Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How are you approaching the decision to start construction on 343 Madison, and what yield are you targeting? A: Michael LaBelle, CFO, explained that the decision point for starting the project is at the end of July. They are targeting an 8% yield, which is considered appropriate given the current higher interest rate environment. Hilary Spann, EVP of the New York Region, added that there is significant interest from tenants willing to pre-commit to the building, which is unusual for tenants of 150,000 square feet.
Q: How confident are you in achieving the 4 million square feet leasing plan for 2025, and what does this mean for occupancy growth? A: Douglas Linde, President, stated that they have already completed 1 million square feet of leasing on vacant and 2025 expirations. With another 400,000 square feet under negotiation and a pipeline of 1 million square feet, they are more than halfway to their goal. However, correlating leased square footage with occupancy on a quarterly basis is challenging due to revenue recognition timing.
Q: Can you provide more details on the impact of leasing activity on 2025 earnings guidance? A: Michael LaBelle, CFO, noted that the guidance range was narrowed due to successful leasing and occupancy timing. The bottom end of the range was raised due to increased confidence, while the top end was adjusted for lease starts that may occur in 2026. The focus remains on leasing, with a strong pipeline of 2.8 million square feet of signed letters of intent and active proposals.
Q: What are the current trends in the life science market, and how is the Boston market performing? A: Douglas Linde, President, mentioned that there is little new demand for raw life science space in South San Francisco and Greater Boston. However, there is demand for office space from life science organizations in the Waltham area. Bryan Koop, EVP of the Boston Region, added that flexibility and capital are becoming more important in the Boston market, helping to secure transactions.
Q: How are you managing leverage and funding given the current debt to EBITDA ratio? A: Michael LaBelle, CFO, explained that the first quarter's higher leverage was due to seasonality and increased debt for development funding. They expect leverage to moderate as developments like 290 Binney deliver income. Funding will continue through incremental debt, asset monetization, and potentially private equity or public equity, depending on market conditions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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