Office Properties Income Trust (OPI) 2019 Q1 法說會逐字稿

Good morning, and welcome to the Office Properties Income Trust First Quarter 2019 Financial Results Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Olivia Snyder, Manager of Investor Relations. Please go ahead.

早安，歡迎參加 Office Properties Income Trust 2019 年第一季財務業績電話會議。（操作員說明）請注意，正在記錄此事件。我現在想將會議交給投資者關係經理 Olivia Snyder。請繼續。

Thank you, and good morning, everyone. Thanks for joining us today. With me on the call are OPI's President and Chief Executive Officer, David Blackman; and Chief Financial Officer and Treasurer, Jeff Leer. In just a moment, they will provide details about our business and our performance for the first quarter of 2019. We will then open the call for the question-and-answer session with analysts.

謝謝大家，大家早安。感謝您今天加入我們。與我一起參加電話會議的有 OPI 總裁兼執行長 David Blackman；財務長兼財務主管 Jeff Leer。稍後，他們將提供有關我們 2019 年第一季業務和業績的詳細資訊。然後我們將開始與分析師進行問答環節。

First, I would like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on OPI's beliefs and expectations as of today, Friday, May 3, 2019, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call.

首先，我想指出的是，未經公司事先書面同意，禁止對今天的電話會議進行錄音和轉播。另請注意，今天的電話會議包含 1995 年《私人證券訴訟改革法案》和其他證券法含義內的前瞻性陳述。這些前瞻性陳述是基於 OPI 截至今天（2019 年 5 月 3 日星期五）的信念和預期，實際結果可能與我們的預測有重大差異。該公司不承擔修改或公開發布對今天電話會議中前瞻性陳述的任何修改結果的義務。

Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, or SEC, which can be accessed from our website, opireit.com, or the SEC website. Investors are cautioned not to place undue reliance upon any forward-looking statements.

有關可能導致這些差異的因素的更多資​​訊包含在我們向美國證券交易委員會 (SEC) 提交的文件中，您可以透過我們的網站 opireit.com 或 SEC 網站存取該文件。投資者應注意不要過度依賴任何前瞻性陳述。

In addition, we will be discussing non-GAAP numbers during this call, including normalized funds from operations, or normalized FFO, and cash-based net operating income, or cash-based NOI. A reconciliation of these non-GAAP figures to net income and components to calculate cash available for distribution, or CAD, are available in our supplemental, operating and financial data package, which also can be found on our website.

此外，我們將在本次電話會議中討論非 GAAP 數據，包括標準化營運資金（或標準化 FFO）以及基於現金的淨營業收入（或基於現金的 NOI）。我們的補充、營運和財務資料包中提供了這些非 GAAP 資料與淨利潤和用於計算可分配現金（或 CAD）的組成部分的對賬，這些資料包也可以在我們的網站上找到。

And now I would turn the call over to David.

現在我會把電話轉給大衛。

Thank you, Olivia, and good morning. Welcome to the first quarter earnings call for Office Properties Income Trust. On today's call, I will discuss our leasing activity for the quarter and provide an update on our disposition program before turning the call over to Jeff Leer to provide an overview of our financial results and balance sheet.

謝謝你，奧利維亞，早安。歡迎參加辦公地產收入信託第一季財報電話會議。在今天的電話會議上，我將討論我們本季度的租賃活動，並提供我們處置計劃的最新信息，然後將電話轉給傑夫·李爾（Jeff Leer），概述我們的財務業績和資產負債表。

As of March 31, OPI's portfolio consisted of 212 buildings containing 30.1 million square feet that were 89.6% occupied, with a weighted average lease term of 5.9 years. 65.7% of our annualized rent is paid by investment-grade rated tenants which we believe is one of the highest percentages of investment-grade rated tenants in the office REIT sector.

截至 3 月 31 日，OPI 的投資組合由 212 棟建築組成，面積為 3,010 萬平方英尺，利用率為 89.6%，加權平均租賃期限為 5.9 年。我們 65.7% 的年化租金由投資等級租戶支付，我們認為這是辦公室 REIT 領域投資等級租戶比例最高的之一。

The U.S. government is our largest tenant, accounting for 25.8% of annualized rent, and no other tenant accounts for more than 2.9% of annualized rent.

美國政府是我們最大的租戶，佔年化租金的25.8%，沒有其他租戶佔年化租金的2.9%以上。

We generated strong leasing results during the quarter in our new and renewal leases for more than 825,000 square feet for a weighted average rollup in rent of 12.8%, a weighted average lease term of 7.5 years and leasing concessions and capital commitments of $4.67 per square foot per lease year. Almost 600,000 square feet or approximately 70% of our executed leases were for terms of 7 years or longer.

本季度，我們在超過 825,000 平方英尺的新租約和續租租約中取得了強勁的租賃業績，加權平均租金上漲 12.8%，加權平均租賃期限為 7.5 年，租賃優惠和資本承諾為每平方英尺 4.67 美元每個租賃年。近 600,000 平方英尺（約 70%）的租賃期限為 7 年或更長。

Now let's review our dispositions. We advanced our disposition program during the first quarter, having closed on $268.5 million of property sales. This includes the sale of a 34-building portfolio located in suburban Metro D.C. for gross proceeds of $198.5 million and the opportunistic sale of 501st Street in Washington, D.C. for $70 million, which is more than $540 per square foot. By selling 501st Street, we eliminated approximately $26 million of budgeted capital in 2019 and 2020 to renovate and re-lease the building. We also eliminated a drag on earnings as we estimated it could take up to 3 years to stabilize the property. We continue managing through the sale of 33 properties where the proceeds will be used to reduce leverage to our long-term target. One property valued at approximately $15 million was removed from our marketing campaign this quarter, while we negotiated potential building expansion and lease extension with a tenant. For the remaining 33 properties in the disposition program, 6 properties are either under agreement or have been awarded to buyers and purchase agreements are being negotiated for $75.4 million in aggregate. Under normal circumstances, we expect the property to sell within 60 days of executing an agreement.

現在讓我們回顧一下我們的部署。我們在第一季推進了處置計劃，完成了 2.685 億美元的房地產銷售。其中包括以 1.985 億美元的總收益出售位於華盛頓特區郊區的 34 棟建築組合，以及以 7,000 萬美元的機會出售華盛頓特區 501 街，即每平方英尺超過 540 美元。透過出售 501 街，我們在 2019 年和 2020 年減少了約 2,600 萬美元的預算資金，用於翻新和重新租賃該建築。我們也消除了對收益的拖累，因為我們估計可能需要長達 3 年的時間才能穩定該財產。我們繼續透過出售 33 處房產進行管理，所得收益將用於降低槓桿以實現我們的長期目標。本季度，一處價值約 1500 萬美元的房產從我們的行銷活動中刪除，同時我們與租戶就潛在的建築擴建和租賃延期進行了談判。對於處置計劃中的其餘 33 處房產，其中 6 處房產已達成協議或已授予買家，正在談判購買協議，總金額為 7,540 萬美元。一般情況下，我們預計該房產將在簽訂協議後 60 天內出售。

22 properties have had at least 1 round of offers, and we are relatively close to selecting buyers. Our typical sales process includes 2 rounds of offers and interviewing the top bidders before selecting a buyer. 5 properties have first round offers scheduled within the next 2 weeks, and buyers should be selected by the end of May. Overall, we are encouraged by the market interest in our disposition properties and believe we are well positioned to discuss the completion of a number of property sales on our next earnings call.

22處房產已至少進行過一輪報價，我們相對接近選擇買家。我們典型的銷售流程包括兩輪報價以及在選擇買家之前採訪最高出價者。5 處房產計劃在未來 2 週內進行第一輪報價，買家應在 5 月底前選定。總體而言，市場對我們的處置房產的興趣令我們感到鼓舞，並相信我們有能力在下一次財報電話會議上討論完成多項房產銷售的事宜。

Once we complete the sale of these 33 properties, we expect to roll into a capital recycling program that shape our key portfolio metrics to manage ongoing capital requirements and to reenter the acquisition market for accretive growth. We expect our acquisitions to focus on first-generation buildings because we believe tenants have a higher probability of renewing leases in these buildings and capital requirements will be lower. This is expected to have a positive impact on occupancy and our long-term cash accretion, which we believe will contribute to maintaining our well-covered dividend.

一旦我們完成這 33 個房產的出售，我們預計將推出一項資本回收計劃，該計劃將製定我們的關鍵投資組合指標，以管理持續的資本需求並重新進入收購市場以實現增值增長。我們預期收購將集中在第一代建築，因為我們相信租戶續租這些建築的可能性更高，資本需求也會更低。預計這將對入住率和我們的長期現金增值產生積極影響，我們相信這將有助於維持我們充分支付的股息。

I will now turn the call over to Jeff to provide an overview of our financial results and balance sheet. Jeff?

我現在將把電話轉給傑夫，概述我們的財務表現和資產負債表。傑夫？

Thanks, David. OPI's results for the first quarter of 2019 represent the full quarter impact of the merger with Select Income REIT or SIR, which closed on December 31, 2018. As David previously discussed, in conjunction with the merger with SIR, OPI also closed on $268.5 million in asset sales during the quarter. The impact of these events has driven the majority of the changes in the overall financial results as compared to the same period in the previous year.

謝謝，大衛。OPI 2019 年第一季的業績代表了與 Select Income REIT 或 SIR 合併的整個季度影響，該合併於 2018 年 12 月 31 日完成。正如 David 之前討論的那樣，在與 SIR 合併的同時，OPI 在本季也完成了 2.685 億美元的資產銷售。這些事件的影響推動了整體財務表現與去年同期相比的大部分變化。

Our focus for this presentation regarding trends will be geared towards comparisons on a same-property basis. In addition, we have included quarterly pro forma same-property information in our disclosures as if the SIR merger had closed on January 1, 2018.

我們本次趨勢的演示的重點將是在相同房產的基礎上進行比較。此外，我們還在披露中納入了季度備考相同財產信息，就好像 SIR 合併已於 2018 年 1 月 1 日完成一樣。

Now turning to property level results for the quarter. On a same-property basis, for the quarter ended March 31, 2019, rental income decreased $1.9 million or 2.1% year-over-year and pro forma same-property cash basis NOI was $107 million or a 2.8% decline on a year-over-year basis. Both of these comparisons were driven by overall declines in occupancy.

現在轉向本季的房地產水平結果。以同一物業為基礎，截至 2019 年 3 月 31 日的季度，租金收入年減 190 萬美元，即 2.1%，預計同一物業現金基礎 NOI 為 1.07 億美元，年減 2.8%。較上年為基礎。這兩項比較都是由入住率整體下降所推動的。

Turning to our overall consolidated first quarter financial results. The results were positively impacted by a noncash unrealized gain of $22.1 million attributable to OPI's investment in the RMR Group Inc., a $22.1 million gain on the sale of 501st Street in Washington, D.C. in March, offset by a $3.2 million noncash impairment charge primarily related to one of our buildings under agreement for sale.

轉向我們第一季的整體綜合財務業績。OPI 對RMR Group Inc. 的投資帶來2,210 萬美元的非現金未實現收益，以及3 月份出售華盛頓特區501 街的2,210 萬美元收益，主要被320 萬美元的非現金減損費用所抵消，對業績產生了積極影響。與我們根據銷售協議出售的一棟建築物有關。

Normalized funds from operations or normalized FFO for the first quarter was $73.3 million or $1.53 per diluted share. G&A expense for the quarter was lower than that of the same period in the previous year due to the reduction in base business management fees which are currently being calculated under market capitalization because it is lower than the historical undepreciated cost of assets. As of March 31, 2019, OPI did not accrue any estimated business management incentive fees. Based on OPI's current share price and base business management fees being calculated on market capitalization, we would expect G&A expense to be within a range of $7 million to $9 million on a quarterly basis for the remainder of 2019.

第一季來自營運的標準化資金或標準化 FFO 為 7,330 萬美元，或攤薄後每股 1.53 美元。本季的一般及行政費用低於去年同期，原因是目前按市值計算的基本業務管理費減少，因為該費用低於歷史未折舊資產成本。截至2019年3月31日，OPI未提列任何預期的業務管理獎勵費。根據 OPI 目前的股價和按市值計算的基本業務管理費，我們預計 2019 年剩餘時間的一般管理費用將在每季 700 萬至 900 萬美元的範圍內。

I would now switch focus to discuss capital and ongoing deleveraging efforts. We spent $4.3 million on recurring building improvements and $12.2 million on tenant improvements and leasing costs in the first quarter of 2019. As of quarter end, we had approximately $63.6 million of unspent leasing-related capital obligations. At March 31, OPI's ratio of debt to gross assets was 57.5%, and we had $80 million outstanding on our $750 million revolving credit facility. We used proceeds received from our property sales in Q1 to pay down $257 million of principal debt, which included reducing unsecured floating-rate debt by 44% to an outstanding balance of $315 million.

我現在將焦點轉向討論資本和正在進行的去槓桿化努力。2019 年第一季度，我們在經常性建築改善上花費了 430 萬美元，在租戶改善和租賃成本上花費了 1,220 萬美元。截至季末，我們有約 6,360 萬美元的未動用租賃相關資本義務。截至 3 月 31 日，OPI 的債務與總資產的比率為 57.5%，我們的 7.5 億美元循環信貸額度中尚未償還 8,000 萬美元。我們利用第一季房地產銷售所得收益償還了 2.57 億美元的本金債務，其中包括將無擔保浮動利率債務減少 44%，使未償餘額達到 3.15 億美元。

OPI's debt to annualized adjusted EBITDA was 6.9x at quarter end. As we've previously stated, during 2019, we intend to reduce our leverage with the proceeds from our property disposition program to achieve our target debt-to-EBITDA of 6 to 6.5x.

截至季末，OPI 的債務與年化調整後 EBITDA 比率為 6.9 倍。正如我們之前所說，2019 年期間，我們打算利用財產處置計畫的收益來降低槓桿率，以實現債務與 EBITDA 比 6 至 6.5 倍的目標。

Operator, that concludes our prepared remarks. We're ready to open the call up for questions.

接線員，我們準備好的發言到此結束。我們已準備好接受提問。

(Operator Instructions) The first question comes from Bryan Maher of B. Riley FBR.

（操作員說明） 第一個問題來自 B. Riley FBR 的 Bryan Maher。

Excellent quarter. On the occupancy front, dipping below 90%. David, I think I recall you saying in the last quarter or so that you're expecting, with all of the asset sales, that ultimately, we'll end up seeing an occupancy improvement, but we could see some vagaries along the way. Do you still think that that's the case and that we should be nicely into the 90s by year-end?

優秀的季度。入住率方面，跌破 90%。大衛，我想我記得你在上個季度左右說過，你預計，隨著所有的資產出售，最終我們將看到入住率的改善，但在此過程中我們可能會看到一些變幻莫測的情況。您是否仍然認為情況確實如此，並且我們到年底就應該順利進入 90 年代？

Yes, Bryan, I definitely agree with that. I think we'll be above 90%. I mean, the average occupancy on the disposition properties is below 80%. So as we continue to sell assets, that will have a positive impact on occupancy. We also have a pretty strong leasing pipeline right now. We've got well over 2 million square feet of leases that are in various stages right now. Of that, I think we've got over 400,000 square feet that could absorb vacant square feet and help improve our occupancy. So I think we're pretty well positioned right now to actually start turning occupancy around.

是的，布萊恩，我絕對同意這一點。我想我們會達到90%以上。我的意思是，處置物業的平均入住率低於80%。因此，隨著我們繼續出售資產，這將對入住率產生積極影響。我們現在也有相當強大的租賃管道。我們已經擁有超過 200 萬平方英尺的租賃合同，目前處於不同階段。其中，我認為我們有超過 400,000 平方英尺可以吸收空置平方英尺並有助於提高我們的入住率。所以我認為我們現在已經處於非常有利的位置，可以真正開始扭轉入住率。

Great. And then as you're working through the sales process in the first half of this year, are cap rates on what you sold and -- or kind of in the process of selling currently kind of in line above or below what you thought as we entered the year?

偉大的。然後，當您在今年上半年完成銷售流程時，您銷售的產品的上限率，或者在當前銷售過程中的上限率是否高於或低於您所認為的水平進入年份？

Bryan, I think they're generally in line. I think that as I look at the broader acquisition market, there is some softening in what I consider high core space. So long-term lease, credit quality tenants, there's less capital chasing those deals today. That tends not to be what we're selling. If I look at what we have under agreements or where we have received offers, and I aggregate that together and look at the third quarter NOI, we will likely achieve a cap rate on our sales below 8%. So I'm pretty encouraged by that and feel like we're pretty well positioned right now.

布萊恩，我認為他們通常都在排隊。我認為，當我審視更廣泛的收購市場時，我認為的高端核心空間出現了一些軟化。因此，長期租賃、信用優質的租戶，如今追逐這些交易的資本較少。這往往不是我們所銷售的。如果我看看我們簽訂的協議或我們收到的報價，然後將其匯總並查看第三季的 NOI，我們的銷售額上限可能會低於 8%。所以我對此感到非常鼓舞，並且覺得我們現在處於有利的位置。

All right. And then, as it relates to the economy, which has been pretty much, for lack of a better word, on fire, and with employment rates low, how is that impacting your discussions with potential buyers? Do you feel like you're coming with a little bit more strength to the table than maybe you would've been in December when things were a little bit more uncertain?

好的。然後，由於它與經濟有關，由於缺乏更好的詞，經濟一直很火爆，而且就業率很低，這對您與潛在買家的討論有何影響？你是否覺得你現在比 12 月事情更不確定時更有力量了？

It's a good question, Bryan, and I don't know, but I would say it's materially different at this particular point. I think the one thing I think in the back of everybody's mind is we're 10 years into a cycle, and that's a long time into the business cycle. So while the economy looks very strong and the numbers that we're seeing are encouraging, I think everybody continues to be somewhat skeptical about continued long-term growth.

這是一個很好的問題，布萊恩，我不知道，但我想說，在這個特定的點上，情況有本質上的不同。我認為每個人心裡都在想的一件事是我們已經進入一個週期 10 年了，而且這是進入商業週期的很長一段時間。因此，雖然經濟看起來非常強勁，而且我們看到的數字令人鼓舞，但我認為每個人仍然對持續的長期成長持懷疑態度。

And then I think, and I might be wrong with this , I think you have about 10% of the annualized rental income expiring in 2019. I know that there's a lot of moving parts with the asset sales and some of these might be involved there, but do you have any thoughts on the amount of vacates in that 10%?

然後我想，我的想法可能是錯的，我認為您大約有 10% 的年化租金收入將在 2019 年到期。我知道資產出售有很多變動因素，其中一些可能涉及其中，但您對這 10% 中的空出數量有什麼想法嗎？

I'm pretty encouraged by the active leasing pipeline we have right now, Bryan. And we don't have -- I think we have one tenant that we think will vacate sometime during 2019 that represents more than 1% of rent. So I think we're going to have a pretty good year for tenant retention and continue to be a market leader in that stand.

布萊恩，我對我們目前活躍的租賃管道感到非常鼓舞。我認為我們沒有——我認為我們有一個租戶，我們認為該租戶將在 2019 年的某個時候騰出，其租金佔租金的 1% 以上。因此，我認為我們在保留租戶方面將迎來非常好的一年，並繼續成為該領域的市場領導者。

And then just last for me. On your RMR shares, I wouldn't think that you'd be a seller at current levels for RMR. But I just want to clarify that you're delevering down to the 6%, 6.5% range. Would that not include the assumption that you would sell the RMR shares?

然後就對我來說最後一次。就您的 RMR 股票而言，我認為您不會以目前的 RMR 水平成為賣家。但我只是想澄清一下，你們正在將槓桿率降至 6%、6.5% 的範圍。這是否不包括您將出售 RMR 股票的假設？

Right now, we believe that we can achieve the low end of our long-term target on leverage without selling the RMR shares.

目前，我們相信我們可以在不出售 RMR 股票的情況下實現長期槓桿目標的低端。

The next question comes from Mitch Germain of JMP Securities.

下一個問題來自 JMP 證券的 Mitch Germain。

David, just confirming that the D.C. portfolio was part of the FPO deleveraging strategy, right? So the 33 assets are basically going to equal around the $750 million that you targeted on sales, right?

大衛，剛剛確認華盛頓投資組合是 FPO 去槓桿化策略的一部分，對吧？因此，這 33 項資產基本上等於您目標銷售的 7.5 億美元左右，對嗎？

That is correct.

那是對的。

Okay. Great. Are you selling any portfolios, or are these individual asset sales?

好的。偉大的。您是否出售任何投資組合，或這些個人資產出售嗎？

We have a few small portfolios, Mitch. When I say small, they are anywhere between 2 properties and 4 properties. But in all circumstances, we may be marketing 2 to 4 assets together in one book with a single broker, but we are entertaining individual bids on those properties as well.

我們有一些小的投資組合，米奇。當我說「小」時，它們介於 2 個屬性和 4 個屬性之間。但在所有情況下，我們可能會與一位經紀人在一本書中一起行銷 2 到 4 項資產，但我們也會接受對這些資產的個人出價。

And it seems like you're selling assets with some leasing needs and some capital needs. Is that -- how did you kind of characterize -- what sort of criteria did you use to identify which assets are the ones that are for sale versus to retain in the portfolio?

看起來您正在出售具有一些租賃需求和一些資本需求的資產。您是如何描述的，您使用什麼樣的標準來確定哪些資產是待售資產，哪些是保留在投資組合中？

Mitch, we selected a handful of properties with good tenants that are very well leased with a pretty good weighted-average remaining lease term. And those are some assets that I consider a little bit more core. And then we've also got some in here that maybe are a little bit older. They're well occupied, but there's a lot of capital that may be needed to spend over the next 3 to 5 years. So it's a pretty good mix. What I consider upper-tier assets, middle-tier assets and then we've got 5 or 6 -- I guess, we have 4 vacant properties that we're selling.

米奇，我們選擇了一些擁有良好租戶的房產，這些房產的租賃情況非常好，加權平均剩餘租期也相當不錯。這些是我認為更核心的一些資產。我們這裡還有一些可能有點舊的東西。它們已經被佔用，但在未來 3 到 5 年內可能需要花費大量資金。所以這是一個非常好的組合。我認為是上層資產、中層資產，然後我們有 5 或 6 個——我想，我們有 4 個正在出售的空置房產。

Got you. Government -- federal government, 26%. When you factor in some of the state, obviously much higher. Is there -- is that along the lines with what you're looking for in terms of tenant mix? Or is there a thought about reducing some of the government exposure?

明白你了。政府－聯邦政府，26%。當你考慮到一些狀態時，顯然要高得多。這是否符合您所尋找的租戶組合？或是考慮減少一些政府風險敞口？

Well, we substantially reduced our government exposure by combining GOV and SIR. We went from kind of 46% U.S. government exposure down to our current level. So I think we've gotten pretty decent diversification. I think from our perspective, we are more focused on the type of government buildings we acquire going forward, meaning that they have maybe higher security requirements, they're younger buildings so that we spend less capital and we have a higher likelihood of renewal. So I think that's more our focus than trying to say we maintain our U.S. government exposure above 20% to 25%.

嗯，我們透過結合 GOV 和 SIR 大幅減少了政府風險。我們對美國政府的風險敞口從 46% 降至目前的水平。所以我認為我們已經實現了相當不錯的多元化。我認為從我們的角度來看，我們更關注我們未來獲得的政府建築類型，這意味著它們可能有更高的安全要求，它們是較年輕的建築，因此我們花費更少的資金，並且更新的可能性更高。因此，我認為這才是我們的重點，而不是試圖說我們將美國政府風險敞口維持在 20% 至 25% 以上。

The next question comes from Vikram Malhotra of Morgan Stanley.

下一個問題來自摩根士丹利的維克拉姆·馬爾霍特拉。

This is Adam here on for Vikram. I just want to talk about your capital recycling comments in the prepared remarks. You said you're going to start to roll into that as the disposition program kind of wraps up. Is that the type of thing where we could kind of see start to be more active even towards the end of this year and maybe have that sort of benefiting FFO in 2020?

這是維克拉姆的亞當。我只想在準備好的發言中談談您對資本回收的看法。你說過，隨著處置計畫的結束，你將開始著手解決這個問題。我們是否可以看到這種事情在今年年底開始變得更加活躍，並且可能在 2020 年使 FFO 受益？

Yes.

是的。

And so do you have any, just to quickly follow-up, any idea on -- just relating to your leverage target, how you'd be planning to fund the incremental acquisitions, and if you'd be sort of comfortable taking debt up after bringing it down with the asset sales if you see accretive deals in the market?

那麼，為了快速跟進，您是否有任何想法 - 只是與您的槓桿目標有關，您計劃如何為增量收購提供資金，以及您是否願意承擔債務在透過資產出售降低價格之後，您是否看到市場上出現了增值交易？

Adam, I think there's a reasonable probability that during the third quarter, we'll have leverage down below 6%. And the idea of the capital recycling program -- or excuse me, 6x. The idea of the capital recycling program is to create CAD accretion by selling some assets that may be a little bit older and may have higher capital needs into assets that are longer duration lease, younger and have less capital needs. So while we may not ultimately grow substantially our total assets, we expect that we would grow our CAD through the capital recycling program. Does that make sense?

Adam，我認為第三季我們的槓桿率有可能降至 6% 以下。還有資本回收計劃的想法——或者對不起，6x。資本回收計劃的想法是透過將一些可能較舊且可能具有較高資本需求的資產出售為租賃期限較長、較年輕且資本需求較少的資產來創造加元增值。因此，雖然我們最終可能不會大幅增加總資產，但我們預計將透過資本回收計劃來增加加元。那有意義嗎？

Yes. Absolutely.

是的。絕對地。

Yes. It's a repositioning of the portfolio to a different asset age.

是的。這是將投資組合重新定位到不同的資產年齡。

Correct.

正確的。

Got it. And then just one more. It looks like part of the beat this quarter came from lower property operating expenses. I just -- can you just sort of talk about how you kind of see that trending moving forward now that you have the GOV and SIR portfolios integrated and just sort of reconcile what you kind of put in the pro forma numbers that you've put in last quarter's supplemental, and then sort of the way things shook out this quarter and any sort of variances that you've seen?

知道了。然後還有一個。本季業績成長的部分原因似乎是房地產營運支出下降。我只是 - 您能否談談您如何看待這種趨勢的發展，因為您已經整合了 GOV 和 SIR 投資組合，並且可以協調您在預計數字中所輸入的內容在上個季度的補充中，然後是本季度的情況以及您看到的任何差異？

This is Jeff. The pro forma numbers we provided last quarter were as if SIR and OPI merged on October 31 -- I mean, October 1, 2018. So we talked about kind of our pro forma and our operating expenses. And I think it's a matter of a combination of 2 things: one, lease type and our ability to pass back certain costs to our tenants; and two, it's about how we continue to try to maintain certain staffing levels and our utility expenses at the property level.

這是傑夫。我們上季提供的預期數據就好像 SIR 和 OPI 於 10 月 31 日合併——我的意思是，2018 年 10 月 1 日。所以我們討論了我們的預估和營運費用。我認為這是兩件事結合的問題：一是租賃類型以及我們將某些成本轉嫁給租戶的能力；二是租賃類型以及我們將某些成本轉嫁給租戶的能力。第二，我們如何繼續努力維持一定的人員配置水準和物業層面的公用事業費用。

The next question comes from Michael Carroll of RBC Capital Markets.

下一個問題來自加拿大皇家銀行資本市場的麥可‧卡羅爾。

David, I wanted to touch on, I guess, the acquisition targets that you're currently looking at. I'm assuming that you're looking at deals in the marketplace, if you're thinking about deploying capital towards the end of this year, maybe the beginning of next, what type of first-generation buildings are you looking at? What markets are they in? And what's the targeted cap rates we should assume for those types of deals?

大衛，我想我想談談您目前正在考慮的收購目標。我假設您正在市場上尋找交易，如果您正在考慮在今年年底（也許明年年初）部署資本，那麼您正在尋找什麼類型的第一代建築？他們在哪些市場？對於這些類型的交易，我們應該假設的目標資本化率是多少？

It's a good question, Mike. I would say, what we are looking at are first-generation single-tenant buildings. And I would say, buildings that tend to be 3 to 5 years old that have 7- to 10-year remaining lease terms. We're also looking at some multi-tenant buildings that have both U.S. and state governments in it. They tend to be tenants that we believe will be stickying to the building and buildings where we don't think they're going to be material capital needs on an ongoing basis. I would say, the cap rates, they're going to be anywhere from, call it, a mid-6 to a mid-7 is what we're looking at, and a lot of that is going to depend upon the accretion we think we could create through the capital recycling program and where we ultimately get leverage to.

這是個好問題，麥克。我想說，我們看到的是第一代單一租戶建築。我想說的是，樓齡往往為 3 至 5 年，剩餘租賃期限為 7 至 10 年。我們也正在研究一些同時有美國和州政府的多租戶建築。他們往往是我們認為會堅持居住的租戶，以及我們認為他們不會持續滿足物質資本需求的建築物。我想說，上限利率，我們正在考慮的是從 6 到 7 中的任何地方，其中很大一部分將取決於我們的成長。我認為我們可以透過資本回收計劃來創造，並最終獲得槓桿作用。

Okay. And there are markets that you're looking at, or you're looking at top-tier type markets, kind of in and around the D.C. area where you're having a lot of exposure today or pretty much throughout the country?

好的。您正在關注某些市場，或者您正在關注頂級類型的市場，例如在華盛頓特區及其周邊地區，您今天在這些市場或幾乎在全國範圍內都有大量的曝光？

We are generally not looking in gateway markets. I would say, we're looking in more primary and secondary markets. We will look at stuff in the D.C. Metro market, but we're not -- we have a fair amount of exposure in the D.C. Metro market and really aren't looking to substantially grow in that market at this time.

我們通常不會關注門戶市場。我想說，我們正在尋找更多的一級和二級市場。我們將關注華盛頓地鐵市場的情況，但我們不會——我們在華盛頓地鐵市場擁有相當多的曝光度，目前並不打算在該市場大幅成長。

Okay. And then can you talk a little bit about the capital that you've already committed, I guess, on the TI side? I believe it was, you said, $63 million in your prepared remarks. Is that related to leases that have already been signed and commenced? And when should we expect that capital to actually be deployed into the portfolio?

好的。然後您能談談您已經在 TI 方面投入的資金嗎？我相信，您在準備好的演講中說，這是 6300 萬美元。這是否與已經簽署並開始的租賃有關？我們應該何時預期這些資本會真正部署到投資組合中？

The answer to that is, yes, that's capital we've committed to. It is tenant directed, so it's a little bit of a challenge to predict when it will be spent. We try to monitor closely with our tenant base, but it's fairly hard to gauge when they'll actually request those funds.

答案是，是的，這就是我們所承諾的資本。它是由租戶主導的，因此預測何時花掉有點困難。我們嘗試密切監控我們的租戶群，但很難判斷他們何時真正會要求這些資金。

And those are tenants that are currently paying your rents and are in the portfolio today?

那些是目前正在支付您的租金並在今天的投資組合中的租戶？

Correct.

正確的。

The next question comes from Jon Petersen of Jefferies.

下一個問題來自傑富瑞 (Jefferies) 的喬恩彼得森 (Jon Petersen)。

Just curious, when you guys announced the merger with SIR, you guys talked about an AFFO payout ratio of 75%, which kind of, now that we know the dividend, kind of back into a number there. Just curious if you guys are still kind of comfortable with that payout ratio and if you're trending better or worse? And then kind of along those same lines, I think last quarter you talked about $60 million to $80 million of CapEx is what we should expect for the year. Just curious, if that is also tracking. And I guess what all lines are included in that $60 million to $80 million? Does that include leasing commissions or not?

只是好奇，當你們宣布與 SIR 合併時，你們談到 AFFO 派息率為 75%，現在我們知道了股息，這有點回到那裡的數字。只是好奇你們是否仍然對這個支付比率感到滿意，以及你們的趨勢是好還是壞？類似地，我認為上個季度您談到的 6,000 萬至 8,000 萬美元的資本支出是我們今年應該預期的。只是好奇，如果這也是跟蹤的話。我想這 6,000 萬至 8,000 萬美元都包含哪些內容？這是否包括租賃佣金？

Yes. So I think the -- we look at CAD payout ratio on an annualized basis, and I believe our target today is, as said, where we believe we can achieve a 75% CAD payout ratio on an annualized basis. And then for your second question related to capital, we gave a range of $60 million to $80 million, and included in that was building improvements as well as certain -- it was mostly building improvements, lease commission, that type of activity.

是的。所以我認為，我們以年化為基礎來看待加元支付率，我相信我們今天的目標是，如上所述，我們相信我們可以實現 75% 的加元年化支付率。然後，對於與資本相關的第二個問題，我們給出了 6000 萬至 8000 萬美元的範圍，其中包括建築改良以及某些類型——主要是建築改良、租賃佣金等類型的活動。

Okay. And then, you -- so $750 million of dispositions. I'm curious, once you get through that, a lot of that will be the stuff that's sellable today. I think David, you had mentioned early that there are some properties out there that still maybe require a few years of investment and make sense to sell out in the future. So I hope you can help us kind of put maybe a percentage on your portfolio or maybe a dollar value of how much of the portfolio will still be "noncore" once you get through this $750 million program?

好的。然後，你——7.5億美元的處置。我很好奇，一旦你完成了這個任務，其中許多將成為今天可以出售的東西。我想大衛，你之前提到過，有些房產可能仍然需要幾年的投資，並且在未來出售是有意義的。因此，我希望您能幫助我們在您的投資組合中投入一定的百分比，或者在您完成這個 7.5 億美元的計劃後，投資組合中的多少部分仍將是「非核心」？

It's a good question, Jon. I don't know that we would have a significant portion of the portfolio that would necessarily be noncore. And I think that will change over time as we have better insight into the likelihood of renewing tenants in place and what the capital requirements are going to be. So I think it's difficult to put a percentage on that because I think that the percentage that's going to change over time. I guess the way I would look at it is we've targeted a capital recycling program in the $100 million to $300 million per year range. And so that's probably the better way to think about it.

這是個好問題，喬恩。我不知道我們的投資組合中有很大一部分一定是非核心的。我認為隨著時間的推移，這種情況將會發生變化，因為我們對續租租戶的可能性以及資本需求將有更深入的了解。所以我認為很難給出一個百分比，因為我認為這個百分比會隨著時間的推移而改變。我想我的看法是，我們的目標是每年 1 億至 3 億美元的資本回收計畫。所以這可能是更好的思考方式。

This concludes our question-and-answer session. I would like to turn the conference back over to David Blackman for any closing remarks.

我們的問答環節到此結束。我想將會議轉回給大衛布萊克曼（David Blackman）發表閉幕詞。

Thank you for joining us today. We look forward to updating you on our continued progress in reshaping the company on our next quarterly earnings call. That concludes today's call.

感謝您今天加入我們。我們期待在下一個季度的財報電話會議上向您通報我們在重塑公司方面的持續進展。今天的電話會議到此結束。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。