Executive Summary

Q2 2024 diluted EPS was $0.20 on total revenues of $14.1M, with net income attributable to common shareholders of $22.2M; EPS rose year over year from $0.12 despite lower revenue, driven by lower G&A (lapping accelerated compensation in 2023) and higher interest income .
Same property operations weakened: leased percentage fell to 71.4% (from 75.4% in Q1 and 82.0% in Q2 2023), and same property NOI declined 3.3% YoY; cash NOI fell 10.4% YoY on lower commenced occupancy .
Leasing spreads were modestly positive: GAAP rent +6.8% and cash rent +0.7% on new/renewal leases, with total TI+LC $21.17/sqft, down from $58.93/sqft in Q1, suggesting easing concessions in Q2 .
Strategic optionality remains intact with $2.2B cash; management reiterated in Q1 their plan to either announce a transaction or move toward winding down before year-end, though no Q2 update was provided in the press release .
Wall Street consensus estimates (S&P Global) were unavailable for EQC this quarter; comparisons to estimates cannot be made. Values retrieved from S&P Global were unavailable.

What Went Well and What Went Wrong

What Went Well

Interest income tailwind and normalized G&A supported YoY EPS growth despite revenue softness: “The increase in net income was primarily due to a decrease in general and administrative expenses … and an increase in interest income from higher average interest rates.”
Positive leasing economics on executed deals: GAAP rent +6.8% and cash rent +0.7% on new/renewals in Q2, a constructive sign amid weak office demand .
Capital strength maintained: cash and equivalents were $2.196B at quarter end, providing significant flexibility for M&A or a potential wind-down plan .

What Went Wrong

Occupancy deterioration: leased fell to 71.4% and commenced to 70.7% (vs 75.4%/74.6% in Q1), driving same property cash NOI down 10.4% YoY, with lower average commenced occupancy cited as the primary driver .
Sequential revenue decline: total revenues decreased to $14.1M from $15.2M in Q1, reflecting pressure from lower occupancy and lower lease termination fees .
Limited leasing velocity: only ~24k sqft signed (20k renewals, 4k new), below recent periods, keeping the path to re-stabilization gradual .

Financial Results

Quarterly Trend (Q4 2023 → Q1 2024 → Q2 2024)

Metric	Q4 2023	Q1 2024	Q2 2024
Total Revenues ($USD Millions)	$15.146	$15.190	$14.109
Net Income Attributable to Common ($USD Millions)	$24.552	$23.408	$22.153
Diluted EPS ($USD)	$0.23	$0.22	$0.20
FFO per Share/Unit — Diluted ($USD)	$0.27	$0.26	$0.24
Normalized FFO per Share/Unit — Diluted ($USD)	$0.26	$0.25	$0.24
Same Property NOI ($USD Millions)	$8.611	$8.672	$7.391
Same Property Cash NOI ($USD Millions)	$7.443	$7.833	$7.063
Same Property NOI Margin (%)	56.9%	57.1%	52.4%

Year over Year (Q2 2023 → Q2 2024)

Metric	Q2 2023	Q2 2024
Total Revenues ($USD Millions)	$14.590	$14.109
Net Income Attributable to Common ($USD Millions)	$13.787	$22.153
Diluted EPS ($USD)	$0.12	$0.20
Same Property NOI ($USD Millions)	$7.644	$7.391
Same Property Cash NOI ($USD Millions)	$7.884	$7.063
% Leased	82.0%	71.4%
% Commenced	78.2%	70.7%
GAAP Rent Change on New/Renewals	+15.3%	+6.8%
Cash Rent Change on New/Renewals	-0.7%	+0.7%

Segment/Property Detail (Annualized Rental Revenue, Q2 2024)

Property	City/State	Sq Ft	% Leased	ARR ($USD ‘000)
1225 Seventeenth St (17th Street Plaza)	Denver, CO	708,937	86.2%	$28,256
Bridgepoint Square	Austin, TX	440,007	53.7%	$9,458
206 East 9th St (Capitol Tower)	Austin, TX	175,510	69.4%	$7,399
1250 H Street, NW	Washington, DC	196,490	59.1%	$6,972
Total	—	1,520,944	71.4%	$52,085

KPIs (Leasing and Capital)

KPI	Q4 2023	Q1 2024	Q2 2024
% Leased	81.2%	75.4%	71.4%
% Commenced	80.0%	74.6%	70.7%
Leases Executed (000 sq ft)	32	18	24
Lease Term (years)	3.0	4.1	4.2
Starting Cash Rent ($/sq ft)	$50.88	$49.71	$48.11
% Change Cash Rent	+7.9%	-2.8%	+0.7%
% Change GAAP Rent	+26.4%	-0.5%	+6.8%
TI + LC ($/sq ft)	$16.97	$58.93	$21.17
TI + LC ($/sq ft/yr)	$5.75	$14.39	$4.99
Total Capex ($USD ‘000)	$2,290	$7,781	$2,696

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Strategic Outcome	FY 2024	“Before the end of this year, we expect to either announce a transaction or move forward with a plan to wind down our business.” (Q1 press release)	No formal update provided in Q2 press release	Maintained direction; no Q2 update
Common Dividend	FY 2024	No recurring quarterly dividend; prior special $4.25 paid in Mar 2023	No regular dividend declared in Q2 materials	Maintained

No quantitative revenue/margin/OpEx guidance was issued in Q2 materials .

Earnings Call Themes & Trends

Note: Q2 2024 earnings call transcript was not retrievable. The table below tracks themes using Q4 2023 and Q1 2024 disclosures vs Q2 2024 press materials.

Topic	Previous Mentions (Q4 2023, Q1 2024)	Current Period (Q2 2024)	Trend
Occupancy/Leasing	Q4: % leased 81.2%; cash NOI declined YoY; GAAP rent +26.4% on renewals	% leased 71.4%; same property cash NOI -10.4% YoY; GAAP rent +6.8%	Deteriorating occupancy; modest positive spreads
Capital Allocation	Cash $2.2B at YE; buyback authorization; strong interest income	Cash $2.196B at Q2	Stable cash; continued optionality
Strategic Direction	Q1 Business Update: transaction or wind-down expected by YE 2024	No update in Q2 press release; call scheduled	Awaiting execution; decision pending by YE
Leasing Concessions	Q1 TI+LC $58.93/sqft; cash rent -2.8%	Q2 TI+LC $21.17/sqft; cash rent +0.7%	Concessions easing; slight rent improvement

Management Commentary

“The increase in net income was primarily due to a decrease in general and administrative expenses … and an increase in interest income from higher average interest rates.” (Q2 press release)
“Before the end of this year, we expect to either announce a transaction or move forward with a plan to wind down our business.” (Q1 business update)
Q2 operational detail: signed ~24k sqft (20k renewals, 4k new); GAAP rent +6.8%, cash rent +0.7%; same property cash NOI down 10.4% YoY on lower commenced occupancy .

Q&A Highlights

Q2 2024 call transcript could not be retrieved; Q&A themes and clarifications are therefore unavailable. The call was scheduled for July 31, 2024 at 9:00 A.M. CT .

Estimates Context

S&P Global/Capital IQ consensus estimates for EQC were unavailable this quarter; we are unable to compare reported results to Street numbers. Values retrieved from S&P Global were unavailable.

Key Takeaways for Investors

Net income/EPS resilience is coming from financial income and normalized G&A rather than property operations; watch interest rate path and cash deployment to sustain EPS/FFO in face of occupancy pressure .
Operational headwinds intensified: leased/commenced slipped further and same property cash NOI fell double digits YoY; stabilization hinges on leasing velocity and backfilling larger vacancies .
Leasing spreads positive and concessions easing (lower TI+LC), hinting at improving unit economics on executed deals despite lower volumes; a sustained trend could improve cash NOI trajectory .
Massive cash position ($2.2B) provides asymmetric optionality; the Q1 statement about an M&A/wind-down decision by YE 2024 is a critical catalyst path—outcomes could unlock value but also introduce execution risk and timing uncertainty .
Without estimates, the stock reaction will hinge on narrative: deteriorating occupancy vs. capital optionality; near-term trading likely sensitive to any strategic update and leasing disclosures.
Monitor tenant roll and expirations: 21.3% of leased sqft expires in 2027 and 15.8% in 2030, with a 4.2-year weighted average lease term—backfill success will meaningfully affect NOI path .
Risk management: continued declines in commenced occupancy would pressure cash NOI; conversely, a strategic transaction/wind-down could crystallize value given cash and low liabilities .

Equity Commonwealth (EQC)·Q2 2024 Earnings Summary