Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you elaborate more on the discussions you're having on the development side, especially for Austin and the Schuylkill Yards projects?
A: Gerard H. Sweeney, President, CEO & Trustee of Brandywine Realty Trust, explained that the leasing velocity is accelerating in higher-quality properties, which includes their developments. Despite macroeconomic uncertainties affecting larger tenants, smaller tenants are less impacted. The completion of project amenities is expected to generate more excitement and urgency among tenants.
Q: What are the chances that IBM might not move to a competitive project in Austin and stay in Uptown ATX?
A: Gerard H. Sweeney mentioned that while he cannot comment on IBM’s intentions or the other developer's financing efforts, Brandywine remains in close contact with IBM and is prepared to take advantage of any opportunities that may arise if IBM decides not to move.
Q: Can you discuss the behavior of tenants moving up the quality spectrum? Are they taking less space or keeping their total rent dollars the same?
A: Gerard H. Sweeney noted that tenants are focusing on quality workspaces that align with their brand and culture, which often leads to higher rental rates in better-quality properties. George Johnstone, EVP of Operations, added that tenants are prioritizing the right footprint and are willing to pay higher per square foot rates for better buildings.
Q: Regarding the guidance for the year, why is the bottom range staying the same despite interest costs affecting the top end?
A: Thomas E. Wirth, EVP & CFO, explained that the bottom range remains unchanged as they anticipate some transactional activity later in the year which could impact the results. The increase in interest expense was significant enough to adjust the top end of the guidance.
Q: How is the lease-up at 3025 JFK going, and what are the expectations for 1 Uptown when it comes online?
A: Gerard H. Sweeney reported positive leasing activity at 3025 JFK with effective rents holding steady and a tenant demographic in line with expectations. For 1 Uptown, leasing will start later in the year, but there is already some pre-leasing activity.
Q: Could you provide some insights on the status of getting a construction loan for the 3151 development?
A: Thomas E. Wirth mentioned that while the market for construction loans has been challenging, interest from lenders is strong, contingent on some pre-leasing. They are optimistic about securing financing once a few leases are signed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.