Ronald Kamdem • Morgan Stanley

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CEO Steve Preston explained the 7.5% cap rate reflects a fluid market with some compression but affirmed the pipeline is robust enough to meet prior, higher guidance if capital costs improve. He projected long-term bad debt would be negligible, around 25-50 basis points, in line with historical performance now that the recent tenant issues are resolved.

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Executive Timothy Dieffenbacher explained that the 2025 bad debt guidance of 2-3% is higher than the historical 1-2% range, primarily due to the specific watch list tenants, and expects a return to normalcy post-2025. Chairman and Co-CEO Stephen Preston added that they are confident in the year-end timeline for resolutions because most current negotiations are for asset sales, which typically close faster than new leases.

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Executive Timothy Dieffenbacher advised that Q4 AFFO is not a simple run-rate due to the upcoming replacement of low-cost ABS debt with a higher-rate term loan, which will create a drag on Q1 2025 AFFO. Regarding bad debt, Dieffenbacher noted the full-year run rate is about 91 basis points of cash NOI, in line with the historical 1% target. Co-CEO Stephen Preston added that historically, the company has successfully created net value from re-leasing returned assets.

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President & CEO Brandon Ribar attributed the July move-in success to significant investments in digital marketing, which increased leads through Sonita's own channels and reduced reliance on paid third-party referrals. Regarding acquisitions, Ribar explained they target communities with occupancy in the mid-70s to low-80s, where they can apply their operational and sales expertise to drive growth, while still targeting low double-digit stabilized cap rates.

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President and CEO Brandon Ribar explained the repositioning of five Indiana communities is a strategic move to reduce Medicaid exposure following a state program change. The company is investing $4-5 million to upgrade these assets for a private-pay model, expecting returns over 30%. Ribar noted no other assets are slated for immediate repositioning. He also confirmed the two new acquisitions are in Florida and Georgia, fitting their strategy of buying quality assets with operational upside and targeting low double-digit stabilized yields.

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President and CEO Danny Prosky affirmed the 'early innings' thesis, citing strong demographic trends and low new supply, targeting mid-90s occupancy while maintaining pricing discipline. Chief Investment Officer Stefan Oh added that the acquisition pipeline consists of high-quality, newer RIDEA assets, primarily in the SHOP segment, with stabilized yields expected in the high-sevens to eight percent range.

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President and CEO Danny Prosky highlighted a focus on reducing concessions and leveraging dynamic pricing, a system where Trilogy is a leader. Regarding tariffs, Prosky stated AHR is well-positioned and does not expect a major impact, though construction costs could be affected. COO Gabe Willhite added that inflationary pressures could further constrain new supply, benefiting AHR's existing portfolio.

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President and CEO Danny Prosky explained that Q1 NOI is expected to be flat versus Q4 due to seasonal factors like FICA resets, higher utility costs, and fewer days, though it will be significantly up year-over-year. CFO Brian Peay added that 2024's 600 basis point SHOP occupancy growth is not repeatable. Regarding the pipeline, Danny Prosky described it as "very robust" and more significant than the prior year.

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President and CEO Danny Prosky stated he expects occupancy to continue trending up into the 90s, with incremental margins on new tenants ranging from 40% to 80% depending on the business line. COO Gabe Willhite added that NOI growth is also driven by rate optimization, not just occupancy gains. Prosky clarified that non-core dispositions, primarily of Outpatient Medical buildings, are now focused on portfolio enhancement rather than being a necessary funding source for growth, and that external growth will likely outpace sales. Management emphasized a focus on sourcing off-market deals through trusted regional operator relationships.

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CEO Sumit Roy stated that the 4.6% credit watch list already incorporates potential tariff impacts and that the portfolio has minimal exposure to the most susceptible industries. He attributed the European focus to superior risk-adjusted returns, driven by less competition and a significant cost of debt advantage, with euro borrowing costs being substantially lower than U.S. dollar debt.

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CEO Sumit Roy stated that Q1 cap rates were just over 7% and expects them to remain in that range due to market uncertainty. He outlined a twofold strategy for increasing rent growth: targeting asset types like industrial and data centers with higher organic escalators, and acquiring assets in Europe with below-market rents to capture significant mark-to-market upside upon renewal.

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CEO Sumit Roy confirmed no very large ($500M+) deals were in the current pipeline. He described gaming as episodic and data centers as a space requiring deliberate partner selection. CFO Jonathan Pong clarified the bad debt guidance includes conservatism and that a Q4 straight-line rent write-down was tied to the same few tenants driving the reserve.

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CEO Sumit Roy stated the fund's strategy will align with the public company's, as Realty Income will be a massive co-investor. He believes the fund will primarily attract institutional investors who lack the mandate for public securities but want to access Realty Income's platform. On data centers, Roy confirmed seeing immense demand and is optimistic about crafting a compelling value proposition for operators, viewing it as a core business of allocating capital to high-credit tenants on long-term leases.

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President & CEO Greg Lehmkuhl noted that while same-store throughput was down 3% year-over-year against tough comps, it was up 1% sequentially. Regarding supply, he cited data indicating that new openings peaked in 2023 and will remain elevated in 2025, but announcements for 2026 deliveries show a significant decrease to approximately 1% of existing capacity.

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CFO Rob Crisci confirmed they are confident in second-half growth driven by easier comps and seasonality but are not providing a specific range due to macro uncertainty. CEO W. Lehmkuhl added that tenants are in a 'wait and see' mode regarding inventory levels and noted that the seafood business, a focus last year, has now stabilized at normal consumption levels.

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CEO W. Lehmkuhl stated that pricing is expected to be at inflationary levels, complemented by ongoing productivity and energy efficiencies. CFO Robert Crisci clarified that the $1.5 billion represents deployment capacity funded by cash and debt, not a committed amount. He added that the pipeline includes both M&A and development opportunities, and the company is now positioned to accelerate growth post-IPO.

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Chief Investment Officer Tim Doherty stated they see future potential with the new sponsors and are already in talks with one for another deal. He explained that the hospitality and office sectors are seeing more activity as capital markets free up. CEO Jay Sugarman added that ground lease yields are targeted at a spread over benchmarks, while leasehold loan returns are based on SOFR plus a spread, making them a tool for acceleration rather than a core business.

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Chief Investment Officer Timothy Doherty detailed the pipeline's diversity, noting it's majority multifamily across the West Coast, Southeast, Northeast, and Midwest, with many new clients. Chairman and CEO Jay Sugarman added that leasehold loans are a useful, selective tool to provide certainty and kickstart deals in volatile markets, emphasizing they will be kept to a small percentage of the balance sheet.

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Chief Investment Officer Timothy Doherty confirmed strong activity in affordable housing carrying into 2025 and noted momentum in market-rate multifamily in supply-constrained markets, as well as early positive signs in office and hospitality. Chairman and CEO Jay Sugarman explained that the buyback is a response to a materially undervalued stock and would be funded through capital recycling from asset sales or JVs, and potentially by unlocking value from Caret, all while remaining leverage-neutral.

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Chief Investment Officer Timothy Doherty responded that the investment pipeline includes all major property types. He noted that while multifamily was the first sector to recover, capital is now increasingly flowing into hospitality and office. Improving fundamentals in these sectors, such as clarity on return-to-work plans and post-COVID performance data, are creating more opportunities, with rate volatility being the primary remaining hurdle.

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President & CEO David Cramer reported that while the occupancy gap has not yet been meaningfully closed, they are about 70% through the initial rate harmonization for the PRO portfolio. EVP & CFO Brandon Togashi clarified that underlying property tax growth is stable at 3-4%, marketing spend growth will moderate, and personnel cost growth will turn positive in the second half of the year.

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CEO Dave Cramer stated there has been no change in move-out behavior, with bad debt in check and payment activity as expected, suggesting no broad affordability issues. Regarding the in-place rent metric, Cramer explained that its growth is driven by both the strength of the ECRI program on existing tenants and the improved rates on new move-ins, which are cycling into the in-place customer base.

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CEO Dave Cramer responded that there have been no changes in move-out behavior, with bad debt in check and no signs of affordability issues. He explained that the improvement in in-place rent is driven by both higher move-in rates for new customers and the continued success and strength of the Existing Customer Rate Increase (ECRI) program.

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CEO Dave Cramer confirmed the occupancy assumption, attributing the expected improvement in 2025 to a more stable operating environment and a stronger focus on execution without the distractions of the 2024 PRO transition. CFO Brandon Togashi provided expense details, guiding to property taxes in the 3-4% range, insurance in the low single-digits, and marketing as the line item with growth above the overall OpEx range.

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CEO Dave Cramer characterized top-of-funnel demand as 'stabilizing,' with web traffic stable but an encouraging increase in customers renting due to moving. The strategy is to improve conversion of this stable demand. CFO Brandon Togashi added that besides a tougher Q4 property tax comp, personnel costs are expected to rise from a Q3 low caused by turnover during the PRO transition.

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EVP & CFO Vincent Chao confirmed the recent $500 million bond offering pre-funded the upcoming maturity. President and CEO Stephen Horn stated that while the historical 9-12 month re-leasing timeline holds for properties needing redevelopment, some recent vacancies like former furniture stores have been resolved much faster.

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CFO Vincent Chao responded that they proactively manage exposure to tenants on their watchlist or dark-but-paying list, like AMC, but it's not specific to a concept and depends on achievable economics. CEO Stephen Horn described the acquisition landscape as similar to last year, with some private buyers re-entering, but noted it remains a consistently competitive market where they can meet their targets.

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CFO Kevin Habicht reiterated that comfort with the 60 basis point guidance comes from having the two most acute credit issues (Badcock/Frisch's) cleared out and no other tenants posing immediate concern. For debt, he estimated a 10-year refinancing rate around 5.5%. On re-leasing, he highlighted that the combined re-lease and disposition of the initial Badcock assets resulted in a rent recovery of 113% of prior rent.

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CFO Kevin B. Habicht stated there is no read-through to other tenants, noting the cash basis list is highly concentrated. Executive Stephen Horn explained that the acquisition pipeline remains strong, supporting the guidance increase. He mentioned that deal timelines of 60-90 days have insulated recent closings from the most recent rate hikes and that sellers are motivated to close by year-end, with Q4 and early Q1 pricing expected to be stable.

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President and CFO Michael Franco projected that same-store NOI would turn positive starting next year. Chairman and CEO Steven Roth described the PENN15 site as the best in West New York but noted that development is not imminent due to high construction costs and the need to secure the right anchor tenant.

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President and CFO Michael Franco confirmed that same-store NOI should follow the occupancy trajectory and accelerate into 2027. On capital allocation, he said the current focus is on investing in the existing business, new development, and debt reduction, with stock buybacks not being a priority at this time. The Hotel PENN site was not specifically addressed in the response.

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Michael Franco, President and CFO, declined to provide a specific forward-looking same-store NOI number. On CapEx, he stated that the current forecast of $250-$275 million is a good directional number for the current year, reflecting a strong leasing environment, but expects the figure will start to come down in future years as the portfolio's occupancy stabilizes.

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President and CFO Michael Franco declined to provide a specific same-store NOI forecast but said management would look into providing more visibility. On CapEx, he stated that the current projection reflects a strong leasing environment and that the number should start coming down in future years as the portfolio's occupancy stabilizes.

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President and CFO Michael Franco stated it was difficult to predict the precise same-store NOI impact for 2025 due to timing variables but reiterated the end goal of stabilizing occupancy. He emphasized that Vornado remains rigorous with capital deployment, investing only where it sees appropriate returns, and hopes to see tenant concessions trend down as the market strengthens.

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Glen Weiss, an executive, confirmed a 'good amount' of the 2.6 million sq. ft. pipeline is for PENN2 but declined to provide a specific breakout. Michael Franco, President & CFO, stated that development of the Hotel Penn site is not imminent due to high construction costs and the challenging financing environment, saying its 'day has not come yet.'

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CEO Michelle MacKay stated that tariffs have created volatility but have not yet disrupted capital markets flow, which remained compelling in July. CFO Neil Johnston noted that while H2 margins will be slightly below H1 due to increased investment, they still expect full-year margin expansion, reflecting strong operational performance.

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CFO Neil Johnston attributed the margin beat to stronger-than-expected leasing and services revenue, with some expense timing benefits expected to reverse. CEO Michelle MacKay added that tariff talks have not materially affected client behavior, with the vast majority proceeding with decisions, supporting the full-year outlook.

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CFO Neil Johnston attributed the Capital Markets forecast to strong pipeline visibility and early momentum. CEO Michelle MacKay added that it's part of a long, multiyear recovery. Regarding margins, Johnston explained that while brokerage recovery brings strong incrementals, they will be partially reinvested for growth, with a focus on defending margins while positioning for the long cycle.

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Chairman, CEO & President David Simon expressed confidence that the company will beat its full-year guidance of "at least 3%" NOI growth. He noted that tenant demand remains unabated and the back-to-school season has been strong, contributing to their outperformance year-to-date.

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Chairman, CEO & President David Simon expressed confidence that the company will beat its full-year guidance of "at least 3%" for domestic property NOI. He cited that tenant demand continues unabated and noted a strong start to the back-to-school season, suggesting continued momentum despite external volatility.

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CEO David Simon and CFO Brian McDade both confirmed there has been 'no change' to the material elements of the full-year guidance issued at the beginning of the year. McDade noted that interest income and expense trends are proceeding as anticipated, but the core operational assumptions remain intact.

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CFO Brian McDade responded that all platforms performed well without significant bifurcation, though value-oriented Outlets and Mills saw slight outperformance in Q4. He noted no material impact from the strong dollar on tourist centers yet, but it could affect foreign earnings translation going forward. CEO David Simon added that the focus on asset improvement is portfolio-wide.

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President and CEO Joey Agree responded that development leases are typically new, long-term (10-20 years) but standard in structure, with yields 50-150 basis points wider than acquisitions. Regarding Genuine Parts (Napa), he stated that while they like the auto parts sector, there are no current plans to materially increase exposure to that specific tenant.

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CEO Joey Agree estimated that tariffs could increase hard construction costs by 2% to 5% on the high end, which they do not consider a material move for their projects. Regarding dispositions, he stated that the annual guidance remains unchanged and he does not foresee dispositions being a major source of capital this year. While they will remain opportunistic, pruning the portfolio is not a priority as it was in the previous year.

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CEO Joey Agree estimated that tariffs could increase hard construction costs by 2% to 5% on the high end, which he does not consider a material impact on their projects. Regarding dispositions, he stated that the annual guidance remains unchanged and that capital recycling is not a major priority this year, unlike in the previous year, though they will continue to evaluate opportunistic sales.

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CEO Joey Agree explained that the high investment-grade percentage is an output of their strategy, not a specific target, as they also value strong unrated retailers. He confirmed a strong start to the year but declined to predict the full-year cadence due to market volatility, noting Q1 was 'locked and loaded'.

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CEO Joey Agree explained that the high investment-grade exposure (68.2%) is an output of their strategy, not a rigid target, as they also value strong unrated tenants. He noted that Q1 transaction volume is already "locked and loaded" after a strong January, but forward visibility for the rest of the year remains limited due to market volatility.

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EVP & CFO Jeff Norman explained that they have now lapped the high property tax comps from legacy Life Storage properties and expect normalization in the second half. He stated that lighter revenue was offset by stronger ancillary income. CEO Joseph Margolis added that demand appears steady and the market is incrementally improving.

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CFO P. Scott Stubbs identified property taxes and casualty insurance as primary pressure points, noting the Q1 tax increase was partly due to a tough prior-year comparison. CEO Joseph Margolis stated there has been no discernible impact on customer behavior, demand, or delinquency to date. He added that while the future effects of tariffs are unknown, they could potentially reduce new supply by increasing construction costs.

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Executive P. Stubbs explained that Q4 property taxes were driven by aggressive reassessments in Georgia, Illinois, and Indiana, and the 2025 budget assumes a 6-8% increase. He also noted a budgeted ~20% increase for property insurance. CEO Joseph Margolis commented on AI, stating the company is taking a cautious approach, particularly with customer-facing applications, while exploring internal uses for data analytics.

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CEO Joseph Margolis confirmed that both portfolios are now on the same ECRI program, with no difference in pace or amount. He reiterated that the primary goal is maximizing long-term revenue, and while current data supports leaning into occupancy, this strategy is dynamic and subject to change based on performance.

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J. Justin Hutchens, EVP - CIO of Senior Housing, confirmed that target unlevered IRRs remain consistent in the low-to-mid teens. While year-one yields have drifted slightly lower, this is offset by acquiring higher-quality, newer assets. On transitions, he described it as a continuous part of their active asset management playbook to ensure the optimal operator is in place to maximize performance for each community.

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EVP & Chief Investment Officer J. Hutchens highlighted a recent triple-net to SHOP conversion in the U.K. as an example of ongoing efforts and expressed excitement about establishing a SHOP presence there. He acknowledged cap rate compression, with yields moving from 7.7% to 7.2% on recent deals, but noted they remain in the target range. He attributed Ventas's competitive success to its platform, relationships, and certainty of close.

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Executive J. Hutchens reported that the labor market is the best it has been 'in some time,' with strong hiring and retention, and the 5% expense growth forecast accounts for inflation and volume. He also suggested that most of the prime triple-net conversion opportunities have been identified, with the focus now shifting to execution.

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J. Hutchens suggested that unfavorable debt market conditions have kept private capital on the sidelines, creating an advantage for Ventas. He noted that while a favorable year-over-year comparison on agency labor costs provided a tailwind, the core fundamentals of strong demand and pricing power are expected to continue.

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President & CIO Ross Cooper noted an increase in both product and demand, with aggressive pricing from competitors. He highlighted Kimco's advantage in its large structured and JV portfolios, which provide proprietary deal flow. CEO Conor Flynn added that a more offensive stance on acquisitions is tied to their cost of capital.

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CFO Glenn Cohen explained the 2%+ guidance is a starting point that bakes in vacancies from late 2024 and uncertainty around bankruptcies, establishing a comfortable floor. David Bujnicki added that assumptions around the signed-not-open pipeline also create variability. Regarding dispositions, President & CIO Ross Cooper reiterated that volume will be dependent on new investment opportunities, as it is a match-funding mechanism.

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CFO Glenn Cohen pointed to strong underlying drivers, particularly the robust signed-not-open pipeline, 90% of which is expected to commence rent in 2025. While credit loss is monitored closely, he noted that current levels are at the low end of the historical 75-100 basis point range, suggesting this is a reasonable starting point for modeling future performance.

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CFO Glenn Cohen highlighted strong drivers for 2025, particularly the signed-not-open (SNO) pipeline, with 90% expected to commence rent. He noted that while credit loss will be monitored, it is currently at the low end of its historical range, providing a solid starting point for next year's assumptions.

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West Region President and CIO Nick Wibbenmeyer suggested that strong investor demand for core shopping centers is encouraging more sellers, leading to a 'marginal pickup in velocity.' He anticipates more assets will come to market after Labor Day. CEO Lisa Palmer added that Regency likes to acquire compelling assets and has a proven ability to execute successfully due to its platform and cost of capital advantages, and will continue to do so.

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CIO Nick Wibenmeyer suggested it's a 'marginal pickup in velocity,' driven by strong investor demand for core assets, which is encouraging more sellers to test the market. He anticipates more assets will become available after Labor Day. CEO Lisa Palmer emphasized that regardless of market volume, Regency's platform and cost of capital advantage position it to execute successfully on attractive opportunities.

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Nicholas Wibbenmeyer, West Region President and CIO, acknowledged they are closely monitoring costs. He noted that while tariffs could have an impact, these are partially offset by year-over-year decreases in steel and crude prices. He confirmed Regency still feels confident in delivering projects on budget and continues to target a 150 basis point spread over stabilized asset values.

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CEO Ted Klinck stated that acquisition opportunities are emerging across their footprint, with cap rates for trophy assets around 7% and IRRs in the high-single to low-double-digit range. Regarding Pittsburgh, he confirmed they are 'closer' to a sale than before but will remain patient to optimize timing, while actively marketing other non-core assets to meet 2025 disposition goals.

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CEO Theodore Klinck reported no new update on the Pittsburgh assets, reiterating the plan to sell when capital markets are more favorable. He confirmed the company is actively underwriting acquisitions but has nothing to announce. Executive Brendan Maiorana projected that same-store NOI growth would likely weaken in Q2 and Q3 due to challenging prior-year comps, with a relative improvement expected in Q4.

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CEO Theodore Klinck stated that the Pittsburgh asset remains non-core with a long-term goal to exit the market, but they will remain patient given the difficult financing environment for such properties. Regarding leasing strategy, Mr. Klinck confirmed no significant changes, highlighting the continued success of their spec suite program for smaller users and noting a recent return of larger prospects to the market. He expressed optimism for continued robust leasing activity.

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CFO Brendan Maiorana confirmed the strong leasing is primarily driven by market share gains, with Highwoods outperforming its markets. He projected year-end 2024 occupancy between 86.5% and 87%, with a trough in early 2025 before recovering to a similar level by year-end 2025. CEO Theodore Klinck added that while few 'wish list' assets are for sale, he is optimistic that future rate cuts will narrow the bid-ask spread and bring more opportunities to market.

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Hilary Spann, EVP of the New York Region, explained that while the floor plates at 343 Madison are well-suited for 200-250k sq. ft. tenants, they are seeing demand from larger clients due to a lack of premier space in the submarket. Douglas Linde, President & Director, commented that pure lab leasing in the Bay Area remains quiet, impacting 651 Gateway's stabilization timeline.

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President Douglas Linde noted weak demand for new raw lab space but significant interest from life science firms for traditional office space as they shift focus from discovery to de-risked products. Executive Bryan Koop addressed the Boston market, stating that BXP's access to capital and flexibility are key differentiators, allowing them to win deals from capital-constrained landlords and pivot projects to meet tenant needs.

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President Douglas Linde confirmed the Q3 occupancy decline in Manhattan was entirely expected and attributable to the single known move-out of O'Melveny & Meyers at Times Square Tower. He stated that overall leasing activity in the market is actually above expectations, with active dialogues across the portfolio, suggesting a positive outlook for the coming year.

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EVP & COO Jeffrey Mooallem stated that shop occupancy could reach 93-94% and that pricing power is manifesting in better lease terms, including rent increases, radius restrictions, and lower landlord contributions. He also noted that while Kohl's is on their radar, they don't see an imminent issue and are proactively discussing getting some locations back. Chairman & CEO Jeffrey Olson added that the acquisition market is strong, with cap rates for quality assets in the 5.5% to 6% range, and that the company's stock appears inexpensive relative to these private market values.

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Chairman and CEO Jeffrey Olson stated that the bid-ask spread for acquisitions remains wide, and the company will be patient. He also noted that Kohl's is not seen as a near-term bankruptcy risk. CFO Mark Langer reiterated the bad debt guidance of 75 to 100 basis points of gross rents for the year.

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Chief Financial Officer Mark Langer detailed the bad debt provision, stating that approximately 70 basis points relate to tenants already in bankruptcy, with a 40 basis point general reserve, partially offset by expected collections. Chairman and CEO Jeffrey Olson addressed the acquisition environment, emphasizing that accretive capital recycling is the company's preferred strategy. He highlighted their track record over the last 16 months, acquiring $550 million in assets at a 7.2% cap rate funded by $427 million in dispositions at a 5.2% cap rate, and expressed hope of finding similar value-creating deals in 2025.

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CEO Jeffrey Olson estimated that Urban Edge could consistently sell $100 million to $200 million in assets annually over the next several years. He identified a specific pool of 21 single-tenant properties (Home Depot, Lowe's, etc.) as the primary source for these low-cap-rate dispositions. Chief Financial Officer Mark Langer addressed the 2025 target, stating that while specific guidance would be provided later, healthy NOI growth numbers around 5% are certainly achievable, supported by the signed-not-opened pipeline.

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CEO Shankh Mitra confirmed a persistent performance gradient, where properties below 80% occupancy have minimal pricing power (RevPOR growth ~1%), while those above 90% have significant power (RevPOR growth >6%). He expressed optimism that as more of the portfolio and the industry reach 90%+ occupancy, overall pricing power should strengthen, potentially within the next 18-24 months.

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CEO Shankh Mitra noted that while the key summer leasing season is still ahead, the strong start prompted the company to raise its full-year occupancy guidance. He reiterated a long-term belief that optimizing the portfolio with dense regional operators will lead to significantly higher occupancy levels over time.

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CEO Shankh Mitra acknowledged that labor is a persistent concern in the business. However, he noted that wage growth is stabilizing and that Welltower's operational and capital initiatives are tangibly reducing employee turnover, though it remains a challenging environment.

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Shankh Mitra (CEO & CIO) declined to provide a 2025 forecast but pointed to positive commentary on pricing and reiterated his previous statement that occupancy growth could potentially improve next year. He highlighted the record sequential occupancy gain in Q3 as evidence of strong momentum.

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CFO Emma Giamartino clarified that significant new operating leverage benefits in BOE are expected in 2026, not 2025. She also detailed that U.S. property sales were strong in April, saw a slight slowdown in May and June, and then picked up materially in July, tracking above April's levels.

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CFO Emma Giamartino stated that the long-term margin for the Project Management segment is expected to trend towards the mid-to-high teens, similar to the legacy Turner & Townsend business, driven by future cost synergies. CEO Robert Sulentic added that market choppiness is actually building momentum for M&A, as potential targets are more attracted to CBRE's stable platform, positioning the company well to capitalize on a downturn.

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CFO Emma Giamartino attributed the strong 2024 margin to successful cost-reduction initiatives, with benefits expected to continue into 2025. CEO Bob Sulentic described the Building Operations opportunity as vast and fragmented, stating that combining businesses creates synergies and a unique capability to manage diverse asset classes at scale, enhanced by the 'experience' focus from Industrious.

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CFO Emma Giamartino confirmed an increase in first-generation outsourcing wins. Chair and CEO Bob Sulentic emphasized that expansions with existing clients remain a major growth driver. He also confirmed that clients engage across multiple business lines, noting that solutions for capital markets clients are typically less integrated than the comprehensive solutions offered to occupiers.

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CEO David Lukes stated that cap rates are stable around a 6% forward NOI yield, with variations depending on vacancy. He highlighted that the acquisition pipeline is now roughly 50% off-market deals due to building direct relationships. CFO Conor Fennerty added that full-year 2025 leasing spreads are expected to be consistent with 2024, attributing quarterly fluctuations to the portfolio's growing but still small size, and confirmed no observable impact from tariffs.

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CEO David Lukes responded that the acquisition pipeline is highly granular, consisting mostly of single-asset deals, with cap rates blending around 6.25%. He explained that the direct impact of tariffs is limited as most tenants are service-based with low inventory. However, he confirmed that the rising cost of capital does influence their investment underwriting, requiring higher returns to be factored into their analysis.

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CEO David Lukes clarified that the pipeline is predominantly made up of single-asset purchases from regional owners, reflecting the granular nature of the asset class. He stated that while individual deal cap rates can range from the mid-5s to over 7%, they are blending to an average of around 6.25%. Regarding tariffs, Lukes noted a lesser impact as most tenants are service-oriented and don't carry significant inventory. However, he acknowledged that the higher cost of capital is influencing underwriting, reinforcing the need for investments to generate strong returns.

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CFO Conor Fennerty stated the 2025 same-store NOI guidance midpoint assumes 55 basis points of bad debt and stable occupancy around 95.1%. CEO David Lukes addressed competition, noting it is 'fierce' and primarily from local and regional private capital. He said unlevered IRR targets remain in the high single-digits (7.5%-9%), as rising market rents have offset cap rate compression seen over the past few years.

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CDO & Head of Lab Scott Bohn provided a market overview: Bay Area demand is stable, San Diego has seen an uptick in tour activity for smaller spaces, and Boston's top-tier submarkets remain strong. He stated it's hard to predict which recovers first but core submarkets will lead. Regarding next year's expirations, he noted most are in the back half of the year and it's too early to provide specific guidance.

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President and CEO Marshall Loeb described the Southern California market as uniquely challenged by negative absorption for ten consecutive quarters, making it difficult to predict rent trends. For the broader market, he believes the catalyst for a leasing recovery will be tenants becoming numb to tariff news or reaching certainty on trade agreements, particularly with China. He is optimistic that once corporate confidence returns, demand will rebound quickly into a supply-constrained market.

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Executive Marshall Loeb reported that overall construction costs have actually declined 10-12% in the past year. While minor tariff-related increases are possible for rebar and storefronts, he believes this will be offset by increased competition among contractors for limited projects. Regarding utilization, he noted a general pent-up demand for expansion has led tenants to use their space more intensely, but did not single out 3PLs specifically.

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Executive Brent Wood explained that the occupancy guidance assumes a slight dip early in the year due to known vacates, followed by stabilization in the first half and a build-up in the second half. Marshall Loeb added that Phoenix remains a strong market, El Paso is doing well but with rent growth leveling off, and San Diego has been slower but is showing signs of picking up.

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CIO Harrison Sitomer described the transaction market as healthy, citing recent trophy asset sales like 590 Madison at a mid-5% cap rate as evidence of strong capital demand. CFO Matthew Diliberto confirmed the logic that rising economic occupancy, driven by recent leasing, sets the foundation for future same-store NOI growth into 2026.

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Executive Harrison Sitomer confirmed the $1 billion disposition plan is on track, citing a strong sales track record. Regarding the pipeline, Steven Durels highlighted that 250,000 square feet consists of TAMI tenants, a notable increase. He confirmed most of the pipeline activity is concentrated in the Grand Central submarket, where the majority of SL Green's portfolio is located.

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Steven Durels, an executive, reported continued leasing momentum at the company's major West Side assets, building on a substantial amount of activity from the previous year. Matthew Diliberto, an executive, clarified that current CapEx is primarily success-based investment for new leases and will decrease as occupancy stabilizes, while base building maintenance CapEx remains nominal.

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Executive Matthew Diliberto noted that the portfolio has been performing better than expected, leading to a guidance raise in July, and continues to trend ahead, though he deferred 2025 guidance to the upcoming investor day. CEO Marc Holliday explained that the ASP strategy has already yielded positive results with assets like 717 Fifth and 2 Herald. He added that the market's recovery aids in reevaluating these non-recourse assets, allowing the company to work creatively with lenders to maximize value.

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Chris Caton, MD of Global Strategy & Analytics, described the pipeline as diverse and up 19% year-over-year, with notable growth in larger deals and renewed interest from 3PLs. President Dan Letter added that the $1 billion increase in development starts is driven by a record build-to-suit pipeline, particularly outside the U.S. in markets like Japan, India, and Mexico.

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Christopher Caton, Managing Director, clarified that Asian 3PLs represent a small portion of their rent roll, just over 1.5%. He noted these tenants are mitigating risk by pulling inventory forward and diversifying. Hamid Moghadam, CEO, added that while inventory flow is a challenge, the underlying consumer demand for the products these 3PLs handle remains strong.

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President Dan Letter explained that the company is waiting for market conditions and rents to improve to boost returns before accelerating its spec program. He highlighted that Prologis has a large land portfolio with significant infrastructure investments already made, allowing them to 'flip the switch' and narrow vertical build times when conditions are right.

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Chris Caton, Managing Director, stated that while market vacancies are still expected to peak late this year, they anticipate an 'elongation of the peak' through the first half of 2025. Timothy Arndt, CFO, confirmed there are no one-time items in the cash same-store NOI metric. He then provided a framework for 2025 same-store growth, expecting a 5.5-6% contribution from rent change, offset by a ~100 bps drag from Duke portfolio accounting and a potential headwind from lower average occupancy.

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Jackson Hsieh, President and CEO, updated his outlook for the go-forward portfolio, stating an expectation for same-store NOI growth of 3% to 4% in 2026, with significantly higher growth in 2027 and 2028. He projected reaching close to 89% physical permanent occupancy, plus the impact of 26 new anchor locations.

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H. Boyle noted that top-of-funnel indicators like web visits and search trends remained positive in April, bouncing off 2024 lows. Joseph Russell stated there has been no significant change in customer behavior due to recent macro events and highlighted returning demand in markets like Florida, expressing encouragement at the lack of disruption.

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Executive Joseph Russell explained that AI is being cautiously integrated into customer care, website interactions, and other digital tools to enhance efficiency and customer satisfaction. He clarified that the 'Property of Tomorrow' branding program was a 20-year cycle, not a recurring event, but investments in energy efficiency like solar and lighting are ongoing, evaluated on a case-by-case basis for their returns.

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Executive H. Boyle confirmed that web visits are in positive territory year-over-year with strong conversion rates, supporting the stabilization narrative. He expressed optimism that the 75% e-rental adoption will continue to grow, leading to more optimization opportunities. CEO Joseph Russell added that the 2 million PS App users also represent a key part of their enhanced digital customer engagement strategy.

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CEO John Moragne reiterated that the Prologis relationship is expected to be a source of repeat business, with deals likely being larger than average. He explained BNL acts as the long-term owner for Prologis's fee-focused 'customer-led' development team. While acknowledging price volatility in materials like steel, he stated BNL mitigates this risk through budget contingencies, fixed-price contracts, and change order processes.

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CEO John Moragne reiterated the hope for a recurring, multi-deal relationship with Prologis, driven by BNL's role as a long-term capital partner for their customer-led development projects. He acknowledged price volatility in construction inputs but stated that BNL mitigates these risks through structural protections like budget contingencies, GMP contracts, and change order processes.

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CEO John Moragne confirmed the target economics for the new build-to-suit pipeline are consistent with current projects: mid-7% cash yields, mid-to-high 8% straight-line yields, and 2.5%-3.5% rent bumps, primarily in industrial. For 'other' assets, he stated that office properties will likely be held to term, while some clinical assets will be sold in 2025-2026. However, he emphasized they will not sell any asset below its perceived value and will hold properties long-term if necessary to preserve value.

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CEO John Moragne confirmed the target economics for the new build-to-suit pipeline are consistent with current projects: primarily industrial assets with mid-7% cash yields and mid-to-high 8% straight-line yields. Regarding non-core assets, he stated that office properties will likely be held to term, while some clinical assets will be sold and others retained long-term if target pricing cannot be achieved.

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CEO John Moragne confirmed BNL is open to build-to-suits with both new and existing tenants, from large to small scale. He explained that risk is mitigated by avoiding speculative projects and structuring deals to protect BNL from traditional development risks. Regarding Green Valley, he stated it is a vacant property expected to be sold soon.

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CEO John Moragne confirmed BNL is open to build-to-suits with new tenants and manages risk by ensuring every project has an identified tenant and structuring deals to be the 'pocket of last resort' for overruns. He clarified that Green Valley Medical Center is a vacant property with no rent contribution, and the company expects a sale resolution soon.

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CEO Edward Pitoniak confirmed the call option on Caesars Forum becomes active in late September 2025 and any decision will be guided by maximizing total shareholder return. Regarding King International, he mentioned they have had preliminary conversations about potentially helping finance the growth of King's St. James sports and wellness facility network.

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CEO Edward Pitoniak expressed a positive outlook on youth sports, citing its growing importance in family culture and the increasing need for high-quality facilities. CFO David Kieske, addressing diversification, pivoted to international opportunities, stating that VICI has mapped the globe for potential real estate investments. He specifically mentioned Canada as a market where VICI would like to pursue more gaming and non-gaming deals, citing favorable operators and economies.

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Albert Behler, Chairman, CEO, and President, noted positive signs in San Francisco, including new political leadership and a stronger return-to-office push from tech firms. Peter Brindley, EVP, Head of Real Estate, added that tour activity is up and plans are underway to add significant amenities to One Market Plaza and One Front Street to attract tenants. Regarding debt, Wilbur Paes, COO, CFO, and Treasurer, stated it's too early for specifics on 2026 maturities but observed that the financing market, especially for CMBS, is improving, and they will address it in late 2025 or early 2026.

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President and CEO Adam Portnoy explained that the residential JVs involve RMR as the General Partner in deals totaling around $200 million, with a fiscal 2025 target of $500 million to over $1 billion in similar investments. He noted expected returns are in the mid-teens with potential for promote income. Portnoy also elaborated on development opportunities, including redeveloping obsolete structures into industrial or multifamily properties, citing large-scale projects in Nashville and Boston as examples that could involve outside partners.

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CEO Adam Portnoy indicated that bringing partners into the private credit vehicle is likely a 2025 event. CFO Matt Jordan added that the residential platform is also expected to gain traction in early 2025, with momentum accelerating. Jordan projected that RMR's cash balance would increase to approximately $150 million by year-end, as no major strategic investments are expected to close in the current quarter, but anticipates drawing down that cash in calendar 2025 to fund strategic initiatives.

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Executive Adam Wyll described a broad spectrum of office tenants and highlighted that the main incentive is landlord-funded tenant improvements in exchange for longer lease terms. Executive Ernest Rady emphasized that the company's strong balance sheet is a competitive advantage. Executive Robert Barton provided guidance for a 1% decrease in same-store office cash NOI and an approximate 1.5% increase for retail. He stated that net debt-to-EBITDA is expected to remain in the '6 range'.

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CFO Conor Fennerty confirmed the Q3 acquisition forecast is not speculative and is supported by a pipeline of over $200 million in awarded deals. CEO David Lukes stated that disposition activity has 'far exceeded' expectations and that he is confident Curbline can achieve an annual acquisition run rate of approximately $500 million.

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