Vikram Malhotra • Mizuho Financial Group, Inc.

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CFO Rob Crisci directed the question to a slide in the presentation, indicating the guidance implies occupancy of roughly 75% in Q3 and 78% in Q4, which is a muted seasonal build compared to historical trends. Regarding G&A, he stated they are managing costs prudently and believe the current level of investment supports long-term growth and will provide operating leverage.

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CEO W. Lehmkuhl acknowledged the simple math implies a $25 million offset elsewhere in the business due to uncertainty, but stressed the company has many levers to pull. He stated the board always evaluates all options to drive shareholder value. On competitive data, both he and CFO Rob Crisci explained the industry is too fragmented and non-transparent for public stats, but their internal intelligence indicates strong relative performance.

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CFO Robert Crisci confirmed that this interpretation is correct. He explained that due to tough comparisons from elevated inventory levels in H1 2024, a normal seasonal pattern in 2025 would result in flattish to slightly down NOI in the first half, followed by a pickup in the second half, which is consistent with the company's guidance.

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President and CFO Michael Franco indicated the earnings growth would be a relatively straightforward step-function, with no unusual headwinds in 2026, and noted that interest expense is on a 'downhill trajectory.' Chairman and CEO Steven Roth added that capital allocation is a top priority, and the company will be disciplined, investing cautiously but aggressively when true value-creation opportunities arise.

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Steven Roth, Chairman and CEO, identified the Hotel Pennsylvania site (Penn 15) as the next logical development, though no plans are finalized. Michael Franco, President and CFO, described the retail market as strengthening, with vacancy declining and rents for prime spaces nearing peak levels, driven by strong retailer sales and demand from new-to-market tenants.

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Chairman and CEO Steven Roth identified the Hotel PENN site (PENN15) as the next logical development, though the company is still studying options. President and CFO Michael Franco described the high-street retail market as strengthening, with vacancy declining and rents for prime spaces approaching peak levels, driven by strong retailer sales and the need for a New York presence.

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CEO Rick Matros stated the investment pace is not overly back-ended, as $350 million is already closed or awarded. CIO Talya Nevo-Hacohen added that deal volume is 'unabated' but noted Canadian pricing is currently 'too rich' for Sabra. CFO Michael Costa confirmed that same-store growth would have been 'better' without the transition assets but did not provide a specific figure.

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EVP Talya Nevo-Hacohen stated that competition for high-quality assets is primarily from other healthcare REITs, as it is difficult for levered buyers to compete. She also noted that rent bumps for major operators are being achieved in the 4% to 5% range.

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President Matthew Gorman explained that Omega's cost of capital necessitates a more selective approach, targeting smaller, value-add opportunities rather than large, low-yield stabilized portfolios. CIO Vikas Gupta confirmed the four ALF deals were structured as triple-net leases at a 10% yield. He added that while the UK pipeline is currently smaller, it remains an active market with long-term consolidation opportunities.

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CEO Taylor Pickett stated his belief that the ABL lender's action was related to a pool of aging collateral but did not have further details. CIO Vikas Gupta explained the shift towards the U.S. pipeline is simply due to seeing more accretive opportunities there at the moment. CFO Bob Stephenson confirmed the plan is to raise equity throughout the year to pre-fund investments and prepare for the 2026 debt maturity, contingent on a favorable stock price.

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President Matthew Gorman clarified the U.K. expansion is driven by opportunity, not as a hedge, and that U.S. debt remains more favorable than what's available in the U.K. SVP of Operations Megan Krull expressed hopefulness that the staffing mandate will be overturned legally or legislatively due to its cost. She noted that while block grants have been discussed for years, the industry would lobby for per capita caps and that Medicaid expansion represents 'low-hanging fruit' for potential cuts before core services.

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CFO Brendan Maiorana pointed to the high 330-basis-point spread between leased and occupied rates as a key driver for steady occupancy growth into 2026, supplemented by NOI from recently delivered developments. COO Brian Leary noted that the large RFPs are competitive, often multi-market searches, and include financial services and international manufacturing firms, with state incentives playing a significant role.

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Executive Brendan Maiorana stated that FFO and occupancy are expected to trough in the first half of 2025 before growing later in the year, reaffirming the year-end occupancy target of 86% to 87%. He clarified that most new leasing signed in 2025 will drive occupancy growth in 2026. CEO Theodore Klinck added that economic development councils report positive trends, with a notable increase in office-related inquiries.

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COO Brian Leary noted an increase in corporate headquarter relocation inquiries in Q1, particularly in Nashville and Charlotte. Executive Brendan Maiorana confirmed the financial trajectory: an occupancy and FFO trough in the first half of 2025, followed by a recovery, with cash flow improvement lagging into 2026. CEO Theodore Klinck added that the 2026 lease roll is manageable, with only four expirations over 50,000 square feet and an expectation of high retention.

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Owen Thomas, Chairman & CEO, detailed rent assumptions for 343 Madison, ranging from mid-to-upper $100s at the base to mid-to-upper $200s at the top, averaging in the low $200s. Douglas Linde, President & Director, clarified that the current in-service portfolio is expected to end the year around 87% occupied, but the headline number will be reduced by about 70 bps due to the addition of new, partially leased developments.

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CEO Scott Brinker stated the reaffirmed guidance range already includes the bookends of potential outcomes, with outperformance in CCRC and Outpatient offsetting lab weakness. CFO Kelvin Moses reiterated that 85% of the 503,000 sq. ft. of lab leasing was renewals, but noted the forward-looking LOI pipeline favors new deals.

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President and CEO Marshall Loeb differentiated EastGroup's position by highlighting its focus on the shallow bay sector, where vacancy is closer to 4%, compared to the national average of 7.5% for all industrial. He believes this lower vacancy will allow for rent growth sooner. Regarding leasing, he noted that EastGroup's business is not focused on large build-to-suits but on multi-tenant properties, where smaller tenants are active but larger tenants are more cautious, thus elongating the decision-making process for larger spaces.

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Executive Brent Wood stated that FFO from development lease-up is minimal in Q2 and Q3, with most of it projected for Q4, reflecting a conservative forecast. He noted that build-to-suits are less common for their smaller, multi-tenant product type. The company's guidance reflects a more cautious approach to both the timing of development starts and subsequent lease-up.

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Joel Marcus, Founder & Executive Chairman, stated the current strategy is to fund needs by selling non-core assets and land to increase ownership concentration in their core mega campuses. Peter Moglia, CEO & CIO, added that monetizing mega campus equity is a backstop, not the primary plan. Regarding the outlook, Joel Marcus cited lower interest rates and agency stabilization as key catalysts for future leasing.

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Executive Chairman Joel Marcus stated the company prefers a 'measured and careful' approach to dispositions rather than a large one-time sale, but will evaluate buybacks quarterly. CFO Marc Binda addressed credit, explaining they proactively monitor all tenants, especially private ones, through quarterly financial reviews to manage risk, noting that while failures happen, their diligence is high.

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Executive Joel Marcus deferred specific leasing velocity forecasts to the next quarter but provided market color, identifying Mission Bay and San Diego as strong, Boston as steady, and South San Francisco as a "sore thumb" due to oversupply. He affirmed that no material changes or pauses are expected for the '25 or '26 development pipeline.

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Chairman & CEO Marc Holliday attributed the demand shift to high prices on Park Avenue and shrinking supply, creating new opportunities. He described a potential casino as 'absolutely transformational' for Times Square, envisioning a halo effect that would uplift the entire area, much like One Vanderbilt did for Grand Central.

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CEO Marc Holliday shared that the Summit Paris project is progressing well, with an expected opening by the end of Q1 2027. Regarding FAD, Matthew Diliberto explained that while economic occupancy is expected to ramp up through the year, capital spend also typically accelerates in the second half, so the full-year FAD is still expected to be in line with guidance despite a strong Q1.

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EVP Peter Schultz and CIO Johannson Yap detailed the properties making up the remaining 1.5 million sq. ft. leasing target, noting active prospects but no signed leases yet. CFO Scott Musil confirmed the new 501,000 sq. ft. lease was not in the original target and its positive impact has effectively eliminated the previously disclosed $0.02 FFO risk, meaning the remaining development leasing is now assumed to occur at year-end.

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EVP Peter Schultz and CIO Johannson Yap detailed the properties in the leasing pipeline, including a large building in Denver and several on the West Coast. CFO Scott Musil clarified that the new Phoenix lease, combined with another in Orlando, eliminated a potential $0.02 FFO drag. The remaining 1.5 million sq. ft. is now assumed to be leased at year-end.

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CFO Scott Musil explained that if the key Q4 development leases don't occur, the FFO impact would be only about $0.02 per share. CEO Peter Baccile noted that while conversations have paused due to tariff uncertainty, the underlying positive momentum from the start of the year remains. EVP Peter Schultz clarified the Federal-Mogul lease expired at the end of Q1 and is now vacant, while the other building is being marketed for sublet by the tenant, who remains current on rent.

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CFO Scott Musil explained that if key Q4 development leases are delayed, the FFO impact would be only about $0.02 per share. CEO Peter Baccile noted that while some leasing conversations have paused due to tariff uncertainty, underlying momentum remains. He also provided an update on two large spaces, stating one lease expired at the end of Q1 and the other tenant is current on rent and backed by a letter of credit.

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Chief Financial Officer Scott Musil specified that of the Q4 leases, a JV deal would contribute from Q1 2025 and a Nashville deal from Q3 2025. President and CEO Peter Baccile stated that visibility is about average for this time of year. An executive also confirmed that occupancy is expected to dip in the first half of 2025 due to a known move-out and new properties coming online, with a recovery in the second half.

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Executive Vice President Peter Schultz stated that the Federal-Mogul space is already being marketed and has seen interest due to limited comparable options in Central Pennsylvania. CFO Scott Musil confirmed that, aside from boohoo, there is nothing material on the tenant watch list. CEO Peter Baccile addressed capital deployment, noting that while some tenants are delaying decisions, the company sees encouraging fundamentals for new development starts in 2025 in markets like Pennsylvania, Texas, South Florida, and Nashville.

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CFO Michael Fitzmaurice stated it was too early to comment on 2026 but confirmed the 2025 NOI impact from new starts remains consistent at around $13-15 million. He reiterated that the future pipeline is fluid and largely driven by the Hertz lease expiration, promising more specific guidance later in the year.

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CFO Michael Fitzmaurice stated that the highest risk-adjusted return remains in repositioning and redevelopment projects, which deliver ~20% incremental returns. He emphasized that the company's $600 million cash balance allows for a patient and offensive position. While $30 million in dispositions are under contract, he did not provide further guidance on future sales or commit to buybacks, prioritizing reinvestment in the portfolio.

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COO Laura Clark and Co-CEO Howard Schwimmer emphasized a strategic shift to focus on capital recycling and high-yield redevelopments over acquisitions due to increased hurdle rates. In a follow-up, Laura Clark stated year-to-date leasing was approximately one-third new and two-thirds renewal. She also clarified that the -8% year-over-year figure represented a decline in market taking rents for comparable properties, which CFO Mike Fitzmaurice noted is the new baseline for 2025 guidance.

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Co-CEO Michael Frankel confirmed the large market opportunity in Southern California persists but emphasized a judicious investment approach. He explained pulling the 3-year guide was a matter of prudence, not a change in long-term outlook. Co-CEO Howard Schwimmer noted that sublease space in the portfolio had actually declined quarter-over-quarter. CFO Laura Clark stated near-term spreads are trending in line with guidance.

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CEO Hamid Moghadam opined that the current 7.4% market vacancy is near its peak and that real pricing power returns when vacancy drops to around 5%. He estimated this could take one to two years with normalized net absorption around 250 million sq. ft. annually. He expects future rent growth to be strong due to the lack of new supply and rising construction costs.

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Timothy Arndt, CFO, detailed the severe stress test, which mirrored and amplified GFC conditions. It assumed a 170 basis point market occupancy drop, an immediate 18% decline in market rents, and a bad debt expense of approximately 75 basis points. Hamid Moghadam, CEO, stressed that this was a 'worst-case' analysis, not a forecast.

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Managing Director Christopher Caton stated that rents declined about 2% in the quarter, with a narrowing differential between coastal and non-coastal markets. He noted that while calling an inflection point is difficult, scenarios for 2025 range from flat to slightly up or down. President Dan Letter added that with 90% of leases rolling beyond 12 months, short-term fluctuations have limited impact on long-term value. CFO Timothy Arndt explained the GAAP-to-cash NOI difference is mainly driven by free rent normalizing. Caton attributed the expected lift in net absorption to reduced uncertainty and deferred decision-making being unlocked.

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An executive explained that while near-term rent softness continues, the long-term driver for rent growth remains the significant gap between current market rents and higher replacement costs. Regarding development, they cited a disciplined approach, deferring some spec projects due to current market fundamentals and clients delaying build-to-suit decisions. However, they are still selectively starting projects in strong submarkets and have a substantial $40 billion land bank ready for future deployment.

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EVP & Chief Investment Officer J. Hutchens clarified that the March move-outs were an unpredictable mortality event, uncorrelated to flu or other trends, and that move-in activity remains strong. Regarding pricing, he noted a strong start with a leap-year-adjusted RevPOR of around 5%, supported by internal rent increases and favorable street rates, with good pricing opportunities in both the U.S. and Canada.

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Executive J. Hutchens confirmed the guidance assumes normal seasonality but noted recent counter-seasonal strength. He stated 25% of the portfolio is below 80% occupied and that pricing power directly correlates with higher occupancy. CEO Debra A. Cafaro added that the VIM fund is a successful and growing vehicle used to benefit the overall enterprise.

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CFO Keith Taylor addressed the seasonality in the business, noting that despite higher seasonal costs in Q1, margins are expected to improve throughout the year, with the second half stronger than the first. He also pointed to the seasonal nature of recurring CapEx impacting AFFO. CEO and President Adaire Fox-Martin reiterated that the revenue step-up in the second half is supported by the implementation of bookings from the first half of 2025.

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CEO Shankh Mitra explained that the Welltower Business System is a complex adaptive system designed to streamline operations and augment the capabilities of their operating partners. He stated its goal is to provide site-level employees with actionable insights, freeing up their time for resident care, which he believes will drive a long runway for margin expansion.

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CEO Shankh Mitra explained that RevPOR growth is well into the six-percent range for assets over 90% occupied but roughly flat for those under 70%. Executive Vice President Nikhil Chaudhri added that the $2 billion in recent acquisitions have occupancy in the low 80s, consistent with prior deals. CFO Tim McHugh noted that over a quarter of the portfolio remains below 80% occupancy.

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Peter Brindley, EVP, Head of Real Estate, reported that several leases are out for the spaces at One Front Street and One Market Plaza, tour activity is picking up, and planned amenity upgrades are being well-received by prospective tenants. Albert Behler, Chairman, CEO, and President, confirmed the company would consider more joint ventures on its assets if they can achieve attractive pricing, similar to past deals. He stated this strategy provides capital flexibility for growth, share buybacks, or dividends.

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