this sale to close in the fourth quarter of 2024 or the first quarter of 2025.

協議下的物業包括位於伊利諾伊州迪爾菲爾德的六處前沃爾格林園區物業，預計將進行重新開發，並且我們在過去一年中一直簽訂銷售合約。雖然該項目經歷了一些延誤，但買家仍在繼續推進其重建計劃，我們現在預計該交易將在 2024 年第四季或 2025 年第一季完成。

We also have a vacant property in Denver, Colorado, which we put under contract to sell during the fourth quarter to a buyer who intends to redevelop the property over the next several years. This sale is scheduled to close in the first half of 2025 and is subject to the buyer’s satisfactory completion of its due diligence and governmental approval process.

我們在科羅拉多州丹佛市還有一處空置房產，我們已經簽訂合同，將在第四季度將其出售給一位打算在未來幾年內重新開發該房產的買家。此次出售預計於 2025 年上半年完成，但須買方圓滿完成盡職調查和政府批准程序。

While the closing of these sales is not immediate, by working with the buyers who wish to redevelop them, we expect to provide the best economic outcome for our shareholders. Executing on the sales of vacant and non-core assets is critical as controlling carrying costs is necessary to maintain a strong low leverage balance sheet in the current environment.

雖然這些銷售不會立即完成，但透過與希望重新開發的買家合作，我們希望為股東提供最佳的經濟效益。執行空置和非核心資產的銷售至關重要，因為在當前環境下，控制持有成本對於維持強勁的低槓桿資產負債表是必要的。

Vacant property operating expenses for the year-ended December 31, 2023, were $11.5 million. As further detailed on Page 18 of the supplemental, as we have said before, while asset sales reduce operating expense drag in the short-term, it will pressure our ability to grow earnings in the future as we become smaller with fewer buildings to lease.

截至 2023 年 12 月 31 日的年度空置物業營運費用為 1,150 萬美元。正如補充文件第 18 頁進一步詳細說明的那樣，正如我們之前所說，雖然資產出售可以在短期內減少營運費用拖累，但隨著我們的規模變小並且可租賃的建築越來越少，它將對我們未來增加盈利的能力造成壓力。

That said, we continue to believe our aggressive sale of vacant properties is the best approach under current market conditions to maximize the long-term value of the overall remaining portfolio and position the company to grow profitably in the future.

儘管如此，我們仍然相信，在當前市場條件下，積極出售空置房產是最佳方法，可以最大限度地提高剩餘投資組合的長期價值，並使公司在未來實現盈利增長。

As a reminder, our portfolio comprises primarily single tenant leases and tenant retention remains a significant challenge as we have faced and will continue to face significant lease role in the next few years, including approximately 1.9 million square feet in 2024 alone, as disclosed in our supplemental.

提醒一下，我們的投資組合主要由單一租戶租賃組成，租戶保留仍然是一個重大挑戰，因為我們已經面臨並將在未來幾年繼續面臨重大租賃角色，僅 2024 年就將面臨約 190 萬平方英尺，正如我們的補充報告中披露的那樣。

Highlighting these challenges are we expect that several of our largest tenants with leases rolling in 2024 will not renew, causing revenues and earnings to decline materially and carrying costs to rise until we can get these properties released. While we are extremely proactive in our efforts to retain tenants, when they leave, it takes longer to release a full building vacancy and this timeline is further pushed out by market conditions.

突出這些挑戰的是，我們預計，我們幾家最大的租戶在 2024 年的租約到期後將不會續約，這將導致收入和收益大幅下降，持有成本上升，直到我們能夠釋放這些房產為止。雖然我們非常積極地努力留住租戶，但當他們離開時，需要更長的時間才能釋放整棟建築的空置空間，而且這個時間表會因市場狀況而進一步推遲。

Therefore, expiring leases and the associated declines in revenues over the past couple of years have had an outsized material effect on our results, and that impact will accelerate in 2024. However, beginning in 2025, the impact on results will begin to moderate as we will have less than half the lease roll we have this year, and then earnings should begin to grow in the out years as expirations improve, we fill vacancy, market demand improves and financing costs fall.

因此，過去幾年租約到期和相關收入下降對我們的業績產生了巨大的實質影響，而且這種影響將在 2024 年加速。然而，從 2025 年開始，對業績的影響將開始緩和，因為我們的租賃合約總額將不到今年的一半，而且隨著到期情況的改善、我們填補空置、市場需求改善和融資成本下降，未來幾年的收益應該會開始增長。

This is not just an Orion issue. The hybrid workplace model has become the mainstay and office tenants continue to need less square footage, creating leasing activity for the industry that has not returned to pre-pandemic levels. Despite these significant secular pressures, it is important to remember that we do have a good portfolio of stable assets supported by a low leverage balance sheet that provides a solid foundation for future growth.

這不僅是獵戶座的問題。混合工作場所模式已成為主流，辦公室租戶對辦公面積的需求持續減少，導致產業租賃活動尚未恢復到疫情前的水準。儘管面臨這些巨大的長期壓力，但重要的是要記住，我們確實擁有良好的穩定資產組合，並以低槓桿資產負債表為支撐，為未來成長奠定了堅實的基礎。

We continue to prioritize current and expected future capital spend for building improvement allowances and lease incentives to retain existing tenants and attract new ones, in order to extend our existing portfolios weighted average lease term and drive sustained cash flows. Given persisting economic conditions, especially in the commercial office real estate sector, maintaining a strong capital structure that can support the necessary investments in our core portfolio is a critical part of our business plan.

我們繼續優先考慮當前和預期的未來資本支出，用於建築改善津貼和租賃激勵，以留住現有租戶並吸引新租戶，從而延長我們現有投資組合的加權平均租賃期限並推動持續的現金流。鑑於持續的經濟狀況，特別是在商業辦公室房地產領域，保持強大的資本結構以支持我們核心投資組合的必要投資是我們業務計劃的關鍵部分。

While market challenges persist, our strategic pillars, retaining existing tenants, filling empty spaces and strategically streamlining through non-core asset disposals remain firmly in place. The lease role we face the next few years will create ongoing pressure on per share results, which we may seek to partially offset through targeted capital recycling efforts. While we remain confident in our plan and committed to its execution, we expect that it will take a few more years to fully reposition our portfolio at a smaller base than when we spun.

儘管市場挑戰依然存在，但我們的策略支柱——保留現有租戶、填補空置空間以及透過非核心資產處置進行策略精簡——仍然堅定不移。我們未來幾年面臨的租賃角色將對每股業績產生持續壓力，我們可能會尋求透過有針對性的資本回收努力來部分抵消這種壓力。雖然我們對我們的計劃仍然充滿信心並致力於執行它，但我們預計還需要幾年時間才能在比我們分拆時更小的基礎上完全重新定位我們的投資組合。

Finally, I also want to stress that we remain flexible and non-dogmatic in our approach to our business plan. With our board, we are constantly assessing our options and strategies given the market realities and are open to making changes to our plans if we believe doing so will generate the best outcome for shareholders.

最後，我還想強調的是，我們在製定商業計劃時仍然保持靈活性和非教條主義的態度。我們和董事會一起，根據市場現實情況不斷評估我們的選擇和策略，如果我們認為這樣做能為股東帶來最好的結果，我們願意對我們的計劃做出改變。

With that, I will now turn the call over to Gavin.

說完這些，我現在將電話轉給加文 (Gavin)。

Thanks, Paul. I will start by discussing Orion’s results for the fourth quarter and full year and then provide our 2024 financial outlook. Orion generated total revenues of $43.8 million in the fourth quarter as compared to $50.3 million in the same quarter of the prior year. We’ve reported a net loss attributable to common stockholders of $16.2 million or $0.29 per share, as compared to a net loss of $19 million or $0.33 per share reported in the fourth quarter of 2022.

謝謝，保羅。我將首先討論 Orion 第四季和全年的業績，然後提供我們的 2024 年財務展望。獵戶座第四季總營收為 4,380 萬美元，而去年同期為 5,030 萬美元。我們報告歸屬於普通股股東的淨虧損為 1,620 萬美元或每股 0.29 美元，而 2022 年第四季報告的淨虧損為 1,900 萬美元或每股 0.33 美元。

Core funds from operations for the quarter was $18.5 million or $0.33 per share as compared to $24.9 million or $0.44 share in the same quarter of 2022. Adjusted EBITDA was $24.6 million versus $30.7 million in the same quarter of 2022. The changes year over year are primarily related to vacancies and the disposition of properties.

本季核心營運資金為 1,850 萬美元或每股 0.33 美元，而 2022 年同期為 2,490 萬美元或每股 0.44 美元。調整後 EBITDA 為 2,460 萬美元，而 2022 年同期為 3,070 萬美元。逐年的變化主要與空置和財產處置有關。

For the full year, Orion’s total revenues were $195 million and net loss attributable to common stockholders was $57.3 million or a loss of $1.02 per share. Core funds from operations was $94.8 million or $1.68 per share. Adjusted EBITDA for the full year was $118.5 million.

全年而言，Orion 公司的總營收為 1.95 億美元，歸屬於普通股股東的淨虧損為 5,730 萬美元，即每股虧損 1.02 美元。核心營運資金為 9,480 萬美元，即每股 1.68 美元。全年調整後 EBITDA 為 1.185 億美元。

G&A in the fourth quarter was $5.5 million, compared to $4.4 million in the same quarter of 2022 due to higher compensation expenses as a result of annual merit increases and hiring additional headcount during the year and an additional year of non-cash stock-based compensation expense. CapEx in the fourth quarter was $7.4 million, compared to $6.1 million in the same quarter of 2022.

第四季的 G&A 費用為 550 萬美元，而 2022 年同期為 440 萬美元，原因是年度績效加薪和年內招聘更多員工導致薪酬費用增加，以及額外一年的非現金股票薪酬費用。第四季的資本支出為 740 萬美元，而 2022 年同期為 610 萬美元。

As we had previously discussed, CapEx timing is dependent on when leases are signed, and work is completed on properties. CapEx will likely increase over time as leases roll and new and existing tenants draw on tenant improvement allowances. G&A for the full year was $18.7 million and CapEx tenant improvements and leasing costs were $21.3 million.

正如我們之前所討論的，資本支出時間取決於租約的簽署時間以及房產工作的完成時間。隨著租約的延長以及新舊租戶使用租戶改善補貼，資本支出可能會隨著時間的推移而增加。全年一般及行政開支為 1,870 萬美元，資本支出（租戶改善及租賃成本）為 2,130 萬美元。

Turning to the balance sheet. We ended the year with strong total liquidity of $332.1 million, comprised of $23.1 million of cash and cash equivalents, including the company’s pro rata share of Arch Street’s joint ventures cash and $309 million of available capacity on the company’s $425 million credit facility revolver.

轉向資產負債表。我們截至今年年底的總流動資金高達 3.321 億美元，其中包括 2,310 萬美元的現金和現金等價物，包括公司在 Arch Street 合資企業現金中的按比例份額以及公司 4.25 億美元循環信貸中的 3.09 億美元可用容量。

As Paul discussed, we intend to maintain significant liquidity on the balance sheet for the foreseeable future to fund expected capital commitments in our future leasing efforts and provide the financial flexibility needed to execute on our business plan over the next several years. We ended the year with $498.3 million of outstanding debt, including $116 million of floating rate debt on a credit facility revolver and $27.3 million representing our share of the Arch Street joint venture mortgage debt, which has swapped the fixed rate until May 27, 2024.

正如保羅所討論的，我們打算在可預見的未來在資產負債表上保持大量流動性，以資助我們未來租賃工作的預期資本承諾，並提供在未來幾年執行我們的業務計劃所需的財務靈活性。截至年底，我們的未償債務為 4.983 億美元，其中包括 1.16 億美元的信貸循環信貸浮動利率債務，以及 2,730 萬美元的 Arch Street 合資企業抵押貸款債務份額，該債務已轉換為固定利率，直至 2024 年 5 月 27 日。

We have two debt maturities in late 2024. Our credit facility revolver and the Arch Street joint venture mortgage debt are both scheduled to mature in November 2024. These debt obligations also include extension options, which may be exercised if applicable conditions are met. We expect to exercise the extension options or otherwise extend the maturity of these obligations.

我們有兩筆債務將於 2024 年底到期。我們的信貸循環信貸和 Arch Street 合資企業抵押債務均計劃於 2024 年 11 月到期。這些債務還包括延期選擇權，如果滿足適用條件則可以行使。我們希望行使延期選擇權或以其他方式延長這些義務的期限。

At year end, our net debt to adjusted EBITDA was 4.01 times and since the spin, as Paul mentioned, we have repaid $145 million in debt, including $59 million in 2023. On February 27, 2024, Orion’s board of directors declared a quarterly cash dividend of $0.10 per share for the first quarter of 2024, payable on April 15, 2024, to stockholders of record as of March 29, 2024.

截至年底，我們的淨債務與調整後 EBITDA 比率為 4.01 倍，正如 Paul 所說，自分拆以來，我們已償還 1.45 億美元的債務，其中包括 2023 年的 5,900 萬美元。2024 年 2 月 27 日，Orion 董事會宣布 2024 年第一季的季度現金股利為每股 0.10 美元，將於 2024 年 4 月 15 日支付給截至 2024 年 3 月 29 日登記在冊的股東。

Turning to the 2024 outlook. As we have previously stated, the company benefited in 2023 from a number of items that will not carry forward. In the next few years, our financial results will be significantly impacted by a large number of lease expirations. This will result in a reduction in revenue quarter to quarter due to the smaller portfolio size and be further impacted by the vacancy carry costs and extended release time as well as the required investment to secure longer term leases.

展望2024年。正如我們之前所說，該公司在 2023 年受益於一些不會結轉的項目。未來幾年，我們的財務表現將因大量租約到期而受到顯著影響。由於投資組合規模較小，這將導致季度收入減少，並受到空置成本和延長釋放時間以及獲得長期租約所需投資的進一步影響。

G&A will rise in 2024 as compared to 2023, primarily due to the amortization of an additional year of non-cash compensation. Given those assumptions, our core FFO for 2024 is expected to range from $0.93 to $1.01 per diluted share. Additionally, our G&A for 2024 is anticipated to range from $19.5 million to $20.5 million, and net debt to adjusted EBITDA is expected to range from 6.2 times to 7.0 times.

2024 年的 G&A 費用將較 2023 年增加，這主要是由於額外一年的非現金薪資攤銷所致。基於這些假設，我們 2024 年的核心 FFO 預計在每股攤薄 0.93 美元至 1.01 美元之間。此外，我們 2024 年的 G&A 預計在 1,950 萬美元至 2,050 萬美元之間，淨債務與調整後 EBITDA 比率預計在 6.2 倍至 7.0 倍之間。

Excluding non-cash compensation, we expect G&A will be flat 2023. We also do not expect G&A to rise significantly in the outer years, including non-cash compensation. As a percentage of revenue and total assets, our G&A remains in line with other similarly sized public REITs.

不包括非現金薪酬，我們預計 2023 年的 G&A 將持平。我們也不認為未來幾年 G&A 費用（包括非現金薪酬）會大幅增加。作為收入和總資產的百分比，我們的 G&A 與其他規模相似的公共房地產投資信託基金保持一致。

While we do not provide quarterly guidance given the cadence of scheduled lease vacancies this year, we expect the first quarter to be relatively in line with the fourth quarter and beginning in the second quarter to have sequential reductions in quarterly amount of earnings and core FFO on a per share basis as we move through the year.

鑑於今年預定的租賃空置率，我們不提供季度指引，但我們預計第一季的業績將與第四季度相對一致，並從第二季度開始，隨著全年的發展，季度收益和每股核心 FFO 將連續減少。

With that, we’ll open the line for questions. Operator?

現在，我們將開始回答大家的提問。操作員？

(Operator Instructions) Mitch Germain, Citizens JMP.

（操作員指示）Mitch Germain，公民 JMP。

This is Judy, on for Mitch. My first question here is, based on the recent leasing trends, what are your thoughts on CapEx, and are you recently rising higher?

這是朱迪，代替米奇。我的第一個問題是，根據最近的租賃趨勢，您對資本支出有何看法，最近您的資本支出是否有所上升？

Good morning. Yes, I mean, we have a variety -- our leasing CapEx has varied pretty dramatically with respect to renewals, we’ve generally been able to maintain relatively smaller CapEx and lease concessions than we have on new leases. So I would say that with respect to new leases, concessions are significantly higher than they may have been traditionally. But on new leases, we’ve been pretty good at maintaining a pretty low level of concessions.

早安.是的，我的意思是，我們有多種選擇——我們的租賃資本支出在續約方面差異很大，我們通常能夠維持比新租賃相對較小的資本支出和租賃優惠。因此我想說，就新租約而言，優惠幅度比傳統水準高得多。但在新的租約中，我們一直非常擅長維持相當低的優惠水準。

Right. And we should expect that to trend quite high for the 2023 expirations that you address as well, right?

正確的。我們應該預期，您所提到的 2023 年到期的合約趨勢會相當高，對嗎？

I think when we get -- the answer to that is yes.

我想當我們得到——答案是肯定的。

The 2024, sorry.

2024年，抱歉。

Yes. The answer to that is yes. When we get back vacancy, our expectation is that we will be required to attract new tenants. We will be required to spend significant amounts of tenant improvement allowance to attract those tenants, as well as to add some additional landlord work to the buildings to improve amenities and things like that. All that being said, once you’ve been able to do that, we do believe that we can attract good quality tenants on a long duration lease where the return on our investment is significantly better than it would be on investing in new properties.

是的。答案是肯定的。當我們恢復空置時，我們期望我們需要吸引新的租戶。我們將需要花費大量的租戶改善補貼來吸引這些租戶，以及在建築物中增加一些額外的房東工作來改善設施等。話雖如此，一旦你能夠做到這一點，我們確實相信我們可以以長期租約吸引優質租戶，而我們的投資回報將遠遠好於投資新房產。

Yes. Thank you. And second question here. So last quarter, I think you had guided to paying $33 million in debt, but 4Q, there was a $59 million reduction. So what was the reason for the change there?

是的。謝謝。這是第二個問題。所以上個季度，我認為你已經指導償還 3,300 萬美元的債務，但第四季卻減少了 5,900 萬美元。那麼那裡發生改變的原因是什麼呢？

Yes. This is Gavin. The term loan we took out last quarter with $175 million. We had $59 million in escrow. I’m sorry, $49 million in escrow. Then we paid an additional $10 million at the year-end. So total pay down for the year on that revolver is $59 million.

是的。這是加文。我們上個季度的定期貸款為 1.75 億美元。我們有5900萬美元的託管資金。抱歉，有 4900 萬美元的託管資金。然後我們在年底又支付了 1000 萬美元。因此，該筆循環貸款今年的還款總額為 5,900 萬美元。

Okay. Good.

好的。好的。

This is the proceeds from escrow that we were carrying throughout the year.

這是我們全年持有的託管收益。

Got it. And the last one from me, Walgreens, the timing, I think you mentioned was 4Q or 1Q 2025. It’s just a due diligence and the timing is delayed because of that.

知道了。我最後一個問題，沃爾格林，您提到的時間是 2025 年第四季或第一季。這只是一次盡職調查，時間因此被推遲了。

Yes. I mean, that’s a six-campus property in Deerfield, Illinois, as you know. And the redevelopment plan there is very large. So as a result, that redevelopment plan is taking time to develop. The developer who is doing that is working diligently to do that. There are a variety of moving pieces, including getting TIF financing, including getting approval from the local municipality, public comment periods and so on and so forth.

是的。我的意思是，如你所知，這是位於伊利諾伊州迪爾菲爾德的擁有六個校區的大學。那裡的重建計劃非常龐大。因此，該重建計劃需要時間來製定。正在做這件事的開發人員正在努力工作。有各種各樣的活動部分，包括獲得 TIF 融資、獲得當地政府的批准、公眾意見徵詢期等等。

And that’s all ongoing. It’s just taking a bit longer than we had initially expected. But we do expect the transaction will reach the goal line, and we hope to have it closed at the end of this year, and if not at the beginning of next.

這一切都還在進行中。只是比我們最初預期的時間長一點。但我們確實預期交易將達到目標，我們希望在今年年底完成交易，如果不能的話，明年年初完成。

Okay. Got it. Thank you for taking my questions. That’s all.

好的。知道了。感謝您回答我的問題。就這些。

Thank you.

謝謝。

Thank you. At this time, I will now turn the call back to Mr. McDowell for any closing remarks.

謝謝。現在，我將把電話轉回給麥克道爾先生，請他做最後發言。

Thank you, everyone. We appreciate you taking part in the call, and we look forward to updating you at the end of the first quarter.

謝謝大家。感謝您參加電話會議，我們期待在第一季末向您報告最新情況。

This will conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

今天的會議到此結束。現在您可以斷開您的線路。感謝您的參與並祝您有美好的一天。