Office Properties Income Trust (OPI) 2021 Q2 法說會逐字稿

Good day, and welcome to the Office Properties Income Trust Second Quarter 2021 Earnings Conference Call. (Operator Instructions) Please note, this is being recorded.

美好的一天，歡迎參加 Office Properties Income Trust 2021 年第二季財報電話會議。 （操作員指示）請注意，此資訊正在被記錄。

At this time, I would like to turn it over to Olivia Snyder, Manager of Investor Relations. Please go ahead.

這次，我想把它交給投資者關係經理奧利維亞·斯奈德(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 Operating Officer, Chris Bilotto; and Chief Financial Officer and Treasurer, Matt Brown. In just a moment, they will provide details about our business and our performance for the second quarter of 2021, followed by a question-and-answer session with sell-side 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是 OPI 總裁兼營運長 Chris Bilotto；財務長兼財務主管馬特布朗。稍後，他們將提供有關我們的業務和 2021 年第二季度業績的詳細信息，然後與賣方分析師進行問答。

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, July 30, 2021, 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. 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's website. Investors are cautioned not to place undue reliance upon any forward-looking statements.

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（2021 年 7 月 30 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。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或 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, cash available for distribution or CAD, adjusted EBITDA and cash basis net operating income, or cash basis NOI. A reconciliation of these non-GAAP figures to net income are available in our supplemental operating and financial data package, which also can be found on our website. In addition, we will be providing guidance on this call, including normalized FFO and cash basis NOI. We are not providing a reconciliation of these non-GAAP measures as part of our guidance because certain information required for such reconciliation is not available without unreasonable efforts or at all, such as gains and losses or impairment charges related to the disposition of real estate.

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、可用於分配的現金或加幣、調整後的 EBITDA 和現金制淨營業收入或現金制 NOI。這些非公認會計準則資料與淨利潤的對帳可在我們的補充營運和財務資料包中找到，這些資料包也可以在我們的網站上找到。此外，我們也將就本次電話會議提供指導，包括標準化 FFO 和現金制 NOI。作為我們指導的一部分，我們不會提供這些非公認會計原則措施的調節表，因為如果沒有不合理的努力，就無法獲得此類調節所需的某些信息，例如與房地產處置相關的損益或減值費用。

Now I will turn the call over to Chris.

現在我將把電話轉給克里斯。

Thank you, Olivia, and good morning. Welcome to the second quarter earnings call for Office Properties Income Trust. Yesterday, we reported normalized FFO of $1.15 per share, exceeding our expectations as well as consensus estimates for the quarter. During the second quarter, we advanced many of our core business strategies focused on enhancing the overall quality and geographic footprint of our portfolio, driving healthy portfolio cash flow growth and retention through proactive asset management and leasing, managing through areas of known risk and opportunity and effective balance sheet management to execute on our deleveraging and refinancing initiatives. Overall, we have seen office leasing activity begin to recover and remain encouraged by the long term outlook for our company.

謝謝你，奧利維亞，早安。歡迎參加辦公地產收入信託第二季財報電話會議。昨天，我們公佈的正常化 FFO 為每股 1.15 美元，超出了我們的預期以及本季的普遍預期。在第二季度，我們推進了許多核心業務策略，重點是提高投資組合的整體品質和地理覆蓋範圍，透過積極的資產管理和租賃，透過已知風險和機會的領域進行管理，推動健康的投資組合現金流量成長和保留。有效的資產負債表管理來執行我們的去槓桿和再融資計劃。總體而言，我們看到辦公室租賃活動開始復甦，並繼續受到公司長期前景的鼓舞。

Turning first to an update on our acquisition and capital recycling activity. As previously announced, in June, we acquired 2 core Class A office properties for a total of $550 million. These acquisitions are accretive to cash flows and enhance our overall portfolio metrics, including geographic diversification, occupancy, average building age and weighted average lease terms. With newer construction and modern infrastructure and design, each of the properties have limited capital requirements, deliver contractual annual rent growth of over 2% and offer a net lease structure for recoveries of operating expenses. As a result, we believe these 2 new investment opportunities will provide attractive long term risk-adjusted returns for OPI.

首先介紹我們的收購和資本回收活動的最新情況。如同先前宣布的，6月份，我們收購了兩處核心甲級辦公室物業，總價值為5.5億美元。這些收購增加了現金流，並增強了我們的整體投資組合指標，包括地理多元化、入住率、平均建築年齡和加權平均租賃期限。憑藉較新的建築以及現代化的基礎設施和設計，每個房產的資本要求都有限，可實現超過 2% 的合約年租金增長，並提供用於收回營運費用的淨租賃結構。因此，我們相信這兩個新的投資機會將為 OPI 提供有吸引力的長期風險調整回報。

The first property, known as 1K Fulton in Chicago was acquired for $355 million, representing a GAAP cap rate of 4.7% at closing. This 531,000 square foot property is 73% leased to Google as its Midwest headquarters and more than 99% leased overall with a weighted average lease term of 6.6 years. We are pleased to add Google as our second largest tenant for OPI, providing AA+ rated cash flow and accounting for 3.6% of OPI's total annualized rental income. This LEED certified property underwent a full redevelopment in 2015 and is located in the highly desirable Fulton submarket of Downtown Chicago, a neighborhood, which has experienced strong population growth among young, educated professionals, attracting Fortune 500 companies such as Google and McDonald's, which has supported residential and mixed-use development. In addition, the Fulton submarket continues to benefit from our rapidly growing presence of both technology and life science companies, providing OPI with a favorable market investment landscape.

第一個物業名為 1K Fulton，位於芝加哥，以 3.55 億美元的價格收購，成交時的 GAAP 上限率為 4.7%。這棟 531,000 平方英尺的房產的 73% 被出租給 Google 作為其中西部總部，整體出租率超過 99%，加權平均租賃期限為 6.6 年。我們很高興谷歌成為 OPI 的第二大租戶，提供 AA+ 級現金流，佔 OPI 年化租金收入總額的 3.6%。該 LEED 認證物業於 2015 年進行了全面重建，位於芝加哥市中心非常理想的富爾頓子市場，該社區的年輕受過教育的專業人士人口增長強勁，吸引了谷歌和麥當勞等財富 500 強公司，支持住宅和綜合用途開發。此外，富爾頓子市場繼續受益於我們快速成長的技術和生命科學公司的影響力，為 OPI 提供了有利的市場投資環境。

While we expect to benefit from the current lease term and corresponding cash flow stability, we estimate current rent to be close to 20% below market, providing the opportunity for further upside upon lease renewal. We also acquired the property known as Twelve24 in Atlanta for $195 million, representing a GAAP cap rate of 6.3% at closing. This 346,000 square foot property is 96% leased to Insight Global as its corporate headquarters and more than 98% leased overall with a weighted average lease term of 14.2 years.

雖然我們預計將受益於當前的租賃期限和相應的現金流穩定性，但我們估計當前的租金將比市場水平低近 20%，這為續租後提供進一步上漲的機會。我們也以 1.95 億美元的價格收購了位於亞特蘭大的 Twelve24 地產，交易結束時的 GAAP 上限率為 6.3%。這棟佔地 346,000 平方英尺的物業的 96% 出租給 Insight Global 作為其公司總部，整體出租率超過 98%，加權平均租賃期限為 14.2 年。

Insight Global is the third largest staffing company in the U.S. and has experienced solid growth over the last few years, including the addition of 5,000 employees in 2020. This core Class A property was constructed in 2021 and is located in Atlanta's Central Perimeter submarket, which is the largest employment center in Greater Atlanta and home to Fortune 500 headquarters for Mercedes, State Farm and NASDAQ. Given these dynamics, we believe Twelve24 should provide OPI attractive risk-adjusted returns in a healthy market with a high-quality tenant.

Insight Global 是美國第三大人力資源公司，在過去幾年中經歷了穩健成長，包括在 2020 年增加了 5,000 名員工。這核心 A 級物業建於 2021 年，位於亞特蘭大中央週邊子市場，是大亞特蘭大地區最大的就業中心，也是財富500 強梅賽德斯、State Farm 和納斯達克總部的所在地。鑑於這些動態，我們認為 Twelve24 應該在擁有高品質租戶的健康市場中為 OPI 提供有吸引力的風險調整回報。

Turning to dispositions. As discussed last quarter, in April, we sold our property located in Huntsville, Alabama that was a known vacate in the third quarter for $39 million. In July, we also sold 2 properties for a total of $7 million, including our property in Fresno, California, that was a known vacate in the fourth quarter. We are pleased to sell these noncore properties as part of our focus to reshape the portfolio and eliminate potential drags in occupancy as well as anticipated capital and downtime.

轉向處置。正如上個季度（4 月）所討論的，我們以 3900 萬美元的價格出售了位於阿拉巴馬州亨茨維爾的房產，該房產在第三季度已被空置。 7 月份，我們還以總計 700 萬美元的價格出售了 2 處房產，其中包括我們在加州弗雷斯諾的房產，該房產在第四季度已被空置。我們很高興出售這些非核心物業，作為我們重塑投資組合、消除入住率以及預期資本和停機時間的潛在拖累的重點的一部分。

Since the start of our capital recycling program in 2020, we committed to selling properties that are older in age, more capital-intensive or those that have maximized value and exit markets, where we see limited future growth and reinvest the proceeds into higher quality and stronger cash flow producing properties. We have since sold $287 million of properties, while eliminating forecasted capital spending needs of $113 million over a 5-year period. As part of these efforts, we have reinvested those proceeds into properties located in strong growing markets with an average age of close to 3 years and a highly accretive 5-year cash contribution yield in excess of 5%.

自2020 年啟動資本回收計劃以來，我們致力於出售年齡較大、資本密集度較高或已實現價值最大化的房產並退出市場，我們認為這些房產未來增長有限，並將收益再投資於更高品質和更高品質的房產。產生現金流的資產更加強勁。此後，我們已售出 2.87 億美元的房產，同時消除了 5 年內預計的 1.13 億美元的資本支出需求。作為這些努力的一部分，我們將這些收益再投資於位於強勁成長市場的房地產，這些房地產的平均年齡接近 3 年，且 5 年期現金貢獻收益率超過 5%。

We believe the execution of our capital recycling initiatives will continue to enhance the quality of our portfolio as supported by key metrics, including the increase of our portfolio wall to 5.9 years from 4.9 years in Q1, an overall reduction of the average age of our portfolio and our expanded footprint in strong growing markets such as Atlanta and Chicago. We expect to continue with our capital recycling program in the future quarters, which Matt will also touch on in his prepared remarks.

我們相信，在關鍵指標的支持下，我們的資本回收計劃的執行將繼續提高我們投資組合的質量，包括將我們的投資組合牆從第一季的4.9 年增加到5.9 年，整體降低我們投資組合的平均年齡我們擴大了在亞特蘭大和芝加哥等強勁成長市場的足跡。我們預計在未來幾季繼續實施我們的資本回收計劃，馬特也將在他準備好的演講中談到這一點。

As was recently announced, in June, we commenced the redevelopment of 20 Massachusetts Avenue in Washington, D.C. This project will expand the existing 7-story, 340,000 square foot Class B property to a 10-story, 427,000 square foot mixed-use property that is expected to be completed in early 2023. The redesigned property will feature 184,000 square feet of Class A office space, 14,000 square feet of retail space, a luxuriously appointed hotel and extensive amenities. State of the art design and construction will underscore our commitment to sustainability with a focus on touchless systems as well as LEED and WELL certifications.

正如最近宣布的，我們於6 月開始了華盛頓特區馬薩諸塞大道20 號的重建工作。該項目將把現有的7 層、340,000 平方英尺的B 級物業擴建為10 層、427,000 平方英尺的混合用途物業，預計將於 2023 年初竣工。重新設計的酒店將擁有 184,000 平方英尺的甲級辦公空間、14,000 平方英尺的零售空間、一家裝修豪華的酒店和廣泛的設施。最先進的設計和施工將強調我們對永續發展的承諾，重點是非接觸式系統以及 LEED 和 WELL 認證。

We are also pleased to be more than 50% pre-leased at this early stage in the project timeline with the execution of a 230,000 square foot lease for a 271-key Royal Sonesta Hotel. Sonesta is one of the largest hotel management companies in the U.S. and the eighth largest hotel brand and franchise company in America. Sonesta currently operates close to 1,300 hotels with over 140,000 rooms and brings growing brand recognition to this distinctive Capitol Hill destination. 20 Massachusetts Ave is located adjacent to Union Station, a major regional transit hub and a short walk to the United States Capitol and Supreme Court. We anticipate total project cost of approximately $200 million with stabilized year returns of 8% to 10%, making this a highly accretive use of capital.

我們也很高興在專案時間表的早期階段就預租了超過 50%，為擁有 271 間客房的 Royal Sonesta 酒店執行了 230,000 平方英尺的租賃。 Sonesta是美國最大的飯店管理公司之一，也是美國第八大飯店品牌和特許經營公司。 Sonesta 目前經營近 1,300 家酒店，擁有超過 140,000 間客房，為這個獨特的國會山目的地帶來了不斷增長的品牌知名度。馬薩諸塞大道 20 號毗鄰主要區域交通樞紐聯合車站，步行片刻即可到達美國國會大廈和最高法院。我們預計專案總成本約為 2 億美元，年回報率將穩定在 8% 至 10%，使其成為資本的高度增值用途。

Turning to leasing results for the quarter. We are encouraged by the momentum of our leasing dialog and activity in the second quarter. Importantly, we have seen new leasing accelerate, and new deals contributed nearly 50% of our total activity. During the second quarter, we completed 548,000 square feet of new and renewal leasing with a 17.1% roll-up in rent, a weighted average lease term of 16.6 years and leasing concessions and capital commitments of $8.42 per square foot per lease year. We ended the quarter with consolidated occupancy of 89.5%.

轉向本季的租賃業績。我們對第二季租賃對話和活動的勢頭感到鼓舞。重要的是，我們看到新租賃加速成長，新交易貢獻了我們總活動的近 50%。第二季度，我們完成了 548,000 平方英尺的新租賃和續租租賃，租金上漲 17.1%，加權平均租賃期限為 16.6 年，租賃優惠和資本承諾為每個租賃年每平方英尺 8.42 美元。本季末，我們的綜合入住率為 89.5%。

In addition to the Sonesta -- to lease of Sonesta, we renewed the GSA in Cheyenne, Wyoming for 67,000 square feet and a 20-year term and extended the GSA lease in Holtsville, New York for 101,000 square feet and a 3-year term. Both of these tenants renewed with the roll-up in rent of close to 20%, and the overall economics serve as a proud example of how a strategically-located agency can deliver strong investment and leasing results for OPI.

除了Sonesta 之外，我們還續簽了懷俄明州夏延市的GSA，租期為67,000 平方英尺，期限為20 年，並將紐約州霍爾茨維爾的GSA 租期延長為101,000 平方英尺，期限為3年。這兩位租戶都以接近 20% 的租金上漲而續約，整體經濟狀況堪稱一個令人自豪的例子，說明戰略位置的代理機構如何能夠為 OPI 帶來強勁的投資和租賃業績。

Our leasing pipeline remains robust with discussions covering 3.8 million square feet, including more than 890,000 square feet of new and renewal leasing in advanced stages of negotiations, more than 130,000 square feet that has been executed subsequent to quarter end and 1.2 million square feet that could absorb vacant space. This is the fourth consecutive quarter, where our leasing pipeline has been in excess of 3 million square feet, which highlights the growing interest from tenants across our portfolio.

我們的租賃管道仍然強勁，討論面積達 380 萬平方英尺，其中包括處於談判後期階段的超過 890,000 平方英尺的新租賃和續租租賃、超過 130,000 平方英尺已在季度末後執行以及 120 萬平方英尺可能會吸收空閒空間。這是我們連續第四個季度的租賃面積超過 300 萬平方英尺，這凸顯了租戶對我們投資組合的興趣不斷增長。

I'll discuss 3 of our 4 known larger vacates for 2021. As mentioned last quarter, at the fourth property in Plantation, Florida, the GSA's lease expired in April and represent 80 basis points of annualized revenue. The tenant elected to hold over for up to 12 months, and we now anticipate continued occupancy through mid-December 2021. Despite this holdover, activity for private sector leasing has been strong with several large users having acquired into the building, including a signed term sheet for half of the total square footage.

我將討論2021 年4 個已知較大空缺中的3 個。正如上季度提到的，在佛羅裡達州種植園的第四處房產，GSA 的租約已於4 月份到期，佔年化收入的80 個基點。租戶選擇保留長達12 個月，我們現在預計到2021 年12 月中旬將繼續入住。儘管有這種延期，但私營部門的租賃活動仍然強勁，有幾家大型用戶已入駐該建築，包括簽署了一份期限佔總面積一半的板材。

Despite the pressure of the last 18 months, our investment strategy and portfolio composition of key industries and tenants has continued to perform well. We are pleased with the successful execution of our capital recycling program and believe we are well positioned to continue to advance our growth objectives.

儘管面臨過去 18 個月的壓力，我們的投資策略以及重點產業和租戶的投資組合組成仍然表現良好。我們對資本回收計劃的成功執行感到高興，並相信我們有能力繼續推進我們的成長目標。

I will now turn the call over to Matt Brown to provide details on our financial results. Matt?

我現在將把電話轉給馬特布朗，以提供有關我們財務業績的詳細資訊。馬特？

Thanks, Chris, and good morning, everyone. Normalized FFO for the second quarter was $55.4 million or $1.15 per share, which beat consensus in the high end of our estimate by $0.02, mainly due to operating expenses lagging our forecast based on building utilization levels remaining below our estimates and NOI from the properties we acquired in June. CAD for the second quarter was $33.8 million or $0.70 per share, resulting in a rolling 4-quarter CAD payout ratio of 63%.

謝謝克里斯，大家早安。第二季標準化FFO 為5,540 萬美元，即每股1.15 美元，比我們預期上限的共識高出0.02 美元，這主要是由於營運費用落後於我們的預測，而建築利用率水準仍然低於我們的預期，而且我們的物業的NOI 也低於我們的預期。六月收購。第二季加幣為 3,380 萬美元，即每股 0.70 美元，第四季滾動加元支付率為 63%。

G&A expense for the second quarter was $13 million, which includes $5.9 million of estimated business management incentive fees. Excluding estimated incentive fees, G&A expense was $7.1 million compared to $7.2 million for the same period last year and $6.1 million for the prior quarter. The increase sequentially is driven by annual trustee share grant expense as well as higher base business management fees due to an increase in our average share price in the quarter. As a reminder, incentive fees under our business management agreement with RMR are payable after the end of each calendar year in which they are earned but are recognized in the calculation of net income in accordance with GAAP in the first, second and third quarters, if applicable. We do not include such expense in adjusted EBITDAre or normalized FFO until the fourth quarter when the final incentive fee amount is determined.

第二季的一般管理費用為 1300 萬美元，其中包括預計的 590 萬美元的業務管理激勵費用。不包括估計的獎勵費用，一般管理費用為 710 萬美元，去年同期為 720 萬美元，上一季為 610 萬美元。這一增長的推動因素是年度受託人股票授予費用以及由於本季平均股價上漲而導致的基本業務管理費上漲。提醒一下，根據我們與 RMR 的業務管理協議，獎勵費用應在賺取獎勵的每個日曆年結束後支付，但在第一、第二和第三季度按照 GAAP 計算淨利潤時予以確認，如果適用的。在第四季度確定最終激勵費用金額之前，我們不會將此類費用計入調整後的 EBITDAre 或標準化 FFO 中。

The incentive fee accrued in the second quarter is based on OPI's total return in comparison to the index over the 3-year measurement period. OPI outperformed the index by 15.1% with a total return of 31.5%. This equates to an estimated annual incentive fee of $22.2 million. The incentive fee accrual may increase or decrease over the remainder of the year depending on how OPI performs relative to the index.

第二季應計的激勵費是根據 OPI 的總回報率與 3 年衡量期間的指數進行比較得出的。 OPI 跑贏指數 15.1%，總報酬率為 31.5%。這相當於預計每年 2,220 萬美元的獎勵費。在今年剩餘時間內，應計獎勵費用可能會增加或減少，具體取決於 OPI 相對於指數的表現。

Interest expense for the second quarter was $29 million, an increase of $200,000 from the prior quarter. While interest expense increased sequentially, we expect interest expense to be between 26 and $27 million for each of the third and fourth quarters of 2021. The expected decline from Q2 is primarily due to the accretive bond offering in May, in which we raised $300 million of 2.65% unsecured senior notes and used the proceeds to redeem $310 million of 5.875% senior notes and the prepayment of $71 million of 3.55% mortgage debt in June using cash on hand and borrowings under our unsecured revolving credit facility. The May bond offering was 6x oversubscribed, and we believe this indicates a positive investor outlook for office real estate. The opportunistic debt management will result in interest expense savings of approximately $10 million annually.

第二季利息支出為2,900萬美元，較上季增加20萬美元。雖然利息支出連續增加，但我們預計2021 年第三季和第四季的利息支出將分別在26 至2,700 萬美元之間。預期較第二季下降主要是由於5 月份債券發行的增加，我們籌集了3 億美元2.65% 的無擔保高級票據，並使用所得款項贖回了3.1 億美元的5.875% 優先票據，並在6 月份使用手頭現金和我們的無擔保循環信貸安排下的借款提前償還了7100萬美元的3.55% 抵押貸款債務。 5 月的債券發行獲得了 6 倍的超額認購，我們認為這表明投資者對辦公房地產的樂觀前景。機會主義債務管理每年將節省約 1000 萬美元的利息支出。

Turning to property level results for the quarter. Same property cash basis NOI decreased $2.7 million or 3.1% compared to the second quarter of 2020, slightly outperforming a low end of our guidance range of negative 3.5% to 5.5%. As expected, the decrease was mainly driven by a reduction in rental income of $2 million, driven by declines in occupancy as well as an increase in operating expenses of $700,000, mainly due to increases in real estate taxes.

轉向本季的房地產水平結果。與 2020 年第二季相比，相同房地產現金基礎 NOI 下降 270 萬美元，即 3.1%，略高於我們指導範圍的負 3.5% 至 5.5% 的下限。正如預期，下降的主要原因是入住率下降導致租金收入減少 200 萬美元，以及主要由於房地產稅增加而導致營運費用增加 70 萬美元。

Turning to normalized FFO and same property cash basis NOI expectations. We expect third quarter normalized FFO to be between $1.20 and $1.22 per share, driven by the following: an increase of $0.16, including $0.11 from the June acquisitions and $0.05 from the Q2 bond offering and redemption activities described above, offset by a decrease of $0.10, including $0.07 due to increased operating expenses and $0.03 from the sale of the Fresno, California property in July. We expect third quarter same property cash basis NOI to be flat to down 2% as compared to the third quarter of 2020.

轉向正常化的 FFO 和相同的房地產現金基礎 NOI 預期。我們預計第三季標準化FFO 將在每股1.20 美元至1.22 美元之間，驅動因素如下：成長0.16 美元，其中包括6 月收購帶來的0.11 美元以及上述第二季債券發行和贖回活動帶來的0.05 美元，但被下降0.10 美元所抵消，其中包括因營運費用增加而產生的 0.07 美元，以及 7 月出售加州弗雷斯諾房產產生的 0.03 美元。我們預計第三季相同房地產現金基礎 NOI 將與 2020 年第三季持平或下降 2%。

Turning to capital expenditures and the balance sheet. We spent $19 million on recurring capital during the second quarter, and we expect recurring capital expenditures for the full year to be between 75 and $80 million. As Chris mentioned, we also commenced our redevelopment of 20 Mass Ave in June and spent $10.3 million in the second quarter. We anticipate delivery in the first quarter of 2023 and total project cost of approximately $200 million, of which $46 million is expected to be spent in 2021.

轉向資本支出和資產負債表。第二季我們在經常性資本上花費了 1,900 萬美元，我們預計全年的經常性資本支出將在 7,500 至 8,000 萬美元之間。正如 Chris 所提到的，我們還在 6 月開始了 20 Mass Ave 的重建工作，第二季花費了 1,030 萬美元。我們預計將於 2023 年第一季交付，專案總成本約為 2 億美元，其中預計 2021 年支出 4,600 萬美元。

At June 30, our leverage was 6.9x, pro forma for the 2 property acquisitions in June, which were funded using cash on hand and approximately $350 million of borrowings under our $750 million revolving credit facility. We expect to dispose of noncore properties under our capital recycling program to repay debt and manage our leverage levels and have approximately $300 million of properties in the market or identified for disposition that we plan to bring to market in the near term.

截至 6 月 30 日，我們的槓桿率為 6.9 倍（以 6 月份兩筆房產收購的預計計算），這些收購的資金來源為手頭現金以及我們 7.5 億美元循環信貸額度下的約 3.5 億美元借款。我們預計將根據我們的資本回收計劃處置非核心財產，以償還債務並管理我們的槓桿水平，並且我們計劃在短期內將大約 3 億美元的財產投入市場或確定待處置。

We currently have $380 million outstanding and $370 million available on our revolving credit facility. We are pleased with the execution of many of our core business strategies in the second quarter, which have enhanced the quality, diversity and security of our portfolio.

目前，我們的循環信貸額度中有 3.8 億美元的未償貸款和 3.7 億美元的可用資金。我們對第二季許多核心業務策略的執行感到高興，這些策略提高了我們投資組合的品質、多樣性和安全性。

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。

And our first question today comes from Bryan Maher, B. Riley FBR.

今天我們的第一個問題來自 Bryan Maher, B. Riley FBR。

Couple of questions on Mass Ave, which looks fantastic on the website that you have, explaining what it's all about. That $200 million of cost, is that going to be a fixed cost? Is there guarantees by the builder on that?

關於 Mass Ave 的幾個問題，在您的網站上看起來很棒，解釋了它的全部內容。這 2 億美元的成本是固定成本嗎？開發商對此有保證嗎？

Yes. I mean, typically -- Bryan, this is Chris. Typically, with these projects at this side, it's kind of a GMP. So on the onset, we structure kind of the agreement, where we kind of lock in pricing and then anything that is in excess would be borne by either the contractor or if needed, through use of contingencies. So for that particular project, we've bought down a lot of the job already. And so, I think we feel pretty comfortable where that number is trending.

是的。我的意思是，通常 - 布萊恩，這是克里斯。通常，這些項目在這方面，它是一種 GMP。因此，從一開始，我們就制定了某種協議，鎖定定價，然後任何超出的部分都將由承包商承擔，或者如果需要的話，透過使用意外費用來承擔。因此，對於那個特定的項目，我們已經買下了很多工作。因此，我認為我們對這個數字的趨勢感到非常滿意。

Okay. And I think, you said, $46 million will be spent on it in 2021. Does that include the $10 million, I think, you referenced in 2Q?

好的。我認為，您說過，2021 年將花費 4600 萬美元。我想，這是否包括您在第二季度提到的 1000 萬美元？

Yes. That's inclusive.

是的。這是包容性的。

Okay. So roughly, $150 million, $155 million in 2022 or do you expect some of the balance to carry over into 2023?

好的。粗略地說，2022 年為 1.5 億美元、1.55 億美元，還是您預計部分餘額會結轉到 2023 年？

There's a portion that will carry into 2023, and I think the number is trending right now at less than $20 million.

其中一部分將持續到 2023 年，我認為目前的數位趨勢是不到 2,000 萬美元。

Okay. And then as it relates to those 2 office properties you recently bought in Chicago and Atlanta, how did you source those and via that sourcing, kind of how deep is the pipeline of other similar assets that you could acquire?

好的。然後，由於它與您最近在芝加哥和亞特蘭大購買的兩處辦公物業相關，您是如何購買這些辦公物業的，以及透過該採購，您可以收購的其他類似資產的管道有多深？

Well, I think from a sourcing initiative, I mean, through kind of our manager and our acquisition team, we're sourcing opportunities rarely. I think, we see most, if not all deals out there, whether individual acquisitions or other opportunities. And so these 2 deals came to us through that kind of venue and then our relationships with brokers. And so with respect to how many other deals like this are out there -- I mean, as far as our pipeline goes, I mean, our focus now coming out of these acquisitions is kind of back into some capital recycling. But there's a handful of deals out there in the market, kind of similar quality. And so I think, we evaluate them on a case-by-case basis. But again, these kind of came through our channel and relationships.

嗯，我認為從採購計劃來看，我的意思是，透過我們的經理和收購團隊，我們很少尋找機會。我認為，我們看到了大多數（如果不是全部）交易，無論是個人收購還是其他機會。因此，這兩筆交易是透過這種場所以及我們與經紀人的關係達成的。因此，關於還有多少其他類似的交易——我的意思是，就我們的管道而言，我的意思是，我們現在從這些收購中得出的重點是某種資本回收。但市場上有一些類似品質的交易。所以我認為，我們會根據具體情況對它們進行評估。但同樣，這些都是透過我們的管道和關係來的。

Great. And then just last for me. And I think, you commented on this in the last quarter's earnings call. But based upon how the last 3 months have unfolded, can you give us your updated thoughts on where year-end occupancy shakes out, maybe plus or minus 50 bps?

偉大的。然後就對我來說最後一次。我想，您在上個季度的財報電話會議上對此發表了評論。但根據過去 3 個月的情況，您能否向我們提供您對年末入住率變化（可能正負 50 個基點）的最新想法？

Yes. I think, it's relatively the same, Bryan. I mean, I think, we've talked about kind of the 89% to 91%, and I think it kind of stands there with some of the moving pieces that we still have with kind of leases out there for pending execution, things around kind of capital recycling. I think, we feel that that's a pretty good number to stand by.

是的。我認為，情況相對相同，布萊恩。我的意思是，我認為，我們已經討論了 89% 到 91% 的情況，我認為它與我們仍然擁有的一些移動部分保持著某種待執行的租賃，周圍的事情一種資本回收。我認為，我們認為這是一個相當不錯的數字。

(Operator Instructions) At this time, our next question comes from Vikram Malhotra of Morgan Stanley.

（操作員指示）此時，我們的下一個問題來自摩根士丹利的Vikram Malhotra。

I guess, just maybe first one. Given the -- given sort of the acquisition disposition kind of faith and just the differing cap rates in terms of what you're paying for acquiring versus the disposition, I think, some of these cap rates seem pretty high. I'm just wondering, if you can give us a sense of like how -- and then obviously, the CapEx implications of the newer assets, can you give us a sense of how CAD is likely to trend or maybe even just from a dividend payout perspective over the next few quarters?

我想，也許只是第一個。考慮到給定的收購處置類型的信念，以及您為收購和處置支付的費用的不同資本化率，我認為，其中一些資本化率似乎相當高。我只是想知道，如果您能讓我們了解新資產的資本支出影響，您能否讓我們了解加元可能的趨勢，甚至可能僅來自股息未來幾季的支出前景如何？

Yes. The acquisitions from a CAD perspective are accretive, so we expect it to be favorable. As it relates to dividend coverage, our rolling fourth quarter coverage is 63% currently, absent potential incentive fee paid to our manager, we expect 2021 payout of about 70%.

是的。從加幣角度來看，這些收購具有增值作用，因此我們預計會是有利的。由於與股息覆蓋率相關，我們第四季的滾動覆蓋率目前為 63%，如果沒有向我們的經理支付潛在的激勵費，我們預計 2021 年的支付率約為 70%。

And that excludes the incentive fee, correct?

這不包括獎勵費，對嗎？

That's right. With the incentive fee, it's right around 80%.

這是正確的。加上獎勵費，大約是80%。

80%. Okay. And then, I guess the -- if we think about the overall occupancy, you mentioned kind of a view of where we could check out near term. I'm just wondering like bigger picture, given sort of the government exposure, I think, a couple of days ago, the GSA announced that they're going to be offering temp space or build out temp space for other -- for different federal branches, and they expect their office space to -- the needs to shrink over time. I'm just wondering kind of how you -- can you combine that with sort of the known move outs? Are there risks to the portfolio you see in terms of potential decline in usage of space on a more permanent basis from the government agencies?

80%。好的。然後，我想，如果我們考慮整體入住率，您提到了我們近期可以查看的地方。我只是想知道更大的前景，考慮到政府的曝光，我想，幾天前，總務管理局宣布他們將提供臨時空間或為其他人——不同的聯邦機構——提供臨時空間或建造臨時空間。分支機構，他們預計辦公空間的需求會隨著時間的推移而縮小。我只是想知道你能如何將其與已知的搬出結合在一起？您認為政府機構的空間使用率可能會長期下降，您認為該投資組合是否有風險？

Yes. So I think a couple of different things. I think, right now, kind of the office of personal management had a memorandum that went out, I think, it was in June, to kind of get feedback from the agencies around: one, kind of their re-entry plans and timing on utilization; and then, 2, at an agency level about kind of how they think about the future of the workplace. And so it's going to be heavily driven by agency in addition to kind of the new commission and the GSA and then that administration. And so I'd say that because I think the outcome of some of that feedback is going to drive that decision, which, I think, over time, we'll learn more about.

是的。所以我想到了一些不同的事情。我想，現在，個人管理辦公室有一份備忘錄，我想，是在六月，從周圍的機構那裡得到回饋：一，他們的重新進入計劃和時間安排利用；然後，2，在機構層級了解他們如何看待工作場所的未來。因此，除了新委員會、總務管理局和政府之外，這將在很大程度上受到機構的推動。所以我這麼說是因為我認為一些回饋的結果將推動這項決定，我認為隨著時間的推移，我們將了解更多。

I would say, today, where we stand, when you kind of look at our makeup, 22% of our annualized revenue is with the federal government. I would say about half of it today is more kind of defense mission-driven, meaning highly secure facilities. And in those cases, those tenants want to retain control of the building or certain areas within a building. And so the likelihood of them consolidating or condensing within a building, it seems less likely. And then, outside of that, I think, it's just going to be -- I think, forward-facing agencies, we would expect to see some shifts in their program, which represents a lesser percentage for us. And I kind of look to our results, I mentioned a few leases or transactions this quarter with the GSA. And both of those, I would say, are kind of the nonpartisan, meaning the ones that are more highly likely, in our view, to downsize or consolidate. And in those cases, I mean, they're extending, in one case, for a 20-year term and the other case for 3.

我想說，今天，當你看看我們的組成時，我們的年化收入的 22% 是來自聯邦政府。我想說，今天大約有一半是國防任務驅動的，這意味著高度安全的設施。在這些情況下，這些租戶希望保留對建築物或建築物內某些區域的管制。因此，它們在建築物內合併或凝聚的可能性似乎較小。然後，除此之外，我認為，我認為，面向前瞻性的機構，我們預計會看到他們的計劃發生一些變化，這對我們來說所佔的比例較小。我有點看一下我們的結果，我提到了本季與 GSA 的一些租賃或交易。我想說，這兩者都是無黨派的，這意味著我們認為更有可能縮小規模或進行合併。我的意思是，在這些情況下，他們會延長任期，其中一種情況是 20 年，另一種情況是 3 年。

And so I think, the short of it is, it remains highly evolved along what agencies will do. And I think our experience with the government is that it's much more difficult to get space given the process if you give space back. And so I think, they'll be very mindful of kind of how they roll out that plan and how much they elect to give back, if any, depending on the circumstances.

所以我認為，缺點是，它仍然按照機構將要做的事情高度發展。我認為我們與政府的經驗是，如果你給予空間，那麼在考慮到流程的情況下獲得空間會更加困難。因此，我認為，他們會非常注意如何實施該計劃，以及根據具體情況選擇回饋多少（如果有的話）。

That makes sense. Just related to that, if you could clarify any update or any changes to kind of the known move outs over the, call it, the next 18 months into '22?

這就說得通了。與此相關的是，您是否可以澄清 22 世紀 18 個月內已知搬遷類型的任何更新或任何變更？

Yes. So typically, we like to provide 12-month guidance on known move outs. And so when you kind of carve out the disposition of Fresno, we have about 5.6% of our annualized revenue expiring between kind of Q3 and the end of Q2 next year. And so we think about 2% of that is a known vacate. And really, it's kind of smaller tenants that make up that list. We talked about the lease with Plantation, Florida being 80% -- 80 basis points and also how we have a signed term sheet for half that space already. And then the rest is just a handful of smaller tenants across the portfolio.

是的。因此，通常情況下，我們希望針對已知的搬遷提供 12 個月的指導。因此，當你對弗雷斯諾進行處置時，我們大約有 5.6% 的年化收入在第三季到明年第二季末之間到期。因此我們認為其中約 2% 是已知的空缺。事實上，這個名單上的租戶都是較小的租戶。我們討論了與佛羅裡達州種植園的租賃率為 80% - 80 個基點，以及我們如何簽署了一半空間的條款清單。剩下的只是投資組合中少數較小的租戶。

Okay. Great. And sorry, just last one. On CapEx, you talked about incremental investment, redevelopment, you gave the capital spend for this year. I'm just wondering, like as you make these portfolio changes, combined with potentially a little bit more of a work from home or work from anywhere model, where do you see sort of the CapEx load on a per square foot basis or percent of NOI basis? Where do you see that trending kind of over the next 2 or 3 years?

好的。偉大的。抱歉，只是最後一個。在資本支出方面，您談到了增量投資、重建，您給出了今年的資本支出。我只是想知道，就像您進行這些投資組合更改一樣，結合可能更多的在家工作或在任何地方工作的模式，您會在哪裡看到每平方英尺的資本支出負載或百分比NOI基礎？您認為未來 2 到 3 年的趨勢是什麼？

I mean, from -- I mean, I can answer it in 2 parts. I'll talk quickly about kind of leasing-related capital. I think, from a leasing-related capital, I think over the last, we'll call it, 6 quarters, it's slightly increased, mostly due to kind of concessions and maybe being a little bit more heavily weighted on TI, just kind of given changes to the economic environment. And so I think that kind of over the short term, I would expect that kind of the leasing capital per square foot would be elevated, but we've started to kind of see it level out a little bit. And from a building capital...

我的意思是，從——我的意思是，我可以分成兩部分來回答。我將快速討論與租賃相關的資本。我認為，從與租賃相關的資本來看，我認為在過去的 6 個季度中，它略有增加，主要是由於某種讓步，並且可能對 TI 的權重更大一些，只是有點鑑於經濟環境的變化。因此，我認為從短期來看，我預計每平方英尺的租賃資本將會有所提高，但我們已經開始看到它稍微趨於平穩。從一棟建築之都.....

Yes, so on a building capital standpoint, as we execute on our capital recycling and sell-out of older, more capital-intensive properties and acquire kind of first-generation buildings, we'd expect that to trend down.

是的，從建築資本的角度來看，當我們執行資本回收和出售舊的、資本密集的房產並收購第一代建築時，我們預計這一趨勢會下降。

(Operator Instructions) Our next question comes from Jason Idoine of RBC Capital Markets.

（操作員說明）我們的下一個問題來自 RBC 資本市場的 Jason Idoine。

Yes, just following up on Vikram's question. On the leasing, I'm curious to -- as to how concessions and tenants' requests are changing today versus pre-COVID. So if you could kind of touch on where the markets are today. And I know you said that you'd expect it to trend lower, but I guess, what would the timeline for that be?

是的，只是跟進維克拉姆的問題。在租賃方面，我很好奇今天的優惠和租戶的要求與新冠疫情之前相比有何變化。那麼您能否談談當今的市場狀況？我知道你說過你預計它會下降，但我想，具體的時間表是什麼？

Yes. So I guess, kind of just going back to my previous comment. I think, we're seeing kind of the capital cost per square foot per year, slightly increasing from pre-COVID. And that's -- I think that while it's leveled off, I think it will stay elevated into the -- to near term or maybe into kind of early next year just based on where our pipeline is at. And from a kind of other concession standpoint, I would say, things around free rent have leveled off, albeit they still are elevated from where they were several years ago. I think, what we're seeing more of with respect to tenant requests is things about kind of expansion and controlling kind of ROFOs or ROFRs being requested or baked to leases. And so I think that's just a function of tenants who want to kind of commit today having room to grow with some form of control in their lease. And so I would say that those are really kind of the 3 areas where we're seeing various levels of movement.

是的。所以我想，有點回到我之前的評論。我認為，我們看到每年每平方英尺的資本成本比新冠疫情之前略有增加。那是 - 我認為雖然它已經趨於平穩，但我認為它會在短期內或明年初保持升高狀態，這取決於我們的管道狀況。我想說，從其他讓步的角度來看，免費租金的情況已經趨於平穩，儘管與幾年前相比仍然有所上升。我認為，關於租戶請求，我們更多地看到的是有關擴展和控制類型的 ROFO 或 ROFR 的請求或烘焙租賃。因此，我認為這只是租戶的功能，他們希望今天能夠在租賃中擁有某種形式的控制權，並擁有發展空間。所以我想說，這確實是我們看到不同程度變化的三個領域。

Got it. Okay. And then, on the -- I guess, the Seattle lease with F5. Any updates on that? I think that that's right outside the 18-month window, but any updates on like leasing activity or what the tenants plans are there?

知道了。好的。然後，我想，西雅圖與 F5 的租約。有更新嗎？我認為這已經超出了 18 個月的期限，但是租賃活動或租戶計劃等方面有什麼更新嗎？

Yes. So that's a lease that expires in July of next year. The plan there, it continues with what we've talked about historically, where we're focused on evaluating that for a partial conversion to life science. It's 3 buildings, and so we're in the kind of the process of evaluating how much of that square footage we want to consider converting. And so from an activity standpoint, we do have activity from life science users for the space. And so I think, it's promising. That's a market that's continued to kind of see an uptick in trends with respect to gravitation towards more life science users, and we would expect that there's an outcome where a portion of buildings will be converted. And so I would venture to guess within this next quarter, we should have a little bit more definitive direction on timing, costs, kind of returns and other things to share.

是的。所以這個租約將於明年七月到期。那裡的計劃延續了我們歷史上討論過的內容，我們專注於評估部分轉向生命科學的情況。這是 3 棟建築，因此我們正在評估我們想要考慮轉換多少平方英尺。因此，從活動的角度來看，我們確實有來自生命科學使用者的活動。所以我認為，這是有希望的。這個市場在吸引更多生命科學用戶方面的趨勢持續上升，我們預期會出現部分建築物將被改造的結果。因此，我大膽猜測，在下個季度內，我們應該在時間、成本、回報類型和其他方面有更明確的方向來分享。

Got it. Okay. And then last one for me. Just on the acquisition market, could you just touch on like the volume of deals you're seeing in the market relative to, I guess, the last couple quarters? Are those -- are you seeing more deals come to the market? And also what type of assets are you seeing coming to the market?

知道了。好的。然後是我的最後一張。就收購市場而言，您能否談談您在市場上看到的交易量（我猜是與過去幾季相比）？您是否看到更多交易進入市場？您認為哪些類型的資產會進入市場？

I think the activity has been pretty consistent. I mean, we've seen elevated transactions coming to the market ever since kind of the turn of the year. And so I think that flow has been relatively consistent since. So -- and again, this is a variation of kind of the single tenant, high credit, well-leased buildings, and then, what I might consider as maybe a little bit more core plus as well. So -- but otherwise, volume itself is -- at least deals out there has been pretty consistent.

我認為活動非常一致。我的意思是，自年初以來，我們就看到市場上的交易量增加。所以我認為此後流量一直相對穩定。所以，再說一遍，這是單一租戶、高信用、租賃良好的建築的變體，然後，我可能認為這可能是更核心的附加設施。因此，除此之外，交易量本身至少是相當穩定的。

This concludes the question-and-answer session. At this time, I would like to turn it back over to Mr. Bilotto for any closing remarks.

問答環節到此結束。現在，我想把它轉回比洛托先生做總結發言。

Well, thanks for joining us today. We look forward to updating you on our progress this year and hope to see many of you at some of the upcoming conferences.

好的，感謝您今天加入我們。我們期待向您通報我們今年的最新進展，並希望在即將舉行的一些會議上見到您。

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。