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Edited Transcript of CXP earnings conference call or presentation 25-Jul-19 9:00pm GMT

Q2 2019 Columbia Property Trust Inc Earnings Call

Atlanta Jul 29, 2019 (Thomson StreetEvents) -- Edited Transcript of Columbia Property Trust Inc earnings conference call or presentation Thursday, July 25, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* E. Nelson Mills

Columbia Property Trust, Inc. - President, CEO & Director

* James A. Fleming

Columbia Property Trust, Inc. - Executive VP & CFO

* Matt Stover

Columbia Property Trust, Inc. - Director of Finance & IR

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Conference Call Participants

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* Mitchell Bradley Germain

JMP Securities LLC, Research Division - MD and Senior Research Analyst

* Piljung Kim

BMO Capital Markets Equity Research - Senior Real Estate Analyst

* Sheila Kathleen McGrath

Evercore ISI Institutional Equities, Research Division - Senior MD

* Vikram Malhotra

Morgan Stanley, Research Division - VP

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Presentation

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Operator [1]

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Good afternoon, and welcome to the Columbia Property Trust's Second Quarter 2019 Conference Call. (Operator Instructions) Please note that this event is being recorded. I would now like to turn the conference over to Matt Stover, Director of Investor Relations. Please go ahead, sir.

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Matt Stover, Columbia Property Trust, Inc. - Director of Finance & IR [2]

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Good afternoon, everyone, and welcome to the Second Quarter 2019 Columbia Property Trust Investor Conference Call. On the call with me today are Nelson Mills, President and Chief Executive Officer; Jim Fleming, Executive Vice President and Chief Financial Officer; and other members of our senior management team.

Our results were released this afternoon in our quarterly supplemental package, which can be found on the Investor Relations section of our website and on file with the SEC on Form 8-K. We filed our 10-Q with the SEC this afternoon, and an audio replay of this call will be available by this time tomorrow.

Statements made on today's call regarding expected operating results and other future events are forward-looking statements that involve risks and uncertainties. A number of factors could cause actual results to differ materially from those anticipated, including those discussed in the Risk Factors section of our 2018 Form 10-K. Forward-looking statements are made based on our current expectations, assumptions and beliefs as well as information available to us at this time. Columbia undertakes no obligation to update any information discussed on this conference call.

During this call, we will also discuss certain non-GAAP financial measures. Reconciliations to comparable GAAP financial measures can be found in our supplemental financial data.

With that, it's my pleasure to turn the call over to Nelson Mills.

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [3]

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Thank you, Matt, and welcome, everyone to the call. 2019 continues to be a very strong year for Columbia, and during the second quarter, we made significant progress on our initiatives to enhance shareholder value. As many of you know, we have one of the best positioned portfolios in the office sector located in some of the most exciting neighborhoods within high barrier to entry coastal markets. Our properties offer the location, structural features and amenities that are most in demand by modern, dynamic companies seeking a work environment that fosters productivity and creativity. The impressive roster of tenants that are choosing our properties as their home is a testament to our portfolio quality and strategic locations.

As a result, our leasing metrics continue to be solid and growing, as Jim will detail in a few minutes. And while we're already producing some of the strongest financial results in the office sector, we also see new growth opportunities ahead. Not only do we have more embedded growth in our existing properties but we also have a pipeline of new value-add projects designed to produce results well into the future. This enviable position reflects our relentless focus on shareholder value creation and is a result of 2 key ingredients.

First, there's our focused and disciplined investment strategy. We have a unique approach to location selection and asset repositioning that continues to attract top tenants and produce market-leading rent growth.

Second, we also have a highly talented and motivated team who continue to generate results. While it is difficult to improve on last quarter's 97% lease rate, we did manage to lease an additional 79,000 square feet during the second quarter headlined by a new lease for the top 2 floors at 116 Huntington Avenue in Boston, which brought that building to 100% leased. San Francisco leasing also contributed to our healthy leasing spread for the quarter. Our team there continues to be creative and assertive in generating revenue growth opportunities in their high-occupancy properties.

In Washington, D.C., we continue to make progress at Market Square with several small but very attractive leases and have surpassed a 90% lease rate there during the quarter. We've leased over 150,000 square feet of the property during the last 2 years and have letters of intent for another 30,000 square feet. Market Square is a great example of Columbia's differentiated approach to creating value for shareholders in varying market conditions. We've made substantial strategic enhancements to this iconic property, including renovated entries, a new conference center and most recently, a stunning new rooftop deck with high-end private event space. With its proximity to Capitol Hill, Market Square has solidified its position as a critical hub for lobbyists, and now more than half of its 65 tenants are in the Fortune 500. Net rents on recent leases are approaching $60 per square foot versus high $40 per square foot in expiring rents. This property is one of the key drivers of our same-store NOI growth this year and should be again next year.

And this and other examples in our portfolio demonstrate incremental financial investments can generate significant returns, and we're constantly seeking new ways to unlock value within our portfolio. Sometimes these projects are as small as a modest lobby upgrade ahead of some leasing roll, such as we executed at 218 West 18th Street in Manhattan.

We were also evaluating more ambitious projects, including the potential addition of a fourth building at University Circle in East Palo Alto, and possible expansions of other existing buildings. While there's nothing imminent on that front, our teams are working hard to uncover any attractive opportunities and to advance them as appropriate.

As announced previously, we're also undertaking a couple of very attractive new development projects. Our New York City development at 799 Broadway with Normandy Real Estate Partners is now well underway and we're experiencing strong interest from prospective tenants. This property is located on the corner of Broadway and 11th Street at Union Square Park adjacent to one of the most active transportation hubs in the city. The building's attractive and efficient design as well as its unique live-work-play location is drawing keen interest from tech and other dynamic companies.

Our second development project is 250 Church Street in TriBeCa, which we're under contract to purchase. This building is also in a highly desirable and underserved New York City neighborhood and presents a great opportunity to create highly appealing boutique office space and capture very attractive rental rates.

In 149 Madison, WeWork's build-out is well underway and they are making a significant investment in the space, including the addition of a roof-deck. While we won't collect cash rents until mid-2020, there's a chance that WeWork and/or its customers could begin occupying parts of the building as early as the fourth quarter of this year.

I'd now like to quickly provide an update on each of our 3 focus markets. Let's start with New York. New supply downtown and in Hudson Yards is adding to the city's overall supply in a substantial way. This new development is creating some issues in New York especially in Upper Midtown. However, the new supply does not directly compete with our Midtown South properties, which continue to have unique appeal to media, tech and other tenants seeking more creative space and demand in our properties remain very strong.

San Francisco and Silicon Valley are undeniably landlord markets right now with strong demand and tight supply. Even though we're almost fully leased in the market, we're capitalizing as much as we can on the favorable conditions by growing rents at our 4 high-quality buildings. These are properties we've invested in over the years to get the most out of the space available that's well below market. And today, 650 California, 333 Market Street, 221 Main and University Circle are each at or close to 100% leased and making strong contributions to our growing NOI.

Turning to Washington, D.C. Amazon HQ2 will eventually have a favorable impact on what is for now still a sluggish market, but as with Market Square, a tailored building by building approach is the key to driving performance. Over the past couple of years, we transformed 80 M Street into a millennial-friendly building. Tenants now recognize the appeal of this building as well as its increasingly desirable neighborhood that's home to the Washington Nationals. At 1800 M Street, we've added shared common areas, built some spec suites, and reached a 96.5% lease rate this quarter, again proving what's possible even in a challenging market like D.C. with the right approach.

In another strategic move that we announced in April, we completed the sale of One & Three Glenlake Parkway in Atlanta. As we mentioned on our last quarterly call, the sales generated nearly $200 million of net proceeds and achieved one of the highest prices per square foot ever in Atlanta's Central Perimeter district following our successful repositioning of the property. At our remaining Atlanta property, Lindbergh Center, our buyer continues to move through the due diligence process and we now expect the sale will close in the third quarter. This will present Columbia with another opportunity to redeploy proceeds in a disciplined manner into our target markets.

In summary, our strong second quarter is a direct result of the strategic positioning we've accomplished over the years and the ongoing hard work of our talented team. What we find most exciting is the value creation still to come given our uniquely positioned portfolio, which has additional embedded growth as well as our new projects that are well underway. While we're exceptionally positioned today, you can rest assured that Columbia won't stop seeking out new opportunities to further enhance our prospects and to create additional shareholder value.

With that, I'm going to turn the call over to Jim to discuss our results in more detail and share our updated outlook for the year.

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James A. Fleming, Columbia Property Trust, Inc. - Executive VP & CFO [4]

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Thank you, Nelson, and thank you all for joining us today. We're continuing to have a strong year at Columbia with second quarter normalized FFO of $0.38 per share and same-store NOI growth of 8.6%. This same-store performance was in line with our expectations and we continue to expect full year same-store NOI growth of 8% to 10%. As Nelson mentioned, we leased another 79,000 square feet in the second quarter despite low vacancy and limited rollover and as a result, our occupancy climbed another 0.5% to 97.6%. Continued realization of some embedded growth opportunities in our existing portfolio drove strong leasing spreads, 36% on a cash basis and 56% on a GAAP basis, both similar to last quarter.

Our balance sheet strengthened further primarily due to the Glenlake sale in April. We ended June with a net debt to adjusted EBITDA ratio of 6.1x, down from 6.6x in March and net debt to gross real estate assets of 29.8%, down from 32.3%. We have no debt maturities until the year 2021 when $58 million of JV-related mortgage debt becomes due, and we have more than $4 billion of unencumbered properties.

Our financial strength allows us to seek the best value-add investment opportunities, both development and redevelopment as well as to repurchase our own shares. We're very selective with the investments and we didn't make any during the quarter although we're hopeful that some of the opportunities we're pursuing today will come to fruition later this year. We also didn't make any share repurchases this quarter, but we continue to believe that our stock is a compelling value and we expect to buy shares later this year. By the way, our share repurchase authorization expires in September but we plan to put new authorization in place at our upcoming August Board meeting.

Due to our continuing strong performance and more clarity on the timing of the anticipated Lindbergh sale, we are again raising our outlook for 2019. We now expect normalized FFO to be in the range of $1.42 to $1.46, up from $1.37 to $1.42 and that's up from our original 2019 outlook of $1.35 to $1.40. Due to our continued strong leasing activity, we're also raising our outlook for year-end lease percentage from 95% to 97% up to 96% to 98%. The remaining elements of our full year outlook remain consistent, including same-store cash NOI growth of 8% to 10%, corporate G&A expense of $34 million to $36 million and a weighted average diluted share count of 117 million shares.

Looking further ahead to 2020, we think we can again produce high single-digit same-store NOI growth on top of what we accomplished this year and of course, the 14% growth we generated last year.

In summary, we had another strong quarter reflecting our unique positioning and the hard work of our experienced team in capitalizing on our many growth and value-creation opportunities.

Nelson and I would now be pleased to take your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And your first question comes from Vikram Malhotra with Morgan Stanley.

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Vikram Malhotra, Morgan Stanley, Research Division - VP [2]

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Just one on the -- first on the Lindbergh asset sale. I guess the last time we've spoken around NAREIT, I sort of assumed it would close in July. Can you maybe describe what's taking longer? And if the asset had sold sort of mid-quarter in 2Q, what would the guidance look like?

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [3]

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Sure. On the first part -- Vikram, thanks for your question. This is Nelson. On the first part of that question, it's a relatively complex project. I think one major sticking point that Kevin and the team have been working through with buyer is the ground lease with MARTA. And so there are approvals that were required there. We made good progress on those. We expect those are all being very close to being resolved. The deal is under contract. It is subject to some financing contingencies but we do expect it to close probably next month. In terms of -- but certainly, this summer, we expect to get it closed. Jim, in terms of guidance, what do we assume there?

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James A. Fleming, Columbia Property Trust, Inc. - Executive VP & CFO [4]

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Yes, Vikram. So we raised our guidance last time. We started off with $1.35, $1.40. We raised it $0.02 last time and we raised it $0.04 to $0.05 this time, a little bit more on the lower end and the higher end. And the reason for that is I think we probably didn't raise it quite enough last time. We were trying to leave ourselves room for various transaction opportunities but -- or transaction timing, but we still, I would say, have a little bit of variability in there. We're assuming in our model that it closes in July or August and that's what we expect. It does affect FFO by $0.01 to $0.015 per month. And so there is some variability in there. But we also have the portfolio performing very well. As you know, we're a little bit higher in lease rate than we had expected. We've had some good same-store NOI growth. And so I would also comment and say that the other parts of the portfolio are performing a little bit better than expected.

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Vikram Malhotra, Morgan Stanley, Research Division - VP [5]

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Okay. So just to clarify on that, I mean it's -- you said $0.01, $0.015 from the pushout of the sale, but then the higher lease rate should translate into GAAP and then eventually cash so the GAAP would drive some of the FFO increase.

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James A. Fleming, Columbia Property Trust, Inc. - Executive VP & CFO [6]

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That's right, Vikram. So if the sale were to get delayed some more, then our FFO would -- we would expect it would be pushed up some more by continuing to own Lindbergh by $0.01 to $0.015 a month.

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Vikram Malhotra, Morgan Stanley, Research Division - VP [7]

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Okay. And then just last one. Can you talk about any prospects or progress around the new development projects? What types of potential tenants are you seeing there? And just timing-wise, sort of what are you baking in over the next 6 months?

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [8]

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So first of all, on 799 Broadway, this is a 50-50 venture we're doing with Normandy. It's a ground-up development just below Union Square Park, 180,000 feet. It's early days in the marketing process. In terms of construction, first of all, the prior building has been razed and we're doing the working foundations now and it will go vertical here the next couple of months. So from the construction side, things are well underway in progress. From a marketing standpoint, there's been a lot of interest primarily from tech and fintech candidates but others as well. It's generated quite a buzz and a lot of interest. I think that interest becomes more tangible and we will have more serious discussions about leasing once we begin to bring the building on the ground. That's the expectation. So yes, we expect interest to be strong and -- but it's still fairly early in the process. We expect to deliver that property late next year.

On 250 Church, that's a little further out. We have yet to even close on that acquisition. We'll do that in the next couple of months and -- but the team is already -- we're obviously looking at architectural design and looking at various options for the design and construction and a bit early to be marketing that. But our expectation there, there could be same, similar type tenants, tech, fintech, media, but also financial players, hedge funds and so forth could be sort of candidates but that one's a little further out. So both are early stage. We feel very excited about the prospects but more to come over the next few quarters.

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Vikram Malhotra, Morgan Stanley, Research Division - VP [9]

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And there's no like initial on 799. It's just -- it's still very initial. You -- there's no proposals or anything out there or any initial interest. It's just still early in your view?

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [10]

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Yes. Strong interest, a lot of lookers. We're not swapping paper with anybody at this point.

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Operator [11]

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Your next question comes from John Kim with BMO Capital Markets.

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Piljung Kim, BMO Capital Markets Equity Research - Senior Real Estate Analyst [12]

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WeWork is a top 10 tenant today. It's conceivable they could be a top 5 tenant in a year or so when you do the development of 149 Madison and asset sales. How comfortable do you feel about that situation?

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [13]

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So very comfortable. Just to remind everybody, we have 3 leases with WeWork, one in D.C., one in San Francisco and then the largest one is 115,000 feet in Manhattan, so full building lease, small building but full building lease. In the case of San Francisco and D.C., those are fully utilized, occupied leases and they're doing quite well. And in the case of 149 Madison in New York, that is -- WeWork is building out the space. They expect to occupy late this year, early next. The lease doesn't actually start until mid-2020 but they're hard at work building out the space. We understand their plans are to fill at least part of the building, if not all of it, with some of their own people or some of their wholly owned subsidiary. So they're very interested in the property and very excited to get into the space, so high demand through WeWork on all 3 of those.

But also in addition to that, as we've explained in the past, we have significant credit enhancement on all 3 properties, which includes a combination of parent guarantees and letter of credit representing many months on each -- of lease revenue on each property. So we -- that further enhances our comfort. But no, they're doing well and we feel very good about that. As far as doing more, we'll see. I mean we have no plans to do anymore there but they're active in all of our markets. They inquire about some of our -- several of our properties from time to time but that's where we are today, just those 3 properties.

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Piljung Kim, BMO Capital Markets Equity Research - Senior Real Estate Analyst [14]

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And then are there any metrics you could share on the 2 operational assets with them as far as occupancy or profitability?

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [15]

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I don't have -- we don't have a lot of details on that, just what we hear from them. We're in touch with them on a regular basis and my understanding is that they're fully utilized, that they're high demand in those properties and they're -- full utilization as far as we can -- we know. We don't get regular updates or data on that.

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Piljung Kim, BMO Capital Markets Equity Research - Senior Real Estate Analyst [16]

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With the sale of Lindbergh Center, you talked a little bit about potential use of proceeds, including share repurchase. Is it fair to say that you're focused in San Francisco given that's the one market you haven't really invested in recently?

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [17]

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Yes. John, it's not the lack of trying. We've been focused on -- it's been over 4 years since we bought our last property there but we've been very active. We've bid on dozens in that time period and it's a very competitive market. Everybody else likes it for the same reason we do and we're keeping a very disciplined approach to our underwriting and we haven't nailed anything in a while. But again, that is a focus market. It continues to be one of the strongest markets in the country. We'd like to have more there. We'd like to have more space leased there. We'd like to own more properties there. So we're trying but again, it's very competitive and very pricey these days.

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James A. Fleming, Columbia Property Trust, Inc. - Executive VP & CFO [18]

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And John, I would just -- I would add. As you know, we're pretty disciplined about this. We're pretty measured. We haven't done a lot of acquisitions over time. We've looked for good opportunities and so we're still doing that. We're mainly looking for value add. And those are just hard to find right now but we're -- we do have some things we're looking at that we are hopeful about in a couple of markets.

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Piljung Kim, BMO Capital Markets Equity Research - Senior Real Estate Analyst [19]

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A final question from me. Can you provide some more color on where the cash spread came from this quarter?

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James A. Fleming, Columbia Property Trust, Inc. - Executive VP & CFO [20]

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They were small. They were similar to last quarter by the way, very strong numbers but they were some small leases. We did lease the top 2 floors at 116 Huntington in Boston at much higher rents than had been there before but that space had been vacant for more than 12 months and so that's not counted in those spreads. Really what's there is some stuff in D.C. and some stuff in San Francisco. I will say that over the next 1.5 years, John, most of the roll that we have is in San Francisco and we do believe it's going to be very substantial roll-ups. Those would be substantial roll-ups. So we're -- we think the trend will continue. This quarter though, in fairness, it was some pretty small leases.

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Operator [21]

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Your next question comes from Sheila McGrath with Evercore.

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Sheila Kathleen McGrath, Evercore ISI Institutional Equities, Research Division - Senior MD [22]

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Now that you're stabilized in Boston with that final leasing that you mentioned, what are your long-term plans for that building? And how did the rent achieved on the upper floors compare to your expectations?

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [23]

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Sheila, so yes, it's fully leased now. In terms of the second part of your question, the original expectation, it was above our original expectation. As Jim said, it did take us a little while to get the space leased. We did some improvements to the lobby. We brought in retail. We held out for a pretty good ask on the rents and we eventually got it. So we're very pleased with the outcome there, but as you know, it took us a couple of years to get that done.

In terms of prospects for that property, it's fully leased now. We do get -- it is the only property we own in Boston. We do get inquiries from time to time about it. There's some interest in the property. And we might consider -- there's nothing in the number, nothing in expectations for this year. We might consider selling that given its stabilized nature and given it being the only property in the market. That said, Boston is -- remains -- continues to be our unofficial fourth market. It is a market we keep tabs on and we do look at opportunities from time to time. So we're not saying never to Boston, but whether we do more there or not, that's something we might look to exit. It's not in the guidance, not in the expectations but it's something that we could sell now that it's fully leased.

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Sheila Kathleen McGrath, Evercore ISI Institutional Equities, Research Division - Senior MD [24]

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Okay. Great. And then can you update us on any leasing progress at -- the discussions on renewal at Jersey City? And if there's nothing to report there, could you remind us on the date that you expect to have a little bit more news on that?

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [25]

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Yes. So that building is -- the lease there with Pershing is just over 500,000 feet. That's about 75% of the building, I think in that range. It's most of the building. That lease expires in 2 years, but the tenant, Pershing, has a renewal option through the end of this year. So we have been in discussions for several months. We've made good progress. We're very hopeful to get that renewed with them and we feel good about the terms. We expect a slight roll-up in rents from existing in place. But I think we mentioned this on the call last time: we do expect to take back a bit of their space and maybe give them some flexibility down the road for a little bit more contraction. So the vast majority of their space, they'll keep for longer term but we may end up taking back a couple of floors as a result of negotiation just to give them more flexibility. But the good news is the bulk of it, we do expect to get leased. We hope to have more to report on that the next quarter or so. But these deals are never done till they're done, but we're very hopeful on that one.

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Sheila Kathleen McGrath, Evercore ISI Institutional Equities, Research Division - Senior MD [26]

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Okay. And last question from me. You'd previously mentioned that there may be some space on the sublease market at the New York Times Building in New York. I know that doesn't impact Columbia's cash flow, but I just wondered if you could update us on what's happening at that property and when tenants that are underutilizing their space, when are their lease expirations.

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [27]

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Sure. So the majority of that space is leased by Yahoo!, now Verizon and Snap. And in both cases, they are not fully occupied. They actually contracted their usage of the space, not have anything to do with the building but just their business plans and so forth. So the good news is we have about 6 years remaining on the Verizon lease. Snap is even further out than that. So you're right, it doesn't affect our cash flows in any meaningful way for several years, but we may have an opportunity to take back some space early at our option if there's another user, another tenant prospect that could be a win-win there for us and the existing tenant. If not, we've got good credit for several more years.

And Verizon has subleased a bit of that space already, a small percentage of it and there could be more of that. And so we're walking that line between we have credit in place but we want to manage the building, we want to manage long-term occupancy. We prefer to have direct leases but at the same time, we're only going to swap out these longer-term direct leases we have at good terms and good credit. We're only going to swap those out if it's a compelling opportunity. As that lease period gets shorter -- it's 6 years now but as it gets a few years shorter, we'll get a little more focused on that, but in the meantime, we're in the driver seat on that.

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Operator [28]

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(Operator Instructions) And your next question comes from Mitch Germain with JMP Securities.

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Mitchell Bradley Germain, JMP Securities LLC, Research Division - MD and Senior Research Analyst [29]

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Some thoughts on the buyback. I mean stock is around 6% below the last time you bought back stock. Obviously, your leverage came down a bit. You're implying a north of 6% cap rate. Why not view that as a good use of capital here?

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James A. Fleming, Columbia Property Trust, Inc. - Executive VP & CFO [30]

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Mitch, we do view it as a good use of capital. As you know, we look at a number of factors each quarter as we consider where to put our money in. And certainly for buybacks, we look at liquidity, we look at all of our sources and uses of capital, we look at where we want our balance sheet to be in. It's something we discuss with our Board every time we meet with the Board. We -- as I said earlier, we didn't buy any shares back this quarter. It was a result of a number of these things. Without really getting into a lot of details, what I would tell you is we do believe the value is compelling. We agree with kind of where you're going on this and we do expect to buy shares later this year.

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Mitchell Bradley Germain, JMP Securities LLC, Research Division - MD and Senior Research Analyst [31]

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Okay. I asked this question last quarter but I know that Church Street's on the contract. What's the cash outlay for you guys? I mean I think you haven't exactly agreed to the full terms of the JV. Have we gotten closer to that as of yet?

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [32]

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So we have some options there, Mitch. So today, we are co-GPs with Normandy and then we also -- in addition to that, we hold majority of our interest in a LP position. So we own the bulk. We, Columbia, own the vast majority of the property today. The plan is to close the property, advance the plan, including budgeting, maybe even contracting, maybe even getting firm contracts on the construction and the property teed up and then we'll test the market on syndicating the LP position, part of it, half of it and we'll maintain control and GP position along with Normandy. That's the plan, but we have options there. But in the near term, we own the bulk of it and we're controlling it. And we feel like the best time to go to the market to syndicate that, if we choose to, would be a little bit further down the road.

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Mitchell Bradley Germain, JMP Securities LLC, Research Division - MD and Senior Research Analyst [33]

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Got you. Last question. I know there was some confusion around Pittsburgh last quarter with regards to the guidance. So Jim, is there -- is Pittsburgh fully in guidance here? Or are you assuming maybe some sort of decline in the back part of the year with regards to a sale?

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James A. Fleming, Columbia Property Trust, Inc. - Executive VP & CFO [34]

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Yes. Mitch, we do have a range there and so that range can accommodate a number of different scenarios and we try to do that intentionally, but I will tell you we're assuming that we're on Pittsburgh for the remainder of the year. We're assuming we'll sell Lindbergh in July or August, and so those are basic assumptions in the model that we've got.

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Operator [35]

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There are currently no further questions at this time. I'll turn the call back to Nelson Mills for closing remarks.

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E. Nelson Mills, Columbia Property Trust, Inc. - President, CEO & Director [36]

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All right. Thank you. We really appreciate everyone's participation on the call and we're particularly thankful for the questions. It's a great opportunity to tell our story and we appreciate your attention and your interest in that story, and we look forward to updating you on our progress over the next few quarters. Thank you again for your time.

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Operator [37]

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This concludes today's webinar, you may now disconnect.