Caitlin Burrows

Caitlin Burrows asked what has changed to give Hudson Pacific Properties the confidence to issue full-year 2026 guidance after not doing so in recent years. She also inquired about updated thoughts on how in-place office rents compare to market, and how this varies by market. Finally, she asked for details on Sunset Pier 94, specifically the length of the 90% leased contracts and expected contribution for 2026.

Answer

Harout Diramerian, CFO, stated that increased comfort in projecting Quixote's performance was the main driver for reinstating full-year guidance, as other components were already provided. Victor Coleman, CEO and Chairman, mentioned that expiring 2026 rents are 3% below market, while 2027 rents are slightly above, indicating potential for positive cash spreads this year. For Pier 94, Victor Coleman explained that Hudson Pacific is a 25% holder, with two tenants occupying 100% of the space; one has a longer-term lease, and the other a shorter-term lease with backup for renewal, expecting minimal downtime and consistent outperformance against competitors.

Caitlin Burrows asked what factors contributed to Hudson Pacific Properties' renewed confidence in issuing full-year 2026 guidance after a period without it. She also inquired about the updated comparison of in-place office rents to market rates across different markets and sought further details on the Sunset Pier 94 leases, including their duration and expected contribution for 2026.

Answer

CFO Harout Diramerian stated that increased comfort in projecting Quixote's performance was the main driver for reinstating full-year guidance. CEO Victor Coleman mentioned that expiring 2026 rents are 3% below market, while 2027 rents are slightly above, positioning the company for potential positive cash spreads. Regarding Pier 94, Victor Coleman explained that Hudson Pacific is a 25% holder, with two high-quality tenants, one on a longer-term lease and another shorter-term with backup, expecting minimal downtime between tenants and consistent outperformance against competitors.

Caitlin Burrows of Goldman Sachs inquired about the current leasing environment, whether leasing volumes are accelerating, and how leasing strength differs across markets, particularly the impact of tech and AI in the Bay Area versus other regions.

Answer

EVP of Leasing, Arthur Suazo, confirmed that the leasing pace is picking up, averaging nearly 590,000 square feet over the last two quarters, with tour activity at a six-year high. He attributed the strength in the Bay Area directly to tech and AI demand, while noting that Seattle is also seeing a more modest but growing tech footprint from major AI companies.

Caitlin Burrows from Goldman Sachs asked about the outlook for office leasing spreads in 2025, questioning if the recent negative double-digit cash spreads would continue and how the company is balancing rate versus occupancy. She also requested details on tenant activity at the Washington 1000 development.

Answer

President Mark Lammas explained that while reported cash spreads can be volatile, underlying lease economics remain strong, with net effective rents holding up well near pre-pandemic levels due to longer lease terms and stable face rents. EVP of Leasing Arthur Suazo described Washington 1000 as the premier new asset in its market and confirmed the company is in negotiations with two prospects for leases commencing in 2026.

Caitlin Burrows sought details on management's confidence in maintaining a leasing pace of 500,000 square feet per quarter, which was cited as a key factor for occupancy stabilization by mid-2025. She also asked for more color on a comment regarding Netflix and the normalization of production.

Answer

CEO and Chairman Victor Coleman and EVP of Leasing Arthur Suazo confirmed their confidence in the leasing pace, noting they are already ahead of last year's volume and have a robust 2 million square foot pipeline. Suazo highlighted positive net absorption trends in key Bay Area markets. Regarding Netflix, Coleman clarified the comment reflected a broader trend among all streaming companies increasing both the quality and quantity of new shows, which drives the conversion of stage holds to active leases.

Caitlin Burrows asked for updates on preliminary discussions with Caesars regarding the master lease, including potential outcomes, timing, and what might be off the table. She also inquired about a senior loan collateralized by a golf development placed on non-accrual status, seeking more color on the situation, visibility, property status, and any assumed impact to 2026 AFFO guidance.

Answer

Edward Pitoniak (CEO, VICI Properties) declined to provide specific details on Caesars discussions but emphasized that any solutions would align with VICI's portfolio and risk management goals, aiming to optimize exposure to any single tenant, category, or geography. He highlighted VICI's history of reducing Caesars exposure and aimed for a win-win solution. Regarding the golf loan, Mr. Pitoniak explained that the borrower faced a working capital issue, leading to a tactical decision to ensure continued operation and development to preserve property value while the borrower focuses on recapitalization. Gabe Wasserman (Chief Accounting Officer, VICI Properties) clarified that the loan is a de minimis part of the loan book and asset base, and no income related to this loan is included in the 2026 guidance.

Caitlin Burrows inquired about any updates on preliminary discussions with Caesars regarding the master lease, including potential outcomes, timing, or what might be off the table. She also asked for more details on a senior loan collateralized by a golf development that was placed on non-accrual status, seeking visibility, property status, and its assumed impact on 2026 AFFO guidance.

Answer

Edward Pitoniak, CEO, stated that VICI would not disclose details of Caesars discussions but emphasized evaluating solutions within the context of portfolio and risk management to optimize exposure. He highlighted VICI's history of reducing Caesars exposure from 100% to the high 30s. Regarding the golf loan, Mr. Pitoniak explained it was a tactical decision due to the borrower's working capital issue to preserve property value, with the borrower actively pursuing recapitalization. Gabe Wasserman, Chief Accounting Officer, clarified that the loan is de minimis and no income from it is included as a headwind in 2026 guidance.

Caitlin Burrows of Goldman Sachs Group Inc. asked why Red Rock Resorts chose VICI for development funding, the expected timing of the funding, and the potential for future opportunities with the new partner.

Answer

President and COO John W. Payne attributed the deal to a long-standing relationship cultivated since 2017. CEO Edward Pitoniak added that funding will follow a regular construction draw schedule through September 2026. While management expressed tremendous respect for Red Rock and a desire for future partnerships, they clarified that the current deal is a single transaction with no further commitments at this time.

Caitlin Burrows asked how VICI weighs development funding, which is eventually repaid, against permanent acquisitions for recurring income, and requested details on the settlement of its outstanding forward equity.

Answer

CEO Ed Pitoniak responded that VICI is not concerned about capital being repaid from partners like Cain and Eldridge due to the deep pipeline of future opportunities, allowing for capital to be rolled into new ventures. CFO David Kieske explained that forward equity contracts are typically one year but are commonly extended, and guidance uses the treasury stock method for dilution, not assuming the full settlement of forwards which are match-funded against potential acquisitions.

Representing Caitlin Burrows from Goldman Sachs, an analyst asked about other specific Partner Property Growth opportunities in the pipeline beyond the Venetian. They also inquired whether the majority of VICI's new relationship-building efforts are focused on the non-gaming space.

Answer

President and COO John W. Payne highlighted the potential for future investment in the Las Vegas 'sports triangle' but stated there was nothing to announce at this time. CEO Edward Pitoniak added that MGM's own materials point to the opportunity to densify assets in that area. Payne clarified that while non-gaming deals may be more frequent and smaller, VICI is not prioritizing them over gaming and continues to see significant opportunities with new gaming partners globally.

Caitlin Burrows inquired about the recent non-core SoCal asset disposition, specifically what made it non-core, the representativeness of the mid-6% cap rate, and Lineage's willingness to sell international assets along with observed international multiples or cap rates.

Answer

Greg Lehmkuhl, President and CEO, explained the SoCal asset was a medium-quality, single-user property sold for liquidity. Robb LeMasters, Chief Financial Officer, noted that recent private market transactions show strong mid-teen EBITDA multiples translating to low to mid-6% cap rates, and the company is evaluating its entire portfolio for optimization.

Caitlin Burrows asked about the rationale behind the non-core Santa Maria disposition, the representativeness of the mid-6% cap rate achieved, and Lineage's potential willingness to sell international assets, along with observed international multiples or cap rates.

Answer

Greg Lehmkuhl, President and CEO, explained the Santa Maria asset was a medium-quality, single-user property that did not support public customers, and the sale to the user was at a reasonable valuation. Robb LeMasters, Chief Financial Officer, added that recent private market transactions, including Lineage's own, show strong mid-teen EBITDA multiples translating to low to mid-6% cap rates, reinforcing private market valuations. He stated Lineage will unemotionally evaluate its entire portfolio for optimization, including international assets, to create capacity for future opportunities.

Caitlin Burrows of Goldman Sachs asked how management weighs the option of being a private versus public company, given the challenging stock performance since the IPO.

Answer

CEO Greg Lehmkuhl and CFO Rob Crisci reaffirmed their commitment to being a public company. They highlighted strategic advantages gained, such as an investment-grade credit rating and access to public capital markets, which are crucial for funding accretive growth. They believe they are well-positioned for a rebound and can execute value-creating deals even at current valuation levels.

Caitlin Burrows asked for clarification on the percentage of throughput tied to the import/export business and sought more detail on the volatility of the food trade, questioning how economic uncertainty impacts customer inventory and throughput.

Answer

CFO Rob Crisci clarified that 15% (one-five) of throughput is tied to import/export, not 50%. CEO W. Lehmkuhl explained that while tariffs create short-term uncertainty causing customers to delay major decisions, overall production and consumption remain steady. He noted that some trade flows, like Alaskan seafood, have been rerouted, but the primary impact is customer hesitancy rather than a substantial change in volume.

Caitlin Burrows asked for a comparison of the margin or productivity of a fully automated facility like Hazelton versus a traditional warehouse.

Answer

CEO W. Lehmkuhl clarified that the company focuses on return on invested capital, not margin, targeting 9-11% yields for all development projects, whether automated or conventional. For a highly automated facility like Hazelton, he noted they expect substantial labor savings of over 50%.

Caitlin Burrows asked for more details on Extra Space Storage's supply expectations, including which markets are more versus less exposed, and the data sources informing their view of a continued incremental reduction in new stores. She also inquired about the reasons for feeling better going into 2026 than 2025, and if this improved sentiment is reflected in the guidance, given that 2025 results are within the 2026 range.

Answer

Joe Margolis, CEO, stated that Extra Space Storage uses Yardi data, supplemented by internal data and on-the-ground insights, to predict an incremental, modest step down in new store deliveries for 2026, noting that actual deliveries are often less than predicted. Sun Belt markets like Northern New Jersey, Las Vegas, Phoenix, and Atlanta are still exposed but incrementally improving. The improved sentiment for 2026 stems from the sustained positive new customer rates (compared to negative rates in early 2025) and the improving supply situation. However, guidance remains cautious until the 2026 leasing season unfolds, given past unexpected outcomes.

Caitlin Burrows asked for more details on Extra Space Storage's supply expectations, including which markets are more versus less exposed to new stores and the data sources informing this view, given the expectation of continued incremental reduction in new stores. She also inquired about the drivers behind feeling better going into 2026 than 2025, and if this improved feeling is reflected in the guidance, considering 2025 results are within the 2026 range.

Answer

CEO Joe Margolis stated that Extra Space Storage uses Yardi data, supplemented by internal information, and expects an incremental, modest step down in new store deliveries in 2026, particularly in Sun Belt markets like Northern New Jersey, Las Vegas, Phoenix, and Atlanta. He attributed the improved sentiment for 2026 to the positive turn in new customer rates and the improving supply situation. He noted that guidance remains cautious due to two years of unexpected leasing seasons, and full optimism will await the upcoming leasing season.

Caitlin Burrows from Goldman Sachs asked for details on the $244 million portfolio acquisition, including initial and stabilized yields, the expected timeline to reach stabilization, and the drivers of the upside. She also inquired about any recent changes in the reasons customers use storage.

Answer

CEO Joseph Margolis detailed the acquisition's leverage yield at about 4.5% in year one, stabilizing to mid-7% by year three, driven by a mix of stabilized and lease-up assets. He noted no significant changes in storage use reasons, with moving customers (58%) and those citing lack of space (staying twice as long) remaining key drivers.

Caitlin Burrows from Goldman Sachs inquired about the initial and stabilized yields for the $244 million portfolio acquisition, the expected timeline to reach stabilization, and the drivers of that upside. She also asked about any recent changes in the reasons customers use storage.

Answer

CEO Joseph Margolis stated the portfolio is a mix of stabilized and lease-up assets, with a year-one leverage yield of about 4.5% and mid-7% by year three, driven by improving performance to company standards. He noted no significant changes in storage use reasons, with moving customers at 58% in Q3 2025 (a seasonal increase) and "lack of space" customers staying twice as long.

In a follow-up question, Caitlin Burrows of Goldman Sachs asked for a more precise estimate of what percentage of the company's tenant base consists of business users.

Answer

CEO Joseph Margolis explained that while it's difficult to track precisely, about 5-6% of tenants sign leases in a corporate name. The total percentage is likely higher, as many small business owners sign leases as individuals. He also noted that this percentage has declined over time as the portfolio has shifted towards multistory buildings, which are less preferred by business users.

Jeremy Keel, on behalf of Caitlin Burrows, asked whether a reduction in new supply could significantly improve move-in rates if housing turnover remains low, questioning if less competition can drive pricing power amid soft demand.

Answer

CEO Joseph Margolis positioned supply reduction as a helpful positive factor but not a sole driver. He also challenged the premise of 'low demand,' stating that while down from pandemic highs, demand is historically healthy and steady, allowing them to maintain high occupancy. The primary headwind, he noted, is new customer price sensitivity, not a lack of potential renters.

Caitlin Burrows asked about the acquisition environment, including seller profiles and pricing alignment, and questioned what differentiates properties with stronger move-in rate trends.

Answer

CEO Joseph Margolis confirmed an increase in accretive acquisition opportunities but noted it's too early to define market-wide seller trends. He identified the two most significant factors weighing on move-in rates as heavy new supply in a market and difficult year-over-year comparisons, emphasizing the cyclical nature of real estate.

Caitlin Burrows asked for clarification on Broadstone Net Lease's build-to-suit pipeline target of $350 million-$500 million, inquiring if it's an annual completion target. She also requested details on the pipeline of unannounced build-to-suit projects compared to a year ago, and the proportion of new versus repeat business. Additionally, she asked about the Claire's lease termination, specifically regarding a termination fee, re-leasing versus selling expectations, and the impact on guidance.

Answer

CEO John Moragne clarified that the $350 million-$500 million is a rolling target for active development. He noted that the current pipeline under LOI is almost entirely repeat business, with new Academy Sports projects and two larger industrial deals expected in Q1. Regarding Claire's, John Moragne confirmed there is no termination fee due to bankruptcy history. The property is expected to be vacant by June 30, with plans to re-lease or sell, and any impact is already factored into guidance and bad debt assumptions.

Caitlin Burrows (The Goldman Sachs Group) asked for clarification on Broadstone Net Lease's build-to-suit pipeline target, specifically if $350 million-$500 million refers to annual completions. She also inquired about the current pipeline of unannounced projects compared to a year ago, and the proportion of new versus repeat business. She later followed up on Claire's, asking about assumed lease termination fees, re-leasing vs. selling expectations, and current options, given the June 2026 termination right.

Answer

CEO John Moragne clarified that $350 million-$500 million is a rolling target for active development, not annual completions, and the current pipeline under LOI is almost entirely repeat business, with a few new projects like Academy Sports and larger industrial deals. Regarding Claire's, he confirmed no termination fee due to bankruptcy history, and the company is working under the assumption of a vacant property by June 30th, with re-leasing or selling efforts underway and any impact already baked into guidance.

Asked about the company's target leverage, why tenants choose build-to-suit over existing properties, and whether BNL works directly with tenants or through developers on these projects.

Answer

The company's long-term goal is to stay comfortably below 6x leverage but is willing to use it as a flexible lever and run closer to it in the short term. Tenants choose build-to-suit for specific strategic needs regarding location or facility design that existing buildings can't meet. BNL engages in build-to-suit deals both directly with tenants and in partnership with developers.

Caitlin Burrows requested details on the watchlist tenant Clair's and asked for an update on the progress toward the $500 million build-to-suit pipeline goal for the year.

Answer

CEO John Moragne described the Clair's asset as a corporate headquarters and distribution facility, noting the tenant is managing tariff impacts and realigning its store footprint. He reaffirmed the $500 million build-to-suit goal for 2025, stating the pipeline remains robust and that adding new developer partners like Prologis is key to expanding opportunities and hitting the target.

Caitlin Burrows inquired about the status of watchlist tenant Clair's and asked for an update on the build-to-suit pipeline's progress toward its $500 million annual goal, questioning if any deals had shifted.

Answer

CEO John Moragne detailed that the Clair's asset is a well-located corporate headquarters and distribution warehouse, and the company is monitoring the tenant's strategy to navigate tariffs and up-tier its store footprint. He reaffirmed the $500 million build-to-suit goal for the year, stating the pipeline remains robust and that adding new developer partners like Prologis will help achieve this target despite macroeconomic uncertainty.

Caitlin Burrows inquired about the evolution of sourcing for build-to-suit deals and whether a potential upcoming announcement could involve a formal partnership. She also asked about the role of retained cash in funding 2025 investments and if there was room for a dividend reduction to retain more cash.

Answer

CEO John Moragne attributed improved deal sourcing to the company's growing reputation, referrals from happy partners, and an expanded team with deep developer relationships. He hinted that upcoming announcements could include both new projects and new relationships. CFO Kevin Fennell noted that BNL retains around $60 million in cash annually, which is a key funding component. He firmly stated that a dividend reduction is not on the table, as the dividend is well-covered.

Asked about the evolution of build-to-suit sourcing, potential future announcements, and the role of retained cash in funding versus a potential dividend cut.

Answer

Build-to-suit sourcing is improving through brand recognition, referrals, and an expanded team. Future announcements will cover new projects and relationships. The company retains about $60M in cash for funding, and a dividend reduction is not on the table as it is well-covered.

Caitlin Burrows inquired about the evolution of BNL's build-to-suit sourcing strategy and whether an upcoming announcement might involve a formal partnership. She also asked about the role of retained cash in funding 2025 investments and the safety of the dividend relative to taxable income.

Answer

CEO John Moragne described the build-to-suit sourcing as evolving organically through reputation, referrals, and an expanded team, with future announcements to cover both new projects and new relationships. CFO Kevin Fennell noted that approximately $60 million in retained cash contributes to funding and affirmed the dividend is well-covered and a reduction is 'not on the table.'

Caitlin Burrows of Goldman Sachs requested more detail on the 'pockets of credit risk' mentioned, asked about the performance of the restaurant portfolio, and questioned how BNL balances tenant concentration risk with its build-to-suit strategy.

Answer

CEO John Moragne identified the 'usual suspects' for credit risk, including Red Lobster, At Home, and certain furniture and clinical health operators. He noted the restaurant portfolio is performing well with 3.3x average rent coverage. To manage concentration, Moragne emphasized a strict policy of not exceeding 5% of ABR for any single tenant.

Caitlin Burrows asked for more detail on the 'pockets of credit risk' mentioned in the prepared remarks. She also inquired about the performance of the restaurant portfolio and whether the focus on build-to-suits with existing tenants could increase concentration risk.

Answer

CEO John Moragne identified the 'usual suspects' for credit risk, including Red Lobster, At Home, and certain clinical healthcare operators. He stated the restaurant portfolio is performing well, with rent coverage around 3.3x. On concentration, he affirmed BNL has a strict policy of not exceeding 5% of ABR for any single tenant, which effectively manages this risk.

Caitlin Burrows asked for Macerich's economic occupancy for the go-forward portfolio, following up on the reported 94.9% leased occupancy.

Answer

Brad Miller, Senior VP of Portfolio Management, stated that while leased occupancy for the go-forward portfolio is 94.9%, the physical occupancy is closer to 91%.

Caitlin Burrows followed up on occupancy, asking for the economic occupancy of the go-forward portfolio, given the reported 94.9% leased occupancy.

Answer

Brad Miller, Senior VP of Portfolio Management, stated that while leased occupancy is 94.9%, physical occupancy for the go-forward portfolio is closer to 91%.

Caitlin Burrows of Goldman Sachs asked what level of tenant fallout and non-renewals is assumed in the company's long-term physical permanent occupancy targets, expressing concern about potential future vacancies.

Answer

Jackson Hsieh, President and CEO, confirmed that the company's target to increase physical permanent occupancy by 500 basis points already takes into full consideration any anticipated fallout from planned store closures and tenants that the company is actively replacing.

Caitlin Burrows from Goldman Sachs pointed out that despite strong leasing, portfolio occupancy has not increased significantly, and asked for the reasons behind this limited upside. She also inquired about the dividend, its payout ratio, and whether management considers it to be at an appropriate level.

Answer

President and CEO Jackson Hsieh explained that the company is shifting from a quarter-to-quarter focus to a more strategic, long-term approach to leasing that will drive permanent occupancy higher over the next 24 months. Regarding the dividend, he stated the Board is comfortable with the current level, as retaining cash flow is crucial for reinvesting in the portfolio during this execution phase. The goal is to eventually grow FFO to a level that supports a higher payout ratio, but for now, the dividend will likely remain stable.

Caitlin Burrows asked for details on the American Signature credit event in Q4, seeking insight into its outcome versus expectations and what it reveals about the company's process. She also questioned the balance between retaining cash flow and increasing dividends, and the expected growth trajectory of the dividend.

Answer

Pete Mavoides, President and CEO, and AJ Peil, Chief Investment Officer, explained that the American Signature bankruptcy is still unfolding but is expected to result in a normal recovery within conservative expectations, with the asset not anticipated to be vacant for long. Rob Salisbury, Chief Financial Officer, highlighted retained free cash flow as a key source for accretive investments, noting that while dividend growth is expected, it's a board decision, and the 63% payout ratio is unlikely to decrease.

Caitlin Burrows asked for details on the American Signature credit event in Q4, specifically how it played out versus expectations and what it reveals about the company's process. She also questioned the balance between retaining free cash flow and increasing the dividend, and whether dividend growth would align with AFFO per share.

Answer

Pete Mavoides, President and Chief Executive Officer, and AJ Peil, Chief Investment Officer, stated that the American Signature bankruptcy is still playing out but is expected to result in a normal outcome and recovery within historical ranges. Rob Salisbury, Chief Financial Officer, explained that the retained free cash flow supports accretive investments, and while dividend growth is expected, the payout ratio (currently 63%) is unlikely to decrease, with the exact dividend growth being a board decision.

Caitlin Burrows asked about the potential of Essential Properties Realty Trust's expanding platform, G&A efficiencies, and why the 2026 midpoint volume guidance isn't necessarily a continuation of growth from 2025. She also inquired about the impact of share price moves on equity issuance activity in Q3 and the broader funding strategy.

Answer

Peter Mavoides, President and CEO, explained that the 2026 guidance targets an AFFO per share growth (6-8%) with a de-risked execution plan, focusing on sustainable, outsized growth rather than solely maximizing volume, despite the platform's scaling capabilities. Mark Patten, CFO, stated that the successful $400 million bond offering allowed them to be selective on equity in Q3, especially with over $500 million in unsettled forward equity. For 2026, funding decisions will depend on the pricing of both debt and equity, maintaining low leverage.

Caitlin Burrows asked about the potential of Essential Properties Realty Trust's expanding platform and G&A efficiencies, questioning why the 2026 midpoint volume guidance doesn't necessarily reflect a continuation of growth from 2025. She also inquired about the impact of share price moves on equity issuance activity in Q3 and the broader funding strategy.

Answer

President and CEO Peter Mavoides explained that the company targets AFFO per share growth with a de-risked business plan. While the platform and opportunities are growing, they prioritize sustainable growth over simply increasing size, aiming for a 6-8% AFFO per share growth. Chief Financial Officer Mark Patten stated that the successful $400 million bond offering allowed them to be selective on equity issuance in Q3, especially with over $500 million in unsettled forward equity. For 2026, funding decisions will depend on the pricing of both debt and equity, while maintaining low leverage.

Caitlin Burrows of Goldman Sachs asked about the drivers behind the higher GAAP cap rate in Q2, given the consistent cash cap rate, and inquired about the strategy for sourcing new, non-repeat business.

Answer

CEO Pete Mavoides attributed the strong 9.7% GAAP yield to successfully negotiating longer lease terms and higher rent escalations, which he suggested was possible due to a less competitive environment. COO Max Jenkins outlined a three-pronged approach for sourcing new tenants: referrals, industry conference engagement, and direct cold outreach.

Caitlin Burrows from Goldman Sachs inquired about the reliance of investment volume on tenant expansion plans and how that might be affected by the economic environment. She also asked under what circumstances the company's low leverage of 3.4x might increase.

Answer

CEO Peter Mavoides stated that tenant expansion, M&A, and development provide a consistent source of opportunities, and while activity might diminish at the margin, less competition would offset this, leading to a steady flow. CFO Mark Patten addressed leverage, noting the company has been 'thoughtfully over-equitized' and has significant liquidity (unsettled forward equity, retained cash flow) to fund growth into 2026 before needing to increase leverage toward their historical 4x-5x range.

Caitlin Burrows asked about the impact of recent interest rate volatility on business operations and pricing. She also inquired about the rationale behind the Q4 dispositions and how to view them in terms of portfolio management versus a source of capital. Later, she asked about the decision-making process between using equity versus debt for future funding.

Answer

CEO Peter Mavoides explained that the company's 60-90 day transaction cycle and long-term investment horizon insulate it from short-term rate volatility, allowing for more consistent pricing. He clarified that the Q4 dispositions, primarily in the carwash sector, were driven by portfolio and risk management to reduce industry exposure below their 15% soft ceiling, rather than as an accretive capital source. CFO Mark Patten later detailed the funding strategy, noting a historical 60% equity/40% debt split that is evolving to include 10% from retained free cash flow. He emphasized their opportunistic approach to both equity and debt markets, supported by a strong balance sheet.

Caitlin Burrows asked about the strategy behind using the ATM to issue more forward shares versus settling existing ones, and questioned the drivers behind property dispositions, the buyer profile, and the depth of the market.

Answer

CFO Mark Patten clarified that the company plans to settle a significant portion of its forward equity in Q4 to fund investments and pay down its revolver, ensuring ample liquidity for 2025 with minimal new equity needs. CEO Peter Mavoides added that dispositions are a risk management tool used to manage industry and tenant concentrations and to sell underperforming assets into a deep pool of local, regional, and 1031 buyers.

Caitlin Burrows asked for more details on Kimco Realty's structured investments, specifically the net guidance, visibility on existing investments being repaid in 2026, and confidence in backfilling those repayments.

Answer

President and Chief Investment Officer Ross Cooper explained that while 2025 saw several large repayments, no significant single repayments are anticipated for 2026. He expressed high confidence in returning to net growth for the structured investment book, with new deals already funded in January and an active pipeline, ensuring the ability to backfill any churn.

Caitlin Burrows asked for more details on Kimco Realty's net structured investments guidance, specifically regarding visibility into existing investments being repaid in 2026 and confidence in backfilling those repayments.

Answer

Dave Jamieson, COO, stated that unlike 2025, which saw several large repayments, Kimco does not anticipate any significant single repayments in 2026. He expressed high confidence in their ability to backfill any churn within the program and achieve net growth for the structured investment book, citing several deals already funded in January and an active pipeline.

Caitlin Burrows inquired about Kimco's ground-up development projects, such as Northtown and Gordon Plaza, and broader industry trends regarding new development opportunities for the company.

Answer

Dave Jamieson, COO, and Conor Flynn, CEO, explained that Kimco's ground-up projects are selective, opportunistic, and de-risked by pre-executing leases on legacy land. They highlighted the sector's extremely limited new supply (0.3% of existing stock) and the significant rent growth (50-60%) required to trigger a new wave of development, reinforcing the safety of Kimco's first-ring suburb strategy.

Caitlin Burrows inquired about Kimco's ground-up development projects, such as Northtown and Gordon Plaza, and broader industry trends regarding new development opportunities for the company.

Answer

Dave Jamieson, COO, and Conor Flynn, CEO, explained that Kimco's ground-up projects are selective, opportunistic, and de-risked by pre-executing leases on legacy land. They highlighted the sector's extremely limited new supply (0.3% of existing stock) and the significant rent growth (50-60%) required to trigger a new wave of development, reinforcing the safety of Kimco's first-ring suburb strategy.

Caitlin Burrows of Goldman Sachs asked about the net acquisition guidance, the tightness of the FFO guidance range, and the drivers behind the lower CapEx guidance for 2025 compared to 2024 actuals.

Answer

President & CIO Ross Cooper confirmed that future acquisitions would be match-funded by dispositions. CFO Glenn Cohen explained the $0.02 FFO range reflects good visibility and few one-time items. COO David Jamieson attributed the lower 2025 CapEx guidance to the timing of tenant improvement funding, as many projects came online in 2024, with new bankruptcy-related investments not expected to hit until 2026.

Caitlin Burrows asked for an update on the leasing environment, specifically how current tenant demand compares to the recent past and its impact on spreads, bumps, and turnover.

Answer

COO David Jamieson characterized the leasing environment as very strong, driven by high demand and limited supply. He noted that leasing for 2025 rollovers is ahead of historical pace, with off-price and grocery tenants leading demand. This strength has enabled Kimco to achieve impressive new lease spreads and maintain steady leasing costs, with no material cracks appearing in the system.

Caitlin Burrows of Goldman Sachs asked for more detail on the leasing environment, including tenant demand versus the recent past and its translation into spreads and lease terms.

Answer

COO David Jamieson described the leasing environment as very strong, driven by high demand and low supply. He noted that leasing for 2025 anchor rollovers is well ahead of historical trends, with off-price and grocers leading demand. This strength allows Kimco to continue pushing for favorable rent growth.

Caitlin Burrows asked about Kilroy's plans for second-half debt maturities and the criteria for allocating disposition proceeds between debt reduction and acquisitions. She also inquired about the reasons why recoveries are expected to be a headwind in 2026, specifically asking if it's related to occupancy levels or real estate tax appeals.

Answer

Jeffrey Kuehling, CFO, explained that for private placement notes, they have flexibility on timing and will evaluate all options for disposition proceeds, including acquisitions, share buybacks, or debt reduction, based on marginal cost of capital. Angela Aman, CEO, added that share buybacks would be leverage-neutral to slightly deleveraging. Jeffrey attributed the recovery headwind to sizable tax refunds in Q2 and Q3 2025 and a slight uptick in OpEx to drive future revenue.

Caitlin Burrows inquired about Kilroy's plans for debt maturities in the second half of the year, specifically asking what factors would lead them to use disposition proceeds for debt reduction versus acquisitions. She also asked for clarification on why recoveries are projected to be a headwind in 2026, linking it to occupancy levels or real estate tax appeals.

Answer

EVP, CFO, and Treasurer Jeffrey Kuehling and CEO Angela Aman explained that with private placement notes, they have flexibility on timing for retirement, and all options (acquisitions, share buybacks, debt reduction) are on the table, with share buybacks being leverage-neutral to slightly deleveraging. Mr. Kuehling attributed the recovery headwind to sizable tax refunds recognized in Q2 and Q3 2025, which will not recur, and a slight uptick in OpEx to drive future revenue.

Caitlin Burrows asked about the changes in Flower Mart activity and expectations year-to-date, the current expectation for June 30th, and the visibility on that timeline. She also inquired about the closing date of the Silicon Valley sale.

Answer

Angela Aman (CEO) explained that the unique path for Flower Mart's additional flexibility has made the timeline historically unclear, but recent proposals to the planning department in September provided greater clarity on the entitlement process, now expected through H1 2026, with updates to follow. Rob Paratte (EVP, Chief Leasing Officer) confirmed that the Silicon Valley sale closed at the very end of September.

Caitlin Burrows followed up on the Flower Mart project, asking about the changes in activity and expectations year-to-date, the current visibility for the June 30th expectation, and whether it's subject to further changes based on city decisions. She also asked for the specific closing date of the Silicon Valley sale in September.

Answer

CEO Angela Aman explained that the unique nature of the Flower Mart's re-entitlement process has made the timeline unclear, but the September filing of additional proposals has provided greater clarity on the entitlement step, extending interest capitalization through the first half of 2026. She noted that updates will be provided as more information becomes available. EVP, Chief Leasing Officer Rob Paratte confirmed that the Silicon Valley sale closed at the very end of September.

Caitlin Burrows asked for quantification of the capitalized interest impact from the KOP 2 and Flower Mart projects and inquired about the types of tenants, besides AI companies, that are currently active in the market.

Answer

EVP and CFO Jeffrey Kuehling clarified that KOP 2's capitalized interest will cease in early 2026, while Flower Mart's is about $7 million per quarter plus $1 million in carry costs. EVP and Chief Leasing Officer Rob Paratte noted that outside of AI, there is notable activity from professional services and law firms, citing major renewals and moves by JPMorgan and Morgan Lewis in San Francisco as key examples.

Caitlin Burrows of Goldman Sachs inquired about the expected time from lease signing to occupancy for both a spec suite and a larger shell space at KOP. She also asked for a breakdown of the factors that caused 2024 FFO to materially exceed original guidance, distinguishing between onetime items and recurring trends.

Answer

Executive A. Paratte estimated that a KOP spec suite could be occupied almost immediately, while a larger shell space would likely require 9-12 months for build-out. Executive Jeffrey Kuehling explained that the 2024 FFO beat was largely driven by non-recurring items, including significant restoration fee income not expected to repeat in 2025, a termination fee from the Walmart deal, and the gain on the sale of the corporate airplane.

Caitlin Burrows requested more detail on the competitiveness of the sublease market in San Francisco and whether it detracts from direct leasing. She also asked if previously mentioned large requirements in the market referred to the recent OpenAI lease or other deals.

Answer

CEO Angela Aman and EVP, Chief Leasing Officer Rob Paratte explained that the San Francisco sublease market is becoming less competitive as expiring terms shorten, making direct deals and spec suites more attractive. Angela Aman clarified that her prior comments on large requirements did not refer to OpenAI and that other deals around 100,000 sq. ft. remain active. Rob Paratte added that 200,000 sq. ft. of other large tech leases are pending.

Caitlin Burrows noted that the signed-but-not-yet-commenced (SNO) pipeline is off its highs as economic occupancy has increased, and asked for Brixmor's view on the SNO pipeline replenishing itself going forward, considering current leasing demand and available vacancy.

Answer

CEO Brian Finnegan expressed strong encouragement with the demand environment, stating that the SNO pipeline has remained sticky around $60 million due to continuous replenishment, even with commencements. He highlighted that thriving retailers are actively seeking new store locations in an environment with limited available space, and noted 50 basis points of remaining occupancy upside from the prior peak.

Caitlin Burrows followed up on Brixmor's balance sheet, specifically its net debt to EBITDA of 5.4x, asking about the company's comfort level with this leverage and whether they aim for lower, are in the right range, or would consider going higher.

Answer

CFO Steve Gallagher stated that Brixmor remains disciplined with its balance sheet and feels well-positioned in the mid-fives for debt to EBITDA, given the anticipated growth. He indicated comfort at this level while noting they would continue to monitor it throughout the year.

Caitlin Burrows asked about the portion of leasing spread upside that has been realized, how much is left, and how long mid-teens leasing spreads can continue, given the company's long history of achieving large spreads.

Answer

Brian Finnegan, Interim CEO and COO, expressed satisfaction with rent growth trends, highlighting record rents signed in Q3 and over the past year across all categories. He noted that the future leasing pipeline sits about 40% higher than in-place rents and, with continued reinvestment and a low rent basis in spaces being backfilled, Brixmor expects a long runway for future rent growth, despite potential quarterly fluctuations.

Caitlin Burrows of Goldman Sachs asked about Brixmor's ability to achieve large leasing spreads, specifically how much of this opportunity has been realized, how much is left, and how long mid-teens leasing spreads can continue.

Answer

Brian Finnegan, Interim CEO and COO, expressed satisfaction with rent growth trends, highlighting record-high rents signed in overall small shop and anchor categories over the last year. He noted that the future leasing pipeline sits at about 40% higher than in-place rents, indicating a long runway for future rent growth as Brixmor continues to reinvest and backfill spaces accretively, despite potential quarterly fluctuations.

Caitlin Burrows from Goldman Sachs asked for commentary on how the year has progressed versus initial expectations and why the high end of the original same-store NOI growth guidance was no longer attainable.

Answer

EVP & CFO Steven Gallagher clarified that while the portfolio's underlying performance is strong, the expected drag from tenant disruption for the year has increased from 200 to 230 basis points due to recent tenant activity. He stressed that the ability to raise the guidance midpoint despite this increased headwind demonstrates the portfolio's powerful organic growth engine.

Caitlin Burrows followed up on the redevelopment topic, asking how potential tariffs could impact costs for tenant improvements and new projects, and what that implies for the sustainability of development yields.

Answer

CEO Jim Taylor explained that Brixmor mitigates this risk by not committing significant capital until a project is pre-leased and construction costs are fixed through a GMAX contract. He stated that while future tariffs could increase costs, the company would push rents to ensure returns remain accretive, or else it would not proceed with a project.

Caitlin Burrows asked for confirmation on transaction cap rates and inquired about expectations for small shop occupancy throughout the upcoming year, given its current record high.

Answer

CEO James Taylor confirmed that dispositions and acquisitions were both in the 6-7% cap rate range, with acquisitions offering higher growth. President and COO Brian Finnegan noted that while they don't provide occupancy guidance, they still see a path to the low 90s for small shops, implying a few hundred basis points of long-term growth despite expected short-term impacts from box recaptures.

Caitlin Burrows of Goldman Sachs asked for confirmation on Q4 acquisition and disposition cap rates, the outlook for small shop occupancy, how value retailers thrive in the current environment, and the plan for maturing debt.

Answer

CEO James Taylor confirmed a 6-7% cap rate range for both dispositions and value-add acquisitions. President & COO Brian Finnegan noted a long-term target in the low-90s for small shop occupancy and explained that off-price retailers benefit from consumer trade-down. EVP & CIO Mark Horgan clarified that the maturing debt was pre-funded in May 2024.

Caitlin Burrows asked for details on the Acton Plaza acquisition and later followed up on whether acquisition cap rates are now higher than disposition cap rates.

Answer

CIO Mark Horgan described the Acton Plaza acquisition as a competitive process where Brixmor's all-cash buyer status was an advantage. CEO Jim Taylor added the asset has below-market rents and densification opportunities. Regarding spreads, Horgan explained their focus is on hold IRR, and while there might be a slight cap rate difference between acquisitions and dispositions, it is not expected to be material. Taylor characterized the near-term impact as neutral.

Caitlin Burrows asked for details on the Acton Plaza acquisition, including cap rate and upside, and also requested a definition of the term 'legal pipeline.'

Answer

President & COO Brian Finnegan defined the 'legal pipeline' as leases that are out for signature. Regarding Acton Plaza, EVP & CIO Mark Horgan described it as a competitively bid asset where Brixmor's all-cash buyer status was an advantage. CEO James Taylor added that the property offers opportunities to capitalize on below-market rents and add density.

Caitlin Burrows asked how Phillips Edison & Company's cost of capital influences its acquisition pace and if a higher share price would lead to a higher acquisition target, and also inquired about the bad debt pickup in Q4 and 2026 expectations.

Answer

Chairman and CEO Jeff Edison confirmed that a higher stock price would encourage more acquisition activity, but PECO has sufficient capital from operations and dispositions to meet current targets without issuing new equity. CFO John Caulfield addressed bad debt, stating that while Q4 2024 had a lower run rate, 2025 bad debt was consistent at 78 basis points, and 2026 expectations remain in line with December guidance, driven by strong leasing demand.

Caitlin Burrows asked how the cost of capital influences Phillips Edison & Company's acquisition pace and if a higher share price would lead to a higher acquisition target for the year. She also inquired about the bad debt pickup in Q4, visibility into it, and how 2026 expectations might have evolved since the December business update.

Answer

Chairman and CEO Jeff Edison confirmed that a higher stock price would encourage more acquisition activity. He stated that PECO has the capital to meet current targets without issuing additional equity and plans to be active on the disposition side to fund further growth. CFO John Caulfield addressed bad debt, stating it was consistent around 78 basis points for the year, with Q4 being slightly elevated but still in line with expectations. He confirmed that 2026 bad debt guidance, set in December, remains consistent with current data and is not a concern, given strong leasing demand.

Caitlin Burrows asked about the drivers behind Phillips Edison & Company's successful transaction wins in H1 2025, the strategic focus on shadow-anchored centers, and the expected timeline for headwinds from 2024 tenant turnover to subside.

Answer

Chairman & CEO Jeffrey Edison attributed acquisition success to their market-by-market approach and ability to expand exposure to top-tier grocers. President Robert Myers added that 70% of recent junior anchor vacancies are already backfilled, with new rent expected to commence in 2026 and 2027, driven by strong retailer demand for future sites.

Caitlin Burrows inquired about the seasonality of leasing activity, recent trends in March and April, and the company's expectations for the upcoming ICSC conference. She also asked for details on the FFO guidance, noting the implied flat performance for the remainder of the year after excluding a one-time fee, and what factors could drive results to the high or low end of the range.

Answer

CEO Jeffrey Edison and President Bob Myers addressed leasing, confirming that Q1's slight occupancy dip is seasonal and that leasing demand remains robust, with a stronger pipeline of leases out for signature than the prior year. Myers anticipates new and renewal rent spreads will exceed Q1's strong results. Regarding guidance, CEO Edison and CFO John Caulfield explained that the outlook is conservative due to macroeconomic uncertainty. Caulfield noted that reaching the high end of the FFO range would likely require improvements in the capital markets and more certainty on future debt costs.

Caitlin Burrows asked about the high signed-but-not-occupied (SNO) spread, the sustainability of the acquisition volume, and the current strength of the leasing pipeline.

Answer

CFO John Caulfield attributed the 100 basis point SNO spread to anchor leasing activity with longer rent commencement timelines. President Bob Myers added that these spaces were leased at significant spreads and will come online later in 2025. CEO Jeffrey Edison expressed confidence in sustaining acquisition volume due to a large market and a strong pipeline, while remaining disciplined. Mr. Myers also confirmed the leasing pipeline remains robust, with retailers planning into 2026-27.

Caitlin Burrows asked for details on PECO's bad debt management, particularly how the company's aggressive stance on reclaiming spaces plays out, and questioned the drivers behind the implied Q4 acceleration in the same-store NOI guide.

Answer

CFO John Caulfield explained that bad debt remains low and the company's proactive approach to taking back spaces allows them to capitalize on strong retailer demand and achieve high new leasing spreads, benefiting future results. Regarding the same-store NOI guide, Mr. Caulfield confirmed an expected Q4 acceleration, attributing it to timing of recoveries and a favorable comparison to the prior year, while emphasizing the overall consistency of the business.

Caitlin Burrows asked about the 2025 tenant retention rate and expectations for 2026, including the status of the remaining 2026 expirations. She also inquired about the types of tenants active in new leasing in Q4 2025 and Q1 2026, and whether this activity reflects broader industry trends or is specific to First Industrial.

Answer

Rob Walter (EVP of Capital Markets and Asset Management) stated 2025 retention was 71% and expects similar for 2026, with 45% of 2026 expirations already handled, and the remaining 55% TBD with most in active discussions. Peter Baccile (CEO) noted 3PLs (36% market share), retail, manufacturing, and food & beverage as active, largely consistent with the broader market. Peter Schultz (EVP) added auto-related, energy, building materials, and products. Jojo Yap (CIO) mentioned a slight increase in data center-related uses compared to 2024.

Caitlin Burrows asked about First Industrial Realty Trust's tenant retention rate for 2025 and expectations for 2026, including reasons for tenant departures. She also inquired about the types of tenants active in new leasing within their portfolio during Q4 2025 and Q1 2026, whether this activity is indicative of the broader industry or specific to First Industrial, and why activity has changed compared to a year ago.

Answer

Rob Walter, Executive Vice President of Capital Markets and Asset Management, reported a 71% overall retention rate for 2025 and expects a similar rate for 2026, with 45% of 2026 expirations already addressed. He noted that most remaining expirations are in active discussions. Peter Baccile, Chief Executive Officer, identified 3PLs, retail, manufacturing, and food and beverage as active tenant types, largely consistent with the broader market. Peter Schultz, Executive Vice President, added auto-related, energy, building materials, and products. Jojo Yap, Chief Investment Officer, also noted a slight increase in data center-related uses compared to 2024.

Caitlin Burrows of Goldman Sachs Group, Inc. asked if reducing rent prices could effectively create more leasing demand. She also inquired about the rationale for issuing public unsecured bonds now versus in prior years. In a follow-up, she asked about market conditions in Southern California and which markets were currently the strongest or weakest.

Answer

President and CEO Peter Baccile stated that lowering rent does not create new demand and the focus is on the total NPV of a deal, including concessions and timing. CFO Scott Musil explained the bond issuance was driven by having a clear path to be a serial issuer and favorable public market pricing. CIO Johannson Yap and EVP Peter Schultz identified Nashville and parts of Dallas and Houston as strong markets, while noting a 5% rent decline in Southern California from Q1 to Q2.

Caitlin Burrows from Goldman Sachs asked about the effectiveness of reducing rent to create demand, the rationale for the recent public bond issuance, conditions in the Southern California market, and which markets are currently strongest or weakest.

Answer

CEO Peter Baccile stated that lowering rent does not create new demand. CFO Scott Musil explained the bond issuance was driven by a path to becoming a serial public issuer and favorable pricing. CIO Johannson Yap noted SoCal rents dipped 5% in Q2 but remain double pre-COVID levels. EVP Peter Schultz and CEO Baccile highlighted Nashville, Florida, and submarkets of Dallas and Houston as strong performers.

Caitlin Burrows from Goldman Sachs asked about the land acquisition process, specifically how the company managed to close on the Philadelphia land and start development quickly, and questioned the sustainability of 6-7%+ development yields given rising costs. She also followed up on the mechanics of securing favorable long-term land contracts.

Answer

EVP Peter Schultz explained the Philadelphia site was an off-market deal put under contract years ago, subject to a lengthy rezoning and entitlement process which they were able to navigate with extensions. CEO Peter Baccile addressed yields, stating that their current land bank can support development at over a 7% yield. He noted that tying up land long-term while completing entitlement work is a key strategy for achieving high yields, a process driven by the local team's expertise and relationships.

Caitlin Burrows from Goldman Sachs inquired about the land acquisition process for the Philadelphia deal and the sustainability of achieving 6-7%+ development yields given rising costs. In a follow-up, she asked for more detail on how such long-term land purchase agreements are structured.

Answer

EVP Peter Schultz explained the Philadelphia site was an off-market deal secured years ago, subject to obtaining entitlements, which de-risked the process. CEO Peter Baccile added that the company's current land bank supports about $1.9 billion in future development at over a 7% yield. Regarding deal structure, Mr. Schultz described it as a core competency of their local teams, involving cultivating relationships and negotiating terms that allow for a prolonged entitlement process.

Caitlin Burrows from Goldman Sachs asked about the risk of tenants having excess space, the potential impact of automation, and whether price reductions could accelerate leasing for slower-moving development projects.

Answer

President and CEO Peter Baccile noted that while national sublease space is up, it is not impacting FR's revenue. CIO Jojo Yap added that they are not seeing a major shift in space needs due to automation. Executive Vice President Peter Schultz stated that the elongated lease-up times are not primarily a price issue but rather a function of a slower pace of tenant decision-making.

Caitlin Burrows asked about the catalysts needed for new leasing activity to accelerate and the current state of tenant space utilization. She also inquired about the acquisition versus disposition strategy, particularly the rationale behind the fully-leased Houston acquisition.

Answer

Executive Vice President Peter Schultz noted that tenant space utilization is high, but decision-making on new leases remains deliberate due to macro uncertainty. CEO Peter Baccile added that pent-up demand exists. Regarding strategy, Chief Investment Officer Jojo Yap explained the Houston acquisition was an off-market deal where the seller valued certainty, allowing First Industrial to acquire a high-quality asset at a 5.9% cash yield. Peter Baccile also stated that the large-scale disposition program is largely complete and future sales volume will be much lower.

Caitlin Burrows inquired about Simon Property Group's leasing performance, specifically seeking details on rents for new versus renewal leases, and how the current leasing pipeline and demand compare to a year ago, taking into account the recent TRG deal.

Answer

CFO Brian McDade stated that 30% new leasing is a good run rate, with new lease rents around $65 per square foot, expected to continue into 2026. Chairman, CEO, and President David Simon added that the pipeline is up about 15% year-over-year, reflecting broad-based and increasing tenant demand.

Caitlin Burrows asked about Simon Property Group's leasing performance, specifically the rents achieved on new and renewal leases, the percentage of new lease signings, and how the current leasing pipeline and tenant demand compare to a year ago, especially considering the recent TRG deal.

Answer

Brian McDade, Chief Financial Officer, indicated that new lease rents were approximately $65 per square foot, a rate expected to continue into 2026. David Simon, Chairman, Chief Executive Officer, and President, added that the leasing pipeline is up about 15% year-over-year, reflecting broad-based and increasing tenant demand across all categories.

Caitlin Burrows asked about the Q1 performance of Other Platform Investments (OPI), progress on synergies, and the potential tariff impact on JCPenney and other Catalyst brands.

Answer

CEO David Simon reported that the Catalyst brands within OPI showed 'real improvement' quarter-over-quarter, driven by synergies and the resolution of the Forever 21 bankruptcy. He noted that while JCPenney has some China sourcing exposure, it is manageable. Despite uncertainties, he expects the Catalyst group to achieve positive EBITDA for the year.

Caitlin Burrows from Goldman Sachs Group, Inc. inquired about the broader acquisition pipeline and how the company balances M&A with other capital allocation priorities like share buybacks, redevelopment, and dividend growth.

Answer

Chairman and CEO David Simon stated that with no 'big, big' deals on the horizon, the current philosophy is to 'do it all.' He confirmed Simon is pursuing a few smaller, high-quality transactions but has ample capacity, due to its delevered balance sheet, to simultaneously fund redevelopment, repurchase stock, and increase the dividend.

Caitlin Burrows inquired about the depth and composition of Simon's growing development and redevelopment pipeline, asking about the potential for anchor replacements, retail redevelopments, and large-scale mixed-use projects.

Answer

David Simon, Chairman, CEO, and President, detailed a pipeline of approximately $4 billion, with significant opportunities in mixed-use projects. He noted a residential pipeline over $1 billion and mentioned specific projects like Fashion Valley. He explained that while some markets have seen residential oversupply, Simon's projects are timed to deliver in 2-4 years when new supply will be scarce. He also confirmed that large speculative office projects are not part of the current strategy.

Caitlin Burrows inquired about the significant year-over-year increase in Q4 other income, which reached almost $40 million, asking what specific factors and items contributed to this rise. She also followed up on Summit's one-time maintenance expenses, asking where they were reported (Summit operator expenses or SL Green's operating expenses) and what drove the increase in operating expenses if not Summit.

Answer

Matt J. DiLiberto, CFO, explained that the fee income, which flows through other income, is lumpy and often tied to transaction closings, citing 100 Park and 800 Third closings, along with special servicing fees, as Q4 drivers. He clarified that Summit expenses were in 'Summit Operator' expenses, and the increase in overall operating expenses was largely due to 800 Third Avenue becoming a consolidated asset during the quarter.

Caitlin Burrows followed up on the Summit one-time expenses, asking if they were shown in the Summit operator expenses line or SL Green's operating expenses, and if not in operating expenses, what drove the increase in operating expenses in Q4.

Answer

Matt J. DiLiberto, CFO, SL Green Realty Corp, confirmed that the Summit expenses were included in the Summit Operator line. He clarified that the increase in operating expenses, along with other consolidated lines, was largely due to 800 Third Avenue becoming a consolidated asset during the quarter after the company bought out its partners.

Caitlin Burrows asked about the 2026 lease expirations, noting their relatively low rents and whether this creates an easier comparison or reflects the quality of those spaces, and inquired about the high operating expenses this quarter, specifically if gaming bid expenses were included.

Answer

Steve M. Durels, EVP and Director of Leasing and Real Property, stated that 2026 is not a large rollover year, with the largest known vacant lease at 120,000 sq ft and few large blocks of continuous vacant space, positioning the portfolio well to push rents. Marc Holliday, Chairman and CEO, added that small pockets of vacancy allow for optimizing concessions and rents. Matt DiLiberto, CFO, clarified that gaming bid expenses are in 'transaction costs,' not operating expenses. The increase in operating expenses was due to an accounting change for a DPE position and higher utility costs, typical for the third quarter.

Caitlin Burrows from Goldman Sachs asked about typical in-place lease escalators and whether they have shifted recently. She also inquired about the number of competing bids for the downstate casino license.

Answer

EVP Steven Durels explained that most leases include pass-throughs for expense increases plus a base rent bump every five years. Chairman & CEO Marc Holliday stated that SLG is one of eight applicants that filed for the three available casino licenses.

Caitlin Burrows of Goldman Sachs asked for an explanation of the high 'other income' in Q4 and for expectations regarding the trend in economic occupancy for the upcoming year.

Answer

Matthew Diliberto, an executive, clarified that the significant 'other income' in Q4 was expected and primarily due to fee income from the One Vanderbilt joint venture sale, which was previously guided. He reiterated that economic occupancy will trend upward throughout 2025, lagging the growth in leased occupancy as spaces are prepared for tenants.

Caitlin Burrows from Goldman Sachs asked how the increased year-end lease occupancy guidance would translate into economic occupancy and rent recognition. She also requested an update on 245 Park Avenue, covering its redevelopment, leasing progress, and the timing of a potential joint venture sale.

Answer

Executive Matthew Diliberto explained that income recognition from new leases on vacant space typically has a 6-to-12-month delay for build-outs, so the benefits of this year's occupancy gains will materialize over 2025. Regarding 245 Park, CEO Marc Holliday detailed the $200 million redevelopment. Executive Steven Durels added that a forthcoming lease will take the building above 90% occupancy. Executive Harrison Sitomer noted that with these milestones, the asset is well-positioned to attract investor interest for a JV partnership, with a roadshow planned in the coming weeks.

Caitlin Burrows sought clarification on the timing of GAAP NOI recognition and the cessation of capitalized interest for the 290 Binney Street project, given that rents commence in April but delivery into occupancy is expected in June.

Answer

CFO Michael LaBelle explained that GAAP revenue recognition and the cessation of capitalized interest will both occur at the end of June, coinciding with the completion of tenant improvements and receipt of the Certificate of Occupancy. He noted that cash rent starting in April will be recorded as prepaid rent on the balance sheet until June 30th, when it will be straight-lined through the full lease term.

Caitlin Burrows asked for clarification on the timing of GAAP NOI recognition and the cessation of capitalized interest for the 290 Binney Street project, given that rents commence in April but the building delivers into occupancy in June.

Answer

Michael LaBelle, CFO, clarified that both GAAP revenue recognition and the cessation of capitalized interest will occur at the end of June, coinciding with the completion of tenant improvements and the issuance of the Certificate of Occupancy. Cash rent starting in April will be recorded as prepaid rent on the balance sheet until June 30th, when it will be straight-lined over the lease term.

Caitlin Burrows from Goldman Sachs asked about the potential for a dividend reset as a funding source, inquiring about the possible reduction amount based on taxable income and the rationale for waiting.

Answer

Michael LaBelle, EVP, CFO & Treasurer, confirmed a dividend reset is a potential funding source. He noted the dividend has been covered by FAD but exceeded taxable income, pointing to the reported return of capital in 2024 as an indicator of flexibility. He stated no decision has been made and the company has time to evaluate its options.

Caitlin Burrows questioned the confidence in sustained positive absorption in San Francisco, given that some traditional tenants like law firms are still reducing their footprints.

Answer

Executive Rodney Diehl acknowledged the rightsizing by traditional tenants but stressed that this is being offset by a new wave of demand from technology and AI companies. He cited major AI-related leases as evidence of this new growth engine and pointed to Q4's positive net absorption as a key indicator that the market dynamic is shifting favorably.

Caitlin Burrows asked for a bigger-picture view on the long-term trajectory for FFO, considering factors like occupancy gains, development completions, and debt refinancing.

Answer

President Douglas Linde expressed optimism for long-term growth. He highlighted significant internal growth potential from leasing up vacant space, noting every 100 basis points of occupancy gain adds substantial revenue. He also expects external growth to be accretive and believes the net impact from interest rates will be manageable as lower short-term rates on floating debt help offset higher fixed-rate refinancing.

Caitlin Burrows (Goldman Sachs) asked for an update on Prologis' 10-gigawatt power access outlook, noting the rapid increase to nearly 6 gigawatts. She questioned whether the pace of future increases would continue or slow due to increasing difficulty in securing power.

Answer

CEO Dan Letter clarified that the 10-gigawatt figure represents the total universe of opportunity across Prologis' extensive portfolio of 6,000 buildings and 14,000 acres of land. He explained that site readiness and energization are 'lumpy,' and while there's no specific update to the 10-gigawatt target, he remains comfortable with the long-term potential, with additional opportunities further down the road.

Caitlin Burrows asked for an update on Prologis' 10 GW power outlook for Data Centers, given the rapid progress to nearly 6 GW, and whether the pace of increase is expected to continue or slow due to increasing difficulty in securing future power.

Answer

CEO Dan Letter clarified that the 10 GW figure represents the universe of opportunity across Prologis' 6,000 buildings and 14,000 acres of land. He stated that the timing of site readiness and energization is lumpy, and while there's no further update to the 10 GW pipeline number, there's significant potential beyond that figure further down the road.

Caitlin Burrows asked for Hamid Moghadam's view on the 'most compelling setup for logistics, rent, and occupancy in the past 40 years,' specifically if market rent growth could still happen in 2027 or sooner, and details on the long-term setup.

Answer

CEO Hamid Moghadam emphasized that long-term rents are driven by the rate of return and replacement costs, which will stabilize at a much higher level than today's rents. He estimated this trend line to be significantly above current market rents (40% over in-place, 20-25% above market rents today). He stated that while the exact timing of the trajectory (a quarter or two) doesn't matter much for short-term leasing, the ultimate earning power of the company, driven by this higher trend line, is what excites him.

Caitlin Burrows from Goldman Sachs requested more detail on the drivers behind the increased FFO guidance, noting that occupancy and pricing expectations appeared relatively unchanged.

Answer

CFO Tim Arndt clarified that the guidance increase reflects a calmer environment since April, improved visibility for the rest of the year, and permanent outperformance from Q1 and Q2. He stated that while the same-store NOI guidance midpoint is the same, the range was narrowed to express confidence that results will land at the stronger end.

Caitlin Burrows inquired about lease gestation periods, asking which types of customers are proceeding with decisions versus those who are delaying in the current environment.

Answer

Christopher Caton, Managing Director, noted that lease gestation times were elevated in Q1 due to seasonality and mix, and he expects them to remain high. Hamid Moghadam, CEO, added that despite the uncertainty, Prologis signed a significant number of build-to-suits in the past two weeks, indicating that some customers with solid underlying businesses are moving forward.

Caitlin Burrows of Goldman Sachs inquired about the current trends in the lease renewal business, asking if tenants are still renewing at high rates and the reasons for non-renewal.

Answer

Managing Director Christopher Caton confirmed that many customers are still interested in renewing, but noted an expansion in the new leasing pipeline as more customers look to grow. CEO Hamid Moghadam added that the primary reasons for non-renewal are changes in space needs (more or less) or location, and that limited availability in a 95% leased portfolio can sometimes lead to losing tenants who would otherwise prefer to stay.

Caitlin Burrows requested an update on the company's newer digital (data center) and energy business lines, asking about their focus, near-term steps, and the portion of Q3 development starts attributable to data centers.

Answer

Timothy Arndt, CFO, reported that the energy business started over 50 megawatts of new systems in the quarter, putting it on track for its 1-gigawatt goal by 2025. Dan Letter, President, detailed the data center pipeline, which includes 1.6 gigawatts of secured power. He clarified that the Q3 start was not a new project but the conversion of an existing powered shell into a full turnkey facility for a hyperscale customer.

Caitlin Burrows from Goldman Sachs inquired about the elevated levels of tenant improvement and leasing commissions as a percentage of rent, and asked for an update on the company's dividend policy.

Answer

EVP of Office Leasing Glen Weiss responded that while TIs have stabilized, free rent concessions are decreasing, which should improve net effective rents. President and CFO Michael Franco stated that for 2025, the dividend is expected to be at least equal to last year's $0.74 per share, and the board will seriously consider reinstating a regular quarterly dividend at year-end.

Caitlin Burrows of Goldman Sachs questioned management's confidence that macroeconomic uncertainty would not impact leasing, asking for observable trends through Q1 and into May. She also asked for guidance on potential refinancing headwinds for remaining 2025 and early 2026 maturities.

Answer

Executive Glen Weiss stated that leasing has not been impacted yet, though they remain mindful. President and CFO Michael Franco cited recent large deals by Deloitte, Amazon, and NYU as evidence of continued tenant commitment. Regarding refinancing, Franco noted the market is open and supportive of proceeds levels. While some loans will see coupon expansion, others will roll over close to flat, with the net impact already factored into guidance.

Caitlin Burrows of Goldman Sachs asked what conditions would be necessary for Vornado to reinstate its quarterly dividend. She also inquired about the expected timeline for the PENN2 lease-up to begin contributing to earnings and reach its projected yield.

Answer

Chairman and CEO Steven Roth explained the current dividend policy was an interim strategy to conserve cash and protect the balance sheet, which was endorsed by shareholders. He stated the company would likely return to a normal policy as business conditions normalize. President and CFO Michael Franco noted that significant earnings impact from PENN2 leasing is not expected until 2026 due to tenant build-out timelines.

Caitlin Burrows from Goldman Sachs asked about the sustainability of positive rent spreads at 555 California Street, the ability to push rents there, and sought clarity on the 2025 earnings outlook and any large upcoming lease expirations.

Answer

Executive Glen Weiss emphasized that 555 California is insulated from the broader San Francisco market, achieving strong rents and even expansion from tenants. He also noted that the major expirations at 280 Park, 770 Broadway, and 1290 Avenue of the Americas are now in the past, with a more modest expiration schedule for 2025.

Caitlin Burrows from Goldman Sachs asked about the sustainability of positive rent spreads at 555 California in San Francisco and sought clarity on the 2025 earnings outlook and any large upcoming lease expirations.

Answer

Glen Weiss, an executive, asserted that 555 California is insulated from the broader SF market and expects its strong performance to continue. He also noted that the 2025 lease expiration schedule is modest, with the bulk of major expirations now in the past. This supports the view of an improving earnings trajectory into late 2025.

Caitlin Burrows from Goldman Sachs asked for an update on the status of 2025 lease expirations and questioned the level of competition for acquisition deals.

Answer

CFO Michael Bilerman reported that approximately 80% of the 2025 lease expirations have been addressed through renewals or re-tenanting, with active talks for the remainder. On acquisitions, he stated Tanger is highly active in both marketed and off-market deals, leveraging its strong balance sheet (5x debt-to-EBITDA) and available forward equity to pursue value-add opportunities in outlets and open-air lifestyle centers.

Caitlin Burrows raised concerns about potential shortages of excess inventory for outlet centers and asked for an update on leasing activity through April and the outlook for ICSC.

Answer

President and CEO Stephen Yalof expressed optimism, stating that supply chain disruptions can ultimately benefit the outlet channel, as seen post-COVID. He and EVP, Leasing Justin Stein described leasing fundamentals as strong, with renewals well ahead of schedule at 57% complete and robust deal activity in Q1 and April, creating a positive outlook for the remainder of 2025.

Caitlin Burrows asked about the structure of overage rents and whether they have normalized, and sought clarification on occupancy metrics, including whether the 98% figure is leased or occupied, the level of temporary tenancy, and its seasonality.

Answer

Executive Justin Stein confirmed Tanger continues to strategically convert variable percentage rents into fixed base rents. President & CEO Stephen Yalof noted that temporary occupancy remains around 10% and is a key strategy for maintaining vibrancy and cash flow. CFO & CIO Michael Bilerman clarified the 98% figure represents physical occupancy, not the leased rate.

Caitlin Burrows of Goldman Sachs asked for details on the pipeline for new brands, the status of activating peripheral land, the financial impact of recent hurricanes, and the company's target leverage range.

Answer

Executive Vice President of Leasing Justin Stein used Birkenstock as an example of a new brand successfully expanding within the portfolio. President and CEO Stephen Yalof stated that while half the portfolio has land activation opportunities, the approach is a thoughtful allocation of capital. Yalof also confirmed no significant financial impact from the hurricanes is expected in Q4. CFO and CIO Michael Bilerman reiterated the target net debt-to-EBITDA range of 5x to 6x.

Caitlin Burrows from Goldman Sachs followed up on the LOI pipeline, asking for quantification of any deals that have already closed and the typical timeline from LOI to closing. She also questioned the meaning behind the 'public vs. private market disconnect' and whether it implied potential asset sales.

Answer

Chief Investment Officer Timothy Doherty explained that closing timelines vary but all deals in the pipeline are expected to close within the year. Chairman and CEO Jay Sugarman confirmed that the earliest deals are beginning to close. CFO Brett Asnas addressed the valuation disconnect, stating that the company is actively exploring opportunities like asset sales or joint ventures to close the value gap and will update the market on their progress.

Caitlin Burrows followed up on the affordable housing strategy, asking why that segment is particularly active now and what the long-term differences are for Safehold in terms of yield and coverage versus traditional multifamily. She also asked if funding new investments via dispositions would result in a positive investment spread.

Answer

Chief Investment Officer Timothy Doherty attributed the activity in affordable housing to its stability, driven by the national housing shortage, noting its investment characteristics are similar to conventional multifamily. Chairman and CEO Jay Sugarman added that ground leases help stretch limited tax credit capital. On the second point, Mr. Sugarman confirmed that achieving a positive spread between the yield on new investments and the cost of capital from dispositions is a key metric they will target.

Caitlin Burrows asked about the company's process for managing ground leases when a property's value declines and the GLTV increases, questioning if modifications are considered. She also asked for the rationale behind buying out the JV's interest in certain properties now, when those same properties were initially placed in the JV.

Answer

Chairman and CEO Jay Sugarman clarified that Safehold expects value volatility and cannot unilaterally change lease terms if GLTV rises, but their long-term capital provides stability for owners to execute their business plans. Regarding the JV buyout, he explained that Safehold would have preferred to own those attractive smaller deals 100% from the start, but their partner had an exclusive right to participate. The buyout was a mutually beneficial transaction now that the exclusive period has ended.

Caitlin Burrows asked about current trends with the Existing Customer Rate Increase (ECRI) program and how the portfolio might perform in a downturn where consumers are constrained.

Answer

H. Boyle stated that the ECRI program is performing in line with expectations, with customer price sensitivity remaining consistent through April. He noted that while a downturn could pressure payment patterns, the industry is resilient due to countercyclical demand drivers and is well-positioned with current move-in rents already at low levels.

Caitlin Burrows asked about the company's target leverage levels and the factors influencing the decision to move higher or lower. She also followed up on development, asking about the expected lease-up pace and yields for recent and in-process projects.

Answer

Executive H. Boyle stated that leverage ended the year at 3.9x, slightly below the 4x-5x long-term target, providing capacity. He confirmed that the development underwriting target remains a yield of 8% plus or minus, achieved over a consistent 3-to-4-year lease-up period, and this expectation has not changed for recent projects.

Caitlin Burrows asked if the reduced full-year acquisition guidance was due to timing, with deals slipping into 2025, or if deals had been cancelled. She also inquired about the pace of development deliveries expected for 2024, 2025, and 2026.

Answer

Executive H. Boyle confirmed the guidance change was purely a timing issue, as a recent pickup in dialogue means more deals are now likely to close in early 2025. CEO Joseph Russell stated that 2024 will be a record year for development deliveries at around $430 million. He anticipates a slight decrease in 2025 due to longer entitlement timelines but aims to ramp deliveries back up in 2026 and beyond.

Caitlin Burrows from Goldman Sachs asked about the outlook for new regional gaming supply over the next three years and for an update on the current deal pipeline, specifically what is active versus on hold due to macro volatility.

Answer

President & COO Brandon Moore indicated that new supply is possible in states like Pennsylvania and Illinois and that he expects expansion in the southeastern U.S. over the next 2-4 years. Regarding the pipeline, CEO Peter Carlino used an anecdote to illustrate that deal timing is unpredictable and depends on seller motivation. SVP & CIO Matthew Demchyk added that while macro uncertainty may slow larger public companies, it creates catalysts for other groups, making GLPI's stable capital more relevant.

Caitlin Burrows from Goldman Sachs asked if the "up to" amounts for development projects (Belle, Chicago, Ione) would be fully funded. She also sought clarity on funding timing relative to project completion dates and asked for a bigger-picture view on how development funding compares to acquisitions for generating recurring income.

Answer

SVP & Chief Development Officer Steven Ladany and President & COO Brandon Moore stated they expect to fund the full "up to" amounts, as they are tied to hard costs, though the final amount could change if project scope changes. CFO Desiree Burke and CEO Peter Carlino clarified that funding can occur after a project's opening date due to reimbursement lags and back-ended costs. Desiree Burke and SVP & CIO Matthew Demchyk explained that most development funding (excluding loans like Ione) converts directly to rent on owned real estate, creating long-term recurring income and establishing a favorable cost basis compared to acquiring a stabilized asset later.

Asked about the sustainability of positive rent spreads at 555 California in San Francisco and for clarification on the 2025 earnings outlook and large lease expirations.

Answer

Management stated that 555 California is a premier asset that is insulated from the broader San Francisco market, and they expect it to continue to outperform. The 2025 lease expiration schedule is modest, with the bulk of large expirations having already passed.

Caitlin Burrows of Goldman Sachs Group asked for more clarity on the two loan maturities for Greenbrier Mall and Hickory Point coming due in December, including potential outcomes. She also questioned if the implied Q4 deceleration in same-store NOI guidance was due to conservatism or specific headwinds.

Answer

EVP & CFO Farzana Mitchell explained that for the two previously restructured loans, the company is in discussions with lenders and does not intend to use its line of credit. The likely outcomes are another restructure or returning the properties to the lender. CEO Stephen Lebovitz clarified that the Q4 NOI deceleration is not conservatism but reflects the full-year impact of tenant bankruptcies, as backfill income does not fully offset the rent losses.

Caitlin Burrows of Goldman Sachs Group sought clarification on the two upcoming December debt maturities for Greenbrier and Hickory Point, asking about potential outcomes. She also asked about the implied deceleration in the Q4 same-store NOI guidance and whether it was due to conservatism or specific headwinds.

Answer

EVP & CFO Farzana Mitchell explained that for the two previously restructured loans, the company will either pursue another restructure or return the properties to the lender, not intending to use the line of credit. CEO Stephen Lebovitz clarified that the implied Q4 NOI deceleration is due to the full-year impact of tenant bankruptcies, which temporary income does not fully offset.