Q1 2025 Douglas Emmett Inc Earnings Call
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Speaker Change: Ladies and gentlemen, thank you for standing by. Welcome to Douglas Emmett's quarterly earnings call.
Speaker Change: Today's call is being recorded. At this time, all the participants are in a lesson only more. After management's prepared remarks, you will receive instructions for participating in the question and answer session.
Speaker Change: I will now turn the conference over to Stuart McElhinney, Vice President of Investor Relations for Douglas Emmett. Please go ahead.
Speaker Change: Thank you. Joining us today on the call are Jordan Kaplan, our president and CEO , Kevin Crummy, our CIO, and Peter Seymour, our CFO . This call is being webcast live from our website and will be available for replay during the next 90 days.
Speaker Change: You can also find our earnings package at the Investor Relations section of our website. You can find the recommendations of non-GAAP financial measures discussed during today's call in the earnings package.
Speaker Change: During the course of this call, we will make four looking statements.
Speaker Change: Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will prove to be incorrect Therefore our actual future results can be expected to differ from our expectations and those differences may be material
Speaker Change: For a more detailed description of some potential risks, please refer to our SEC filings which can be found in the Investor Relations section of our website. When we reach the question and answer portion in consideration of others, please limit yourself to one question and one follow-up. I will now turn the call over to Jordan.
Good morning, and thank you for joining us.
Leasing during the first quarter of 2025 was quite successful.
Speaker Change: We achieved positive absorption across our total office portfolio. We signed over 300,000 square feet of new leases.
Speaker Change: New leasing to tenants over 10,000 square feet was well above our historical averages.
Speaker Change: Our class A office portfolio has maintained stable in place and asking rental rates despite this higher vacancy market. And as we convert studio plaza to a multi tenant office building, our leasing there is well above expectations.
Speaker Change: Our multifamily portfolio enjoys very full occupancy and robust revenue growth.
Speaker Change: This reflects the appeal of our high-end residential communities and the affluence of our coastal submarkets, where the need for quality housing only seems to accelerate.
Speaker Change: We are working on four solid avenues for restoring and then exceeding our pre-pandemic FFO with good progress in all four fronts.
Speaker Change: Leasing up our Existing Office portfolio, redeveloping our 712-unit Barrington Plaza Residential Property, converting our Studio Plaza Office Building to multi-tenant use, and acquiring additional office and residential properties.
Speaker Change: Of course, higher interest rates remain a drag on income. As we roll through refinancing our existing debt portfolio, I suspect that our cost of debt will increase between 100 and 200 basis points.
From the 3% average we enjoyed before COVID [inaudible]
Speaker Change: My hope is that the higher cost of debt is matched with rental income growth as the economy recovers and the market reflects the slowdown in new development.
Speaker Change: At present, our office leasing pipeline remains healthy and our multifamily demand continues to be strong, but we are keeping a weather eye towards broader economic landscape.
Speaker Change: Recent volatility in national policies affecting the public markets could pose even greater challenges if they lead to a slowdown in office leasing or worse, tip the economy into a recession.
Speaker Change: Whatever happens, our operating platform is built to weather storms, our conservative financing strategy, diversified tenant base, and focus on the best supply Australian markets.
Speaker Change: gives us a strong foundation to manage superiors of turbulence.
Speaker Change: With that, I'll turn the call over to Kevin to discuss our investment activities.
Thanks Jordan, and good morning everyone.
Kevin: We are making good progress toward developing a new residential building that are recently acquired property in Westwood.
Kevin: We still expect that JV's total investment to be approximately $150-$200 million over a three-to-four-year period, including the cost of acquisition, construction of the new residential building, and upgrades to the existing tower.
Kevin: As Jordan indicated, our Barrington Plaza residential redevelopment, including installing new Fire Life Safety Equipment, is on track.
Kevin: In addition, the lease up and repositioning of studio plaza into a multi-tenor office building has surpassed expectations.
Kevin: During the quarter, we close a non-recourse interest only $127.2 million loan secured by one of our residential properties that will mature in April 2030.
Kevin: The interest rate is fixed at 4.99% per annum. We use part of the proceeds to pay off 102.4 million
We also refinanced a $335 million secured office loan.
Kevin: with a non-recourse interest only loan and an effective fixed interest rate of 4.57% that will mature in March 2032. With that, I will turn the call over to Stuart.
Stuart Mcelhinney: Thanks, Kevin. Good morning, everyone. During the first quarter we signed just under 800,000 square feet in our total portfolio.
including over 300,000 square feet of new leases. [inaudible]
Stuart Mcelhinney: We also had our best quarter in more than two years for new leases over 10,000 square feet.
Stuart Mcelhinney: The overall value of new leases we sign in a quarter increased by 0.9%, with cash spreads down 12.6%, as larger tenants skew the averages and make it hard to beat the contractual 3-4% annual rent at bumps in our existing leases.
as we sign More Leases over 10,000 square feet.
Stuart Mcelhinney: We expect to see an increase in leasing costs and a widening of our lease to occupied spread However, even with more large leases and a higher proportion of new leases last quarter our average leasing costs of only $6.17 per square foot per year remains well below the average for office reach in our benchmark group We expect to see an increase in leasing costs and a higher proportion of new leases and a higher proportion of new leases and a higher proportion of new leases
Stuart Mcelhinney: Our residential portfolio remained essentially fully leased at 99.1% with strong demand.
Stuart Mcelhinney: With that, I'll turn the call over to Peter to discuss our results
Thanks, Stuart. Good morning, everyone.
Stuart Mcelhinney: Compared to the first quarter of 2024, revenue increased by 2.7%.
Stuart Mcelhinney: FFO, decreased to 40 cents per share, and AFFO, decreased to $62.3 million.
and St. Property Cash, N.O.I. was essentially flat. [inaudible]
Stuart Mcelhinney: Our results this quarter reflect the acquisition of 10900 Wilshire, as well as the January 1st consolidation of a previously unconsolidated joint venture, which owns two class A office properties, totaling 400,000 square feet.
Stuart Mcelhinney: At approximately 4.5% of revenue, our GNA remains low relative to our benchmark group.
Turning to guidance
Stuart Mcelhinney: We expect our 2025 net income for common share diluted to be between $0.7 and $0.13 and $0.13.
Stuart Mcelhinney: and we continue to expect our FFO portfolio diluted chair to be between $1.42 and $1.48.
Stuart Mcelhinney: for information on assumptions underlying our guidance. Please refer to the schedule in the earnings package.
Stuart Mcelhinney: As usual, our guidance does not assume the impact of future property acquisitions or dispositions, common stock sales or repurchases, financings, property damage insurance recoveries, impairment charges, or other possible capital market activities.
Stuart Mcelhinney: I will now turn the call over to the operator so we can take your questions
Thank you. Bye.
Thank you.
We will now begin the question and answer session.
Stuart Mcelhinney: To ask a question, you might press star then one on your telephone keypad.
Stuart Mcelhinney: If at any time your question has been addressed and you would like to withdraw your question, please press star 9-2
Stuart Mcelhinney: In consideration of other participants, please limit your queries to one question and one follow-up.
Speaker Change: Our first question comes from Steve Sakwa from Evacore ISI, please go ahead.
Oh yeah, thanks. Good morning out there.
Speaker Change: Jordan, I was just wondering, I was just wondering if you could provide a little bit more color detail on kind of the leasing and the larger tenants that you mentioned the over 10,000 feet.
Speaker Change: Your smaller tenants are maybe less impacted by sort of all the tariff uncertainty but just I'm just curious like the pace of leasing that maybe you saw throughout the quarter and you know, did you see any real change between January , February , March on the on the smalls and then the larger tenants?
Hey Steve, it's Stuart.
Speaker Change: You know, please to see the new leasing increases quarter, we had good demand kind of across all the industries. The over 10,000 guys also, you know, really strong last quarter, which was great to see diverse industries that have set as well. So, you know, we saw legal, we saw real estate fitness, all those guys coming in. So
Speaker Change: I'd say the core portfolio is still performing really nicely and you know, the last three quarters in a row that we've seen improvement over 10,000 square feet.
Speaker Change: I was, you know, they got us kind of up to the positive territory which made a big difference, you know, remember we were saying to you we need to get positive absorption and we need these guys to come back and they're getting us there.
Speaker Change: Okay, thanks and then obviously your apartment portfolio did far better than we had thought and I know you added two assets into the same store pool this quarter but could you just maybe speak to
Speaker Change: Kind of the pricing trends that you're seeing in multifamily and you know how much of the NLI growth was was driven by rent growth versus say occupancy gain and I guess what are your expectations for rent growth moving forward on the multifamily asset.
[inaudible]
Yeah, so one thing to be super clear on is...
We have not changed our asking rents [inaudible]
from the time before the fire to now. [inaudible]
Speaker Change: Franklin, closely monitored by the state and you can check and we haven't changed our asking rent.
Speaker Change: So we are, although we have people that are moving and of course they might have been at a lower rent and now it's the asking rent before the fire and now so that's obviously making a difference and we're very full.
When I say very full, I will say that. [inaudible]
Speaker Change: Probably in my career, I've had a few times a people call I want to get a unit here and there, but in general nothing like now. I get called a week.
Speaker Change: or almost every couple days from people saying, I need to get into your LMLA building, I need to get into shorts, I need to get into champagne, can you find me a unit, et cetera, and I'm like a pre on the list, I mean, so it's very full.
Did that answer your question, Steve?
Steve Sakwa: Well, it was just curious, I guess you're saying that with the restrictions you can't actually push rent, so maybe this is just the function of...
Below Market Leases, moving up to Market Rent. [inaudible]
Speaker Change: at this point. But I guess the SOE staying in place through the end of this year.
Speaker Change: Well, you can't move rents 10%, we're probably being a little more cautious, but we're big and we want to be clear of where we stand. And so, as I said, I mean, we literally have not changed our asking rents from before to after. Now, you probably were facing before.
Speaker Change: No fire, no nothing. You're looking at a pretty big roll-up. The market has been very strong and strengthening before the fire.
So, I'm not sure they'd.
Speaker Change: You can attribute the fire to a lot of this. You can probably just, and maybe there's even more coming. I don't know that answer.
Speaker Change: But I know this, we, you know, we probably were moving our asking rents in a pretty good way up into the fire we stopped at that point
Ray, but we're getting those rents and we're very full.
Speaker Change: Steve I'll add to two buildings that came into the same store were 1132 Bishop and Hawaii and Lamar Galai and Brentwood both of which are performing really well, so having those in their helps.
God, it's thanks, it's it for me.
Thank you.
Speaker Change: The next question comes from Nick Yulico from Scotia Bank. Please go ahead.
Nick Julico: Thanks, hi everyone. So in terms of the debt refinancing act done in the quarter of the $335 million and secured office loan.
Nick Julico: Looks like there was an extension on that. Can you just talk a little bit more about the rate that you got. It seemed pretty good for an office loan and how we should think about being able to get a similar rate for other debt, office debt that you're dealing with.
You know, maturing over the next year.
Um...
Nick Julico: Really rough front, we're getting it done and thankfully we have great relationships and that's probably helping us a lot and I'm glad you like the raid I thought it was pretty good and I wasn't getting knocked over by it, but in general I tried to say in my prepared remarks that
Nick Julico: that, you know, looking at what's going on because we're working on debt. We start, you know, with stuff that's two years away. You know, we're working on a lot of stuff right now.
Nick Julico: It's one of the big agenda items around here. I come starting to see a little bit of light at the end and I tried to give you guys that information and said, you know, we ran for a long time at about a 3% average in terms of our debt and I think now we're going to be, you know, 100 to 200 basis points up on that.
Nick Julico: and I think we're kind of coming out in that range. I mean we'll see, we have more to do, but we're coming out in that range.
Speaker Change: All right, that's helpful, thanks. And then second question is just on the absorption comments, which I know that that applies to the total portfolio. If we look at
Speaker Change: in service pool and also it wasn't sure if there was any early termination of space issue you were dealing with in the court that may have affected those numbers. Thanks.
Speaker Change: No, there wasn't anything like that. And I think you're kind of right me, we have our...
Speaker Change: But I will tell you, these are tiny moves, getting deposit and negative on these things, and I'm not going to tell you going forward, what's going to happen, I have concerns about the economy, you heard that in my prepare remarks.
Speaker Change: But at this moment, we're feeling pretty good and we're doing a lot of leasing and you know
Speaker Change: Cross in service, out of service, and all the rest. So we're feeling pretty good about what's going on.
All right. Thanks, Jordan.
Thank you. Bye.
Thank you.
Speaker Change: The next question comes from Connor Michele, from Piper Sanlo, please go ahead.
Connor Mischel: Hey, thanks for taking my question. I guess first, Jordan, you mentioned, you know, some of the macro uncertainty in care of turmoil. Have you guys seen any like tenant fallouts or leasing ideals kind of fall out from, you know, importer export related businesses?
so far.
So good!
Connor Mischel: and I really tried to say that right in the prepared remarks by saying look we already know the effectiveness stock market. Stock market is jumping around like a cat.
Connor Mischel: and then even worse, which is obviously a fear, is that this roll into some version of stagnation or just recession. And like I said, we're watching for it, but haven't seen it.
Speaker Change: Okay, I appreciate the color of mine. And then on the acquisition of Westwood and then the related developments, did you guys mention any timing on the start of that development?
We are...
are already working on plants, we're going. [inaudible]
Speaker Change: It's it's so I hope that the timing is that we get the building bill and the next one.
Three to four years, completed, three, hopefully. We're going.
Speaker Change: It's by right entitlement, and in our business plan of buying it, it was to build it.
Okay, great, thank you [inaudible]
Thank you.
Speaker Change: The next question comes from Rich Anderson, from SMBC Nico. Please go ahead.
No, a wet bush.
Speaker Change: Leasing Velocity Exceed at Your Expectations But Would You Say That The Cash Releasing Spread Under Performed Your Expectations The Down 12% Which So Together Net Sort of Inline?
Speaker Change: Performance on a dollar basis. Is that the right way to think about it? Or do I have that wrong?
Speaker Change: Hey Rich, I don't think that we're disappointed with the spreads or surprise by the spreads. The spreads are going to jump around. Obviously it's dependent on the mix of leases that get done. We did some larger leases and you had some longer leases rolling off, so longer leases have higher bumps.
Speaker Change: The, you know, we focused on the straight line spreads, which are still positive, which is great, but I think in this market you should expect the spreads to be in the territory they've been, and they'll be a little volatile quarter to quarter.
Speaker Change: But all in meeting your expectations, you would say, or exceeding your expectations when you take into account the pace of leasing.
Speaker Change: The Velocity. You know, the comment about exceeding expectations that's in the side related to
and the leasing there.
Okay, so, put that to the side.
I want to add that it does exceed.
Speaker Change: and we've said this in a variety of ways over the last few corners.
and I had it in my section.
Speaker Change: I am surprised we haven't seen much of a change in rent considering the vacancy in the market.
and now I understand the reason for it.
Speaker Change: and I understand that you know where the vacancy is and how it's operating and tendency to be where they want to be and all of that but I don't I know there hasn't been a lot of written about this I've talked about it but I'm impressed that we are holding rates so well
Speaker Change: that we've stayed flat on the straight line, meaning like leases we did in a pretty good market, you know, 2019, 2018, we're still holding that right now.
and it certainly isn't the same market.
Speaker Change: I think it's a testament to the fact that there's no new construction, it's a testament to the fact that the quality of buildings that we have and I see that in New York
Speaker Change: We, you know, the higher quality buildings are also holding rate and doing better and we're experiencing that there. I mean, I can't speak for the B&C product that's in the market, I think they're suffering, but we...
Sheeper want to be in the buildings!
Speaker Change: and their well-run and managed and kept clean and nice and with good amenities and all the good stuff and it's making more of a difference than I ever really thought dead it would.
Speaker Change: in terms of holding right and being a place that people want to end up at.
Speaker Change: Okay, all right, sounds good. And Jordan, you made a comment, your remarks, interest costs up.
Jordan: 100-200 basis points, and you hope that NOI follows along.
Jordan: at some point. Your guides for same-store cash and a wise call it one and a half, two percent negative, so that's not happening now. But is this interest expense?
Jordan: Vue, like a sort of flash in the pan, that's going to what's going to happen this year and into next year and then then you commence the catch up on the NOI line as long as we don't fall into some sort of major recession, is that
Jordan: sort of your three-four-year outlook on when you look at those two competing measures.
Jordan: One thing is leasing up the portfolio. That's just straight, straight, perfect, increases in a line. Another thing is as the economy recovers
Jordan: which we have seen in the past. We got to be around for a long time because there's no new development and as companies recover things tighten up and you see a acceleration in rental rates.
and it's that acceleration in response to whether it be...
Jordan: Interstates. Interstates may also come down. I don't know what will happen there. I know that for now the reason I made that comment is because we are...
Jordan: Centered in the process, literally, of doing a lot of refice. We're refining some stuff that's farther out. We're doing a lot of that kind of work which we'll announce when it closes.
and I can see where we're headed.
Jordan: And we're about to move a bunch of stuff out quite a period of time and I could see where we're going to end up so I know I'm going to end up in that generally I believe in that range that I gave you for at least the next few years now if the market also improves and renovates go up it should offset that and that was the point I was trying to make
Okay, all right, fair enough. Thanks very much.
Thanks.
Thank you.
Conference Operator: The next question comes from Peter Abramowitz from Jeffries, please go ahead.
Peter Abramowitz: Yes, thanks for taking the question. Just wanted to dig a little more into the comments around Studio Plaza so when you say
Speaker Change: Leasing its surpassing expectations, is that just sort of in terms of demand and interest in the asset? Have you actually gotten anything signed there? And then just maybe kind of expectations around timing of when you think you could be close to full occupancy again? Yeah.
All three.
Speaker Change: Leaching Demand, the Mountleases were signing, and the speed at which we'll reach, you know, a very reasonable
Speaker Change: Got it. I guess if you were to handicap, you know, when a reasonable occupancy level could be achieved, but when do you think that is, I guess, for modeling purposes?
I don't, you know...
Speaker Change: I don't want to make a prediction about it beyond giving you that color.
because...
Speaker Change: I've made other predictions that have been thrown back at me, but I can give you my feel about it and we've usually been right on those fronts and I was very nervous going into it.
Speaker Change: in the market and everything we're hearing about the studios and everything else and this building has, you know, they're doing, I don't know, the team's doing a great job at leasing it and this building has not been available for a long time and it's a...
Speaker Change: Saw it after a location in an extremely high-quality building, and we've done a really beautiful
Speaker Change: Redu, a remodel of all the common areas and it's working. I mean it's attracting tenants and I'm super pleased about it because I was nervous and now I'm happy.
Speaker Change: and Peter, that remodel work should be done later this year, and hopefully we'll have some of the leases that we've signed already commencing later this year as well.
We have some of that on our website.
Speaker Change: We appreciate the color there. And then one more, just could you comment on entertainment industry demand? I guess I'm lighted some of the challenges of the last two years or so, sort of how that's shaping up today.
Speaker Change: Well, we really have only that one building in the media district. We haven't been like a big landlord to the entertainment industry historically other than the vendors like the agents and and whatnot. You know, we were new to try it.
interaction to comment.
Speaker Change: More largely on, you know, overall demanded, we're not in, obviously the studio business, which is where like a lot of the discussion revolves.
Right, thanks for the color, Jordan. Appreciate it.
Thank you.
Conference Operator: The next question comes from the line of Upal Rana from Keybank Capital Markets. Please go ahead.
Opal Rana: Great. Thanks to my question. You know, just on the recovery and LA post the fires, you know, how's that progressing broadly? Has there been any shifts in demand that you have noticed, either by the side of the tenants industry or sub market? I know you already commented on the residential side, but just curious how's it going on the opposite side. Thanks.
I know we've been asked a lot.
Opal Rana: or people who propose that we should see billions of dollars moving into the market. That I'm definitely saying.
Opal Rana: Now, that should translate to additional office leasing and I understand why people feel that will happen whether it be architects or contractors or whatever it is that want to be here and near where all this construction is going on because it's not just houses, I mean it streets and
and Utilities being installed and tons of stuff. And I...
Opal Rana: But I anecdotally only know of one or two small pieces and I can't tell you we're seeing that flood at this moment but maybe it takes time to form you [inaudible]
Speaker Change: Okay, great. Thank you. And then just to walk into the decision to consolidate the
Speaker Change: We redid the agreement with our partners and extended it out substantially and as it's hard to call it a decision one way or another, the terms of the agreement dictate whether it's consolidated or not consolidated and under the new agreement, obviously we're very large owner.
Speaker Change: and there were other terms in there that dictate that under the counting rules now it's consolidated. I can't tell you I was thrilled about that. It gave us...
Speaker Change: Additional interest expense. It's kind of fandom because they act like you bought it and keep you on time.
Speaker Change: Yeah, it's Peter. When we go through the consolidation process, I mean, obviously it affected a lot of line items on the consolidated P&L, not to mention the, you know, the gain that we had to take and, you know, which, which rolls through that income.
Speaker Change: Overall, probably slightly negative impact to interest because we had to also fair value of the debt when we put it on the balance sheet and it's obviously had a great interest rate so we'll see some amortization roll through interest expense.
Speaker Change: Maybe about a penny impact or so, overall, included in our guidance.
Okay, great. Thank you.
Thank you.
Conference Operator: An excursion comes from the line of set, Turgie from city, please go ahead.
Seth Tergy: Hi, thanks for taking my question. I was just kind of curious, you know, would you look to do kind of future acquisitions with the JV partner or fully owned and, you know, where do you see the opportunity of the days that are kind of on a multi-family side or the opposite side?
Kevin: It's definitely, this is Kevin here. It's definitely on the opposite side is...
Kevin: The rezzy pricing is backed up slightly but not to the degree that the office market has backed up and so...
Kevin: The 10900 acquisition raised a lot of eyebrows as some of our partners and other people that we've been talking to overseas about the opportunities and so, you know, we're going to focus on finding high quality office buildings in our markets that we can apply.
Kevin: The operating platform to create some value and our partners are very intrigued by what they're seeing.
Great, thanks.
Thank you. Bye.
Thank you.
Conference Operator: The next question comes from the line of Jenna Gallen from Bank of America, please go ahead.
Capital Allocation Thinking between these opportunistic
Conference Operator: Acquisitions for the property. Could you also think about third-party management and then redevelopment like in Studio Plaza or share buybacks?
Conference Operator: Yeah, and whether there would be with partners or on-bound cheap.
So.
Conference Operator: We have bought back shares. I think we've bought back a...
Conference Operator: A group here, and we all met, you know, talk about it, but you got to really be really in it clear.
Good thing. In terms of doing acquisitions, [inaudible]
Thank you. Bye.
I mean...
Speaker Change: I think we have an opportunity to buy stuff directly, but if we don't include our partners in our acquisitions, we're going to lose the partners, because they're going to look at us like we're cherry picking.
Speaker Change: and they're going to go, oh yeah, you come to us when you don't want to do the deal because we obviously have money to do deals, but you don't come to us when you really love the deal. So in general,
Speaker Change: Everything we buy, we give them an opportunity to come in and historically they have. So I would expect to continue that way.
Thank you [inaudible]
Thanks for watching!
Thank you.
Conference Operator: The next question comes from the line of John Kim from BMO Capital Markets. Please go ahead.
John Kim: Thank you. Can I just follow up on Steve's question on the multifamily growth, yet 7.7% saves to revenue, not much of pickup and occupancy. You don't have a lot of turnover in the assets, so you can't really push rents to market. So, were there one time items in the first quarter that don't carry on for the rest of the year?
John Kim: Now John , no one-timers. We did have an increase in occupancy over year in the same store pool, so that was contributing factor. And, you know, we do have pretty good turnover. We do have some rank controlled units in Santa Monica that turn over less frequently, but the rest of the portfolio, besides us, turns over at a pretty good normal rate.
Speaker Change: So, you know, we had occupancy contributing as Jordan said, we're very full and good rent growth.
Speaker Change: I think what is being missed and maybe I'm misleading by saying we haven't raised rent since the fire, but rents have been really moving up.
Speaker Change: and just sticking even at that new number with the role that's now happening over the last few months.
is rolling through in terms of not the seven. [inaudible]
Speaker Change: 70% that you're referring to. I think that's probably the primary cause. Yeah, I mean, it's Peter. The same store includes, you know, all of last year in Rank Road over the course of that year.
Speaker Change: So I know you don't give guidance on the same store to multifamily, but high single digits is that a good assumption?
Well, it has been…
But we don't give guys [inaudible]
Okay.
Speaker Change: Switching gears, can I ask about Warner Center and the new REMS village development proposal, if you're involved at all as far as potentially selling assets to the organization or maybe overall how that impacts the...
The Office Market in Warner Center.
It's very good
Speaker Change: for the Market and Wormer Center. And the stuff that Cronkey and Otto and that crowd is doing is outstanding and we're certainly in communication with them. And, you know,
hugely in favor of the things they're doing in support of.
But you're not looking to sell any assets [inaudible]
Chew there.
Speaker Change: Organization. Well, historically we don't talk about deals and we still and by me saying yes or no you go you only talk about not once yes or no so we really don't talk about
Scott, I remember with you, we'll definitely announce it.
Speaker Change: A few years ago, I think this was a market that you were looking to potentially exit.
Speaker Change: Some wondering if that's still on the cards or if this changes your view of your long-term ownership?
Speaker Change: I don't think I ever said I was trying to exit this market.
Speaker Change: That's not correct. I mean, I don't know if that was out in the world, but it didn't come from me.
Okay, thank you.
Thank you.
Thank you
Speaker Change: Our next question comes from the line of Dylan Burzinski from Green Street, please go ahead.
Speaker Change: Okay, thanks for taking the question. Most of my questions have already been asked, but I guess just
What do you think? I think that
that people's website assets are the family jewels. [inaudible]
and so...
Speaker Change: People will do as much as they can to hold on to those assets. We don't have a lot of distressed
Speaker Change: Bank opportunities, but there are some core funds and other people who...
Speaker Change: Have other more portfolio pressure that might end up selling some of their West Side assets because they don't have liquidity in their other markets?
He's certainly not a flood, that's for sure. Right?
Okay, that's all guys, thanks.
Thank you.
Conference Operator: Next question comes from Anthony Paolone from JP Morgan, please go ahead.
Anthony Poulon: Yeah, thanks. Just first one on Studio Plaza. Apologies if I missed this but what is the least rate at this point at that asset?
Speaker Change: Hey, Tony, we're not giving, we're not tracking individual buildings or leases that way, so we haven't provided a rate.
Speaker Change: Okay, but when you talk about your leasing and the new leasing and the quarter, the difference between the over 300,000 and I think the 275 or whatever for the in service is safe to assume that the rest of it was Studio Plaza or something else outside of the instrument.
Speaker Change: Yeah, we've got two buildings in the not-in-the-in service portfolio. So it will be Stoogia Plaza and then the new acquisition in Westwood.
Speaker Change: Okay, got it. And then just the other question, you did a couple of debt deals in the quarter. And so I guess next up is the 2026. Any thoughts as to when you, like are those on deck for near term or so to imagine they'll have some implication on earnings for this year? Yeah, sure.
Speaker Change: Yeah, that's what I was alluding to. We're working on a lot of debt right now and we do start early on stuff and yeah, you're right. That's why I'm able to give you my prediction.
Well, just to remind you, Anthony, we...
Speaker Change: We typically like to do a seven-year alone that's swapped for five years and leave ourselves a two-year runway.
Speaker Change: and so there's 20, 26 explorations. That's the floating rate debt that you're seeing and so, you know, we're working with our lenders right now to figure out new deals and we'll announce them when we close them.
Speaker Change: But I try to give you guys a feel for it because I said I'm not prepared to march.
Speaker Change: I think we're going to be up one to 200 basis points over the 3% rate that we enjoyed.
Cree Coddett
Speaker Change: Right, but just make sure I understand that those because you have been pretty clear that you want to get those done you know this year and you kind of gave us those brackets but those aren't but you didn't put those in your guide right like we have to kind of think about that separately.
That's right, we don't put future refinancing in the guidance, so...
Speaker Change: The guidance has it bump in it at the rate of flooding and the courage. It's important that you know, like...
You guys can also figure out.
Okay. Thank you.
Thank you.
Conference Operator: This concludes our question and answer session. I would now like to turn the conference back over to Jordan Kaplan for any closing remarks.
Speaker Change: All I can say is thank you for joining us and we'll see you next quarter.
Goodbye.
Conference Operator: The conference has now concluded. Thank you for attending today's presentation.
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