John Kim • Bank of America

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Executive Chairman William Ackman stated the focus is on acquiring one well-run, conventionally operated insurance company and then transforming its investment strategy. CEO David O'Reilly explained that the price-per-acre estimate is kept conservative and not updated based on a single quarter. Ackman took responsibility for intentionally slowing Ritz-Carlton condo sales to maximize long-term value by selling the remaining units after the project's quality is physically apparent.

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CFO Carlos Olea explained that cash flow can be lumpy quarterly due to MPC infrastructure costs but that investments are sized to free cash flow, which is expected to grow meaningfully as communities mature. CEO David O'Reilly noted that home sales remain strong and that lower builder price participation reflects slower home price appreciation, not a market slowdown. Executive Chairman Bill Ackman stated that the allocation of the $900 million is to be determined and that return on capital objectives are high, referencing Pershing Square's historical performance.

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CEO David O'Reilly directed all inquiries regarding the Pershing Square proposal to the board's special committee. Dave Striph, President of Asset Management and Operations, explained that they are actively marketing vacant space in Columbia and exploring strategic alternatives for one building, noting strong ongoing lease negotiations. O'Reilly added that the portfolio has not been negatively impacted by broader D.C. office market trends.

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CEO David O'Reilly stated that capital allocation is a balance between the highest risk-adjusted returns, including new developments, share buybacks, and community improvements, with multifamily currently being more attractive than office. He expects positive mid-single-digit re-leasing spreads in retail. Regarding G&A, O'Reilly noted it will moderate over time and that the current run rate is sustainable for growth, clarifying that success-based fees are in cost of sales, not G&A.

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CEO Michael Weil explained that GNL will be strategic and opportunistic with office dispositions, focusing on harvesting value after lease renewals rather than committing to a specific percentage or timeline. He highlighted the portfolio's high investment-grade tenancy. Regarding earnings, he pointed to the raised 2025 guidance but deferred on a 2026 outlook. On his stock sale, Weil stated it was for a personal obligation, was not indicative of his confidence in the company, and that his alignment remains unchanged.

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CEO Edward Weil explained that the additional dispositions are a continuation of the non-core asset sales from 2024, targeting local private and 1031 buyers, with pricing remaining stable. Regarding buybacks, he noted the current 12% AFFO yield is a highly accretive and opportunistic way to capitalize on the stock's discount to NAV, though the primary goal remains a higher stock price.

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CEO Michael Weil explained that the buyer is a developer intending to reposition the property from office use after the lease expires in 2026, with GNL collecting full rent until then. He noted that this strategy is evaluated on a case-by-case basis and has been successfully used before with other assets, such as the Foster Wheeler property.

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President and CEO Jordan Kaplan explained that the wide gap between leased and occupied rates (270 basis points) is a positive leading indicator of future absorption, driven by larger deals that take longer for tenants to occupy. He also highlighted that over 30% of leasing was for new tenants, which he views as a very strong sign for the portfolio's health.

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Stuart McElhinney confirmed there were no one-time items, attributing the growth to higher year-over-year occupancy and normal lease turnover. President and CEO Jordan Kaplan added that strong rent growth preceding recent events is now rolling through the portfolio. Regarding Warner Center, Kaplan expressed support for the new development but did not comment on specific transactions and refuted any suggestion that the company planned to exit the market.

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President and CEO Jordan Kaplan clarified his comment was for a yield 'above 10%' on the entire project, not just the multifamily portion. He attributed the attractive economics to a combination of factors, including the purchase price, local rents, building costs, and recognizing a development opportunity others missed due to their platform's expertise. CFO Peter Seymour stated that while specific guidance isn't given, capitalized interest will increase as development expands.

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Executive Stuart McElhinney explained their long-term policy is to move leases expiring on the last day of the quarter into the 'short-term' bucket while they remain in occupancy for that day. He clarified the Warner Bros. vacancy officially began October 1st. Regarding the disclosure change, he stated that management felt the focus on small, volatile submarket data was a distraction and that presenting by region is more reflective of how they view the business internally.

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President and CFO Michael Franco clarified that the occupancy figure was impacted by retail vacancies, specifically two Forever 21 stores, and that the key Verizon office lease was signed just after quarter-end. Chairman and CEO Steven Roth stated that a sale of The Mart would be opportunistic and not actively marketed. Both executives highlighted the significant improvement in the company's balance sheet, including a 1.4-turn reduction in net debt to EBITDA.

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Chairman and CEO Steven Roth and President and CFO Michael Franco asserted they would not sell great assets at distressed prices, using pre-COVID 2019 valuations as the benchmark. Executive Glen Weiss confirmed a significant portion of the current pipeline consists of new deals and expansions that will absorb vacant space and increase occupancy. Michael Franco projected that leasing up PENN 1 and PENN 2 would lift portfolio occupancy to around 94% within approximately 24 months.

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Steven Roth, Chairman and CEO, bluntly predicted that 'none' other than 350 Park would get off the ground due to high construction costs and interest rates creating a 'frozen' market. He reiterated that new development would require rents around a '$200 a foot' bogey to be economically viable.

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Chairman and CEO Steven Roth clarified the $1 billion includes proceeds from the 770 Broadway and 1535 Broadway refinancings, with the remainder from short-term dispositions, but declined to specify which assets. He later predicted that no other major office projects would get off the ground in the near term to compete with 350 Park, citing high construction and financing costs.

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Chairman and CEO Steven Roth confirmed the NYU lease is included in the year-end forecast. He explained the deal involves a significant upfront prepaid rent payment, making the ongoing cash rent lower but equivalent in value when capitalized. Roth added that the Mart's debt-free status allows for opportunistic leasing in a soft Chicago market, leveraging its strong financial position.

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Michael Franco, President & CFO, explained the UNIQLO sale was at a 4.2% cap rate, with proceeds repaying preferred equity, making the transaction at least earnings-neutral and likely accretive. He affirmed the high value of remaining Fifth Avenue assets. Thomas Sanelli, an executive, stated MSG's rent commenced in Q2 and will be fully in effect by Q4 2024, and that capitalized interest on PENN2 will roll down in 2025.

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President & CFO Michael Franco confirmed Vornado's direct involvement, stating, 'I think it's both,' citing the company's significant tech tenant base and premier retail portfolio. On 350 Park, Chairman & CEO Steven Roth affirmed the project is 'full steam ahead,' with a public approval process underway. He declined to confirm the rent, explaining it is 'formulaic' and dependent on future financing costs.

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CEO Mike Raab and CCO Eric Foster noted a positive trend of increasing refills for Ibsrela, indicating patient stickiness, but did not provide specific numbers. Regarding the CMS lawsuit, Mike Raab confirmed that oral arguments are scheduled for September 25 but reminded listeners there is no statutory deadline for a decision.

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President & CFO Alex Jessett clarified that after a 0.7% blended rate in Q2, they expect a slight acceleration in Q3 to just under 1%. He expressed high confidence in this forecast due to significant visibility into signed leases and occupancy, with new leases known ~25 days out and renewals ~60 days out.

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President and CFO Alex Jessett directly refuted the idea of a stall, stating, "No, we have not. Not at all." He confirmed that Camden is seeing the expected uptick in performance moving from the first quarter into April and was unsure what data sources were suggesting otherwise.

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President and CFO Alexander Jessett stated that the repositioning program generates an 8% to 10% return on invested capital, which translates to approximately $150 per door in additional rent. He quantified the impact on 2024 NOI at 10 to 15 basis points. Jessett stressed the program's strategic importance in modernizing kitchens and bathrooms, which keeps the portfolio competitive against new supply.

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Executive Vice Chairman D. Keith Oden affirmed that factors benefiting the oil and gas industry are generally positive for Houston's economy and its real estate market. However, he emphasized that Camden's strategy to lower its Houston exposure is a long-standing one that predates recent political cycles. The goal is to bring the market's concentration in line with others in the portfolio, aiming for below double-digit exposure, and this strategic rebalancing effort will continue regardless of election outcomes.

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EVP and Chief Investment Officer Kennedy Hicks quantified the rent spread at approximately $20 per square foot below market and noted upside from leasing available spec suites and growing parking income. She described the acquisition as a relationship-driven deal but acknowledged that the market is becoming more competitive. President and CEO Colin Connolly reiterated the significant rent growth potential across high-end lifestyle office assets.

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President and CEO Colin Connolly explained that the removal of obsolete office space is now a broad-based trend across all of the company's markets. He characterized it as a necessary 'catch-up' on demolition, driven by properties that are no longer viable. He noted that these sites are being reimagined through a combination of teardowns and repositioning for new uses, including multifamily.

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President and CEO Michael Connolly clarified the Saint Ann Court investment was a whole loan on a top-tier asset where Cousins was comfortable with any outcome, including the eventual payoff by the sponsor. He emphasized that debt investments are opportunistic and not a core long-term strategy. EVP and CIO Kennedy Hicks added that Google is currently evaluating its space needs at Sail Tower and has begun its build-out process.

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EVP of Operations Richard Hickson identified the second Austin lease as PayPal and confirmed strong tech sector activity. President and CEO Michael Connolly declined to comment on specific borrower discussions for Saint Ann Court due to confidentiality. Hickson detailed the BofA sublessee direct lease as a short-term, two-phase extension. CFO Gregg Adzema confirmed the SVB bankruptcy claim remains active but is not included in guidance.

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President John McLaren confirmed that Sun is indeed embracing the rental home business, viewing these residents as future homeowners. He explained that the percentage of rental homes will 'ebb and flow' based on market dynamics and strategy, noting it has historically ranged from 9% to 16%. The company will continue to utilize the rental program strategically to maximize growth within the portfolio.

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Executive Gary Shiffman stated that while they have a great opportunity, they will be very disciplined. He suggested high-quality MH cap rates are generally in the 4-5% range but declined to give specifics while actively in the market. He confirmed the primary focus for acquisitions is manufactured housing. Executive Fernando Castro-Caratini attributed the Q1 transient RV revenue decline primarily to seasonality and a reduced number of available transient sites due to successful annual conversions, especially in Florida, and confirmed Q1 should be the trough.

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Executive Fernando Castro-Caratini stated that the company is evaluating all strategies to maximize its tax position and will update the market closer to closing. Executive Gary Shiffman confirmed that the language for a 1031 exchange is available in their agreement and nothing would restrict them from using it.

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Gary Shiffman, Executive, stated his retirement is a personal decision based on his stage in life after 40 years with the company and is unrelated to any external reports. He emphasized that the priorities for a new CEO will be to leverage the high-quality portfolio, control expenses, and continue simplifying the business, supported by the recent progress on strategic initiatives.

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CIO Matthew Birenbaum stated that cap rates are likely similar to when the deal was struck in late 2024. CEO Benjamin Schall added that a recovery in the assets' rent rolls was key to reaching a transaction value they were comfortable with. COO Sean Breslin projected that Q3/Q4 rent change would likely flatten out rather than decline seasonally, due to softer comps from the prior year.

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CIO Matthew Birenbaum explained the cost breakdown is a blended average for wood-frame construction and varies more by location (e.g., land costs in California) than by product type. COO Sean Breslin confirmed the 100-150 bps spread on renewals is a typical long-term average and that the centralized renewal process enforces strict discipline.

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COO Sean Breslin explained that the primary driver for moderating property tax growth in 2025 will be the diminished impact from the expiration of tax abatement programs, like New York's 421-a. CIO Matthew Birenbaum clarified that the drop in the development pipeline's average yield to 5.9% was not due to underperformance but a change in mix, as high-yield projects were completed and new projects with ~6% yields were added. He noted the average yield is expected to rise as newer projects become a larger part of the mix.

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President & CIO Joseph Fisher clarified the LaSalle JV is focused on yield-oriented, 1990s-2000s vintage assets, not new developments from struggling developers, as lenders are extending terms. SVP & COO Michael Lacy addressed the D.C. question by explaining that UDR has been more aggressive on renewals (5.5-6% growth), which impacts new lease growth but results in a strong blended rate of ~3.5% and overall revenue outperformance, supported by high occupancy and 10%+ other income growth.

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COO Mike Lacy confirmed that achieving the high end of the H1 blended lease rate guidance of 1.4%-1.8% is on track, with April's mid-2% blend supporting this. He reiterated that new lease growth turning flat in April was in line with their expectations for the start of the leasing season. CFO Joe Fisher affirmed that the company is still on track with its other income and innovation initiatives, citing continued high-single to double-digit growth in the other income line item and record low resident turnover, which is exceeding expectations.

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COO Mike Lacy explained that other income margins vary by initiative but that the 2025 growth forecast is strong, and he hopes to exceed it as they did in 2024. An unnamed executive clarified the Monterey measure abides by Costa-Hawkins (no vacancy control) and identified Washington state and potential California state-level bills as the primary other rent control risks being monitored.

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SVP of Operations Mike Lacy clarified that the 2025 earn-in is tracking similarly to the 2024 earn-in because the blended lease growth pattern over the last nine months of 2024 mirrors that of 2023. He identified the coastal markets as seeing more pressure on new lease growth in October, attributing it to the higher impact from short-term leases (e.g., summer interns) converting to long-term leases.

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EVP Timothy Argo confirmed that July's new lease pricing was the best of the year, trending better than June. He clarified that while Atlanta's performance is improving, it still lags the portfolio, and he expressed no concern over broader migration trends, which remain a strong net positive for MAA's footprint.

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Clay Holder, EVP, CFO & Chief Accounting Officer, identified the stabilization of lease-up properties, which are outperforming on pricing and yield, as a key driver of FFO growth beyond seasonality. EVP & COO Tim Argo added that the Wi-Fi program will contribute $1-1.5 million in 2025, with the potential for nearly $6 million annually from the current batch of projects once fully rolled out over the next few years.

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Tim Argo, EVP and Chief Strategy Officer, reported that 13 markets showed positive blended rates in January. He expressed bullishness on continued strength from Washington D.C. and Houston, while also highlighting improving trends in Tampa and Orlando. He noted the current gain-to-lease is approximately 1% and that market rent growth is expected to follow a normal seasonal pattern, which should align with the full-year new lease rate guidance.

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A. Holder, EVP and CFO, explained that while 2024 storm costs were unusually high, they will likely include a provision for some storm costs in future guidance, though not at 2024 levels. He affirmed MAA's commitment to Florida, stating that the portfolio's diversification helps mitigate market-specific risks like higher insurance costs. He also clarified that cleanup costs are excluded from same-store results to maintain comparability.

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EVP & CFO Barb Pak indicated that the Q3 blended rate would be slightly below Q2, with a more significant drop in Q4 to closer to 2%. President & CEO Angela Kleiman stated it is too early to predict the 2026 earn-in. She also noted no direct impact on demand from immigration policy, attributing LA's softness to broader economic uncertainty rather than a specific policy change.

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Executive Barb Pak stated that while the full year is expected to average around 3%, the second and third quarters are projected to have the highest blended rent growth. Executive Rylan Burns highlighted South San Francisco's appeal due to its proximity to the world's largest biotech hub. He clarified the project will target higher-income workers and will not include a corporate housing component.

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Executive Barb Pak clarified that the reported Q4 delinquency was impacted by a noncash charge to eliminate the remaining accounts receivable balance. The 50 bps improvement in 2025 guidance includes 20 bps from this accounting change and 30 bps of true cash improvement. She noted that 10-year unsecured debt is currently in the mid-5% range, and while guidance includes various assumptions, the company will evaluate all financing options at the time of refinancing.

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Executive Angela Kleiman explained their strategy is to maximize total revenue by balancing rates and occupancy, rather than maximizing a single metric. On homeownership, she stated it's not a significant pricing factor because the cost to own is already prohibitively high (nearly 3x the cost to rent). The move-out-to-buy rate, currently 5%, has always been low and thus doesn't create significant new pricing leverage.

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Michael LaBelle, EVP, CFO & Treasurer, explained the capitalized interest is an imputed figure based on a blended cost of capital over the project's timeline. He stated that BXP has multiple funding sources, including asset sales, private or public equity, dividend adjustments, and various debt options, and has ample time to decide on the optimal mix.

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President Douglas Linde expressed high confidence in achieving the *leased* square footage goal, noting they are already more than halfway there. However, he cautioned against directly translating this to quarter-over-quarter *occupancy* gains due to variable revenue commencement dates, urging investors to focus on the growth in the overall leased percentage as the primary indicator of future revenue.

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President Douglas Linde explained the trend is driven by companies acquiring later-stage, de-risked products, reducing the need for early-stage lab infrastructure. Executive Rodney Diehl noted this is common in South San Francisco but was unsure of a direct AI link. Executive Bryan Koop observed some instances in Boston but stated it was not yet a major trend.

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President Douglas Linde expressed optimism, stating that the company expects to sign over 2 million square feet for revenue commencement in 2024 and 2025, which should keep occupancy flat at a minimum. He noted that the formal 2025 guidance and business plan will provide more clarity on the potential for positive absorption.

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Toni Sanzone, MD & CEO, explained that comprehensive growth is expected to normalize as the full rent loss reserve is assumed for H2, though this could prove conservative. Jason Fox, CEO, added that the remaining self-storage assets offer flexibility for either further sales or conversion to net leases, and he confirmed that management contracts on sold properties are typically cancelable on short notice.

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Toni Sanzone, MD & CEO, explained that comprehensive income is expected to normalize in the latter half of the year, as current guidance conservatively assumes the full rent loss reserve will be utilized in Q3 and Q4. CEO Jason Fox added that the company maintains flexibility with its remaining self-storage assets, considering both further sales and conversions to net leases, with the goal of exiting the operating storage business by mid-2026. He also confirmed that management contracts on sold properties are typically cancelable with short notice.

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Head of Asset Management Brooks Gordon detailed that of the 1.8% of ABR expiring in 2025, the vast majority is warehouse and industrial, with about 20% being retail. CEO Jason Fox added that WPC's loan-to-value on its European assets is within a reasonable range, and the company has the capacity and flexibility to issue more euro debt, which enhances the attractiveness of European acquisitions due to wider investment spreads.

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CEO Jason Fox explained the self-storage conversion was structured to be earnings-neutral, with rent set to achieve approximately 1.0x coverage of NOI. The leases include fixed escalators above 2% and a percentage rent component. Regarding Lineage, Mr. Fox noted they are in a multi-year lock-up period, and while capital return is uncertain, they expect to receive the dividend, contributing about $0.05 to AFFO in 2025.

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EVP & Chief Leasing Officer A. Robert Paratte stated KOP2 tenants are a mix of new and local companies. CEO Angela Aman noted it was too early for specific returns. EVP & CIO Eliott Trencher could not discuss the Matilda sale's cap rate due to an NDA but confirmed selling was more advantageous than re-leasing the campus given its future vacancy.

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CEO Angela Aman clarified that Q1's negative spreads were driven by a single, low-capital deal with an existing subtenant and not a broader strategy shift. EVP and Chief Leasing Officer Rob Paratte stated they are pricing KOP 2 competitively based on various factors. He ranked Bellevue as the strongest market, followed by San Diego, with Austin also performing well and San Francisco showing positive momentum.

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Executive Angela Aman explained that 2024 overhead was artificially low as cost-saving initiatives were realized faster than platform reinvestments, and the 2025 guidance represents a more appropriate run rate. Regarding Sale Tower, she stated that while it is a high-quality asset, the pricing was more 'core' than 'opportunistic,' and Kilroy must remain disciplined. Executive A. Paratte added that active tenants in Austin's CBD are primarily professional services, banking, and law firms.

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CEO Angela Aman and EVP, CIO Eliott Trencher explained that capitalized interest will likely be lower in 2025, any gains on land sales would be excluded from FFO, and proceeds are expected in phases from late 2025 to 2027. Regarding KOP 2, Angela Aman and EVP, Chief Leasing Officer Rob Paratte stated that two of the three buildings are in shell condition, allowing for office conversion without significant demolition costs, and noted that co-location of office and life science tenants worked well in Phase 1.

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EVP & COO Michael Manelis indicated that the full-year blended rate growth would likely be in the bottom half of the original 2-3% range, pointing towards 2.0-2.5%. EVP & CIO Alexander Brackenridge noted that cap rates are around 5%, sometimes in the high 4s for desirable assets, and that compelling opportunities have not yet emerged in established markets to alter their acquisition strategy.

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COO Michael Manelis confirmed that leaning into occupancy in Boston during the shoulder season could have contributed to softer new lease rates. Regarding D.C., he stated that while the number of job-related lease breaks has increased from 12 to 28 since the Investor Day, this volume is normal over a two-month period and is not signaling any unusual weakness.

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COO Michael Manelis specified that the demand spike for larger units was localized to three submarkets and not widespread, so their base case for gradual L.A. improvement remains. He confirmed that flattish new lease growth combined with ~5% renewals is a plausible path to the 2.5% blend, citing normal Q4/Q1 seasonal weakness on new leases. CEO Mark Parrell added that stronger-than-expected new lease growth represents the biggest potential upside to their guidance.

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COO Michael Manelis clarified that the migration is primarily internal, with residents moving from 20+ miles out to be closer to urban offices, rather than a reversal of out-of-state moves. CEO Mark Parrell defended the acquisition timing, emphasizing the trade-off of securing a highly favorable price and basis now, despite weaker near-term rent growth, which was factored into their underwriting.

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EVP of Real Estate Thomas Durels stated that despite a planned redevelopment, strong tenant interest could lead to an early lease-up at the new property, with corner rents expected to be north of $500 per square foot. President Christina Chiu estimated the portfolio's overall rent mark-to-market is 25-30%. EVP & CFO Steve Horn clarified that the multifamily NOI growth was driven by 8% rent growth and lower concessions, not the new units. Ms. Chiu added that multifamily assets are trading at strong valuations, around a 5% cap rate or lower.

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Chairman and CEO Anthony Malkin stated that their underwriting for the Williamsburg assets forecasted a 30% mark-to-market rent increase and that they have active proposals for the one vacant space. Regarding tenant risk, Malkin clarified that the Macy's space is already subleased with no impact to ESRT, while the situation with Kohl's, which has a long lease term, is yet to be determined.

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President and CFO Christina Chiu explained that the yield on Williamsburg assets will increase from 4% to over 6% through contractual free rent burn-off and leasing of a vacant space. Chairman and CEO Anthony Malkin added that ESRT is always proactive in working with tenants like Flagstar to manage their space needs, viewing it as an opportunity. Regarding structure, he stated that while ESRT has maintained a clean, wholly-owned portfolio by choice, they are 'omnivorous opportunivores' and would consider JVs for future opportunities to attract capital, especially for new investments.

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EVP & CFO Brent Wood noted that the revolver's cost is around 5.2%, and while the cost of equity has been less attractive recently, they continuously monitor all capital sources. President and CEO Marshall Loeb added that while there is no target floor for leverage, the company's policy is to maintain a maximum debt-to-EBITDA ratio with a 'five handle,' ideally staying below five times. The current low leverage is a byproduct of opportunistic equity issuance rather than a specific goal.

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Executive Marshall Loeb described the 5% spread as a 'statistically odd sample set' due to a very small number of leases rolling in Q1 and stated it was not representative of the portfolio's potential. While acknowledging L.A. is a weak market with negative absorption, he expects future re-leasing spreads there to be higher and more aligned with historical rent growth as more leases roll throughout the year.

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CFO Brent Wood stated that year-to-date bad debt is around 50 basis points of revenue, slightly above the historical average of 30-40 bps. Regarding Conn's, he confirmed they were current on rent through October and have only rejected one smaller lease, while still occupying a large 300,000 sq. ft. space. He also noted the tenant watch list has remained stable in size.

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President & COO Patrick Waite explained that new home sales volume is consistent with pre-COVID levels, and the lower average price reflects a moderation in demand for higher-priced homes and the specific inventory mix. CEO Marguerite Nader commented that the M&A market is quiet but noted the fragmented ownership base will create future opportunities. She refrained from quoting cap rates due to a lack of recent comparable transactions.

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Marguerite Nader, an executive, estimated that reoccupying the sites would take through the remainder of 2025 and into 2026. Regarding the casual RV user, she explained that recent pressure on seasonal revenue stemmed from a decline in seasonal workers, particularly in Florida, but stressed that underlying demand remains strong, as shown by conversions to annual customers.

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CEO Marguerite Nader stated that properties were not impacted by wildfires and that while it's too early to determine the effect on insurance rates, an assumption is included in the expense guidance. Executive Patrick Waite projected delivering 400-600 expansion sites in 2025, attributing the lower number to extended entitlement and permitting timelines, particularly in Florida.

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Marguerite Nader, President and CEO, highlighted that unlike with Ian, no properties are currently being considered for removal from the Core portfolio due to Milton, indicating a less severe impact. Paul Seavey, EVP and CFO, clarified that the six assets impacted by Ian have resumed partial operations but will not rejoin the Core portfolio until 2026 at the earliest. Regarding insurance, Marguerite Nader stated it is too early to predict the renewal rate, as it will depend on the final claims from recent storms.

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Chairman & CEO Marc Holliday explained that while the resolution was quicker than anticipated, it was within the range of expected outcomes for opportunistic investments. CFO Matthew Diliberto clarified that the investment was a CMBS vehicle, which follows different disclosure rules than the DPE portfolio, and that the FFO guidance increase reflects the incremental gain net of income that was already included in the original forecast.

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CEO Marc Holliday expressed confidence in the targets, citing strong tenant demand. For 500 Park, Steven Durels noted a new lease was signed at a rent $10/foot higher than the prior owner asked. Harrison Sitomer updated the acquisition yield to 7.2% from 6.8%, and Marc Holliday added that a $20M+ improvement program is planned to further increase rents.

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Matthew Diliberto, an executive, explained that financial occupancy temporarily declined due to planned tenant move-outs, and it will trail the rise in leased occupancy as new spaces are built out. Marc Holliday, Executive, and Steven Durels, Executive, noted it is too early to assess the congestion tax's impact but theorized it would benefit properties near transit hubs.

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Executive Steven Durels confirmed the Bloomberg deal was not in the reported pipeline due to its rapid and unanticipated nature. While under an NDA, he noted a substantial positive mark-to-market and concessions appropriate for a renewal. Executive Harrison Sitomer stated the One Vanderbilt JV sale is on track for a Q4 closing. CEO Marc Holliday clarified that while the sale isn't a necessity, it aligns with the original business plan to optimize the asset and enhance fee generation, expecting over $500 million in net proceeds from total asset monetizations by year-end.

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CFO Michael Fitzmaurice clarified that the change was due to a mix shift in the pipeline, as two projects stabilized and three new projects with different yield profiles were added. He emphasized that the capital allocation priority remains on these projects, as they are achieving high incremental returns, citing a 19% incremental yield on projects stabilized year-to-date.

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COO Laura Clark clarified that the negative 5% cash leasing spread was based on a very small sample size of 280,000 square feet of comparable leases. She explained the result was primarily driven by a single lease on a property with an above-market prior rent due to specialized improvements, making it a unique circumstance.

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CFO Mike Fitzmaurice explained that the lower GAAP NOI growth guidance (1%) compared to cash (2.5%) is due to a drag from the straight-line rent burn-off of below-market leases that are in their later stages. He then stated that the 2025 guidance assumes GAAP leasing spreads of approximately 30%.

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Co-CEO Michael Frankel attributed the leasing slowdown to broad macro-economic and geopolitical uncertainty rather than tenant-specific issues, highlighting stable underlying business fundamentals. CFO Laura Clark added that quarterly rent figures are influenced by the specific mix of leases signed and that recent leasing spreads were in line with full-year guidance. She noted that smaller spaces with shorter lease terms are realizing their mark-to-market potential more immediately.

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CFO Tim Arndt stated there were no abnormal changes to lease terms, though concessions continue to normalize. He explained the higher lease termination income was forecasted and is offset by resulting vacancy, with all knock-on effects reflected in guidance. CEO Hamid Moghadam reiterated that these payments, combined with mark-to-market opportunities, make defaults value-accretive.

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Hamid Moghadam, CEO, stated he could not identify any other significant reason for the caution besides the tariff uncertainty. He declined to speculate on the short-term path of a demand recovery, reiterating that the company is focused on long-term fundamentals rather than trying to predict short-term market movements.

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CEO Hamid Moghadam stated that the current strategy is to act as a developer, monetizing data center assets upon completion to fund the core logistics business. While a dedicated fund or expanding existing fund mandates are possibilities, no decision has been made. He confirmed Prologis will not hold 100% of these assets on its balance sheet long-term. CFO Timothy Arndt clarified that the current data center development activity is on the balance sheet, not within funds.

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Timothy Arndt, CFO, clarified that the company did not view the quarter as a 'beat' because the positive events, including the Ventures gain and certain tax credit sales, were already incorporated into their annual forecast. He also noted that any apparent foreign exchange gains in the P&L are typically unrealized and do not impact FFO due to the company's comprehensive hedging program.

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CEO John Moragne stated that the company has ample liquidity from its credit facility and does not plan for permanent financing on individual deals, preferring to fund through operations or asset recycling. He explained the Prologis deal was sourced via industry relationships and is symbiotic, as Prologis's customer-led development team generates fee income on projects they don't intend to hold long-term, which fits BNL's strategy.

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CEO John Moragne stated that BNL has ample liquidity via its revolver and ATM program and prefers to self-fund through strategic asset sales rather than seek permanent financing on new developments. He explained the Prologis deal was sourced through direct relationships and fits Prologis's customer-led development strategy, where they act as a fee developer for certain projects and partner with long-term owners like BNL.

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President and CFO Jim Sebra confirmed that commentary on pricing power is based on positive developments in blended rental rates. CEO Scott Schaeffer addressed development, stating that while they see many opportunities, they remain disciplined regarding their cost of capital and balance sheet risk. He noted the Charleston development was a strategic way to grow in a market where accretive acquisitions are difficult.

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CFO James Sebra explained the lower renewal guidance reflects a thoughtful and conservative approach in an unusual market environment, noting current renewal offers are in the 3-3.5% range. He clarified that the value-add performance spread appears narrow because the metric includes all leases at the property, not just newly renovated ones, and that the renovation premium methodology is designed to isolate the upgrade benefit from general market rent movements.

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Executive Janice Richards acknowledged that new lease rate lift was less than hoped for due to supply. Executive Scott Schaeffer detailed that two of the three acquisitions are newly constructed assets (87% occupied) expected to stabilize in Q1 2025, while the third is an older asset targeted for the value-add program. He attributed the attractive 6% stabilized cap rate to moving quickly with available capital and accepting some lease-up risk.

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CEO Darrell Crate stated that while not entirely over, the company understands DOGE's objectives and feels well-positioned, highlighting that 95% of its leases are firm term. Executive Meghan Baivier described the D.C. lease as modified gross with ~1% annual escalators. CFO Allison Marino and CEO Darrell Crate confirmed they have ample funding from debt, internal cash, and their JV partner, and do not need to access public equity markets to achieve their strategic goals.

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President and CEO Darrell Crate distinguished between Washington D.C. offices, where utilization is a focus, and Easterly's mission-critical facilities like labs, where functionality is more important than occupancy metrics. He confirmed the guided acquisitions would likely be in the state, local, or government-adjacent sectors. Regarding CAD, CFO and CAO Allison Marino explained that growth is driven by renewals, operating margins, and accretive acquisitions. Mr. Crate added that the goal is for CAD generation to be within 'striking distance' of the dividend by the end of 2026, noting a higher stock price would accelerate this.

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CEO William Crooker broke down the ~14 million sq. ft. of expected 2025 leasing into operating and non-operating buckets. CFO Matts Pinard added a key clarification, explaining that the total expected leasing volume includes new speculative leasing on existing and future vacancy, not just the renewal of expiring leases, which helps reconcile the figures.

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CFO Jill McConnell explained that commercial investments target specific therapeutic areas and sales geographies to grow the pipeline, particularly in biotech. She stated that one-time spin-related costs will continue to step down through the first half of 2025. CEO Tom Pike described the overall RFP flow as 'solid' and adequate for the company to achieve its growth targets.

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Executive Anthony Saladino confirmed the Accredo Health vacancy was a known move and part of the plan, with some space being converted and a smaller office portion under contract for divestiture. James Connolly, Head of Asset Management, explained the Communication Test Design tenant's one-year renewal is tied to their client contract and they are likely to extend for at least one of their two buildings. Saladino clarified that 'transitory vacancy' refers to leases executed but not yet commenced, with rent expected in Q1. Executive Jeffrey Witherell attributed the pipeline's growth directly to securing capital from the Sixth Street transaction, which allows them to actively pursue deals.

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CEO Adam Schechter stated that the M&A pipeline remains focused on hospital, health system, and regional lab deals that are accretive in year one. He characterized the Invitae deal as an atypical strategic one-off. CFO Glenn Eisenberg addressed turnover, noting that attrition has improved to pre-pandemic levels in biopharma and is making progress in diagnostics. However, he acknowledged that the frontline worker environment remains competitive, contributing to overall labor costs.

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