COPT Defense Properties Q4 2025 COPT Defense Properties Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 COPT Defense Properties Earnings Call
Speaker #1: This call is being recorded. At this time, I'd like to turn the call over to Venkat Kommineni, COPT DEFENSES Vice President of Vestor Relations.
Speaker #1: Mr. Kommineni, please go
Speaker #1: ahead. Thank you,
Speaker #2: Jonathan. Good afternoon and welcome to COPT DEFENSES Conference Call to discuss fourth quarter and full year results. With me today are Steve Budorick, President and CEO; Britt Snider, Executive Vice President and COO; and Anthony Mifsud, Executive Vice President and CFO.
Venkat Kommineni: Thank you, Jonathan. Good afternoon, and welcome to COPT Defense Properties' conference call to discuss fourth quarter and full year results. With me today are Steve Budorick, President and CEO; Britt Snider, Executive Vice President and COO; and Anthony Mifsud, Executive Vice President and CFO. Reconciliations of GAAP and non-GAAP financial measures that management discusses are available on our website, in the results press release, and presentation, and in our supplemental information package. As a reminder, forward-looking statements made during today's call are subject to risks and uncertainties, which are discussed in our SEC filings. Actual events and results can differ materially from these forward-looking statements, and the company does not undertake a duty to update them. Steve?
Venkat Kommineni: Thank you, Jonathan. Good afternoon, and welcome to COPT Defense Properties' conference call to discuss fourth quarter and full year results. With me today are Steve Budorick, President and CEO; Britt Snider, Executive Vice President and COO; and Anthony Mifsud, Executive Vice President and CFO. Reconciliations of GAAP and non-GAAP financial measures that management discusses are available on our website, in the results press release, and presentation, and in our supplemental information package. As a reminder, forward-looking statements made during today's call are subject to risks and uncertainties, which are discussed in our SEC filings. Actual events and results can differ materially from these forward-looking statements, and the company does not undertake a duty to update them. Steve?
Speaker #2: Reconciliations of GAAP and non-GAAP financial measures that management discusses are available on our website, in the results press release and presentation, and in our supplemental information package.
Speaker #2: As a reminder, forward-looking statements made during today's call are subject to risks and uncertainties, which are discussed in our SEC differ materially from these forward-looking statements, and the company does not undertake a duty to update them.
Speaker #3: and thank you for joining us. 2025 was another great year for the company as we outperformed on virtually all of our operating and financial metrics.
Steve Budorick: Good afternoon, and thank you for joining us. 2025 was another great year for the company as we outperformed on virtually all of our operating and financial metrics. FFO per share was $2.72, which is $0.06 above the midpoint of our initial guidance and represents an increase of 5.8% over 2024's results, and marks our seventh consecutive year of FFO per share growth. Same-property cash NOI increased 4.1% year-over-year, driven by a 40 basis point increase in our average occupancy. We executed 557,000sq ft of vacancy leasing, which represented 47% of the space we had vacant at the beginning of the year. We also executed 477,000sq ft of investment leasing at a weighted average lease term of 13 years.
Steve Budorick: Good afternoon, and thank you for joining us. 2025 was another great year for the company as we outperformed on virtually all of our operating and financial metrics. FFO per share was $2.72, which is $0.06 above the midpoint of our initial guidance and represents an increase of 5.8% over 2024's results, and marks our seventh consecutive year of FFO per share growth. Same-property cash NOI increased 4.1% year-over-year, driven by a 40 basis point increase in our average occupancy. We executed 557,000sq ft of vacancy leasing, which represented 47% of the space we had vacant at the beginning of the year. We also executed 477,000sq ft of investment leasing at a weighted average lease term of 13 years.
Speaker #3: FFO per share was $2.72, which is 6 cents above the midpoint of our initial guidance, and represents an increase of 5.8% over 2024's results.
Speaker #3: And marks our seventh consecutive year of FFO per share growth. Same property cash, NOI increased 4.1% year over year. Driven by a 40 basis point increase in our average occupancy.
Speaker #3: We 557,000 square feet of vacancy leasing which represented 47% of the space we had vacant at the beginning of the year. We also executed 477,000 square feet of investment leasing at a weighted average lease term of 13 years.
Speaker #3: We committed 278 million dollars of capital to new investments which consisted of five projects and four different markets and these pre-lease. projects are 81% Importantly, four of the five with existing tenants.
Steve Budorick: We committed $278 million of capital to new investments, which consisted of 5 projects in 4 different markets, and these projects are 81% pre-leased. Importantly, 4 of the 5 projects represent expansions with existing tenants. In late December, we committed roughly $155 million to 2 build-to-suit projects in our Fort Meade BW Corridor, and San Antonio markets. First, we committed $66 million to a fully pre-leased development with ARLIS, which is the University of Maryland's Applied Research Laboratory for Intelligence and Security, to expand their footprint in our park. This 110,000-square-foot project will expand our Discovery District campus, which currently totals 415,000 square feet and is 98.4% leased.
Steve Budorick: We committed $278 million of capital to new investments, which consisted of 5 projects in 4 different markets, and these projects are 81% pre-leased. Importantly, 4 of the 5 projects represent expansions with existing tenants. In late December, we committed roughly $155 million to 2 build-to-suit projects in our Fort Meade BW Corridor, and San Antonio markets. First, we committed $66 million to a fully pre-leased development with ARLIS, which is the University of Maryland's Applied Research Laboratory for Intelligence and Security, to expand their footprint in our park. This 110,000-square-foot project will expand our Discovery District campus, which currently totals 415,000 square feet and is 98.4% leased.
Speaker #3: In late December, we committed roughly 155 million dollars to two build-to-suit projects in our Fort Meade BW corridor and San Antonio markets. First, we committed 66 million dollars to a fully pre-lease development with Arlis which is the University of Maryland's laboratory for intelligence and security to expand their footprint in our park.
Speaker #3: This 110,000 square foot project will expand our discovery district campus which currently totals 415,000 square feet and is 98.4% leased. This new Arlis facility will serve as the capital quantum benchmarking hub to test and evaluate quantum computing prototypes for national security.
Steve Budorick: This new ARLIS facility will serve as the capital quantum benchmarking hub to test and evaluate quantum computing prototypes for national security. In a partnership between the State of Maryland and DARPA, the Defense Advanced Research Projects Agency. In 2024, the University of Maryland received a $500 million contract from the DoD to support ARLIS in their mission of addressing complex national security problems. Second, we committed $88 million to a 132,000sq ft, fully pre-leased development project in San Antonio with an existing defense IT tenant. Our team did a tremendous job of adding incremental density to our already fully leased, high-security 1.1 million sq ft campus to create this additional development opportunity.
Steve Budorick: This new ARLIS facility will serve as the capital quantum benchmarking hub to test and evaluate quantum computing prototypes for national security. In a partnership between the State of Maryland and DARPA, the Defense Advanced Research Projects Agency. In 2024, the University of Maryland received a $500 million contract from the DoD to support ARLIS in their mission of addressing complex national security problems. Second, we committed $88 million to a 132,000sq ft, fully pre-leased development project in San Antonio with an existing defense IT tenant. Our team did a tremendous job of adding incremental density to our already fully leased, high-security 1.1 million sq ft campus to create this additional development opportunity.
Speaker #3: In a partnership between the State of Maryland and DARPA, the defense advanced research projects agency. In 2024, the University of Maryland received a $500 million Arlis and their mission of addressing complex national security problems.
Speaker #3: Second, we committed 88 million dollars to fully 132,000 square foot pre-leased development project in San Antonio with an existing defense IT tenant. Our team did a tremendous job of adding incremental density to our already fully leased high security 1.1 million square foot campus to create this additional development opportunity.
Speaker #3: In aggregate, our active developments along with those projects placed in service are acquired in incremental 52 million dollars of cash basis which will be NOI on a stabilized annual realized as projects are completed and placed into service.
Steve Budorick: In aggregate, our active developments, along with those projects placed in service or acquired in 2025, will generate an incremental $52 million of Cash NOI on a stabilized annual basis, which will be realized as projects are completed and placed into service. The incremental NOI will phase in between 2026 and 2029, which will be the first full year benefiting from the total amount. $48 million of this is contractual, and the balance is from leasing up the remaining availability at 8500 Advanced Gateway. Britt will discuss the very strong pipeline of activity we have for our 8500. For 2026, we're establishing the midpoint of FFO per share guidance at $2.75, which implies 3 cents or 1.1% growth over 2025's outstanding results. Our guidance absorbs a 9 cent increase in financing costs.
Steve Budorick: In aggregate, our active developments, along with those projects placed in service or acquired in 2025, will generate an incremental $52 million of Cash NOI on a stabilized annual basis, which will be realized as projects are completed and placed into service. The incremental NOI will phase in between 2026 and 2029, which will be the first full year benefiting from the total amount. $48 million of this is contractual, and the balance is from leasing up the remaining availability at 8500 Advanced Gateway. Britt will discuss the very strong pipeline of activity we have for our 8500. For 2026, we're establishing the midpoint of FFO per share guidance at $2.75, which implies 3 cents or 1.1% growth over 2025's outstanding results. Our guidance absorbs a 9 cent increase in financing costs.
Speaker #3: The incremental NOI will phase in between 2026 and 2029 which will be the first full year benefiting from the total amount. 48 million dollars of this is contractual and the balance is from leasing up the remaining availability at 8,500 advanced gateway.
Which will be the first full year of benefiting from the total amount.
Speaker #3: strong pipeline of activity we have for our G8500. For 2026, we're establishing the midpoint of FFO per share guidance at $2.75 which implies 3 cents or 1.1% Britt will discuss the very growth over 2025's outstanding results.
Forty-eight million of this is contractual, and the balance is from leasing up the remaining availability at 8,500 Advanced Gateway.
Britt will discuss the very strong pipeline of activity we have for our G8500.
For 2026, we're establishing the midpoint of effortful per share guidance at $2.75.
Speaker #3: cent increase in financing costs. Excluding this impact, 2026 FFO per share would have totaled $2.84 and 4.4% year over year growth. Anthony will Our guidance absorbs a 9 provide details on the specific assumptions included in our guidance but we're already off to a great start to the year with capital commitments and investment leasing.
Which implies 3 cents, or 1.1% growth over 2025, is outstanding results.
Steve Budorick: Excluding this impact, 2026 FFO per share would have totaled $2.84 and 4.4% year-over-year growth. Anthony will provide details on the specific assumptions included in our guidance, but we're already off to a great start to the year with capital commitments and investment leasing. In January, we committed $146 million to yet another fully pre-leased development project at the National Business Park, once again, with an existing defense IT tenant. This is another high security specialized facility that will total 236,000sq ft. Earlier this week, we executed a full building lease for NBP 400, with an existing tenant that is a top ten US defense contractor, for 148,000sq ft and a lease term of nearly 11 years. Turning to the defense budget.
Steve Budorick: Excluding this impact, 2026 FFO per share would have totaled $2.84 and 4.4% year-over-year growth. Anthony will provide details on the specific assumptions included in our guidance, but we're already off to a great start to the year with capital commitments and investment leasing. In January, we committed $146 million to yet another fully pre-leased development project at the National Business Park, once again, with an existing defense IT tenant. This is another high security specialized facility that will total 236,000sq ft. Earlier this week, we executed a full building lease for NBP 400, with an existing tenant that is a top ten US defense contractor, for 148,000sq ft and a lease term of nearly 11 years. Turning to the defense budget.
Our guidance absorbs a 9-cent increase in financing costs.
Excluding this effect.
2026 FFO per share would have totaled $2.84 and 4.4% year-over-year growth.
Speaker #3: In January, we committed 146 million dollars to yet another fully pre-leased development project at the National Business Park once again with an existing defense IT tenant.
Anthony will provide details on the specific assumptions included in our guidance.
But we're already off to a great start to the year with capital commitments and investment leasing.
Speaker #3: This is another high security specialized facility that will total 236,000 square feet. And earlier building lease for NBP 400 with an existing this week, we executed a full tenant that is a top 10 US defense contractor feet and a lease term of for 148,000 square nearly 11 years.
International Business Park.
Once again, with the existing Defense IT tenant.
This is another high-security, specialized facility that will total 236,000 square feet.
And earlier this week, we executed a full building-in lease for MVP 400 with an existing tenant. That is a top 10 U.S. defense contractor.
Speaker #3: Turning to the defense budget, three days ago President Trump signed the FY 2026 defense appropriations act this base budget is 841 billion dollars which is an 8 billion dollar increase over the President's initial Adding the 113 billion request.
For 148,000 square feet, and a lease term of nearly 11 years.
Steve Budorick: Three days ago, President Trump signed the FY 2026 Defense Appropriations Act. This base budget is $841 billion, which is an $8 billion increase over the president's initial request. Adding the $113 billion in allocated DoD funding that was in the big, beautiful bill, this amounts to a defense budget of over $950 billion, which is the largest defense-based budget in our nation's history and is a 15% year-over-year increase. The president's fiscal year 2027 budget request is expected to be submitted in the coming weeks, but he publicly announced the need for a $1.5 trillion defense budget.
Steve Budorick: Three days ago, President Trump signed the FY 2026 Defense Appropriations Act. This base budget is $841 billion, which is an $8 billion increase over the president's initial request. Adding the $113 billion in allocated DoD funding that was in the big, beautiful bill, this amounts to a defense budget of over $950 billion, which is the largest defense-based budget in our nation's history and is a 15% year-over-year increase. The president's fiscal year 2027 budget request is expected to be submitted in the coming weeks, but he publicly announced the need for a $1.5 trillion defense budget.
Turning to the defense budget.
Three days ago, President Trump signed the FY 2026 Defense Appropriations Act.
Speaker #3: dollars in allocated DOD funding that was in the big beautiful bill, this amounts to a defense budget of over 950 billion dollars which is the largest defense base budget in our nation's history and is a 15% year over year increase.
This base budget is $841 billion, which is an $8 billion increase over the President's initial request.
Adding the $113 billion in the allocated DOD funding that was in the big, beautiful bill.
Speaker #3: The President's fiscal year 2027 budget request is expected to be submitted in the coming need for a 1.5 trillion dollar defense budget. Regardless of where the final number ends up, his comments send a strong policy signal of the President's commitment to increase investment in defense and we expect the overall size of the defense budget to continue to increase throughout the next three years.
This amounts to a defense budget of over $950 billion, which is the largest defense space budget in our nation's history and is the 15th year of increase.
Steve Budorick: Regardless of where the final number ends up, his comments send a strong policy signal of the president's commitment to increase investment in defense, and we expect the overall size of the defense budget to continue to increase throughout the next three years. Importantly, the initial FY 2026 Defense Appropriations Act enjoyed very strong bipartisan support, recognizing the increasingly complex global threat environment. A recent editorial published in The Wall Street Journal was titled The Serious Defense Budget at Last, and it highlighted the new technologies that are proliferating in ways that threaten the US homeland, which include hypersonic missiles, space and cyber weapons, drones, and the weaponization of AI. The editorial's conclusions are perfectly aligned with the administration's peace through strength philosophy and recognizes that investment in defense is infinitely less costly than a war.
Steve Budorick: Regardless of where the final number ends up, his comments send a strong policy signal of the president's commitment to increase investment in defense, and we expect the overall size of the defense budget to continue to increase throughout the next three years. Importantly, the initial FY 2026 Defense Appropriations Act enjoyed very strong bipartisan support, recognizing the increasingly complex global threat environment. A recent editorial published in The Wall Street Journal was titled The Serious Defense Budget at Last, and it highlighted the new technologies that are proliferating in ways that threaten the US homeland, which include hypersonic missiles, space and cyber weapons, drones, and the weaponization of AI. The editorial's conclusions are perfectly aligned with the administration's peace through strength philosophy and recognizes that investment in defense is infinitely less costly than a war.
The President's fiscal year 2027 budget request is expected to be submitted in the coming weeks, but he publicly announced the need for a $1.5 trillion defense budget.
Regardless of where the final number ends up.
Speaker #3: the initial FY Importantly, 2026 defense appropriations act enjoyed very strong bipartisan support recognizing the increasingly complex global threat weeks but he publicly announced the published in the Wall Street Journal was titled "A Serious Defense environment.
His comments send a strong policy signal of the president's commitment to increase investment in defense. And we expect the overall size of the defense budget to continue to increase throughout the next three years.
Importantly.
The initial FY 2026 Defense Appropriations Act enjoyed very strong, bipartisan support.
Speaker #3: Budget at A recent editorial Last." And it highlighted the new ways that threaten the US hypersonic missiles, space and cyber weapons, drones, and homeland which include the weaponization of conclusions are perfectly aligned with the administration's peace through strength philosophy defense is infinitely war.
Recognizing the increasingly complex, global threat environment.
A recent editorial published in The Wall Street Journal was titled 'A Serious Defense Budget at Last.'
And it highlighted the new technologies that are proliferating in ways that threaten the U.S. homeland, which include hypersonic missiles, space and cyber weapons, drones, and the weaponization of AI.
Speaker #3: Given this backdrop, we continue to expect that the priority less costly than a be well funded in the near and medium term to safeguard national security.
Steve Budorick: Given this backdrop, we continue to expect that the priority missions our portfolio supports will be well funded in the near and medium term to safeguard national security. These missions include intelligence, surveillance, and reconnaissance, cybersecurity, missile defense, space activities, among others. Space is the newest war fighting domain, and achieving uncontested dominance in this theater is of paramount importance to the country's defense. In support of this objective, we expect a $175 billion multi-year Golden Dome initiative and the relocation of Space Command's headquarters to Huntsville to drive growth and demand for both government and contractors at the Redstone Gateway for the foreseeable future. Before I turn the call over to Britt, let me reflect on our performance over the past few years.
Steve Budorick: Given this backdrop, we continue to expect that the priority missions our portfolio supports will be well funded in the near and medium term to safeguard national security. These missions include intelligence, surveillance, and reconnaissance, cybersecurity, missile defense, space activities, among others. Space is the newest war fighting domain, and achieving uncontested dominance in this theater is of paramount importance to the country's defense. In support of this objective, we expect a $175 billion multi-year Golden Dome initiative and the relocation of Space Command's headquarters to Huntsville to drive growth and demand for both government and contractors at the Redstone Gateway for the foreseeable future. Before I turn the call over to Britt, let me reflect on our performance over the past few years.
The editorial's conclusions are perfectly aligned with the administration's: peace through strength philosophy, and it recognizes that investment in defense is infinitely less costly than a war.
Speaker #3: And these missions include intelligence, surveillance, and reconnaissance, and recognizes that investment in cybersecurity, missile defense, space activities among others. Space is the newest war fighting domain and achieving uncontested dominance in this theater is of paramount importance to the country's defense.
Given this backdrop, we continue to expect that the priority missions our portfolio supports will be well funded in the near and medium term to safeguard national security.
In these missions, include intelligence, surveillance, and reconnaissance, cyber security, and missile defense.
Space activities among others.
Speaker #3: In support of this objective, we expect the multi-year Golden Dome initiative and the relocation of space 175 billion dollar command's headquarters to Huntsville to drive growth and demand from both government and contractors at the Redstone Gateway for the foreseeable future.
Space is the newest warfighting domain, and achieving uncontested dominance in this theater is of paramount importance to the country's defense.
Speaker #3: Before I turn the call over to Britt, let me reflect on our performance over the past few years. In 2019, we entered our era of growth as we had largely completed our strategic reallocation plan and our $2.03.
In support of this objective, we expect the $175 billion multi-year Golden Dome initiative and the relocation of Space Command's headquarters to Huntsville.
To drive growth in demand for both government and contractors at the Redstone Gateway for the foreseeable future.
Before I turn the call over to Brett,
Steve Budorick: In 2019, we entered our era of growth as we had largely completed our strategic reallocation plan, and our FFO per share for that year was $2.03. Seven years later, the midpoint of our 2026 guidance is $2.75, a 35% increase, and represents compound annual growth rate of 4.4%. Between the initial midpoint of 2023 and 2026 guidance ranges, FFO per share is expected to grow at a compounded rate of 4.9%, which is over 20% higher than what we had projected back in 2022. With that, I'll turn the call over to Britt for some details.
Steve Budorick: In 2019, we entered our era of growth as we had largely completed our strategic reallocation plan, and our FFO per share for that year was $2.03. Seven years later, the midpoint of our 2026 guidance is $2.75, a 35% increase, and represents compound annual growth rate of 4.4%. Between the initial midpoint of 2023 and 2026 guidance ranges, FFO per share is expected to grow at a compounded rate of 4.9%, which is over 20% higher than what we had projected back in 2022. With that, I'll turn the call over to Britt for some details.
Let me reflect on our performance over the past few years.
In 2019.
Speaker #3: midpoint of our 2026 Seven years later, the guidance is $2.75, a 35% increase and represents a compound annual growth rate of 4.4%. Between the initial midpoint of 2023 and 2026 guidance ranges, FFO per share is expected to grow at a compounded rate of 4.9% which is over 20% higher than what we had projected back in
We entered our era of growth as we had largely completed our strategic reallocation plan, and our FFO per share for that year was $2.03.
Seven years later, the midpoint of our 2026 guidance is $2.75, a 35% increase, and represents a compound annual growth rate of 4.4%.
Speaker #3: 2022.
Speaker #3: And with that,
Between the initial midpoint of 2023 and 2026, guidance ranges for FFO per share are expected to grow at a compounded rate of 4.9%.
Speaker #2: Thank you, Steve. We
Speaker #2: 94% in the total portfolio and 95.5% in the defense IT portfolio. Year I'll turn the call over to Britt for some points in the total portfolio and 10 basis points in the defense IT portfolio.
Which is over 20% higher than what we had projected back in 2022.
Britt Snider: Thank you, Steve. We finished the quarter with strong occupancy at 94% in the total portfolio, and 95.5% in the defense IT portfolio. Year over year, occupancy increased 40 basis points in the total portfolio and 10 basis points in the defense IT portfolio. Our buildings remain highly leased, with our total portfolio at 95.3% and our defense IT portfolio at 96.5%. The lease percentage for the total portfolio increased 20 basis points from the end of last year, driven by our incredibly strong vacancy leasing performance. And I want to give special recognition to our entire team, who contributed to these outstanding results in terms of both vacancy and investment leasing.
Britt Snider: Thank you, Steve. We finished the quarter with strong occupancy at 94% in the total portfolio, and 95.5% in the defense IT portfolio. Year over year, occupancy increased 40 basis points in the total portfolio and 10 basis points in the defense IT portfolio. Our buildings remain highly leased, with our total portfolio at 95.3% and our defense IT portfolio at 96.5%. The lease percentage for the total portfolio increased 20 basis points from the end of last year, driven by our incredibly strong vacancy leasing performance. And I want to give special recognition to our entire team, who contributed to these outstanding results in terms of both vacancy and investment leasing.
Speaker #2: Our buildings remain highly 95.3% and our defense IT portfolio at 96.5%. The leased percentage for the total portfolio increased 20 basis points from the end of last year driven by our incredibly strong I want to give special recognition to our vacancy leasing performance.
And with that, I'll turn the call over to Brett for some details. Thank you, Steve. We finish the quarter with strong occupancy, at 94% in the total portfolio and 95 and a half percent in the defense it portfolio.
Year-over-year, occupancy increased 40 basis points in the total portfolio and 10 basis points in the Defense IT portfolio.
Our buildings remain highly leased, with our total portfolio at 95.3% and our Defense IT portfolio at 96.5%.
Speaker #2: entire team who contributed to these outstanding And and investment leasing. In fact, we executed 557,000 square feet of vacancy initial target by 40% or over 150,000 square feet.
By our incredibly strong vacancy leasing performance.
Britt Snider: In fact, we executed 557,000 sq ft of vacancy leasing during the year, which exceeded our initial target by 40% or over 150,000 sq ft. In our defense IT portfolio, we executed 424,000 sq ft, which alone exceeded our 400,000 sq ft initial goal for our entire portfolio. The vacancy leasing achieved represented 47% of our available inventory at the beginning of the year for the total portfolio, and 58% within our defense IT portfolio. Half of this leasing was tied to either secure space, cyber activity, or a combination of both. In our defense IT portfolio, over half of our vacancy leasing and 90% of our investment leasing was executed with existing tenants....
Britt Snider: In fact, we executed 557,000 sq ft of vacancy leasing during the year, which exceeded our initial target by 40% or over 150,000 sq ft. In our defense IT portfolio, we executed 424,000 sq ft, which alone exceeded our 400,000 sq ft initial goal for our entire portfolio. The vacancy leasing achieved represented 47% of our available inventory at the beginning of the year for the total portfolio, and 58% within our defense IT portfolio. Half of this leasing was tied to either secure space, cyber activity, or a combination of both. In our defense IT portfolio, over half of our vacancy leasing and 90% of our investment leasing was executed with existing tenants....
And I want to give special recognition to our entire team who contributed to these outstanding results in terms of both vacancy and investment leasing.
Speaker #2: And our defense IT portfolio, we executed 424,000 square feet which alone exceeded our 400,000 square foot initial goal for our entire portfolio. The vacancy leasing achieved represented 47% of our available inventory at the beginning of the year for the total portfolio and 58% within our defense IT portfolio.
In fact, we executed 557,000 square feet of vacancy leasing during the year, which exceeded our initial target by 40%, or over 150,000 square feet.
Which alone exceeded our 400,000-square-foot initial goal for our entire portfolio.
Speaker #2: Half of this leasing was tied to either secure space, cyber activity, or a combination of both. And our defense IT portfolio over half of our vacancy leasing and 90% of our investment leasing was executed with existing tenants.
The vacancy leasing achieved represented 47% of our available inventory at the beginning of the year for the total portfolio, and 58% within our Defense IT portfolio.
Half of this leasing was tied to either secure space, cyber activity, or a combination of both.
Speaker #2: We enjoyed broad base leasing activity across our markets. And notably, we executed roughly 110,000 square feet in our Navy support market which represented 73% of our available inventory in that group at the beginning of the year.
Britt Snider: We enjoyed broad-based leasing activity across our markets, and notably, we executed roughly 110,000 sq ft in our Navy support market, which represented 73% of our available inventory in that group at the beginning of the year. Many of you have asked about this market over the past few quarters, and we delivered. The lease rate in this portfolio increased nearly 200 basis points over the year, and the occupancy rate increased over 400 basis points. We also executed over 130,000 sq ft in our other segment, which is the highest level in over a decade and represented 29% of our available inventory at the beginning of the year. This is important, as this segment holds the largest amount of vacancy in the portfolio.
Britt Snider: We enjoyed broad-based leasing activity across our markets, and notably, we executed roughly 110,000 sq ft in our Navy support market, which represented 73% of our available inventory in that group at the beginning of the year. Many of you have asked about this market over the past few quarters, and we delivered. The lease rate in this portfolio increased nearly 200 basis points over the year, and the occupancy rate increased over 400 basis points. We also executed over 130,000 sq ft in our other segment, which is the highest level in over a decade and represented 29% of our available inventory at the beginning of the year. This is important, as this segment holds the largest amount of vacancy in the portfolio.
In our defense IT portfolio, over half of our vacancy leasing and 90% of our investment leasing was executed with existing tenants.
Speaker #2: Many of you have asked about this market over the past few quarters and we delivered. The least rate in this portfolio increased nearly 200 basis points over the year and the occupancy rate increased over 400 basis points.
We enjoyed broad-based leasing activity across our markets, and notably, we executed roughly 110,000 square feet in our Navy Support market.
which represented 73% of our available inventory in that group at the beginning of the year.
Many of you have asked about this market over the past few quarters, and we delivered.
Speaker #2: We also executed over 130,000 square feet in our other segment which is the highest level in over a decade. And represented 29% of our available This is important as this segment holds inventory at the beginning of the year.
At lease rate in this portfolio increased nearly 200 basis points over the year, and the occupancy rate increased over 400 basis points.
Speaker #2: the largest amount of vacancy in the portfolio. Leasing achievement in the other segment included over 40,000 square feet at our property in Tyson's Corner and nearly 90,000 square feet in Baltimore.
We also executed over 130,000 square feet in our other segments, which is the highest level in over a decade and represented 29% of our available inventory at the beginning of the year.
Britt Snider: Leasing achievement in the other segment included over 40,000sq ft at our property in Tysons Corner and nearly 90,000sq ft in Baltimore. Year-over-year, the lease rate in our other segment increased nearly 300 basis points, and the occupancy rate increased nearly 400 basis points. For 2026, we have again set a vacancy leasing target of 400,000sq ft, which represents 1/3 of total available inventory at the beginning of the year. Our leasing activity ratio is 74%, which equates to 870,000sq ft of prospects on 1.2 million sq ft of availability, and 10% of this activity is in advanced negotiations. Turning to renewal leasing, we executed 2 million sq ft for the year, with tenant retention of 78% and cash rent spreads of 1.1%.
Britt Snider: Leasing achievement in the other segment included over 40,000sq ft at our property in Tysons Corner and nearly 90,000sq ft in Baltimore. Year-over-year, the lease rate in our other segment increased nearly 300 basis points, and the occupancy rate increased nearly 400 basis points. For 2026, we have again set a vacancy leasing target of 400,000sq ft, which represents 1/3 of total available inventory at the beginning of the year. Our leasing activity ratio is 74%, which equates to 870,000sq ft of prospects on 1.2 million sq ft of availability, and 10% of this activity is in advanced negotiations. Turning to renewal leasing, we executed 2 million sq ft for the year, with tenant retention of 78% and cash rent spreads of 1.1%.
This is important, as this segment holds the largest amount of vacancy in the portfolio.
Speaker #2: Year over year, increased nearly 300 basis the least rate in our other segment points and the occupancy rate increased nearly 400 basis points. For 2026, we have again set a vacancy leasing target of 400,000 square feet which represents one third of total available inventory at the beginning of the year.
Leasing achievements in the Other segment included over 40,000 square feet at our property in Tysons Corner and nearly 90,000 square feet in Baltimore.
Year-over-year, the lease rate in our other segments increased nearly 300 basis points, and the occupancy rate increased nearly 400 basis points.
Speaker #2: Our leasing activity ratio is 74% which equates to 870,000 square feet of square feet of availability. And prospects on 1.2 million 10% of this activity is in advanced we executed 2 million square feet for the year with tenant retention of 78% and cash rent spreads of 1.1%.
For 2026, we have, again, set a vacancy leasing target of 400,000 square feet, which represents one-third of the total available inventory at the beginning of the year.
Our leasing activity ratio is 74%, which equates to 870,000 square feet of prospects on 1.2 million square feet of availability, and 10% of this activity is in advanced negotiations.
Speaker #2: our defense IT portfolio, we executed And 1.9 million square feet for the year with tenant retention of 79% and cash rent spreads up 2.7%.
Britt Snider: In our defense IT portfolio, we executed 1.9 million sq ft for the year, with tenant retention of 79% and cash rent spreads up 2.7%. The government had an administrative delay in processing lease renewals that were expected in Q4, which included 700,000 sq ft of secure full building leases in San Antonio. This delay negatively impacted our tenant retention and cash rent spreads relative to our guidance. And to quantify the impact of these delayed renewals, tenant retention would have been 84% or over 600 basis points higher, and cash rent spreads on renewals would have been 2.4% or over 130 basis points higher. Our 2026 guidance assumes a midpoint for tenant retention of 80% and cash rent spreads up 2% at the midpoint.
Britt Snider: In our defense IT portfolio, we executed 1.9 million sq ft for the year, with tenant retention of 79% and cash rent spreads up 2.7%. The government had an administrative delay in processing lease renewals that were expected in Q4, which included 700,000 sq ft of secure full building leases in San Antonio. This delay negatively impacted our tenant retention and cash rent spreads relative to our guidance. And to quantify the impact of these delayed renewals, tenant retention would have been 84% or over 600 basis points higher, and cash rent spreads on renewals would have been 2.4% or over 130 basis points higher. Our 2026 guidance assumes a midpoint for tenant retention of 80% and cash rent spreads up 2% at the midpoint.
Turning to renewal leasing, we executed 2 million square feet for the year with tenant retention of 78% and cash rent spreads of 1.1%.
Speaker #2: The government had an administrative delay in processing lease renewals that were expected in the fourth quarter which included 700,000 square feet of secure full building leases in San Antonio.
In our defense IT portfolio, we executed 1.9 million square feet for the year, with tenant retention of 79% and cash rent spreads up 2.7%.
Speaker #2: This delay negatively impacted our tenant retention and negotiations. Turning to renewal leasing, delayed renewals, tenant retention would have been 84% or over 600 basis points higher.
The government had an administrative delay in processing lease renewals that were expected in the fourth quarter, which included 700,000 square feet of secure, full-building leases in San Antonio.
Speaker #2: And cash rent spreads on renewals would have been 2.4% or over 130 basis points higher. Our 2026 retention of 80% and cash rent spreads up 2% at the midpoint.
Speaker #2: And cash rent spreads on renewals would have been 2.4% or over 130 basis points higher. Our 2026 retention of 80% and cash guidance assumes a midpoint for tenant government leases expiring virtually all of which we expect to renew.
This delay negatively impacted our tenant retention and cash rent spreads relative to our guidance. To quantify the impact of these delayed renewals, tenant retention would have been 84%, or over 600 basis points higher, and cash rent spreads on renewals would have been 2.4%, or over 130 basis points higher.
Britt Snider: In 2026, we have 2.2 million sq ft of government leases expiring, virtually all of which we expect to renew. Nearly 1 million sq ft of this total is at our campus in San Antonio, which consists entirely of secure full building leases with the government that expire in Q1 2026. This group of leases accounts for 1/3 of the expiring square feet in our defense IT portfolio this year and over 40% of the expiring annualized rental revenue. We expect 100% retention on this nearly 1 million sq ft, as lease economics have already been finalized. And again, we're just waiting for the government to finish processing the paperwork. We believe this process will be completed, and this batch of leases will be renewed in Q1.
Britt Snider: In 2026, we have 2.2 million sq ft of government leases expiring, virtually all of which we expect to renew. Nearly 1 million sq ft of this total is at our campus in San Antonio, which consists entirely of secure full building leases with the government that expire in Q1 2026. This group of leases accounts for 1/3 of the expiring square feet in our defense IT portfolio this year and over 40% of the expiring annualized rental revenue. We expect 100% retention on this nearly 1 million sq ft, as lease economics have already been finalized. And again, we're just waiting for the government to finish processing the paperwork. We believe this process will be completed, and this batch of leases will be renewed in Q1.
Speaker #2: Nearly 1 million square feet of this total is at our campus in San Antonio which consists entirely of secure full building leases with the 2026.
Our 2026 guidance assumes a midpoint for tenant retention of 80%, and cash rent spreads up 2% at the midpoint.
In 2026, we have 2.2 million square feet of government leases expiring, virtually all of which we expect to renew.
Speaker #2: leases accounts for one third of the expiring square feet in our defense IT portfolio this year and This group of over 40% of the expiring annualized rental revenue.
Nearly 1 million square feet of this total is at our campus in San Antonio, which consists entirely of secure, full-building leases with the government that expire in the first quarter of 2026.
Speaker #2: We expect 100% retention on this nearly 1 million square feet as lease And again, we're just waiting for the government to finish batch of leases will be renewed in the first quarter.
This group of leases accounts for one-third of the expiring square feet in our Defense IT portfolio this year, and over 40% of the expiring annualized rental revenue.
Speaker #2: believe this process will be completed and this processing the paperwork. We Turning to our large lease retention on slide 20 of our flip book, we provide an update on leases in excess of 50,000 mid-2024 and year-end 2026.
We expect 100% retention on this nearly 1 million square feet as lease. Economics have already been finalized. And again, we're just waiting for the government to finish processing the paperwork.
We believe this process will be completed, and this batch of leases will be renewed in the first quarter.
Britt Snider: Turning to our large lease retention on slide 20 of our flip book, we provide an update on leases in excess of 50,000 sq ft that expire between mid-2024 and year-end 2026. Overall, we now expect tenant retention of over 95% on the entire 4 million sq ft of these large leases, of these large lease renewals, as we expect 100% retention on the remaining 12 leases, totaling 1.9 million sq ft, all of which are with the US government and half of which are at our campus in San Antonio. Additionally, since we started providing this disclosure 3.5 years ago, we have renewed over 4 million sq ft of large leases with a retention rate of over 97%. Moving on to development.
Britt Snider: Turning to our large lease retention on slide 20 of our flip book, we provide an update on leases in excess of 50,000 sq ft that expire between mid-2024 and year-end 2026. Overall, we now expect tenant retention of over 95% on the entire 4 million sq ft of these large leases, of these large lease renewals, as we expect 100% retention on the remaining 12 leases, totaling 1.9 million sq ft, all of which are with the US government and half of which are at our campus in San Antonio. Additionally, since we started providing this disclosure 3.5 years ago, we have renewed over 4 million sq ft of large leases with a retention rate of over 97%. Moving on to development.
Speaker #2: Overall, we now square feet that expired between expect tenant retention of over 95% on the entire 4 million economics have already been finalized. square feet of these large lease renewals.
Turning to our large lease retention on slide 20 of our flip book, we provide an update on leases in excess of 50,000 square feet that expire between mid-2024 and year-end 2026.
Speaker #2: As we expect 100% retention on the remaining 12 leases totaling 1.9 million square feet, all of which are with the US government and half of which are at our campus in San Antonio.
Overall, we now expect tenant retention of over 95% on the entire 4 million square feet of these large lease renewals.
As we expect 100% retention on the remaining 12 leases, totaling 1.9 million square feet.
Speaker #2: feet of large leases with a retention rate of ago, we have renewed over 4 million square providing this disclosure three and a half years Additionally, since we started over development, we commenced three developments over the past few months and our active development pipeline totals nearly 450 million dollars of capital commitment.
All of which are with the U.S. government, and half of which are at our campus in San Antonio.
Additionally, since we started providing this disclosure 3 and a half years ago, we have renewed over 4 million square feet of large leases, with a retention rate of over 97%.
Britt Snider: We commenced three developments over the past few months, and our active development pipeline totals nearly $450 million of capital commitment. The active pipeline totals 880,000 sq ft and is 86% pre-leased. Five of our six development projects are 100% pre-leased now that we've executed the full building lease at NBP 400. The only development with space available is our 8,500 Advanced Gateway project in Huntsville, which was just constructed as an inventory building in one of our highest occupied parks. We commenced construction on 8,500 Advanced Gateway a year ago, and the roughly 400,000 sq ft of prospects on the remaining 125,000 sq ft of availability speaks to the strength of tenant demand at Redstone Gateway.
Britt Snider: We commenced three developments over the past few months, and our active development pipeline totals nearly $450 million of capital commitment. The active pipeline totals 880,000 sq ft and is 86% pre-leased. Five of our six development projects are 100% pre-leased now that we've executed the full building lease at NBP 400. The only development with space available is our 8,500 Advanced Gateway project in Huntsville, which was just constructed as an inventory building in one of our highest occupied parks. We commenced construction on 8,500 Advanced Gateway a year ago, and the roughly 400,000 sq ft of prospects on the remaining 125,000 sq ft of availability speaks to the strength of tenant demand at Redstone Gateway.
Speaker #2: The active pipeline totals 880,000 square feet and is 86% pre-leased. Five of our six development projects are 100% pre-leased now that we've executed the full building lease at MVP 400.
The past few months and our active development pipeline total nearly $450 million of capital commitment.
Speaker #2: The only development with space available is our 8,500 Advanced Gateway project in Huntsville. Which was just highest occupied parks. We commenced construction on and the roughly 400,000 square feet of 8,500 Advanced Gateway a year ago prospects on the remaining 125,000 square feet of Redstone Gateway.
The active pipeline totals 880,000 square feet and is 86% pre-leased.
Five of our six development projects are 100% pre-leased, now that we've executed the full building lease at MBP 400.
The only development with space available is our 8,500 Advanced Gateway project in Huntsville.
Which was just constructed as an inventory building and one of our highest occupied parks.
Speaker #2: The project is currently 20% pre-leased as availability speaks to the strength of tenant demand at we signed a $32,000 square foot lease in tenant whose technology is central to the the fourth quarter with a defense IT Golden Dome initiative.
We commenced construction on 8500 Advanced Gateway a year ago and the roughly 400,000 square feet of prospects. On the remaining 125,000 square feet of availability.
Britt Snider: The project is currently 20% pre-leased as we signed a 32,000sq ft lease in Q4 with a Defense IT tenant, whose technology is central to the Golden Dome initiative. We are in advanced negotiations on a 32,000sq ft lease with another defense contractor, which is also supporting Golden Dome and has been a tenant of ours for over 20 years. This lease will increase the pre-lease rate at 8500 Advanced Gateway to 40%. We are already progressing, planning, and design for our next inventory building at Redstone Gateway. Once 8500 Advanced Gateway approaches 60% pre-leased, we expect to commence the next inventory development.
Britt Snider: The project is currently 20% pre-leased as we signed a 32,000sq ft lease in Q4 with a Defense IT tenant, whose technology is central to the Golden Dome initiative. We are in advanced negotiations on a 32,000sq ft lease with another defense contractor, which is also supporting Golden Dome and has been a tenant of ours for over 20 years. This lease will increase the pre-lease rate at 8500 Advanced Gateway to 40%. We are already progressing, planning, and design for our next inventory building at Redstone Gateway. Once 8500 Advanced Gateway approaches 60% pre-leased, we expect to commence the next inventory development.
Speaks to the strength of tenant demand at Redstone Gateway.
Speaker #2: We are in advanced negotiations on a $32,000 square foot lease with another defense contractor which is also supporting Golden Dome and has been a years.
The project is currently 20% pre-leased. As we signed a 32,000-square-foot lease in the fourth quarter with a defense IT tenant, whose technology is central to the Golden Dome initiative.
Speaker #2: This lease will increase the pre-lease rate at 8,500 Advanced Gateway to 40%. We are already progressing planning and design for our next inventory building at Redstone Gateway and once 8,500 Advanced Gateway approaches 60% pre-leased, we expect to commence the next inventory development.
We are in advanced negotiations on a 32,000-square-foot lease with another defense contractor, which is also supporting Golden Dome.
And has been our tenant for over 20 years.
This lease will increase the pre-lease rate at 8,500 Advanced Gateway to 40%.
Speaker #2: And finally, at 8,100 Rideout Road in Huntsville, which is an inventory we are in advanced negotiations with one of our top defense IT tenants to expand into the remaining 27,000 square feet of availability.
Britt Snider: And finally, at 8100 Rideout Road in Huntsville, which is an inventory development we delivered last year, we are in advanced negotiations with one of our top defense IT tenants to expand into the remaining 27,000sq ft of availability. Once executed, the only space available in our 2.4 millionsq ft Redstone Gateway operating portfolio will be a single 10,000sq ft suite, and we are in advanced negotiations with a defense contractor on that space. Our development leasing pipeline, which we define as opportunities we consider 50% likely to win or better within two years or less, currently stands at nearly 1 millionsq ft. Recall, the pipeline stood at 1.3 millionsq ft at the end of last quarter.
Britt Snider: And finally, at 8100 Rideout Road in Huntsville, which is an inventory development we delivered last year, we are in advanced negotiations with one of our top defense IT tenants to expand into the remaining 27,000sq ft of availability. Once executed, the only space available in our 2.4 millionsq ft Redstone Gateway operating portfolio will be a single 10,000sq ft suite, and we are in advanced negotiations with a defense contractor on that space. Our development leasing pipeline, which we define as opportunities we consider 50% likely to win or better within two years or less, currently stands at nearly 1 millionsq ft. Recall, the pipeline stood at 1.3 millionsq ft at the end of last quarter.
We're already progressing planning and design for our next inventory building at Redstone Gateway, and once 8,500, Advanced Gateway, approaches 60% pre-leased, we expect to commence the next inventory development.
Speaker #2: Once executed, the only space available in our 2.4 million square foot Redstone Gateway operating portfolio will be a single 10,000 square foot suite and we are in advanced negotiations with a defense contractor on that space.
And finally, at 8100 Write Out Road in Huntsville, which is an inventory development we delivered last year. We are in advanced negotiations with one of our top defense IT tenants to expand into the remaining 27,000 square feet of availability.
Speaker #2: pipeline, which we define as opportunities we consider 50% likely to win or Our development leasing better within two years or less, currently stands at nearly 1 million square feet.
Once executed, the only space available in our 2.4 million square foot Redstone Gateway operating portfolio will be a single 10,000 square foot suite, and we are in advanced negotiations with a defense contractor on that space.
Speaker #2: Recall, the pipeline stood at 1.3 million square feet at the end of last quarter. Since then, we achieved over leasing and we added another 300,000 650,000 square feet of investment prospects.
Our development leasing pipeline, which we define as opportunities we consider 50% likely to win or better within two years or less, currently stands at nearly 1 million square feet.
Britt Snider: Since then, we achieved over 650,000 sq ft of investment leasing, and we added another 300,000 sq ft of high-probability prospects. Beyond that, we are tracking an additional 1,000,000 sq ft of potential development opportunities. This activity should allow us to maintain a solid development pipeline in the near and medium term. And with that, I'll hand it over to Anthony.
Britt Snider: Since then, we achieved over 650,000 sq ft of investment leasing, and we added another 300,000 sq ft of high-probability prospects. Beyond that, we are tracking an additional 1,000,000 sq ft of potential development opportunities. This activity should allow us to maintain a solid development pipeline in the near and medium term. And with that, I'll hand it over to Anthony.
Recall, the pipeline stood at 1.3 million square feet at the end of last quarter.
Speaker #2: Beyond that, we are tracking an square feet of high probability opportunities. This activity should pipeline in the near and medium allow us to maintain a solid development term.
Since then, we achieved over 650,000 square feet of investment leasing, and we added another 300,000 square feet of high-probability prospects.
Speaker #2: you, Brett. We reported 2025 FFO per share of And with that, I'll hand it over to Anthony. 2 cents above the midpoint of our revised Thank guidance and 6 cents above our initial guidance.
Beyond that, we are tracking an additional 1 million square feet of potential development opportunities.
Anthony Mifsud: Thank you, Britt. We reported 2025 FFO per share of $2.72, which was $0.02 above the midpoint of our revised guidance and $0.06 above our initial guidance. The year benefited from earlier than expected leases commencements and success in flipping expected non-renewals to renewals, lower than anticipated net operating expenses, including non-recurring real estate tax refunds, the Stonegate acquisition in late October, additional interest and other income on investments, and lower net interest expense from the timing of development funding, which was partially offset by higher interest expense from our October bond offering.
Anthony Mifsud: Thank you, Britt. We reported 2025 FFO per share of $2.72, which was $0.02 above the midpoint of our revised guidance and $0.06 above our initial guidance. The year benefited from earlier than expected leases commencements and success in flipping expected non-renewals to renewals, lower than anticipated net operating expenses, including non-recurring real estate tax refunds, the Stonegate acquisition in late October, additional interest and other income on investments, and lower net interest expense from the timing of development funding, which was partially offset by higher interest expense from our October bond offering.
Speaker #2: The year benefited from earlier-than-expected leases commencements and success in flipping expected non-renewals to renewals. Lower-than-anticipated net operating expenses including non-recurring real estate tax refunds.
This activity should allow us to maintain a solid development pipeline in the near and medium term with that. I'll hand it over to Anthony. Thank you, bruh. We reported 2025 FFO per share of $2.72, which was 2 cents above the midpoint of our revised guidance and 6 cents above our initial guidance.
Speaker #2: The Stone Gate acquisition and late October additional interest and other income on investments and lower net interest expense from the timing of development funding, which was partially offset by higher interest expense from our October bond offering.
The year benefited from earlier-than-expected lease commencements and success in Flippin; expected non-renewals to renewals were lower than anticipated. Net operating expenses, including non-recurring real estate tax refunds, the Stone Gate acquisition, and late October additional interest and other income on investment.
Speaker #2: 2025, same property cash NOI increased 4.1%, which was well During of 2.75% and was driven by a 40 basis point increase in same property average occupancy and operating expense savings, which also positively impacted FFO per share.
Anthony Mifsud: During 2025, same property Cash NOI increased 4.1%, which was well above the midpoint of our original guidance of 2.75%, and was driven by a 40 basis point increase in same property average occupancy and operating expense savings, which also positively impacted FFO per share. Same property occupancy ended the year at 94.2%, which is right in line with the midpoint of updated guidance and 20 basis points higher than initial guidance. The 10 basis point decline over the quarter was driven by a few previously discussed non-renewals in the Fort Meade BW Corridor, each of which were under 30,000sq ft. In October, we issued $400 million of 5-year unsecured notes at a yield to maturity of 4.6%.
Anthony Mifsud: During 2025, same property Cash NOI increased 4.1%, which was well above the midpoint of our original guidance of 2.75%, and was driven by a 40 basis point increase in same property average occupancy and operating expense savings, which also positively impacted FFO per share. Same property occupancy ended the year at 94.2%, which is right in line with the midpoint of updated guidance and 20 basis points higher than initial guidance. The 10 basis point decline over the quarter was driven by a few previously discussed non-renewals in the Fort Meade BW Corridor, each of which were under 30,000sq ft. In October, we issued $400 million of 5-year unsecured notes at a yield to maturity of 4.6%.
And lower net interest expense from the timing of development funding, which was partially offset by higher interest expense from our October bond offering.
Speaker #2: Same property occupancy ended the year at 94.2%, which is right in line with the midpoint of updated guidance and 20 basis points higher than initial guidance.
During 2025, same property cash NOI increased 4.1%, which was well above the midpoint of our original guidance of 2.75% and was driven by a 40 basis point increase in same property average occupancy and operating expense savings, which also positively impacted FFO per share.
Speaker #2: The 10 basis point decline over the quarter was driven by a few previously discussed non-renewals in the Fort Meade BW corridor, each of which were under $30,000 square feet.
Same property occupancy ended the year at 94.2%.
Which is right in line with the midpoint of updated guidance and 20 basis points higher than initial guidance.
Speaker #2: In October, we issued $400 million of five-year unsecured notes at a yield to maturity of 4.6%. The bonds priced at a credit currently trading at spreads that are tighter than our higher-rated office peers.
The 10 basis point decline over the quarter was driven by a few previously discussed non-renewals in the Fort Meade BW Corridor, each of which were under 30,000 square feet.
Anthony Mifsud: The bonds priced at a credit spread of 95 basis points and are currently trading at spreads that are tighter than our higher-rated office peers. The proceeds from the offering will be used to repay our $400 million, 2.25% bond, which impacts 2026 FFO per share, based on the higher interest rate between the new bond and the maturing bond. Our decision in September to pre-fund this bond maturity was driven by our conservative and risk-averse nature and the tight execution window that exists for any issuer early in the Q1. Our decision not only eliminated any execution risk, but also removed any underlying treasury rate risk.
Anthony Mifsud: The bonds priced at a credit spread of 95 basis points and are currently trading at spreads that are tighter than our higher-rated office peers. The proceeds from the offering will be used to repay our $400 million, 2.25% bond, which impacts 2026 FFO per share, based on the higher interest rate between the new bond and the maturing bond. Our decision in September to pre-fund this bond maturity was driven by our conservative and risk-averse nature and the tight execution window that exists for any issuer early in the Q1. Our decision not only eliminated any execution risk, but also removed any underlying treasury rate risk.
In October, we issued $400 million of 5-year unsecured notes at a yield to maturity of 4.6%.
Speaker #2: The proceeds from the offering will be used to repay our bond, which impacts 2026 FFO per share based on the higher interest rate between the new bond and spread of 95 basis points and are the maturing bond.
The bonds priced at a credit spread of 95 basis points and are currently trading at spreads that are tighter than our higher-rated office peers.
Speaker #2: Our decision in September to pre-fund this the tight execution window that exists for conservative and risk-averse nature and any issuer early in the first quarter.
The proceeds from the offering will be used to repay our 400 million dollar 2 and a quarter percent bond which impacts 2026 ffo per share, based on the higher interest rate between the new Bond and the maturing Bond.
Speaker #2: Our decision not only eliminated any execution risk, but also removed any underlying treasury rate risk. The five-year treasury at the time of our offering was deal priced, the five-year has traded at or above that rate in 90% of the trading days open for issuance.
Our decision in September to pre-fund this bond maturity was driven by our conservative and risk-averse nature and the tight execution window that exists for any issuer early in the first quarter.
Anthony Mifsud: The five-year treasury at the time of our offering was 3.67%, and since our deal priced, the five-year has traded at or above that rate in 90% of the trading days open for issuance. With respect to guidance, we expect another solid year of performance in 2026. We are establishing FFO per share at a range of $2.71 to 2.79, implying 1.1% growth at the midpoint. The $2.75 per share midpoint takes into account a 17-cent increase in NOI from increases, rent increases and lease commencements in the operating portfolio, partially offset by non-recurring real estate tax refunds, along with increases in NOI from developments and one acquisition placed into service during 2025 and 2026.
Anthony Mifsud: The five-year treasury at the time of our offering was 3.67%, and since our deal priced, the five-year has traded at or above that rate in 90% of the trading days open for issuance. With respect to guidance, we expect another solid year of performance in 2026. We are establishing FFO per share at a range of $2.71 to 2.79, implying 1.1% growth at the midpoint. The $2.75 per share midpoint takes into account a 17-cent increase in NOI from increases, rent increases and lease commencements in the operating portfolio, partially offset by non-recurring real estate tax refunds, along with increases in NOI from developments and one acquisition placed into service during 2025 and 2026.
Our decision not only eliminated any execution risk, but also removed any underlying treasury rate risk.
Speaker #2: With 3.67%, and since our respect to guidance, we expect bond maturity was driven by our another solid year of performance in 2026. We are establishing FFO per share at a range of $2.71 to $2.79, implying 1.1% growth at the midpoint.
The 5-year Treasury at the time of our offering was 3.67%, and since our deal priced, the 5-year has traded at or above that rate in 90% of the trading days open for issuance.
With respect to guidance, we expect another solid year of performance in 2026.
Speaker #2: The $2.75 per share midpoint takes into account a 17-cent increase rent increases and lease commencements in the operating portfolio, in NOI from increases partially offset by non-recurring real estate tax refunds.
We have to overshare at a range of $2.71 to $2.79, implying 1.1% growth at the midpoint,
Speaker #2: increases in NOI from developments and Along with one acquisition placed into service during 2025 and 2026. This is partially financing costs, one-and-a-half cents from the delivery of NBP 400 into the 3 cents from the net effect of lower interest and other income on investments and higher G&A.
Anthony Mifsud: This is partially offset by $0.09 from higher financing costs, $0.015 from the delivery of NBP 400 into the operational portfolio, and $0.03 from the net effect of lower interest and other income on investments and higher GNA. Same property cash NOI is projected to increase 2.5% at the midpoint. This guidance is impacted by the non-recurring real estate tax benefits in 2025, which reduced the 2026 growth rate by 100 basis points. We expect same property occupancy to end the year between 93.5% and 94.5% and be relatively flat throughout the year.
Anthony Mifsud: This is partially offset by $0.09 from higher financing costs, $0.015 from the delivery of NBP 400 into the operational portfolio, and $0.03 from the net effect of lower interest and other income on investments and higher GNA. Same property cash NOI is projected to increase 2.5% at the midpoint. This guidance is impacted by the non-recurring real estate tax benefits in 2025, which reduced the 2026 growth rate by 100 basis points. We expect same property occupancy to end the year between 93.5% and 94.5% and be relatively flat throughout the year.
Speaker #2: operational portfolio, and property cash NOI is projected to increase Same two-and-a-half percent at the non-recurring real estate tax benefits in 2025, which reduce the midpoint.
The $2.75 per share midpoint takes into account a 17% increase in NOI from rent increases and lease commencements in the operating portfolio, partially offset by non-recurring real estate tax refunds. This is along with increases in NOI from developments and one acquisition placed into service during 2025 and 2026.
This is partially offset by 9 cents from higher financing costs, 1 and a half cents from the delivery of nbp 400 into the operational portfolio and 3 cents from the net effect of lower interest in other income on investments and higher GNA.
Same property cash NOI is projected to increase 2.5% at the midpoint.
Speaker #2: points. We expect same property occupancy and 94-and-a-half percent and be relatively flat throughout the This guidance is impacted by the year. Regarding uses of capital in 2026, we expect to spend $200 to $250 million on active and future projects and to commit $225 to $275 million of capital to new investments.
This guidance is impacted by the non-recurring real estate tax benefits in 2025, which reduced the 2026 growth rate by 100 basis points.
Anthony Mifsud: Regarding uses of capital in 2026, we expect to spend $200 to 250 million on active and future projects, and to commit $225 to 275 million of capital to new investments. We take a conservative approach to our AFFO payout ratio, which has averaged roughly 60% over the past 2 years and is forecasted to be under 65% in 2026. At this level, the portfolio continues to generate sufficient cash to fund the equity component of our anticipated investments on a leverage neutral basis. Finally, I'd like to take a moment to discuss the impact of placing our development, NBP 400, into service this year and our overall approach to capitalized costs as it relates to development.
Anthony Mifsud: Regarding uses of capital in 2026, we expect to spend $200 to 250 million on active and future projects, and to commit $225 to 275 million of capital to new investments. We take a conservative approach to our AFFO payout ratio, which has averaged roughly 60% over the past 2 years and is forecasted to be under 65% in 2026. At this level, the portfolio continues to generate sufficient cash to fund the equity component of our anticipated investments on a leverage neutral basis. Finally, I'd like to take a moment to discuss the impact of placing our development, NBP 400, into service this year and our overall approach to capitalized costs as it relates to development.
We expect same property occupancy to end the year between 93 and a half and 94 and a half percent and be relatively flat throughout the year.
Speaker #2: We take a conservative to end the year between 93-and-a-half approach to our AFFO payout ratio, which has averaged roughly and is forecasted to be under 60% over the past two years 65% in 2026.
Regarding uses of capital in 2026, we expect to spend $200 to $250 million on active and future projects, and to commit $225 to $275 million of capital to new investments.
Speaker #2: At this level, the anticipated investments on a leveraged basis. Finally, I'd like to take a moment to discuss the impact of placing our development NBP 400 into service this year and our overall approach to capitalized costs as it relates to development.
We take a conservative approach to our AFFO payout ratio, which has averaged roughly 60% over the past two years and is forecasted to be under 65% in 2026.
At this level, the portfolio continues to generate sufficient cash to fund the equity component of our anticipated investments on a leverage-neutral basis.
Speaker #2: We will place NBP completion of the core and shell of the building. At that point, as our longstanding policy compels us, we will stop capitalizing interest in operating costs associated with the project.
Anthony Mifsud: We will place NBP 400 into service on April 1, which marks one year from the completion of the core and shell of the building. At that point, as our long-standing policy compels us, we will stop capitalizing interest and operating costs associated with the project. This results in a $0.015 impact to 2026 FFO per share, which is absorbed in our guidance. Our policy is to capitalize interest and operating expenses, the largest component of which is real estate taxes associated with properties undergoing development or redevelopment. We continue to capitalize these costs until a property becomes operational, which we define as the earlier of 90% occupancy or one year from substantial completion of the core and shell.
Anthony Mifsud: We will place NBP 400 into service on April 1, which marks one year from the completion of the core and shell of the building. At that point, as our long-standing policy compels us, we will stop capitalizing interest and operating costs associated with the project. This results in a $0.015 impact to 2026 FFO per share, which is absorbed in our guidance. Our policy is to capitalize interest and operating expenses, the largest component of which is real estate taxes associated with properties undergoing development or redevelopment. We continue to capitalize these costs until a property becomes operational, which we define as the earlier of 90% occupancy or one year from substantial completion of the core and shell.
Finally, I'd like to take a moment to discuss the impact of placing our development and BP400 into service this year, and our overall approach to capitalize costs as it relates to development.
We will place NBP 400 into service on April 1st, which marks one year from the completion of the core and shell of the building.
Speaker #2: This results in a one-and-a-half-cent impact to 2026 FFO per share, which is absorbed in our guidance. Our policy is to capitalize interest in operating expenses, the largest component of which is real estate taxes, associated with redevelopment.
At that point, as our long-standing policy compels us, we will stop capitalizing interest in operating costs associated with the project.
This results in a one-and-a-half cent impact to 2026 FFO per share, which is absorbed in our guidance.
Speaker #2: We continue to capitalize these costs until a property becomes 1st, which marks one year from the operational, which we define as the earlier of 90% occupancy or one year from shell.
Our policy is to capitalize interest and operating expenses, the largest component of which is real estate taxes associated with properties undergoing development or redevelopment.
Speaker #2: Historically, substantial completion of the core and we capitalize only a small fraction of our capitalized interest averaging roughly 5% of our gross interest over the past three years.
Anthony Mifsud: Historically, we capitalize only a small fraction of our overall interest expense, with capitalized interest averaging roughly 5% of our gross interest over the past 3 years. In 2026, we forecast we will capitalize less than 8% of our gross interest expense. While delivery of NBP 400 will temporarily reduce total portfolio occupancy by 60 basis points beginning in Q2, and FFO per share in Q2 and Q3, our guidance assumes the lease we just executed with a defense contractor will commence in Q4.
Anthony Mifsud: Historically, we capitalize only a small fraction of our overall interest expense, with capitalized interest averaging roughly 5% of our gross interest over the past 3 years. In 2026, we forecast we will capitalize less than 8% of our gross interest expense. While delivery of NBP 400 will temporarily reduce total portfolio occupancy by 60 basis points beginning in Q2, and FFO per share in Q2 and Q3, our guidance assumes the lease we just executed with a defense contractor will commence in Q4.
We continue to capitalize these costs until a property becomes operational, which we define as the earlier of 90% occupancy or one year from substantial completion of the core and shell.
Speaker #2: And in overall interest expense, with 2026, we forecast we will capitalize less than 8% of our gross interest expense. occupancy by 60 basis points beginning in the share in the second and third quarters, executed with a defense contractor will commence in the fourth quarter.
Historically, we capitalize only a small fraction of our overall interest expense, with capitalized interest averaging roughly 5% of our growth interest over the past three years.
And in 2026, we forecast we will capitalize less than 8% of our gross interest expense.
Speaker #2: capitalized costs related to development and redevelopment projects is a illustrative of our conservative approach to adhering to We believe our policy regarding GAAP standards and avoids which would deteriorate our expected yields.
Britt Snider: ... We believe our policy regarding capitalized costs related to development and redevelopment projects is illustrative of our conservative approach to adhering to GAAP standards and avoids accumulating excess basis in our projects, which would deteriorate our expected yields. With that, I'll turn the call back to Steve.
Anthony Mifsud: We believe our policy regarding capitalized costs related to development and redevelopment projects is illustrative of our conservative approach to adhering to GAAP standards and avoids accumulating excess basis in our projects, which would deteriorate our expected yields. With that, I'll turn the call back to Steve.
While the delivery of NBP for 100 will temporarily reduce total portfolio occupancy by 60 basis points, beginning in the second quarter, and FFO per share in the second and third quarters, our guidance assumes the lease we just executed with a defense contractor will commence in the fourth quarter.
Speaker #2: With that, I'll turn the call accumulating excess basis in our projects
Speaker #2: back to Steve.
We believe our policy regarding capitalized costs related to development and redevelopment projects is a clear example of our conservative approach to adhering to GAAP standards and avoids accumulating success fees.
Speaker #1: our key accomplishments and messages. 2025 was the year of outstanding achievements, delivering strong portfolio and all departments of the business. Resulting in FFO per share growth of 5.8% year over year, and representing our third consecutive dividend increase, resulting in a last three years.
Deteriorate, our expected yields.
Steve Budorick: Thanks. I'll close by summarizing our key accomplishments and messages. 2025 was a year of outstanding achievements, delivering strong performance across all segments of the portfolio and all departments of the business, resulting in FFO per share growth of 5.8% year over year, and representing our third consecutive dividend increase, resulting in a 10.9% increase over the last three years. For 2026, we expect this will be our eighth consecutive year of FFO per share growth. We again set a target for vacancy leasing at 400,000 square feet, which is an aggressive goal, given the limited amount of unleased space in our portfolio. We expect tenant retention will remain strong at 80%, and we expect to commit $250 million of capital to new investments, of which we've already committed $146 million.
Steve Budorick: Thanks. I'll close by summarizing our key accomplishments and messages. 2025 was a year of outstanding achievements, delivering strong performance across all segments of the portfolio and all departments of the business, resulting in FFO per share growth of 5.8% year over year, and representing our third consecutive dividend increase, resulting in a 10.9% increase over the last three years. For 2026, we expect this will be our eighth consecutive year of FFO per share growth. We again set a target for vacancy leasing at 400,000 square feet, which is an aggressive goal, given the limited amount of unleased space in our portfolio. We expect tenant retention will remain strong at 80%, and we expect to commit $250 million of capital to new investments, of which we've already committed $146 million.
With that, I'll turn the call back to Steve. Thanks.
I'll close by summarizing our key accomplishments and messages. 2025 was a year of outstanding achievements, delivering strong performance across all segments of the portfolio and all departments of the business, resulting in FFO per share growth of 5.8% year-over-year.
Speaker #1: For 2026, we Thanks. I'll close by summarizing expect this will be our eighth consecutive year of FFO per share
Speaker #1: growth. We again set a target for our guidance assumes the lease we just vacancy leasing at 400,000 square feet, which is an aggressive goal given space in our remain strong at commit 250 million dollars portfolio.
And representing our third consecutive dividend increase, resulting in a 10.9% increase over the last three years.
For 2026, we expect this will be our eighth consecutive year of FFO per share growth.
Speaker #1: 80%, and we expect to of capital to new investments of which we've already committed 146 million We expect tenant retention will dollars. Our liquidity remains very strong, and we expect to continue self-funding the equity component of our capital investments.
We again set a target for vacancy leasing at 400,000 square feet, which is an aggressive goal given the limited amount of Unleashed space in our portfolio.
We expect 10% will remain strong, and 80%.
Steve Budorick: Our liquidity remains very strong, and we expect to continue self-funding the equity component of our capital investments. We now anticipate compound annual FFO per share growth of nearly 5% between 2023 and 2026, and we're already off to a great start. We expect to deliver another strong year of results. Before I wrap up, I want to make a comment about the passing of my good friend and former colleague, Roger Waesche. Sadly, Roger passed away suddenly on 8 January. Much of the foundation that we have built on over the past decade is a result of the leadership and foresight of Roger Waesche. Roger worked for the company for over three decades, serving in a wide range of leadership roles, culminating with being the company's third Chief Executive Officer from 2011 and 2016.
Steve Budorick: Our liquidity remains very strong, and we expect to continue self-funding the equity component of our capital investments. We now anticipate compound annual FFO per share growth of nearly 5% between 2023 and 2026, and we're already off to a great start. We expect to deliver another strong year of results. Before I wrap up, I want to make a comment about the passing of my good friend and former colleague, Roger Waesche. Sadly, Roger passed away suddenly on 8 January. Much of the foundation that we have built on over the past decade is a result of the leadership and foresight of Roger Waesche. Roger worked for the company for over three decades, serving in a wide range of leadership roles, culminating with being the company's third Chief Executive Officer from 2011 and 2016.
And we expect to commit $250 million of capital to new investments, of which we've already committed $146 million.
Speaker #1: We now anticipate compound annual FFO per share growth of nearly 5% between 2023 and 2026, and we're already off to a great start. We expect to deliver another strong year of I wrap up, I want to make a results.
Our liquidity remains very strong.
And we expect to continue self-funding the equity component of our capital investments.
% between 2023 and 2026.
Speaker #1: comment about the passing of my good friend and former colleague, Roger Weishi. Sadly, Roger passed away suddenly on January 8th. on over the past Much of the foundation that we have built decade is a result of the leadership and foresight of Roger Weishi.
And we're already off to a great start. We expect to deliver another strong year of results.
Before I wrap up, I want to make a comment about the passing of my good friend and former colleague, Graduation.
Sadly, Roger passed away suddenly on January 8th.
Speaker #1: Roger worked for the company for over three decades, Before serving in a wide range of leadership roles, culminating with being officer from the company's third chief executive 2016.
Much of the foundation that we have built on over the past decade is a result of the leadership and foresight of Roger Wing.
Roger worked for the company for over three decades.
Speaker #1: We have no need 2011 and was. Because that enough. A loving husband and was more than father, a man of great faith and integrity, friend.
Serving in a wide range of leadership roles, culminating with being the company's third chief executive officer from 2011 to 2016.
Steve Budorick: We have no need to idolize him beyond what he was, because that was more than enough. A loving husband and father, a man of great faith and integrity, a fierce and loyal friend, a man of great intelligence and kindness, and a colleague and leader who cared deeply for all those he encountered. Those of us who had the privilege to work with and alongside Roger are better off because of it. He is greatly missed. Operator, with that, please open up the call for questions.
Steve Budorick: We have no need to idolize him beyond what he was, because that was more than enough. A loving husband and father, a man of great faith and integrity, a fierce and loyal friend, a man of great intelligence and kindness, and a colleague and leader who cared deeply for all those he encountered. Those of us who had the privilege to work with and alongside Roger are better off because of it. He is greatly missed. Operator, with that, please open up the call for questions.
We have no need to idolize him beyond what he was.
Speaker #1: a fierce and loyal and kindness, and a colleague and leader who cared deeply for all those he encountered. Those of us who had the privilege to work with and alongside Roger are better it.
Because that was more than enough.
I love you and husband and father.
The man of great faith and integrity.
The first and oil friend.
A man of great intelligence and kindness.
Speaker #1: He is greatly off because of A man of great intelligence please open up the call for
And a colleague and leader who cared deeply for all those he encountered.
Speaker #1: missed. Operator, with that,
Speaker #2: Thank you, Mr.
Those of us who have the privilege to work with and alongside Roger are better off because of it.
Speaker #2: Budorick. Ladies and gentlemen, if you do have a question questions. at this time, please press star has been answered and you'd like to remove yourself from the Q&A, press star 11 again.
He is greatly missed.
Operator: Thank you, Mr. Budorick. Ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, press star one one again. Our first question comes from the line of Seth Berky from Citi. Your question, please.
Operator: Thank you, Mr. Budorick. Ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, press star one one again. Our first question comes from the line of Seth Berky from Citi. Your question, please.
Operator, with that, please open up the call for questions.
Speaker #2: Our first question comes from the line of Seth Bergey y from Citi. Your question, please.
Speaker #3: Hey, thanks for taking my question. I guess just starting off with the development pipeline, are you starting to see opportunities from Golden Dome and the new kind of defense or are projects kind of related to that still on the
Seth Bergey: Hey, thanks for taking my question. I guess just starting off with the development pipeline, are you starting to see opportunities from Golden Dome and, you know, the new kind of defense appropriations kind of trickle into that pipeline visibility? Or, you know, is the-- are projects kind of related to that still on the come?
Seth Bergey: Hey, thanks for taking my question. I guess just starting off with the development pipeline, are you starting to see opportunities from Golden Dome and, you know, the new kind of defense appropriations kind of trickle into that pipeline visibility? Or, you know, is the-- are projects kind of related to that still on the come?
Thank you, Mr. Beador. Ladies and gentlemen, if you do have a question at this time, please press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, press star 1-1 again. Our first question comes from the line of Seth Bergie from Citi. Your question, please.
Speaker #3: come? I think the answer
Steve Budorick: I think the answer is both, Seth. Brit talked about the big backlog of prospects we have for our 8500 in the 400,000sq ft range. Many, if not most, of those pertain to Golden Dome, and I believe they represent, you know, kind of initial footprints, early moves to get into the action. And I think subsequent down the road, you'll see larger requirements as awards are made and the contractors ramp up to perform the actual creation of the Golden Dome.
Steve Budorick: I think the answer is both, Seth. Brit talked about the big backlog of prospects we have for our 8500 in the 400,000sq ft range. Many, if not most, of those pertain to Golden Dome, and I believe they represent, you know, kind of initial footprints, early moves to get into the action. And I think subsequent down the road, you'll see larger requirements as awards are made and the contractors ramp up to perform the actual creation of the Golden Dome.
Hey, thanks for taking my question. I guess, just starting off with the development pipeline, are you starting to see opportunities from Golden Dome? And, you know, the new kind of defense appropriations kind of trickle into that pipeline visibility or, you know, are projects kind of related to that, so, on the come,
Speaker #1: they represent kind of initial footprints early moves to get into the action. And I think subsequent down the road you'll see larger requirements as awards are
Uh, I think the answer is both. Uh, Brent talked about the big backlog of, uh, prospects we have for our G8500 in the 400,000 square foot range.
Speaker #1: made and the contractors ramp up to appropriations kind of trickle into that perform the actual creation of
Speaker #1: the Golden Dome.
Speaker #4: I'll just add a
Speaker #4: couple of things to that too. I mean, they're really trying to move that process forward from the contracting standpoint. And I mean, the missile defense agencies, shield contracts, could afford DOD with quite a bit more flexibility to process orders more quickly.
Many, if not most, of those pertain to the Golden Dome. And I believe they represent, um, you know, kind of initial footprints—early moves to get into the action. Uh, and I think, subsequent, down the road you'll see larger requirements as awards are made and the contractors ramp up to perform, uh, the actual create.
Britt Snider: I'll just add a couple of things to that, too. I mean, they're really trying to move that process forward from a contracting standpoint. I mean, the Missile Defense Agency's shield contract could afford DoD with quite a bit more flexibility to process orders more quickly. And then also, they're looking to fast track, especially some of the space-based interceptor contractors, through OTAs or other transactional authority. So we're seeing it not just through the tours, but also how they're setting up for these contracts to be awarded. So, expect some velocity this year.
Britt Snider: I'll just add a couple of things to that, too. I mean, they're really trying to move that process forward from a contracting standpoint. I mean, the Missile Defense Agency's shield contract could afford DoD with quite a bit more flexibility to process orders more quickly. And then also, they're looking to fast track, especially some of the space-based interceptor contractors, through OTAs or other transactional authority. So we're seeing it not just through the tours, but also how they're setting up for these contracts to be awarded. So, expect some velocity this year.
Of the golden dome. I'll just add a couple things to that too. I mean, they're really trying to move that process forward from the contracting standpoint.
Speaker #4: And then especially some of the space-based interceptor contractors through OTAs or other transactional authority. So we actually were seeing it not just through the tours, but also how they're setting up for these contracts to be awarded.
Speaker #4: also they're looking to fast track,
And I mean, the Missile Defense Agency's shield contracts could afford DOD with quite a bit more flexibility to process orders more quickly, and then also they're looking to Fastrac.
Speaker #4: So the 20% that would not be
The space-based Interceptor contractors through—um, OTAs, or Other Transactional Authority.
Speaker #3: Great. And then just a second one assumptions around tenant retention. 80%
So, actually, we were saying it not just through the tours, but also how they're setting up for these contracts to be awarded. So, expect some velocity this year.
Seth Bergey: Great. And then just a second one on kind of the leasing assumptions around tenant retention, you know, 80% at the midpoint. I guess, kind of for the 20% that, you know, would not be retained, you know, given kind of the type of tenant that you have, where are those tenants going? Is there like a cited reason for move-out, or could that be conservative, just kind of given where your retention has been the past couple of years?
Seth Bergey: Great. And then just a second one on kind of the leasing assumptions around tenant retention, you know, 80% at the midpoint. I guess, kind of for the 20% that, you know, would not be retained, you know, given kind of the type of tenant that you have, where are those tenants going? Is there like a cited reason for move-out, or could that be conservative, just kind of given where your retention has been the past couple of years?
Speaker #3: retained, given kind of the type of tenant that on kind of the leasing of the midpoint, I guess, kind of for you have, where are those tenants going?
Speaker #3: Is there a cited reason for move-out, conservative, just kind of given where you're retention has been the past couple of
Speaker #1: our non-renewals from year to year,
Speaker #1: it's typically smaller Well, when you look at tenants that are vulnerable to a relocation because they need a years? little less space or a little more space.
Steve Budorick: Well, when you look at our non-renewals from year to year, it's typically smaller tenants that are vulnerable to a relocation because they need a little less space or a little more space. Probably 70% of non-renewals are just getting smaller tenants into the right size space. Some of those are non-defense tenants, and often it's our asset managers managing their inventory to accommodate the growth of larger defense tenants. So there's always a little friction in there. But I have to remind you, for a decade, we've delivered 80% retention. It's a pretty astounding number.
Steve Budorick: Well, when you look at our non-renewals from year to year, it's typically smaller tenants that are vulnerable to a relocation because they need a little less space or a little more space. Probably 70% of non-renewals are just getting smaller tenants into the right size space. Some of those are non-defense tenants, and often it's our asset managers managing their inventory to accommodate the growth of larger defense tenants. So there's always a little friction in there. But I have to remind you, for a decade, we've delivered 80% retention. It's a pretty astounding number.
Great. And then just a second one on the leasing assumptions around, um, tenant retention— you know, 80% at the midpoint. I guess kind of for the 20% that, you know, would not be retained— you know, given kind of the, the type of tenant that you have, where are those tenants going? Is there, is there like a cited, readout reason for move-out? Or could that be, um, conservative, just kind of given where your retention has been, the possible views?
well, when you look
Here, it's typical.
Speaker #1: Probably 70% of non-renewals are just getting smaller tenants into the right-sized space. Some of those are often, it's our asset managers managing their inventory to accommodate the growth of larger non-fence tenants.
Smaller tenants that are vulnerable to a relocation because they need a little less space, or a little more space. Probably 70% of non-renewals are just getting smaller tenants into the right size space.
Speaker #1: defense tenants. So there's always a And little friction in there. But I have to remind you, for a decade, we've delivered 80% retention. It's pretty astounding
Speaker #1: number.
Speaker #3: Yep,
Speaker #3: great.
Speaker #2: Thank your question, please.
Uh, some of those are, uh, non-defense tenants, and often it's our asset managers managing their inventory to accommodate the growth of larger defense tenants. So there's always a little friction in there, but I have to remind you, for a decade we've delivered 80% retention. It's a pretty astounding number.
Speaker #2: from the line of Blaine
Britt Snider: Yep, great. Thanks.
Seth Bergey: Yep, great. Thanks.
Yep. Great thanks.
Operator: Thank you. Our next question comes from the line of Blaine Heck from Wells Fargo. Your question, please.
Operator: Thank you. Our next question comes from the line of Blaine Heck from Wells Fargo. Your question, please.
Speaker #5: Great, thanks. Just following up on potential additional you.
Speaker #5: Great, thanks. Just following up on potential additional
Speaker #5: investments, specifically the roughly $100 And our next question comes investments earmarked for guidance Thanks. I guess, what do you think the mix between acquisitions and developments will be in that total?
Thank you. And our next question comes from the line of Blaine Heck.
Blaine Heck: Great, thanks. Just following up on potential additional investments, specifically the roughly $100 million of additional investments earmarked for guidance in 2026. I guess, what do you think the mix between acquisitions and developments will be in that total? And can you talk about the profile and yields that you're targeting on the acquisitions? And outside the activity in Huntsville you described, are there any additional near-term development projects that you're eyeing at the moment?
Blaine Heck: Great, thanks. Just following up on potential additional investments, specifically the roughly $100 million of additional investments earmarked for guidance in 2026. I guess, what do you think the mix between acquisitions and developments will be in that total? And can you talk about the profile and yields that you're targeting on the acquisitions? And outside the activity in Huntsville you described, are there any additional near-term development projects that you're eyeing at the moment?
Speaker #5: And can you Heck.
Speaker #5: talk about the profile and yields that From Wells Fargo, you're targeting on the acquisitions and outside the activity in Huntsville you described? Are there any million of additional additional near-term development projects that you're eyeing at the
Speaker #1: Well, we talked about our development pipeline having roughly a million that are smaller contractors for square feet. A big chunk of 8,500. But there are some builds through the opportunities.
Steve Budorick: Well, we talked about our development pipeline having roughly 1 million sq ft. A big chunk of that are smaller contractors for 8500, but there are some build-to-suit opportunities. Our yield targets haven't really changed for developments. We target, you know, 8.5 cash-on-cash yield at the commencement of the lease. Regarding acquisitions, when they occur, we consider them opportunistic. We don't have any built into our guidance, if you will. Typically, the yield on that acquisition has to exceed that which we can do on our development opportunities for us to make the move.
Steve Budorick: Well, we talked about our development pipeline having roughly 1 million sq ft. A big chunk of that are smaller contractors for 8500, but there are some build-to-suit opportunities. Our yield targets haven't really changed for developments. We target, you know, 8.5 cash-on-cash yield at the commencement of the lease. Regarding acquisitions, when they occur, we consider them opportunistic. We don't have any built into our guidance, if you will. Typically, the yield on that acquisition has to exceed that which we can do on our development opportunities for us to make the move.
Uh, great thanks. Um, just following up on potential additional Investments specifically the roughly hundred million dollars of additional Investments earmarked for guidance, in in 2026. I guess, what do you think the mix between Acquisitions and developments will be in that total and can you talk about the profile and yields that you're targeting on the Acquisitions? And outside the, the activity in Huntsville, you described are there, any additional near-term development projects that you're eyeing at the moment?
Speaker #1: Our developments. We target yield targets haven't really changed for 8.5 the commencement of the
Speaker #1: lease. Regarding cash-on-cash yield at acquisitions, when they moment? consider them will. And typically, the yield on that occur, we acquisition has to exceed that which we can do on our development opportunities for opportunistic.
Speaker #1: We don't have any built-in to Got it.
Speaker #1: our guidance, if you
Well, we talked about our uh, uh, our development pipeline having roughly a million square feet. A big chunk of that or smaller contractors for 8,500, but there are some build suit opportunities. Our yield targets haven't really changed for developments. We target, you know, 8 and 1/2, uh, cash cash on cash yield at the commencement of the lease, uh, regarding Acquisitions when they occur. Um,
Speaker #1: us to make the move.
Speaker #5: That's helpful color. And then just pretty steadfast in your messaging around not needing equity as a source of funds to support your investment initiatives.
We consider them, um, opportunistic. We don't have any built into our guidance, if you will. Uh, and typically, the yield on that acquisition has to exceed that which we can do on our development.
Uh, opportunities for us to make the move.
Blaine Heck: Got it. That's helpful color. And then just switching gears, you guys have been pretty steadfast in your messaging around not needing equity as a source of funds to support your investment initiatives. But, you know, given that the stock performance has been very strong thus far this year, I'm wondering whether you'd be more open to issuance at these levels. I guess, how equity would rank in your options for funding sources? And maybe alternatively, are there any assets that you would consider for dispositions if you were to add significant developments or acquisitions this year?
Blaine Heck: Got it. That's helpful color. And then just switching gears, you guys have been pretty steadfast in your messaging around not needing equity as a source of funds to support your investment initiatives. But, you know, given that the stock performance has been very strong thus far this year, I'm wondering whether you'd be more open to issuance at these levels. I guess, how equity would rank in your options for funding sources? And maybe alternatively, are there any assets that you would consider for dispositions if you were to add significant developments or acquisitions this year?
Speaker #5: strong thus far this year, I'm wondering whether these levels. I guess, how equity would rank in your options for funding sources? And maybe alternatively, are there any assets that you you'd be more open to issuance at But given would consider for dispositions if that the stock performance has been very you were to add significant developments year?
Speaker #1: yeah. It's nice to be in a position where we could consider issuing equity. But it's kind of a We have made very clear the ability to handle our expected last alternative.
Got it. That's helpful color. Um, and then just switching gears, you guys have been pretty steadfast in your messaging around not needing equity as a source of funds to support your investment initiatives. But, you know, given that the stock performance has been very strong thus far this year, I'm wondering whether you'd be more open to issuance at these levels. I guess, how equity would rank in your options for funding sources. And maybe, alternatively, are there any assets that you would consider for dispositions if you were to add significant developments or acquisitions this year?
Steve Budorick: Well, many layers to that question.
Steve Budorick: Well, many layers to that question.
Blaine Heck: Yeah.
Blaine Heck: Yeah.
Steve Budorick: It's nice to be in a position where we could consider issuing equity, but it's kind of a last alternative. We have, as we have made very clear, the ability to handle our expected development investments with the cash we generate internally. We actually have the ability to flex up in a given year or two with a modest increase in our debt ratio, which on a pre-lease basis, will only be temporary. Regarding dispositions, there are a few assets that we've clearly indicated we'd like to sell. They're all in the other segment, not defense. Timing of those sales is not so much dependent on our development, our pace of development opportunities, but more market conditions in the markets where they exist, where we can get an efficient sale and preserve shareholder value.
Steve Budorick: It's nice to be in a position where we could consider issuing equity, but it's kind of a last alternative. We have, as we have made very clear, the ability to handle our expected development investments with the cash we generate internally. We actually have the ability to flex up in a given year or two with a modest increase in our debt ratio, which on a pre-lease basis, will only be temporary. Regarding dispositions, there are a few assets that we've clearly indicated we'd like to sell. They're all in the other segment, not defense. Timing of those sales is not so much dependent on our development, our pace of development opportunities, but more market conditions in the markets where they exist, where we can get an efficient sale and preserve shareholder value.
Uh, well, there are many layers to that question. Yeah. Uh,
Speaker #1: investments with the cash development we generate internally. We actually have the ability to flex up in a given year or increase in our debt ratio, which on a pre-lease basis will only be two, with a modest Regarding dispositions there are a few assets that we've clearly indicated we'd like to sell.
Yeah, it's nice to be in a position where we could consider issuing equity, but, uh, it's kind of a last alternative. Uh, we have made very clear the ability to handle our expected development investments,
Speaker #1: They're all in the other segment, not temporary. defense. Timing of those sales is development, our pace of development opportunities, but more market conditions in the markets where they efficient sale and preserve shareholder not so much dependent on our
With the cash we generate internally, we actually have the ability—the ability to flex up in a given year or two with a modest increase in our debt ratio, which, on a pre-release basis, will only be temporary. Uh, regarding this position, there are a few assets that we've clearly indicated we'd like to sell. They're all in the Other segment—that Defense, uh, timing of those.
Sales, is that so much dependent on our development.
Speaker #1: value. So I exist, where we can get an
Speaker #5: guess, you don't feel like your back at all from taking on more projects? Is that correct? Okay. Great. Thank you,
Uh, our pace of development opportunities, but more market conditions in the markets where they exist, where we can get an efficient sale and preserve shareholder value.
Blaine Heck: So I guess, just asked another way, I guess, you don't feel like your hesitation to issue equity has held you back at all from taking on more projects. Is that correct?
Blaine Heck: So I guess, just asked another way, I guess, you don't feel like your hesitation to issue equity has held you back at all from taking on more projects. Is that correct?
Speaker #5: guys.
Speaker #1: If God forbid we get so
Steve Budorick: Not at all.
Steve Budorick: Not at all.
Speaker #1: have to issue equity, well, that'll be a happy day for our investors and we'll let everyone know. Well in much that we advance. But we don't expect that to happen.
Blaine Heck: Okay, great. Thank you, guys.
Blaine Heck: Okay, great. Thank you, guys.
So, I guess just to ask another way, you don't feel like your hesitation to issue equity has held you back at all from taking on more projects. Is that correct? Not at all.
Steve Budorick: If, God forbid, we get so much that, we have to issue equity, well, that'll be a happy day for our investors, and we'll let everyone know well in advance. But, we don't expect that to happen.
Steve Budorick: If, God forbid, we get so much that, we have to issue equity, well, that'll be a happy day for our investors, and we'll let everyone know well in advance. But, we don't expect that to happen.
Great. Thank you guys.
Speaker #3: Great. Thanks,
Speaker #3: Steve. Thank you.
Speaker #2: And our next question comes from the line of Anthony Paolone from JP Morgan. Your question, please.
Speaker #2: And our next question comes from the line of Anthony Paolone from JP Morgan. Your question, please.
Blaine Heck: Great. Thanks, Steve.
Blaine Heck: Great. Thanks, Steve.
It's God forbid we get so much that, uh, we have to issue equity. Well, that'll be a happy day for our investors. So we'll let everyone know well in advance, but we don't expect that to happen.
Great. Thanks. Steve.
Operator: Thank you, and our next question comes from the line of Anthony Paolone from J.P. Morgan. Your question, please.
Operator: Thank you, and our next question comes from the line of Anthony Paolone from J.P. Morgan. Your question, please.
Speaker #3: Yeah, thanks. So first one, just on the 2026, it sounds starts that you anticipate for like maybe the follow-up for are there any others in the plan?
Anthony Paolone: Yeah, thanks. So first one, just on the starts that you anticipate for 2026, it sounds like maybe the follow-up for 8500 at Huntsville, and then are there any others in the plans?
Anthony Paolone: Yeah, thanks. So first one, just on the starts that you anticipate for 2026, it sounds like maybe the follow-up for 8500 at Huntsville, and then are there any others in the plans?
Thank you. And our next question comes from the line of Anthony Pain from J.P. Morgan. Your question, please.
Speaker #3: 8,500 in Huntsville, and then
Speaker #1: they are few, but we're not going to tell you where at. We're working several other opportunities. And yes, you're right. We expect to start an quickly after 8,500 gets
Uh, yeah, thanks. Um, so first one, just on the starts that you anticipate for 2026? It sounds like, uh, maybe the follow-up for 8,500 and Huntsville. And then are there any others in the plan?
Steve Budorick: Well, we have our eye on a few, but you know we're not gonna tell you where they're at. We're working several other opportunities, and yes, you're right, we expect to start an inventory, pretty, pretty quickly, after 8500 gets committed.
Steve Budorick: Well, we have our eye on a few, but you know we're not gonna tell you where they're at. We're working several other opportunities, and yes, you're right, we expect to start an inventory, pretty, pretty quickly, after 8500 gets committed.
Um, well, we have our eye on a few, but, you know, we're not going to tell you where they are at. Uh, we're working several other opportunities, and yes, you're right. We expect to start an inventory, uh, pretty, pretty quickly. Um,
After 8,500 gets committed.
Anthony Paolone: Okay. So I guess if we're kind of looking out even beyond 2026, like your development, like your investment spending's been pretty consistent the last couple of years in your guidance for 2026. But if we look at, like, what's left to spend on the developments in place right now, it sounds like you'll still have $200 million to spend after 2026, and then if you start some things this year, that'll kind of add to that. So I guess, should we expect development spending or investment spending to maybe ramp a bit in the next couple of years?
Anthony Paolone: Okay. So I guess if we're kind of looking out even beyond 2026, like your development, like your investment spending's been pretty consistent the last couple of years in your guidance for 2026. But if we look at, like, what's left to spend on the developments in place right now, it sounds like you'll still have $200 million to spend after 2026, and then if you start some things this year, that'll kind of add to that. So I guess, should we expect development spending or investment spending to maybe ramp a bit in the next couple of years?
Speaker #3: last couple of years, and your guidance '26, your investment look at what's left to spend on the developments in place right now, million to spend after 2026.
Speaker #3: And then if you start something this year, that'll kind of add to that. So I guess should we expect development spending or investment spending to maybe ramp a bit in the next couple of years?
Speaker #3: And then if you start something this year, that'll kind of add to that. So I guess should we expect development spending or investment spending to maybe ramp a bit in the next couple of years?
Speaker #4: From if you look at the development chart in our supplement, you'll notice committed to, one in late December and one in that the two buildings that we early January, in 2027 and late 2028.
Anthony Mifsud: From a spending standpoint, yes, because if you look at the development chart in our supplement, you'll notice that the two buildings that we committed to, one in late December and one in early January, have placed in service dates that are in 2027 and late 2028. So you're correct, the spending for the significant spending for those isn't gonna occur in 2026, so it will occur in 2027 and 2028. So there will be incremental funding for the commitments that we've made this year, as well as the commitments we expect to make in 2026 and beyond.
Anthony Mifsud: From a spending standpoint, yes, because if you look at the development chart in our supplement, you'll notice that the two buildings that we committed to, one in late December and one in early January, have placed in service dates that are in 2027 and late 2028. So you're correct, the spending for the significant spending for those isn't gonna occur in 2026, so it will occur in 2027 and 2028. So there will be incremental funding for the commitments that we've made this year, as well as the commitments we expect to make in 2026 and beyond.
Okay. And so, I guess if if, if we're kind of looking out even Beyond 26, like your, your development, your investment spending has been pretty consistent last. Uh, couple years and your guidance for for 26. But if we look at like what's left to spend on the developments in place right now, it sounds like you'll still have a couple hundred million to spend after 2026 and then if you start something this year, that'll that'll kind of add to that. So I guess you would expect development spending or investment spending to to maybe ramp a bit in the next couple years.
Speaker #4: have placed in service dates that are a spending standpoint, yes, because 2026. So it will occur in '27 and commitments that we've made 2028.
Speaker #4: be incremental funding for the So there will this year, as well as the commitments we expect to make in 2026 and
Uh, chart in our supplement. You'll notice that the the 2 buildings that we committed to 1 in late December and 1 in early January, have um, placed in service dates that are in 2027 and late 2028. So you're correct the the spending for the
Speaker #4: beyond.
Speaker #3: Okay. And then I guess my follow-up then on all of that, because it seems like business is going well, and a few years ago you had laid CAGR as an intermediate out your 4% kind of earnings
Significant spending for those isn't going to occur in 2026, so it will occur in 2027 and 2028. So there will be incremental funding for the commitments that we've made this year, as well as the commitments we expect to make in 2026 and beyond.
Anthony Paolone: Okay. And then I guess my follow-up then on all of that, because it seems like, you know, business is going well, and, you know, a few years ago, you had laid out your, your 4% kind of earnings CAGR as a, as a, you know, intermediate or maybe even longer term growth rate. Do you think that still stands? Is there a chance that could, that could bump a bit higher, given all the conditions surrounding the business, or maybe how to think about that?
Anthony Paolone: Okay. And then I guess my follow-up then on all of that, because it seems like, you know, business is going well, and, you know, a few years ago, you had laid out your, your 4% kind of earnings CAGR as a, as a, you know, intermediate or maybe even longer term growth rate. Do you think that still stands? Is there a chance that could, that could bump a bit higher, given all the conditions surrounding the business, or maybe how to think about that?
Speaker #3: or maybe even longer-term growth rate. Do you think that's still stands? Is there a chance that could bump a bit higher given all that?
Speaker #3: business or maybe how to think about
Speaker #1: year, because of the impact of costs, I think later in the year Well, this year's transition we'll probably try to give you a little more of a view of what our future looks like.
Steve Budorick: Well, you know, this year is a transition year because of the impact of the refinancing costs. I think later in the year, we'll probably try to give you a little more of a view of what our future looks like. But we're very confident we're gonna continue to produce solid growth as we have. And that's my message.
Steve Budorick: Well, you know, this year is a transition year because of the impact of the refinancing costs. I think later in the year, we'll probably try to give you a little more of a view of what our future looks like. But we're very confident we're gonna continue to produce solid growth as we have. And that's my message.
Okay, and then I guess my follow-up, then, in all that, because it seems like, you know, business is going well. And a few years ago, you had laid out your 4% kind of earnings CAGR as a, you know, intermediate, or maybe even longer-term growth rate. Do you think that still stands, or is there a chance that could bump a bit higher given all the conditions surrounding the business, or maybe how should we think about that?
Speaker #1: But we're very confident we're going to the refinancing have. And that's my continue to produce solid
Speaker #3: Okay. Fair enough. Thank you.
Well, you know, this year's a transition year because of the impact of the, uh, refinancing costs. I think later in the year, we'll probably try to give you a little more of a view of what our future looks like. Uh, but we're very confident we're going to continue to produce solid growth, as we have.
Speaker #2: you. And our next question comes from Thank the line of Manus Ebbecke from Ebbekor, ISI. Your
and uh,
that's my message.
Seth Bergey: Okay, fair enough. Thank you.
Seth Bergey: Okay, fair enough. Thank you.
Okay, fair enough. Thank you.
Speaker #2: question, please.
Operator: Thank you. And our next question comes from the line of Manus Ebbecke from Evercore ISI. Your question, please.
Operator: Thank you. And our next question comes from the line of Manus Ebbecke from Evercore ISI. Your question, please.
Speaker #3: Perfect.
Speaker #3: the man that you're seeing in your markets, how much Thanks for taking the question. Of new tenants? And have you witnessed in-migration from maybe tech defense tenants into your markets from other is driven by existing tenants versus
Manus Ebbecke: Perfect. Thanks for taking the question. Out of the demand that you're seeing in your markets, how much is driven by existing tenants versus new tenants? And have you witnessed any, like, meaningful uptake in immigration from maybe like tech defense tenants into your markets from other regions in the US?
Manus Ebbecke: Perfect. Thanks for taking the question. Out of the demand that you're seeing in your markets, how much is driven by existing tenants versus new tenants? And have you witnessed any, like, meaningful uptake in immigration from maybe like tech defense tenants into your markets from other regions in the US?
Thank you. And our next question comes from the line of Madness AA from Evercore ISI. Your question, please.
Speaker #3: US? Well, yeah, I would say any meaningful uptake in
Speaker #1: existing and new biz. And some groups come in from then we are seeing other locations including Colorado and California. So it's yeah, we're encouraged by seeing some influx from people into our markets that have not had footprints there
Steve Budorick: Well-
Steve Budorick: Well.
Thanks for taking the question. Um, out of the manage you're seeing in your markets, how much is just driven by existing tenants versus new tenants, and have you witnessed any, like, meaningful uptake in in-migration from maybe like tech or defense tenants into your markets from other regions of the US?
Britt Snider: Yeah, yeah, I'd say it's about 50/50 existing and new biz. And then we are seeing some groups come in from other locations, including Colorado and California. So it's, yeah, we're encouraged by seeing some influx from people into our markets that have not had footprints there previously.
Britt Snider: Yeah, yeah, I'd say it's about 50/50 existing and new biz. And then we are seeing some groups come in from other locations, including Colorado and California. So it's, yeah, we're encouraged by seeing some influx from people into our markets that have not had footprints there previously.
Speaker #3: Gotcha. Appreciate the commentary about maybe getting
Speaker #3: another outlook later this year. So previously. we'll definitely look forward to that one.
Manus Ebbecke: Gotcha. Appreciate the commentary about maybe getting another outlook later this year, so we're definitely looking forward to that one. But just maybe in your view, obviously, with now the demand picture looking really good, and you're certainly like, being able to capitalize on that, like, how do you expect your, like, tenant mix maybe to change if we compare today's portfolio, maybe to one potentially in, like, five years from now? Like, where do you think, like, maybe the mix is shifting in your portfolio?
Manus Ebbecke: Gotcha. Appreciate the commentary about maybe getting another outlook later this year, so we're definitely looking forward to that one. But just maybe in your view, obviously, with now the demand picture looking really good, and you're certainly like, being able to capitalize on that, like, how do you expect your, like, tenant mix maybe to change if we compare today's portfolio, maybe to one potentially in, like, five years from now? Like, where do you think, like, maybe the mix is shifting in your portfolio?
Speaker #3: But just maybe in your view, obviously with now the demand it's about 50/50 picture looking really good and you're certainly being able to capitalize on expect your tenant mix maybe to change if we compare today's growth as we portfolio maybe to one potentially in five years from now?
Yeah, yeah, I would say it's about 50/50 existing and and New Biz. Um, and then we are seeing some, some groups come in from other from other locations, uh, including Colorado, and California. So it's um, yeah. We're encouraged by, um, seeing some influx from people into our markets that have not had Footprints there previously.
Speaker #3: that, how do you I'm specifically tenants.
Speaker #3: that, how do you
Speaker #3: Where do you think maybe the mix is shifting in your portfolio?
Speaker #1: concentration?
Steve Budorick: The mix of tenant? Or are you talking about concentration?
Steve Budorick: The mix of tenant? Or are you talking about concentration?
Gotcha, um, appreciate the commentary about maybe getting another Outlook later this year. So I'll definitely looking forward to that 1, uh, but just maybe in in York you would obviously with now the demand picture looking really good and you're certainly like being able to capitalize on that. Like how do you expect your like, tenant mix? Maybe to change. If we compare today's portfolio, maybe to 1 potentially in like 5 years from now. Like, where do you think like maybe the mix of Shifting in your portfolio?
The mix of tenant.
Or are you talking about concentration?
Manus Ebbecke: Specifically tenants, like government versus tech defense versus traditional contractors. Like, where do you think there's maybe outside growth? Who do you think is gonna take bigger shares going forward?
Manus Ebbecke: Specifically tenants, like government versus tech defense versus traditional contractors. Like, where do you think there's maybe outside growth? Who do you think is gonna take bigger shares going forward?
Speaker #1: Boy, that's a hard The mix one to answer. I think it'll be roughly comparable to what it is: two parts defense contractor for every one part government.
I'm specifically talking about tenants like government versus tech defense versus traditional contractors. Where do you think there might be outsized growth? Who do you think is going to take bigger shares going forward?
Steve Budorick: Boy, that's a hard one to answer. You know, I think it'll be, you know, roughly comparable to what it is, two parts defense contractor for every one part government, and we'll see that growth in a variety of markets.
Steve Budorick: Boy, that's a hard one to answer. You know, I think it'll be, you know, roughly comparable to what it is, two parts defense contractor for every one part government, and we'll see that growth in a variety of markets.
uh,
Well, that's a hard one to answer, you know. Um,
Speaker #1: And we'll see that growth in a variety of
I think it'll be, you know, roughly comparable to what it is.
Speaker #3: Gotcha. Perfect. Thank you. I appreciate it.
Two parts defense contractor for every one part government.
And we'll see that growth in a variety of markets.
Speaker #2: question. Comes from the line of Rich Anderson from Kanter Fitzgerald.
Manus Ebbecke: Gotcha. Perfect. Thank you. Appreciate it.
Manus Ebbecke: Gotcha. Perfect. Thank you. Appreciate it.
Got you, perfect. Thank you. I appreciate it.
Operator: Thank you. Our next question comes from the line of Rich Anderson from Cantor Fitzgerald. Your question, please.
Operator: Thank you. Our next question comes from the line of Rich Anderson from Cantor Fitzgerald. Your question, please.
Speaker #2: Your question, please. Yeah. Thank you.
Speaker #3: Rich Anderson here. I cut of off there. Steve, first, well said on
You, and our next question.
Richard Anderson: Yeah, Rich Anderson here. I got cut off there. Steve, first, well said on Roger, you know, one of the best that I can recall ever working with. Soft-spoken, unassuming, but probably a big part, as you mentioned, the architect of where you guys are today. So, so his legacy lives. Just, now getting onto the questions. In terms of Huntsville and, you know, kind of where it is in terms of the size of the portfolio, 2.5 million sq ft or thereabouts, NBP is 4.3 million sq ft and growing from there.
Richard Anderson: Yeah, Rich Anderson here. I got cut off there. Steve, first, well said on Roger, you know, one of the best that I can recall ever working with. Soft-spoken, unassuming, but probably a big part, as you mentioned, the architect of where you guys are today. So, so his legacy lives. Just, now getting onto the questions. In terms of Huntsville and, you know, kind of where it is in terms of the size of the portfolio, 2.5 million sq ft or thereabouts, NBP is 4.3 million sq ft and growing from there.
Comes from the line of Rich Anderson from Cantor. Gerald, your question, please.
Speaker #3: Soft-spoken, unassuming, but recall ever working with. probably a big part, as you mentioned, of the architect of where you guys are today. So his And our next Roger.
Speaker #3: lives just now getting under One of the best that I can the questions. In terms of Huntsville of the portfolio, 2.5 million square feet, or thereabouts, MVP is 4.3 legacy growing.
Yeah, uh, Rich Anderson here. I caught off there, uh, Steve. First, well said on Roger—you know, one of the best that I can recall ever working with. Soft-spoken, unassuming, but probably a big part, as you mentioned, the architect of where you guys are today. So, uh.
so, his legacy lives, um,
Just, uh, now getting under the questions. Um,
Speaker #3: From there, when I think about all the forces at work moving to Huntsville, whether it's missile command, space command, Golden Dome, do you feel like you could get to a point where you just kind of run out of opportunity to meet some of demand forces coming at these the area?
In terms of Huntsville and you know, kind of where it is. In terms of the size of the portfolio, 2 and a half million, square feet are thereabouts.
Richard Anderson: When I think about all the forces at work moving to Huntsville, whether it's, you know, Missile Command, Space Command, Golden Dome, do you feel like you could get to a point where you just kind of run out of opportunity to meet some of these demand forces coming at the area? Or do you see opportunities to expand, to be able to build more in the area? I'm curious what your sort of five-year outlook is on Huntsville in terms of how big it can become within the portfolio.
Richard Anderson: When I think about all the forces at work moving to Huntsville, whether it's, you know, Missile Command, Space Command, Golden Dome, do you feel like you could get to a point where you just kind of run out of opportunity to meet some of these demand forces coming at the area? Or do you see opportunities to expand, to be able to build more in the area? I'm curious what your sort of five-year outlook is on Huntsville in terms of how big it can become within the portfolio.
MVP is 4.3 million square feet, and growing from there. Um.
When I think about all the forces at work moving to Huntsville, whether it's Missile Command, Space Command, or Golden Dome, you know,
Speaker #3: opportunities to expand to be able Or do you see to build more in the area? I'm curious what your sort of five-year outlook is on
Speaker #3: opportunities to expand to be able Or do you see to build more in the area? I'm curious what your sort of five-year outlook is on become within the Huntsville in terms of how big it can
Do you feel like you could get to a point where you just kind of run out of opportunity to, to, to meet some of these demands? Um,
Speaker #1: call to tell you how we're going to manage that growth. And it's going to happen. It's just going to take a year or two, Rich.
Steve Budorick: Well, I can't wait to be on a call to tell you how we're gonna manage that growth. It's gonna happen. It's just gonna take a year or two, Rich. But do recall, we're built to 2.4 million sq ft right now. We've got a little bit under development. Our overall capacity on the land we control, without structured parking, is 5.5 million sq ft. So we got 3 million sq ft of development runway and the enhanced use land that we do currently control. We believe there is a significant opportunity at the point where we have consumed that development, that we can continue to expand our enhanced use lease presence on the base, because there's ample land available. The existence of our contractor and government campus is a well-appreciated catalyst to the missions on the base.
Steve Budorick: Well, I can't wait to be on a call to tell you how we're gonna manage that growth. It's gonna happen. It's just gonna take a year or two, Rich. But do recall, we're built to 2.4 million sq ft right now. We've got a little bit under development. Our overall capacity on the land we control, without structured parking, is 5.5 million sq ft. So we got 3 million sq ft of development runway and the enhanced use land that we do currently control. We believe there is a significant opportunity at the point where we have consumed that development, that we can continue to expand our enhanced use lease presence on the base, because there's ample land available. The existence of our contractor and government campus is a well-appreciated catalyst to the missions on the base.
Are there forces coming at the area, or do you see opportunities to expand to be able to build more in the area? I'm curious what your sort of 5-year outlook is on Huntsville in terms of how big it can become within the portfolio.
Speaker #1: 2.4 million square feet But do recall, we're built to underdevelopment. Our overall capacity on the land we control without right now. We've got a little bit structured parking is 5.5 million square feet.
Speaker #1: million square feet of development So we got 3 portfolio. runway on the enhanced control. We believe there is a significant use land that we do currently have consumed that opportunity at the point where we development that we can continue present on the base because there's use lease ample land available.
Called to tell you how we're going to manage that growth, and it's going to happen. It's just going to take a year or two, Rich. But do recall, we're built to 2.4 million square feet right now. We've got a little bit under development. Our overall capacity on the land we control, without structured parking, is 5.5 million square feet. So we've got 3 million square feet of development runway. And the enhanced use land that we do currently control, we believe there is a significant opportunity.
Speaker #1: The existence of our contractor and government catalyst to the missions on a well-appreciated the base. And in essence, we work Army overall commands to out of runway there.
Speaker #1: The existence of our contractor and government catalyst to the missions on a well-appreciated the base. And in essence, we work Army overall commands to in partnership with the US might be some processes we have to go campus is through, but we've got to expand our enhanced a long runway in
At the point where we have consumed that development, we can continue to expand our enhanced use lease present.
presence on the base because there's ample land available.
Steve Budorick: And, you know, in essence, we work in partnership with the U.S. Army overall commands to support their missions. So, I don't think we're ever gonna run out of runway there. There might be some processes we have to go through, but we've got a long runway in Huntsville.
Steve Budorick: And, you know, in essence, we work in partnership with the U.S. Army overall commands to support their missions. So, I don't think we're ever gonna run out of runway there. There might be some processes we have to go through, but we've got a long runway in Huntsville.
The existence of our contractor and government campus is a well-appreciated catalyst to the missions on the base. Uh, and you know, in essence, we work in partnership with the U.S. Army overall commands to support their missions.
Speaker #3: Okay. In terms of the organic growth of
So, uh, I—I don't think we're ever going to run out of runway there. There might be some processes we have to go through.
Speaker #3: the company, you guys have been Huntsville. successful at improving upon whatever your guidance was to start the year. I think in steadily sort of improve from one the last two years, you've seen it quarter to the little bit different this but would you say that you've left some opportunity on year.
Richard Anderson: Okay. In terms of the organic growth of the company, you guys have been successful at improving upon whatever your guidance was to start the year. I think in the last two years, you've seen it steadily sort of improve from one quarter to the next. Maybe the calculus is a little bit different this year. I'm not sure, but would you say that you've left some opportunity on the table from a pure organic point of view? And what has to happen for same store to sort of get a little boost up as the year progresses, and maybe you've left some conservatism on the table as well?
Richard Anderson: Okay. In terms of the organic growth of the company, you guys have been successful at improving upon whatever your guidance was to start the year. I think in the last two years, you've seen it steadily sort of improve from one quarter to the next. Maybe the calculus is a little bit different this year. I'm not sure, but would you say that you've left some opportunity on the table from a pure organic point of view? And what has to happen for same store to sort of get a little boost up as the year progresses, and maybe you've left some conservatism on the table as well?
Uh, but we've got a long runway in Huntsville.
Okay.
Um,
In terms of the organic growth of the company, um, you guys have been successful.
At.
Speaker #3: the table from a pure organic point of Maybe the calculus is a year progresses and maybe you've left of get a little boost up as the I'm not sure, some conservatism on the tables as
Speaker #3: And what has to happen
Speaker #1: Well, year, our team executed commencements. of earlier or later Pennies of extraordinarily well at getting the best outcome of view? well?
Improving upon whatever your guidance was to start the year. I think, in the last 2 years you've seen it steadily sort of improved from 1 quarter to the next. Um, maybe the, the the calculus is a little bit different this year. I'm, I'm, I'm not sure, but would you, would you say that you've left some opportunity on the table from a pure organic point of view and and, and what has to happen for same stored as sort of
Speaker #1: inches. It's rents it's hard to say we're leaving
Steve Budorick: Well, you know, same store is a battle of inches. It's, you know, square feet renewed, just weeks of earlier or later commencements, pennies of rents. You know, it's hard to say we're leaving anything on the table. Last year, our team executed extraordinarily well at getting the best outcome of probably, you know, 150 different transactions. And meanwhile, our operating teams have to keep the expenses in line and contest, you know, taxes. It, you know, it's hand-to-hand combat in same-store growth. And I think we've put out a good, solid forecast, and we'd like to beat it, but I don't think we've sugarcoated it.
Steve Budorick: Well, you know, same store is a battle of inches. It's, you know, square feet renewed, just weeks of earlier or later commencements, pennies of rents. You know, it's hard to say we're leaving anything on the table. Last year, our team executed extraordinarily well at getting the best outcome of probably, you know, 150 different transactions. And meanwhile, our operating teams have to keep the expenses in line and contest, you know, taxes. It, you know, it's hand-to-hand combat in same-store growth. And I think we've put out a good, solid forecast, and we'd like to beat it, but I don't think we've sugarcoated it.
Speaker #1: square feet renewed weeks
Get a little boost up as the year progresses, and maybe you’ve left some conservatism on the table as well.
Well, you know, same story as a battle of inches. It's, you know, uh,
It's square feet, renewed.
Speaker #1: transactions. And meanwhile, our operating teams have to keep the expenses in It's hand-to-hand combat in contest same-stored growth. And I think we've put out a good, solid forecast.
Speaker #1: And we'd like to beat it, but I don't think we've sugarcoated it.
Weeks of earlier or later commencements, pennies of rents. You know, it's hard to say we're leaving anything on the table last year. Our team executed extraordinarily, well, at getting the best outcome of probably, you know, 150 different transactions. And meanwhile, our operating teams have to keep the expenses in line and contest, uh, you know, taxes it. You know, it's it's, uh, hand to hand combat and same store growth.
Speaker #3: Okay. Last for me, the 950 billion defense budget with the OBBB, I'm curious if you matter to the that will start to and actual opportunities for could sort of frame when the company.
Richard Anderson: Okay. Last for me, the $950 billion defense budget with the OBBB. I'm curious if you could sort of frame when that will start to matter in- from, at the, to the bottom line in terms of leasing and, and, you know, actual opportunities for the company. I mean, it's great, obviously, as a, as a, as a setup for the long term, but is that like a 2 or 3-year type of process before you actually see it, you know, make its way to your FFO line?
Richard Anderson: Okay. Last for me, the $950 billion defense budget with the OBBB. I'm curious if you could sort of frame when that will start to matter in- from, at the, to the bottom line in terms of leasing and, and, you know, actual opportunities for the company. I mean, it's great, obviously, as a, as a, as a setup for the long term, but is that like a 2 or 3-year type of process before you actually see it, you know, make its way to your FFO line?
And I think we've put in that, we've put out a good, solid forecast and we'd like to beat it, but I don't think we've sugarcoated it.
It okay.
Last for me, um, the $950 billion, uh,
Speaker #3: I mean, it's great, bottom line in terms of leasing obviously, as a setup for the long term, but is that
Defense budget with, uh, the, uh, OBB. Um, I'm curious if you could sort of frame when that will start to matter,
Speaker #3: a two or three-year type your FFO line?
Speaker #1: Yeah. We've traditionally conveyed that from an
Speaker #1: appropriation our probably 150 different demand impact is 12 and sometimes 18 months down the road. And particularly with some of the it make its way to now because the funding is going to new programs, new programs have to be conceptualized, then put into contract competitions.
Steve Budorick: Yeah, we've traditionally conveyed that from an appropriations, our demand impact is 12 and sometimes 18 months down the road. And particularly with some of the big funding things that are occurring right now, because the funding's going to new programs. New programs have to be conceptualized, then put into, you know, contract competitions. Defense contractors have to compete for the contract, get an award, survive a protest, finally get, you know, an adjudicated result, and then they can lease space. So, you know, 12 to 18 months, it's really a very strong signal that our demand is gonna remain, remain very healthy, if not improve, over the next, you know, 2 years.
Steve Budorick: Yeah, we've traditionally conveyed that from an appropriations, our demand impact is 12 and sometimes 18 months down the road. And particularly with some of the big funding things that are occurring right now, because the funding's going to new programs. New programs have to be conceptualized, then put into, you know, contract competitions. Defense contractors have to compete for the contract, get an award, survive a protest, finally get, you know, an adjudicated result, and then they can lease space. So, you know, 12 to 18 months, it's really a very strong signal that our demand is gonna remain, remain very healthy, if not improve, over the next, you know, 2 years.
Uh, in from at the to the bottom line terms of Leasing and and you know actual opportunities for the company. I mean, it's great obviously as a as a as a setup for the long term but is that like a 2 or 3 year type of process before you actually see it, you know, make its way to your ffo line.
Yeah, we've traditionally conveyed that from an appropriation.
Uh, our demand impact is 12, and sometimes 18, months down the road, and particularly with some of the big funding things that are occurring right now.
Speaker #1: Defense contractors have to compete for the contract, get an award, survive a protest, finally get an space. adjudicated result, and then they can lease So 12 to 18 months, it's really a very strong signal that our demand is going to remain very healthy,
Because the funding's going to new programs, new programs have to be conceptualized. Then you, uh, put into, you know, contract competitions.
Defense contractors have to compete for the contract, get an award, survive a protest, finally get, you know, an adjudicated result, and then they can leave space.
Speaker #1: if not improve, over the
Speaker #1: next two years.
Richard Anderson: Rich, I would just add-
Richard Anderson: Rich, I would just add-
Speaker #3: even Golden Fleet, which is less to earlier, Golden Dome and initiatives they're working on ways to fast-track those dollars into Dome, for us, is certainly has the potential to see benefit from that sooner than that.
Operator: Go ahead.
Operator: Go ahead.
Richard Anderson: I would just add that there's a couple. You know, like, if you look at what I was referring to earlier, Golden Dome and even Golden Fleet, which is less applicable to us, but those two initiatives, they're working on ways to fast-track those dollars into the program. So, Golden Dome, for us, is certainly has the potential to see benefit from that sooner than that. That was the genesis of my question. Like, you know, it's somewhat political that all this is happening, although it is bipartisan, I get it, in terms of the spending bills. But, I just wondered if there was, given the geopolitical climate of today, maybe, you know, you would see the benefits of this appropriations bill and so on, sooner than 12 months.
Richard Anderson: I would just add that there's a couple. You know, like, if you look at what I was referring to earlier, Golden Dome and even Golden Fleet, which is less applicable to us, but those two initiatives, they're working on ways to fast-track those dollars into the program. So, Golden Dome, for us, is certainly has the potential to see benefit from that sooner than that. That was the genesis of my question. Like, you know, it's somewhat political that all this is happening, although it is bipartisan, I get it, in terms of the spending bills. But, I just wondered if there was, given the geopolitical climate of today, maybe, you know, you would see the benefits of this appropriations bill and so on, sooner than 12 months.
Speaker #3: That was the genesis of my bipartisan. I get it in terms of the spending bills, but I just wondered if the program. there was given the geopolitical climate of today, maybe you would see the benefits of this appropriations bill and so on So Golden
Speaker #3: That was the genesis of my bipartisan. I get it in terms of the spending bills, but I just wondered if the program. there was given the geopolitical climate of today, maybe you would see the that all this is happening, although it is sooner than 12 months.
Uh so you know 12 to 18 months, it's really um a very strong signal that our demand is going to remain remain very healthy if not approved over the next you know 2 years I would just add that there's a couple you know like if you look at when I was referring to earlier golden dome and even golden Fleet Which is less applicable to us but those those 2 initiatives they're they're working on ways to Fast Track those dollars into the system. So
Benefit from that soon.
Speaker #3: But I guess you're holding the line on that for now.
Speaker #1: Well, I think what Brick conveyed is
Speaker #1: you're going to see a mix of both, but one thing that's crystal clear is this administration has urgency. So it could be quicker than we have traditionally very high sense of seen.
Richard Anderson: But I guess you're holding the line on that for now.
Richard Anderson: But I guess you're holding the line on that for now.
Steve Budorick: Well, I think what Rick conveyed is you're gonna see a mix of both. But, you know, one thing that's crystal clear is this administration has very high sense of urgency. So it could be quicker than we have traditionally seen, but it's hard to tell you it will be.
Steve Budorick: Well, I think what Rick conveyed is you're gonna see a mix of both. But, you know, one thing that's crystal clear is this administration has very high sense of urgency. So it could be quicker than we have traditionally seen, but it's hard to tell you it will be.
Speaker #1: But it's hard to tell you it And
Speaker #1: will be.
Speaker #3: Okay. Thanks
Speaker #3: very
Speaker #2: as a reminder, ladies and gentlemen, if you do have a 11 on your telephone. Our
Richard Anderson: Okay. Thanks very much.
Richard Anderson: Okay. Thanks very much.
Although it is bipartisan, I get it in terms of the spending bills, but I just wondered if there was given the, the geopolitical climate of today, maybe, you know, you would see the the benefits of, of this, uh, of this Appropriations Bill. And so on sooner than 12 months. But I guess you're holding the line on that for for now. Well, I think with brick conveyed is you're going to see a mix of both. But you know 1 thing it's Crystal Clear is this Administration is very high sense of urgency. Um, so it it, it could be quicker than we have traditionally seen but it's hard to tell you. It will be okay.
Thanks very much.
Operator: Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. Our next question comes from the line of Dylan Burzinski from Green Street. Your question, please.
Operator: Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. Our next question comes from the line of Dylan Burzinski from Green Street. Your question, please.
Speaker #2: Dylan Brzezinski Thank you.
Speaker #2: Your question,
Speaker #2: Your question,
Speaker #2: please.
Speaker #4: Okay. Thanks for taking the question. I know the Iowa been pushed back a little bit, but just sort
Speaker #4: Data Center Development Plan has sort of other sort of markets that you're from Green Street.
Thank you. And as a reminder, ladies and gentlemen, if you do have a question at this time, please press star, 1, 1 on your telephone. Our next question comes from the line of Dylan Brazinski from Green Street. Your question, please?
Dylan Burzinski: Yes, thanks for taking the question. I know the Iowa data center development plan has sort of been pushed back a little bit, but just sort of wondering if there are any other sort of markets that you're looking to sort of go out and gobble up some land parcels to, for future development opportunities on the data center side?
Dylan Burzinski: Yes, thanks for taking the question. I know the Iowa data center development plan has sort of been pushed back a little bit, but just sort of wondering if there are any other sort of markets that you're looking to sort of go out and gobble up some land parcels to, for future development opportunities on the data center side?
Speaker #4: and gobble up some land parcels for
Speaker #4: future development opportunities on the data center That currently we're constantly looking to sort of go out side.
Speaker #4: future development opportunities on the data center That currently we're constantly looking to sort of go out side. of wondering if there are any evaluating
Speaker #1: we're seriously
Steve Budorick: Not currently. We're constantly evaluating opportunities, but there's nothing that we're seriously considering.
Steve Budorick: Not currently. We're constantly evaluating opportunities, but there's nothing that we're seriously considering.
You taking the question. I know the Iowa Data Center development plan has sort of been pushed back a little bit, but just sort of wondering if there are any other sort of markets that you're looking to sort of go out and gobble up some land parcels too, for future development opportunities on the data center side.
Speaker #4: on sort of the office considering. disposition plans. I think the theme that we've heard over the last several months is that debt capital markets are improving, bidding tents are getting more on your thoughts full.
Uh, but there's nothing that we're seriously considering.
Dylan Burzinski: Then I guess just one last one on sort of the office disposition plans. You know, I think the theme that we've heard over the last several months is that debt capital markets are improving, bidding tents are getting more full. Just sort of curious on your thoughts on sort of bringing 2100 L to market, 'cause I know that's sort of largely stabilized now.
Dylan Burzinski: Then I guess just one last one on sort of the office disposition plans. You know, I think the theme that we've heard over the last several months is that debt capital markets are improving, bidding tents are getting more full. Just sort of curious on your thoughts on sort of bringing 2100 L to market, 'cause I know that's sort of largely stabilized now.
And then, I guess just one last one on, sort of, the office disposition plans.
Speaker #4: 2,100 L to market because I know that's sort
Speaker #4: of largely stabilized Well, the
Speaker #1: DC market is not yet indicated pricing for
You know, I think the theme that we've heard over the last several months is that debt capital markets are improving, bidding sense are getting more full. Just sort of curious on your thoughts on bringing 2100 Elder to market, because I know that's sort of largely stabilized now.
Speaker #1: assets that excite now. but we have that building extremely well positioned. It's a
Steve Budorick: Well, the DC market has not yet indicated pricing for assets that excite us, and so I don't expect that to happen for 12 months. But we have that building extremely well positioned. It's a fantastic development with great tenants, and when we see capitalization rates approach the level that makes sense for our shareholders, we can move on it.
Steve Budorick: Well, the DC market has not yet indicated pricing for assets that excite us, and so I don't expect that to happen for 12 months. But we have that building extremely well positioned. It's a fantastic development with great tenants, and when we see capitalization rates approach the level that makes sense for our shareholders, we can move on it.
Uh, well, the D.C. market is not yet, indicated, pricing for assets that excites us.
Speaker #1: tenants. And when we happen for 12 months, see capitalization rates approach the level that makes sense for our shareholders, we can move on it.
And so, I don't expect that to happen for 12 months, but
We have that building extremely well positioned?
Uh, it's a fantastic development with great tenants.
Speaker #4: That's
And when we see capitalization rates,
Speaker #4: guys. helpful. Thanks, like to talk to us further.
Speaker #4: guys. helpful. Thanks,
Speaker #2: Thank you. This does conclude
Uh, approach the level that makes sense for our shareholders, we can move on it.
Speaker #2: the question and answer session of Just sort of curious today's program. I'd like to hand the program back to Mr. Babaderik for any further
Dylan Burzinski: That's helpful. Thanks, guys.
Dylan Burzinski: That's helpful. Thanks, guys.
That's helpful.
Thanks bud.
Operator: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Mr. Budorick for any further remarks.
Operator: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Mr. Budorick for any further remarks.
Speaker #1: call today. We are in our offices, so please feel free to coordinate through VennCAT if you'd great day. fantastic development with great
Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Mr.
Baba Derk, for any further remarks.
Steve Budorick: Thank you all for joining our call today. We are in our offices, so please feel free to coordinate through Venkat if you'd like to talk to us further. Have a great day.
Steve Budorick: Thank you all for joining our call today. We are in our offices, so please feel free to coordinate through Venkat if you'd like to talk to us further. Have a great day.
Speaker #2: the program. You may now
Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
Thank you all for joining our call today. We are in our offices, so please feel free to coordinate through. Venkat, if you’d like to talk to us further, have a great day.
Thank you, ladies and gentlemen, for your participation. This does conclude the program for today's conference. You may now disconnect. Good day.
