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OFC Corporate Office Properties Trust

Participants
Stephanie Krewson-Kelly IR
Steve Budorick President & CEO
Anthony Mifsud EVP & CFO
Todd Hartman EVP & COO
Manny Korchman Citi
Craig Mailman KeyBanc Capital Markets
Blaine Heck Wells Fargo
Steve Sakwa Evercore ISI
Tom Catherwood BTIG
Jamie Feldman Bank of America
Jay Kornreich SMBC
Dave Rodgers Baird
Omotayo Okusanya Mizuho
Chris Lucas Capital One Securities
Call transcript
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Operator

Welcome to the Corporate Office Properties Trust Fourth Quarter and Full Year 2020 Earnings Conference Call.

As a reminder, today’s call is being recorded. At this time, I will turn the call over to Stephanie Krewson-Kelly, Corporate Office Properties Trust’s Vice President of Investor Relations. Ms. Krewson-Kelly, please go ahead.

Stephanie Krewson-Kelly

Carmen. you, Thank welcome quarter and as conference to call guidance Good full to year fourth and XXXX. well XXXX discuss for afternoon COPT’s results our as Hartman, Budorick, With are and CFO. and President Executive EVP Vice and Anthony me Mifsud, President Steve CEO; today COO; and Todd Reconciliations and presentation supplemental release, information measures and results non-GAAP management call website. on this press of available the on results on GAAP posted our are our financial discusses website, in package,

are events forward-looking subject are from reminder, made can the statements not a and uncertainties, in today’s call company differ statements, risks a which undertake to As duty discussed our during and SEC and materially length update at to forward-looking Steve? does filings. these Actual results them.

Steve Budorick

thank in but United for government technology was engaged from We you States economy defense among our company. the XXXX us. these the defense strong work the the with not nearly support and for activities its activities buildings and XX% These our challenging drive general the joining information in locations Good done. of executed cybersecurity and missions rents shuts correlated year in afternoon are that contractors national never security others.

missions among on are defense strategy concentrating of Our buildings REITs. installations is executing US priority unique

strict last and Our the result this leasing the second a perspective performance and year was XXXX our as reduced volumes shutdown third in during for In investment the execute quarters a were unimpeded. vacancy strategy. From leasing our leasing economic our demonstrates development of outlook year uncertainty quarters contrast of of significantly to unique the restrictions. our strength ability

of combinations $X.X XX.X% these high annualized we retail shutdowns. them rents. our the operations represented revenue, to of our credit gross including made reserves aggregate gap and between rent In April collected rents tenants tenants. the the exceptional We our due X% to bridge rental and In by year-end. In amended reserves terms remained against help million straight-line through of financial collections very caused the total of these concessions and of

combinations, million rent $X.X were the than and original Beyond our our revenues plan. parking lower

largely by Although operating offset expense amounts these were savings.

$X.X or impacts on absorbed expectations of impacts multiple Notwithstanding met we operations million during pandemic these exceeded year. fronts. the Our related

visibility impacts is guidance quarter for $X.XX. at we to for FFO comparability reporting the initial the beat we by Our time per over X.X% at held $X.XX. per the a the in XXXX the shutdowns midpoint When midpoint the initial capacity share and absorbed $X.XX details grew to midpoint last $X.XX the by adjusted shutdowns of our call of to of With of $X.XX are good on and year. a remainder absorb guidance that share our results. of FFO midpoint from to had we COVID were increased night's began XXXX the create third events. unanticipated Those guidance we By the had $X.XX

times. debt-to-EBITDA with on X.X goal pre-pandemic Development met address year leasing have leasing square X.X During total we a as was And equity maturities the to and million we And We raise demand result, a of of conservative million XXXX. X throughout we ended at we our capital year attractive a of square feet zero during completed and the last dry feet. year. year, terms. debt debt the

renewals by adversely pandemic mastered the is leasing average affected X.X excluding years. term XX-year on X.X downs. short-term a average Notably was rate was Our record. volume years. the borrowing term our renewals And XX% shut Vacancy retention our

plan. leasing Most outlook. company importantly, XXX,XXX in that leasing property by The second year XX% This was feet record productivity the first fully dramatically the X.X our feet square the volume the into and more of year volumes we the While XXXX million about and FFO during downs surpassing was square quarters. fourth were third ensuring during prior we vacancy quarter service strong shut square pre-pandemic volume feet place recovered, XXX,XXX quarter completed share impacts growth. reduction than leased our suppressed in leasing per

fiscal $XX our demand in locations. and million new development square for we're contractors leasing and per hyperscale of leased year's FFO demand to NOI XXXX the we ability cloud defense year solid defense place these remains -- over IT Our demand on of includes service IT results. XXXX. and in completed growth healthy. of more demand to Congress of locations our support. for of another IT fiscal several million higher for up all projects spending was the several feet This beginning budget will bipartisan expect recently for leasing current will we leasing. this bicameral appropriated the and defense years. industry XXXX’s and Act depth for to and continue including X% the to X% our than key National spending elevated and we defense The the developments volumes large contribute tracking per NOI environment vacancy at NOI National solutions to effects and offset set to of remain by development the calendar a breadth consensus is Authorization that in million In feet developments passing customers the our and base demand square defense of highly development across in will DoD to over long-term between it X% XXXX the year share levels computing. at forecast roughly drives guidance development defense the two solid This is increased in pipeline from defense Based than the Defense results. will XXXX budget last next delayed grow year XXXX In XXXX the X% drive government one

to that October. hand FFO in midpoint the now XXXX guidepost is per call share $X.XX With Additionally I'll over higher our of we guidance the than the provided a Todd.

Todd Hartman

occupied strong increases in our XX.X% representing at of was end gains Navy Thank IT basis basis leased gains Defense the by At led subsegments. National points year-over-year core and and These portfolio Park of our and Business and XXX respectively. were points XX% XX XXXX, you, NoVA Steve. the

Huntsville during doubled portfolio million nearly occupied XXXX our feet. $X.X to operating fully square Additionally,

averaging strong of average renewal line sector, achieved XXXX CapEx renewals lowest $X.XX rate. both a Leasing with with rents per office Cash During remained of only expectations. XX% annual very the year averaging and we down in among rolled foot the per in X.X% escalations X.X% an term.

of renewed to leases totaling annually, growth structures. internal demonstrating on large XXX,XXX relative First at year X.X% first lease embedded cash six compounded office year square of the our expiring lease We renewed leases XXX,XXX the office renewals cash to will in of our early that including feet government renewed leases large leases two feet expirations totaling XX On expire slide four XXXX shortly. are square the large be scheduled in XXXX. presentation,

the XXX,XXX recovered As leasing our a achievements started the out feet slide square XXX,XXX in suppressed quarter year healthy with to the was quarterly vacancy first in quarters square and two fourth and feet. quarter shows XX for

Northern leased plan. vacancy was leasing and volume totaled for subsegments; build-to-suits square XXX,XXX one roughly at still defense six the Gateway, XXXX year five data Virginia. projects defense Business in fully development one Park XXXX feet National volume, at the San two included five-year of during of I. Redstone our Although or original leasing center contractors achieved it below our million one build-to-suit four XX% XX% The shell totaling of Antonio at average our XXX,XXX in

now a which During square secured is completed including in of gateway the the leasing occupied XXX,XXX of an government Huntsville Navy XXX development development also the and new year in XXX,XXX lease and Pax XX,XXX and we fully portion our foot feet feet River US with square group. square leased

developments demand portfolio solid operating have and In for outlook we our XXXX recovering our we the Regarding new for prospects and year sound for our current activity leasing operating is with ratio for properties. availability entered XX%. momentum

have we We're Gateway square square concentrations space. six prospects feet with of Columbia XX% in XXX,XXX working the example feet. representing available XXX,XXX of vacancy totaling XX or For

we square feet in demand. pursuing the XXX,XXX square in prospects of of of Gateway our vacancy In XXXX Virginia and of the had square requires backfilled demand. of feet In represents tracking of occupancy Gate Northern our and -- quarter space availability square XXXX. feet vacant XXX,XXX are additional XX,XXX these fourth square we With feet block XXX,XXX park. XX,XXX feet one largest Although, Columbia

the feet NBP Lastly, National the at government, leased. now we blocks Also against which vacancy park of NBP totaling for to XXX,XXX which XX% US have half negotiation. Park of square pursuing signed which is square leasing demand square XXX,XXX Business feet are of reserved XX% and is feet and we under XX,XXX bringing excluding XXX the the at occupied lease of XXXX in vacancy we five

confidence office of two XX% demand feet Roughly though have feet XX% completed and million leasing during will Demand still defense from new our this continues of are for leases of center the we pursuing continue the facilities million for in is NBP over government the confidence XXX feet we which year. is of continue executing potential we XXX,XXX Regarding million for of and lease feet another transactions X development to will look we US have square goal development pipeline, in square supports year. to leave our December contractors to shelves. availability strong even data the development X.X square government square government the

the XXX,XXX size were square of These XXXX their contribute increasing year NOI development our developments the of bringing million X.X quarter fully the and active portfolio over operating and feet total for record will to by square service placed space our to leased Turning fourth projects results. leased in the in significantly fully our to we feet X%. volume a

million the expected developments tracking concentrated and XX projects Redstone projects Road XXXX are availability L pandemic. square a during downtown we Road in College D.C. many and like of has market are square an our three significantly both Street Rideout stabilize Our shutdown to D.C. XXXX in more urban XX,XXX Maryland the we downtown leased River And prospects. Park availability in stage to XX% XXXX now XX,XXX roughly feet of active major office square demand markets early available Gateway during and space at are building the than trophy working X.X in Encouragingly with totaled feet feet year. at with

narrowed year. on I'll progress and feet are rent that full deployment the XX% quarter now contractor gains super have five-year megawatt a last points. activity with The since premises is Discussions progressed during The leased. original the and During play service NOI. option. conclude term, of with to expansion my replaced. I'll the square holiday leasing lease megawatt That effect negotiating X.X-megawatt lease break adding XX.XX exercises to executed at turn that X.X continues an in $X further and and the amended open during nicely five-year the spring million our expect the a have lease on call finalized DC-X. we a has that, renewal term on Based update their over months’ option customer supercomputing with XXX,XXX we we're a annualized government remarks tracking unless fourth a paying Anthony. US roughly or the XXXX perpetual party lease in notice we either the termination expect on or full force six the is With

Anthony Mifsud

cash as the X.X% $X.XX. FFO investment. for increase Thanks, elevated operating property Fourth year at on efficiencies, ended exceeded were of $X.XX high by our the and share of quarter per solid, lower for guidance free revenues Scott. the in Fourth benefited rent concessions of gains at results a quarter and property impacts the and Property COVID and net an the XX.X%. from year $X.XX and same same occupancy higher ends operations full-year of drove comparability sale DC-X NOI alternative adjusted

a both the with demonstrating We joint formed $XXX two In pricing Blackstone. with through value create the on During strong we debt-to-adjusted of the EBITDA of new fourth achieved X.X raised we development. million year transactions, ratio venture ending we quarter, equity times. transactions

X.X the of plan and this of be of development continues midpoint occurred the The on our $XX plan service two-thirds year's year. slides XXXX summarized NOI acquisitions of into nature. square this million and from Our million between planned. $XXX incremental and placed million half is is driver which service $XX growth. NOI. main We last year, million properties straightforward record in presentation development XX% should XX a service We feet into NOI of and we to At this second placed year and to XX into -- $XXX of risk contribute of low cash plus and revenues no million those this is between expect the the contractual. invest place in in to have

interests venture shells $XXX investment we value development our fund can to development, segment additional data maintain and existing on sell prudently equity data our to portfolio monetize levels. to requirements. wholly fund and current owned continue sub plus from the will expect of leverage center We joint million of XXX to this shells Based approximately future

we same assuming is Same the the down deferred impacted well occupancy and year. the will of Based NOI reduction between X.X% property Lastly normal cash. by we property X% same by XX% occupancy by is cash expense forecast flat for in X%. NOI end occupied year impacted on XXXX approximately levels these forecast leasing by pool -- in XXXX approximately vacancy as to property is to X%. which XX% the vacancy be the and levels which leasing

of both we activity Based in same assumptions our for in some built tenants is of are in midpoint the range implied these gross impacts for guideposts have than statistics. share $X.XX. establishing properties to our which we call the Additionally to FFO some which capacity back of turn outlook $X.XX With early that The nondefense and the we a provided of per on renewal midpoint Steve. higher by $X.XX I'll possible a October. contraction

Steve Budorick

Thank you.

strategy assets developing recurring respond durable portfolio in are balance with maintain assets to market seize value and low by invest markets well-below Our a Create value opportunities flexibility three and for and capital in strong to broader the for economic and durable fundamental new cycles. and shareholders expenditures sheet disruptions capital quickly. their with to that because from pillars characteristics our occupancies protection on built managing high to is demand

five markets executing law the activity in to implemented we've new exploration, positions cloud targeting and For defense missions enforcement, value with US this essential creating computing; space developments. such signals the investments more strategy we and Government serve allocating capital hyperscale as and our properties discipline, great that target follows; support human missions priority risk investing cyber years, land best defense, as and missile intelligence, advantage last Defense located

shells high our performance demonstrate in high appetite shareholders. the data flows. XXXX Our demonstrated impressive cash level the our has in provide our Investor XXXX and durability of visibility creation developments our into our value to for

our most illustrated offering of and structure for the bond during rewarded resilience the portfolio recognized us the history. market franchise, debt Our that in XXXX attractive and debt our achieving

Over million the approximately we've leasing, square feet million feet per year. averaging past X.X XX years, square nine completed of development

X.X produce new development feet square our three in plan square that and completed operating past asset per leasing executed year. in share the X.X as we've During years, We reallocation strategic million developments and feet in of over FFO our portfolio averaging million per growth since adjusted. XXXX time, our durable

forward open reliable COPT risk era entered and before driven that portfolio And the growth a operator please questions. NOI sheet of program We impressive incremental that is balance in So producing conclusion durable call XXXX. by strong an annually. in for a seizing up low has look to operating us the development with opportunity

Operator

Manny Our first Citi. Korchman from with is question

please. question Your

Manny Korchman

guidance the DC-X timing range us down roll what NOI your into assumptions rent there? and you are looking just can for provided Anthony at based everyone. tell that Hey you

Steve Budorick

Sure.

we renewal rent roll the and So and that assumes quarter that quarter down which is XX% the -- beginning XX%. of down between the current at the paying tenant roll the have is for the range second executed the at first point rent rolls downs the

Manny Korchman

users users anyway ask your retention you've than maturities with commercial are lower if at those just but last are for with at Great. up that those looking had large discussions how in XXXX coming what least now going all? forward And far and I'll you corporate year this maybe obviously too then presented the ratios

Steve Budorick

the told. those extend and fairly pandemic to the customers time occurred. that of advanced shutdowns have negotiations since both we’ve with discussions active before And been had contract So

and before to We since contraction both to them they're up we the expect in and heat this continue pandemic Baltimore. Downtown, them year we're -- we're expect negotiating contract to

Manny Korchman

else books to in And one the the some losses the in Anthony gains then about gains last that on we expect alternative XQ. drive quick me mentioned one What sales or might from future? investment you is

Anthony Mifsud

remaining. to pretty $X.X $X left. So we those about It's million investments have limited million a of amount

the of So fund company they the in and a they're in liquidation fund. that invested manage that

that of to is timing very the difficult predict. So

sort of off. is fund comes sold it So the as and goes

Steve Budorick

a create that with to startup it to companies. market is be the equity And in brings fund private The technology tenants create. opportunities we invest defense creates, new those for successfully fund to they landlord that

Manny Korchman

Thank you.

Operator

Thank you.

Our Markets. next Mailman Craig question comes from Capital with KeyBanc

Your question please.

Craig Mailman

or I'm you also floor tour leasing seeing Hi it just hopefully you little it back guys what you know vaccine could bit for a better up plan or everyone. be about just the little know space a usage that? as bit space we layouts just or sounds actually unlike the curious are I'm curious end discernibly you a know get different is like And think people feeling decisions? of of here. making vacancy the ability guys the Is to kind curious the you was just trigger if of long-term types anything pandemic? to at picking

Steve Budorick

Activity Certainly, in component which So, either little that defense estimate around rate much healthy third a take properties. continue strong showing I creates you or know awards I'll flow XX% to quarter in installations layers. on a that fourth the had quarter, and of very is the contract anticipation XX% would natural void the that of pretty to deal was at now. their activity up contractors will in remain contingent it. out flow there and second that is defense that picked kind in to activity, of during and a

a planned. we've -- in terms and have went had In a as for their the even that we April, in the the before fulfill onto not change it’s we really interior the space their surprising that material buildout interior It's plan densities the been executed a -- seen -- March that planning, had bit April leases of -- tenants the pandemic. planned

Craig Mailman

the kind of going to space? Okay. here? on face of That like it are rent or come or rents how the is and what's kind progressing is know kind take Any as you conversation helpful. TIs of it totally back is want dynamics or Or it people

Steve Budorick

strengthening of stable each a So Alabama If execute markets. all of economics essence by watermark we in but impact a business in soon our for that are high have rates in for now, remain DC I lot lease that’s some where Downtown find activity new right we Columbia both sets up DC, in downtown is what and very We'll rent. to expect Special of kind out to new would market stable. the Gateway stable. concessions in go

Craig Mailman

Any I know early location the Huntsville. too was to that of for think that. that the pickup a for it Force generator? they demand picked that Is Space way in I just be

Steve Budorick

for Yeah, term. early. some with both It there down Certainly create time, the there Other with opportunity be create It'll opportunity contractors. It's potentially early, it's are exciting, very way but the been unquestionably and too requirements but short could the And it activity space know evaluating challenged you is awards Craig. contesting government. announced. will states award. long

Craig Mailman

last changes as organization that one the is delay the that been top XXX there one, there's that. review sounds kind change you just another about of it? -- MBP, at that turnover require any then will And had like there tenant feeling of guys administration like be this of have could space with to you that guys But going better are

Steve Budorick

expect true. that don't I to be

the level much evaluated. a lower think a to new matter cabinet are it's going I positions than at be

Operator

you. Thank

Our Blaine Wells Heck next with question from Fargo. comes

Your question please.

Blaine Heck

bit with given to likelihood get and you Good we talk every expanding about that’s ask thanks. -- increasingly DC has like to other competitive? cater this the your all you to an Shell goes some tenants afternoon. Can computing that become I quarter it update. cloud feel your program of guys a just Great,

Steve Budorick

potential So have tenants, exploratory we routinely discussions tenants. other with

program the now. alignment want developed hundred the interested Here we few a it dollars centers taking a to X model in all foot a would and they're that taking our center. procurement those more To to customer the we've relationship an to and measurably the shell square who data with risk in putting extent fully for or had in model for is development bulk capital by we we're a for It's data great because the strategy ideal would we people welcome lease a a developing similar a customer great us our the -- model and landowners risk, is capital Tier that of opportunity. the bearing the with got

Blaine Heck

one for just Steve. little potential little this Thanks and maybe for That's you more a on expected on needs shell and your give Anthony, DC us on year? right. just bit What All timing bit helpful. a detail JV? And size can equity a then an

Steve Budorick

Sure.

center data we million is shell million. the $XXX equity need between So $XXX that and

us which them sort that longer the to We tax assets have service available been in of than of purposes. throughout venture some you group of is those placed two have we year have know to years for for as benchmark our

quarter So our likely it second in and in in go out the third most closing and that and that call quarters. third the it plan transactions even call fourth second, is -- beginning would

Blaine Heck

Got guys. it. Thanks right. All

Operator

Thank you.

Our with comes Evercore Steve Sakwa next from question ISI.

please. question Your

Steve Sakwa

actively Most of further size out and the just business my but you of to questions remind of Thanks. in data us looking land bank asked can is land for what shell been center more Virginia? are the Northern the you have

Steve Budorick

land acres or of to and recently completed three all adjacent have Steve is current developments. We that

needed by to strained a of and to are extreme half get critical power two program We of is got the but right the we more of years company development we've long they'll so developed two have runtime the power of to maybe both the notional land. a level years last getting these now when and the activity additional before with be schedule sites tent pole a over suppliers in from power two

Anthony Mifsud

would to X.X developable little that convert almost footage? of that, more what it’s to -- acres just square kind equate Sorry square three million a feet.

Steve Sakwa

Got it.

Okay, Thanks. for that's now. it

Operator

Tom BTIG. from comes with Our next Catherwood question

Your question please.

Tom Catherwood

good Thank everyone. afternoon, you and

quarter we looks right One and wasn't the there defense like in on question. started the more decrease data the potential data land repurpose There shell shells it that to shells? the in Are you land is out, center a Following IT thing are been land. center some of did in your fourth in data that center jump reading portfolio actually bucket. on kind had for up elsewhere Steve's

Steve Budorick

very in personal Well that shell analysis. those Fairfax needs we center some land Yeah was our in you Virginia. tenant much get make County in have a that available leases for on good more cookie that Northern specific think Tom we office and held there's us development customer allowed executed to to data that the, that. I don't of

Tom Catherwood

challenges Got kind development it you from the at in the the and the of constraints getting in data before? to then or you Is you've than quarter Steve and little longer to of started getting these shells done you've this a developments power ones that done. seem alluded with center on that other power timelines the because two have and different what

Steve Budorick

a in But that Fairfax county, they they're which out is bureaucratic. are in yes I County, no. and pointed notoriously different So

schedule very through to develop a long us asset. sufficient re-zoning the that a and need to we So, approvals allow got the we've all get development [ph] to time

we critical well. Additionally, to need the time as power get

Tom Catherwood

Got it. then And Understood.

Steve Budorick

we deliver will those and to access the To power, accelerate approvals the the we extent early. can

Tom Catherwood

for one forward. know budget the you increases that -- Got it. mentioned one Defense going Steve expectations then, the had And you Department last Thank for Steve. X% you

overwhelmed know things the defense -- of and on and been recently kind cyber the has by that’s stories the agencies. was of other One government hit hack you news but

is portion have a either are of guys or seeing a Gateway you attention portfolio, that know that imagine and far? upside dollars -- your of that for what so space? growing are was What a be that that could Columbia seeing know BP. to some you And you Given you reallocation I

Steve Budorick

demand think tenants those then early know XX exogenous down of agencies address demand. it's maybe events flow will that significant expect you the experience increases the another see government when we impacts materialize funding we -- that out and of I that would I -- we that in road. the but to months into issue, also contracts would in kinds of

Tom Catherwood

Understood. Thanks, everyone.

Operator

Bank next Jamie Our of with from question comes Feldman America.

please? question Your

Jamie Feldman

you. Thank Great.

guess piece defense I over to at for mentioned what last same the the the tied to your were But cyber budget -- if like next IT expected look question last several relevant with segment the the lines like that that along rate the budget do the the years. over you growth business is of you'd So few along looks you and next in with more years? the growth that think defense X%

Steve Budorick

So the it's but changes. the allows don't X% have for more to higher programs other then access for a we north I to not published and us they may mind to. little which have years the early will Book grow think program passed Certainly next of just they data that budget level Green the documents I cyber if several speak probably can't

Jamie Feldman

You’re saying X% per year?

Steve Budorick

Yeah.

Jamie Feldman

I really sell else well? two mean it's opportunity move maybe Okay. And large are everything and exposure at seems does doing question mean those does and Baltimore that downtown Baltimore make XXXX to I that then in your both rethink all the mentioned for you’d assets on? leases you like

Steve Budorick

point at time. Well that those assets recycle right we we've always would considered in the

we we to reasons two one next selling of be those the enter talked say we our discussions our wanted those But on we or growth is of selling. -- we assets for be to era certainly I get the would selling certainly XX hold in the that would established months. them that considered of in the One them about renewals before could

Jamie Feldman

until figure out two market you But -- to leases? these them them market don't want Okay. you

Steve Budorick

saw worst mean not. at we absolutely Well them the possible time. I

Jamie Feldman

leasing of look sense store what I Can then growth you a growth you you your guidance on and a those And provide same spreads. know Okay. cash, guys basis? in give GAAP NOI terms cash of us like

Steve Budorick

into on have we given So terms embedded the our, that spreads leasing assumed GAAP between X% in to call cash downs GAAP basis roll increases into X% renewals. of a -- spreads it converting those our in are the

Jamie Feldman

to X%? X% Positive

Steve Budorick

Yeah.

Jamie Feldman

Okay. And what about same store NOI?

Steve Budorick

is, NOI back Jamie. I'll you store get Same I had on but there, to that finally,

Jamie Feldman

you. you. set. all Thank All I think I'm Okay. Thank right

Operator

Jay question SMBC. Thank you. from comes next And Kornreich our with the

open. Your line is

Jay Kornreich

it as what business portfolio lends you itself you in your do that potentially other as about you as markets Huntsville? area you the are heavily metro markets do -- stretching How the which at D.C. expansion that looking in sense to So -- well? in. looking Just Antonio those considering guys San and think do you entered do beyond makes how more

Steve Budorick

we try but or call pursued would not troop more weapons periodically have give phone we And the -- locations are that missions we production where for priority. I good that the places for decade. we the the detail, scoured very Well knowledge-based are into serve us last missions high you have go I opportunities a recommend country base. could have where

have high or pretty they to in have. residential which office the levels base property funding consistent suggests committed So will we're and so need manufacturing locations of we our they knowledge that

Jay Kornreich

I high it that appreciate Thank me. for you. color and that's level Okay.

Operator

Thank you.

Dave next from Rodgers Baird. with Our question comes

Your line is open.

Dave Rodgers

guys or You sematic that One showing question can Todd have component Todd year be Steve that's year questions. is the obviously negatively think see to if geographic mentioned And you But you in the consider there hold lower selling and that one two to guys trying you could the any is the impacted program loss guys to lot this occupancy I of that but there. maybe build second to that before when is still I’m portfolio that either then subject plan? lower the retention? of the lower just for that XXXX two but it consider going you the addressed thinking on backfill or retention tackle maybe it, up when kind any same a potentially period that that's

Steve Budorick

So I’ll Dave. one take the first

for been to there a was to has X,XXX bad REIT. the owned order in asset structure -- when a be create flexibility our to within monetize within REIT created So out

not to of a allow district. us kind have we sell structure that the So not will which which a is within is -- common in structure

so? So, we that able period asset to be monetize allow and the have a that structure us would to XX-month before

Todd Hartman

specifically presented contraction And numbers the our two opportunity capacity regard and then of absorb renewals, into assumption those -- some kind we've regard if built to regarding contractions early to an year with to in the on during tenants commercial renewal with conservative is with Baltimore. pretty the a downtown office

Dave Rodgers

on expiration, -- So, there's absorb there's room XXXX those are years… to just this the but

Steve Budorick

handicapped capacity for at we've when or kind contraction we tenants of commercial other We've then, or the Yeah. put specifically. we've and some renewing, one -- some generally look

Dave Rodgers

Thanks, helpful. That's Okay. everyone.

Operator

with is, me, question next Mizuho. Omotayo please our And Okusanya forgive you. Thank

Your line open. is

Omotayo Okusanya

of a that kind to XX%, get question for year, And occupancy’s of that the end could were of things So, What forecast range? guidance the -- lower probably of of forecast you us a about next were quick at XX% you XXXX. XX% XXXX, flat you for to things NOI are higher just at through you still is if number the little which that same at Can about kind even the walk bit? growth. of in you end, a to

Steve Budorick

contemplated lower of achievement. leasing of And hit year feet the that year. converse by will and in represented you generate mind the lower end we a the the be is more extent risk to that, be target a able the the revenue been fewer plan weren't know would you of has higher end that that we've The leasing to got the plan. our over at than midpoint less So manageable at earlier that our in we end square number, reflected pretty but

Todd Hartman

corollary and the number that flat why those to is office, is the year on occupancy growth And the contribute time end commence the the high we NOI of cash that cash at The end at based at end. year. on a is leases up in point the same how throughout

Steve Budorick

number. lower average two-year the end is versus the lower So probably for actual the

Operator

you. Thank

Capital Chris with question ahead. comes Securities. go Lucas Our One next from Please

Chris Lucas

Hey, guys. afternoon. Good

of service a that quarter. fourth GAAP contribute ones into any Did was Just revenue fourth quick in the X,XXX-L in me. quarter? couple placed for the

Steve Budorick

a It like week. was was small. It very

Chris Lucas

Okay.

Steve Budorick

amendments. …to

Chris Lucas

cash change date start expected guess lease? the then that that doesn't rent And Okay. for I

Steve Budorick

not. does It

Chris Lucas

to Okay. Anthony FFO included included is as your the investment it adjusted And relates in alternative just comparability? is your then FFO sale that adjusted alternative for that sale investment in

Steve Budorick

small point It we is and in… had a

Operator

And of Jamie our next question from Thanks. with is Bank America. Feldman

please? question Your

Jamie Feldman

saying Hi. for guys want April renewal how Thanks so the DC-X I just X process -- choose follow-up. on just and thought date? understand that did you a quick your

Steve Budorick

of the issues break checking had progress since the Fairly with off that based holiday the tenants. on now randomly just kind we’re we've open

Jamie Feldman

to Okay. All Are needs get to done? you that? still discuss right what and able

Steve Budorick

in further want the I to points. go on any detail really don't

issues I progress be narrow conveyed them positions to the accept agree we with last it's that to good -- to shareholders or pretty we that ultimately we're the on all think we're address I and willing the bundle have challenge gap to making a got be open call and our of some for we'd want but good to it. we

Operator

turn for will closing to I'm further now questions showing remarks. Mr. queue. any Budorick And call back the his in you. not Thank I the

Steve Budorick

thank for today. our call you all So joining

offices We afternoon. our are this in

you’d to coordinate like call. a please Thank So follow-up if Stephanie you.

Operator

today Trust fourth Corporate for you year the full and call. concludes conference the your participation XXXX presentation. quarter thank in This Office And Properties

You may day. now Good disconnect.