Good day, and thank you for standing by. Welcome to the Brandywine Realty Trust fourth quarter 2023 earnings call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. Please be advised that today's conference is being recorded. I would like to hand the conference over to your speaker today, Jerry Sweeney, President and CEO. Please go ahead. Michelle, thank you very much. Good morning, everyone, and thank you for participating in our fourth quarter 2023 earnings call. On today's call with me are George Johnstone, our Executive Vice President of Operations, Dan Palazzo, our Senior Vice President and Chief Accounting Officer, and Tom Wirth, our Executive Vice President and Chief Financial Officer. Prior to beginning, certain information that will be discussed during our call may constitute forward-looking statements within the meaning of the Federal securities law. Although we believe estimates reflected in these statements are based on reasonable assumptions, we cannot give assurance that the anticipated results will be achieved. For further information on factors that could impact our anticipated results, please reference our press release, as well as our most recent annual and quarterly reports that we file with the SEC. First and foremost, we hope that you and yours are well and are looking forward to a successful and ever-improving 2024. During our prepared comments, we'll briefly review our fourth quarter results and then spend time outlining the key assumptions of our 2024 business plan. After that, Dan, Tom, George, and I will be available to answer any questions. Looking at 2023, we posted fourth quarter FFO of $0.27 per share and full-year FFO of $1.15 per share. Our combined leasing activity for the quarter totaled 550,000 sq ft. During the quarter, we executed 240,000 sq ft of leases, including 66,000 sq ft of new leases in our wholly owned portfolio. In our joint venture portfolios, we achieved 312,000 sq ft of lease executions, including 140,000 sq ft of new leasing activity. Our quarterly rental rate mark to market was 13.4% on a GAAP basis and 7.5% on a cash basis. Our full year mark to market was 13.5% on a GAAP basis, which outperformed our business plan, and our full year cash mark to market was at 4.8% within our range. We ended the quarter 88% occupied and 89.6% leased, 100 basis points below our previously announced targets. That occupancy and lease percentage was lower due to two things. We anticipated December move-ins that slid until January. That was about 50 basis points of that change, and an anticipated portfolio sale that we had under agreement did not come to fruition. That was on an underleased portfolio, and that, impacted our occupancy, by 50 basis points. On the other hand, occupancy in our core markets of Philadelphia CBD, University City, Pennsylvania suburbs and Austin, which comprise 93% of four NOI, are 89% occupied and 91% leased. In looking just at our PA urban and suburban operations, we are 93% leased. As we highlight in our supplemental package on page four, eight of our wholly owned properties comprise over 50% of our overall vacancy, impacting our occupancy numbers by almost 500 basis points. Plans are well underway to address each of these projects, range from accelerated leasing and capital investment programs, as well as continuing to explore sale and conversion opportunities. Our 2023 spec revenue was $17.1 million in at the bottom end of our range. The metric was at the lower end of this range, due solely to lower leasing volumes in our Austin, Texas operation. The operating portfolio does remain in solid shape. Our forward rollover exposure through 2024 is now an average of 6.4%, and through 2026, an average of 6.2%. Several points to amplify in green shoots, if you will. The increase in physical tours has been very encouraging. Fourth quarter physical tours exceeded third quarter tours by 54%, exceeding our trailing four-quarter average by 55%, or over 200,000 sq ft per quarter. Also, our tour activity remains above pre-pandemic levels by 42%. On a wholly owned basis, 55% of our new leasing activity was a result of a flight to quality. Tenant expansions continue to outweigh tenant contractions, and our total leasing pipeline is up for the third consecutive quarter and stands at 4.2 million sq ft. That pipeline is broken down between 2 million sq ft in our wholly owned portfolio, which is up 300,000 sq ft from last quarter. We have 2.2 million sq ft on our development projects, which is up 150,000 sq ft from last quarter. The 2 million sq ft in our existing portfolio pipeline includes approximately 250,000 sq ft in advanced stages of lease negotiations, and also about 41% of our operating portfolio new deal pipeline are prospects looking to move up the quality curve. So while the timeline for lease execution remains more protracted than we would like, tour velocity and the composition of those tours, which, as you know, is the starting point for the leasing cycle, continues to improve. In terms of staging through the portfolio, proposals that we have outstanding are up 200,000 sq ft quarter-over-quarter, and leases and negotiations are up 170,000 sq ft from last quarter. Turning to the balance sheet, our year-end net debt to EBITDA was 7.5 x, which is up 0.1 of a point from the third quarter, primarily due to our delay in anticipated reduction in debt attribution from our unconsolidated joint ventures, asset sales being below our 2023 target, and a slight increase in our development and redevelopment spend. As a counterbalance to that, our core EBITDA metric, which excludes joint venture debt attribution and development and redevelopment spend, ended the year at 6.3 x within our targeted range. Looking at liquidity, on the liquidity front, controlled capital spending and our refinancing efforts have enabled us to maintain excellent liquidity as we close out 2023 and look forward to 2024. For 2023, we achieved our goal of having full availability on our $600 million unsecured line of credit. We also closed the year with approximately $58 million of unrestricted cash on hand. More importantly, as noted on page 13 of our SIP, based on our 2024 business plan, we expect to have full availability on our line of credit at year-end 2024. During the quarter, we also bought back $10 million of our 2024 unsecured bonds at a slight discount. We did complete $25 million of sales during the quarter. We did end the year about $78 million of sales, which was below our business plan range. While we received good investor interest, the lack of attractive lender financing resulted in pricing levels below our expectations, and given our strong liquidity position, we decided to postpone several sales until market conditions improve. As Tom will touch on, our consolidated debt is 96% fixed at a 5.1% rate. We do continue to assess our options to refinance our 2024 bond maturities. We're evaluating a secured mortgage financing on several of our properties or an unsecured offering. We expect to finalize that plan in the next 90 days, and our 2024 business plan does assume this refinancing occurs by June 30, 2024 at a mid-8% interest rate. As noted on page 38 of our SIP, we do have four operating joint ventures with loan maturities during the first half of 2024. Our ownership stake in those ventures ranges between 15%-50%. All of these loans are secured solely by the real estate and are non-recourse, with no obligation for either our partner or Brandywine to fund any additional money. That being said, we do believe these ventures present a valuable opportunity as the debt and real estate markets recover. As such, along with our partners, we are engaged in productive conversations with each lender. And while these discussions are progressing slower than we originally anticipated, we do expect a full resolution on each of these ventures within the next 90-120 days. G iven the nature of those discussions, we still do anticipate our overall joint venture debt attribution will be reduced by over $100 million. Looking at our dividend, we closed out the 2023 with full year FFO and CAD payout ratios, well covered at 63% and 80% respectively. As we noted in our supplemental package, we did record impairment charges totaling $151 million during the fourth quarter. That wholly owned impairment charge is really based on several assets located in our D.C. operation, really representing shorter hold periods, which is evidence of our intention to sell those assets as soon as permitted by market conditions. T hen, given certainly the unresolved loan renegotiation status on several of our unconsolidated operating joint ventures, we are recognizing impairment on several of those ventures on assets located in Virginia, Maryland, and suburban Pennsylvania. Looking at our 2024 business plan, we are providing 2024 guidance with an FFO range of $0.90-$1.00 per share, with a midpoint of $0.95 per share. The primary drivers of this guidance is additional interest expense equal to $0.15 per share, represents the full impact of refinancing done in 2023, both on our consolidated and our joint ventures, and the anticipated refinancing of our $350 million 2024 bonds. We will also, with our two of our residential projects entering the lease-up phase, we will recognize charges against earnings of $0.05 a share during 2024. That's really based on, as you know, is once residential projects are delivered, capitalization ceases, and we'll be recognizing those operating carry losses during the lease-up. There were several other items, including one-time items in 2023 we don't expect to occur in 2024. Slightly higher G&A expense is offset by additional land sales and other items that comprise the remaining $0.01. In looking at the operating metrics, our 2024 GAAP NOI will approximate 2023 levels. Our core portfolio year-end occupancy is expected to remain flat year-over-year. We do have several known move-outs during the year, so our average occupancy during 2024 will be slightly below our average occupancy in 2023. Our cash mark-to-market range will be between 0% and 2%. GAAP mark-to-market range will be between 11% and 13%. While the cash range is lower than our 2023 levels, it is driven purely by the regional composition of our projected 2024 leasing activity. Our mark-to-market in CBD and University City in the Pennsylvania suburbs will perform above our business plan range, while Austin will be below that, that targeted range. We do expect spec revenue will range between $24 million and $25 million, which is up 43% from 2023 levels. We are currently $19 million or 79% of the midpoint achieved. That midpoint level is above our historical averages, and we believe that puts our operating plan in excellent shape at looking at the current year. Occupancy levels were between 87% and 88%. Lease levels will be between 88% and 89%. Retention will be impacted by a couple move-outs during the year, and we target a range of improvement over 2023, but still in the 51%-53% range. Same-store cash NOI growth will be 1%-3%. We anticipate it being between -1% and 1% on a GAAP basis. Capital control will remain a key focus point, and we anticipate that our capital spend as a percentage of lease revenues will be about 12%, slightly above our 2023 result. Based on increased 2024 leasing activity, the continued development and redevelopment spend, we do project our net debt to EBITDA to be in the 7.5-7.8 range. We expect the $0.60 per share dividend will represent a 63% payout ratio and a 92% CAD payout ratio at the business plan midpoint. Our business plan does project $80 million-$100 million of sales activities to occur in Q4 with the minimal dilution. And while that CAD ratio is slightly above the 2023 levels, it is well covered, particularly as additional development revenue comes online. Looking at some financing, certainly with a more favorable tone to the interest rate and financing climate, we do expect investment sales market to improve as the year progresses. As such, we do plan to have a number of assets in the market for price discovery and have built $80 million-$100 million of sales into our capital plan, with again, as I just mentioned, those sales occurring primarily in the fourth quarter. We are targeting sales in the Met D.C. and Pennsylvania suburban markets. We also anticipate continuing to sell non-core land parcels. In looking at our developments, as noted earlier, our development leasing pipeline stands at 2.2 million sq ft. That's up 5% from last quarter. While we only executed several leases during the quarter, we did see the status of that pipeline advance. As of now, we have about 120,000 sq ft of leasing under early negotiations, 800,000 sq ft of proposals outstanding, and 240,000 sq ft of space undergoing test fits. Tour velocity does continue to pick up. Our objective is certainly to get our prospects across the finish line while continuing to build that pipeline. We opened 2024 with the commercial components of One Uptown and 3025 JFK delivered, so we do anticipate activity levels to continue to increase. However, given the length of time to complete space plans, obtain permits, and then construct the space, our 2024 financial plan does not include any spec revenue coming from these two projects. To accelerate revenue recognition, we are building 1-2 floors of spec suites in each building that will be completed by mid-year. When we take a look at our total development pipeline, from a cost standpoint, that pipeline is 31% residential, 41% life science, and 28% office. As we noted in the supplemental package, our remaining funding obligation on this entire pipeline is only $11 million. Looking at specific projects, 3025 JFK, which is our residential office life science tower, as I mentioned, delivered late Q4 2023. On the commercial component, we're currently 15% leased, with an active pipeline totaling 770,000 sq ft, which is up 88,000 sq ft from last quarter. The delivery of the additional residential units continues, with the balance phasing in over the next quarter. Activity levels remain good. Tours are occurring daily, and we currently have 83 leases executed for about 25% of the project, and 73% of those leases have taken occupancy. We do project the residential component of that project will be between 80%-85% leased by year-end 2024. In looking at 3151 Market, our 440,000 sq ft life science building, that is again on schedule and on budget. The building is scheduled for delivery in very late Q2 2024. We have a pipeline totaling 357,000 sq ft, with about 120,000 sq ft in early lease negotiations and 90,000 sq ft at the proposal stage, so a good advancement of that pipeline in the last quarter. We do continue to seek a construction loan, the 55% loan, the cost range, and expect that to close sometime by mid-year. Looking at our Texas projects, Uptown ATX Block A construction is also on time and on budget. Our leasing pipeline there includes a mix of prospects ranging from 5,000 sq ft- 200,000 sq ft. We did commence a floor of spec suites, and during the quarter, executed a 12,000 sq ft lease. We are also proceeding on building out an additional floor of spec suites. The multifamily component of 341 units will begin phasing in during the third quarter of 2024, and we anticipate that residential component will be 50% leased by the end of 2024. Our next phase of B. Labs expansion on the ninth floor is now complete. That is also 100% occupied. We have now shifted focus and commenced construction on the eighth floor of 27,000 sq ft, and we have three active prospects in the very advanced stages of lease negotiation there as well. So with that, I'll now, Tom, turn the presentation over to Tom to provide an overview of our financial results. Thank you, Jerry, and good morning. Our fourth quarter net loss was $157 million or $0.91 per share, and our results were impacted by several non-cash impairment charges, totaling about $153 million or $0.89 per share. Our fourth quarter FFO totaled $47.2 million or $0.27 per diluted share, and our full year FFO totaled $198.3 million or $1.15 per share, and was within our range of $1.15-$1.17 guidance range. Some general observations regarding the fourth quarter. During the quarter, we had several moving pieces and several variances to highlight. The contribution from our joint ventures was $2.2 million below reforecast, primarily due to increased costs to commence the lease up of our multifamily project at Schuylkill Yards, and a one-time charge at one of our joint venture properties that's non-recurring. Interest expense was $600,000 below reforecast, primarily due to some higher capitalized interest. We also forecasted two vacant land parcel sales to generate $1 million of earnings. One of those land parcels has been delayed to a 2024 close. On impairments, as Jerry mentioned, we recorded impairments on both our wholly owned properties and joint ventures. The wholly owned impairments were based on short and anticipated hold periods in the D.C. metro area, primarily in the D.C. metro area, and the joint venture impairments were based on the uncertain outcome related to the recapitalization of those partnerships. However, we do believe the ultimate success or recoverability of those investments. Our fourth quarter debt service and interest coverage ratios were 2.5 and 2.6 respectively, and net debt to GAV was 43.4%. Our fourth quarter annualized core net debt EBITDA was 6.3x and was within our range that we had given, and our combined net debt to EBITDA was 7.52x above our 7.1-7.3 high end of our range. Our leverage was within our target range. We didn't achieve that due to 2023 business plan sales targets, the debt attribution we had anticipated being reduced due to some of the recapitalization events that we hope to take place in the first half of 2024, and continued capital spend on the development projects. During the quarter, 2340 Dulles was stabilized and added to our core portfolio. On the financing side, we remain focused on the 2024 bonds and continue to evaluate funding on both the secured and unsecured financing market, with an objective of completing the financing in the first half of the year. We're exploring some property-level secured financing options, including another wholly owned CMBS transaction. We anticipate our ongoing sales and joint venture liquidation strategy will also generate additional capacity. As we've discussed in the past, we prefer to remain an unsecured borrower, and we'll continue to monitor the unsecured market as well. Given the above, we have seen improved pricing for both secured and financings since our first call. We will continue to seek the most efficient capital source with a bias towards the unsecured market. Regarding the upcoming joint venture maturities, as Jerry mentioned, we are working with our partners on the 2024 maturities, to potentially extend those current maturity dates with our existing lenders and commence marketing efforts, with some new lenders, on certain properties for sale to help lower JV leverage. Going to 2024 guidance at the midpoint, our net loss of $0.31 per diluted share and FFO will be $0.95 per diluted share. Based on our 2024 guidance range, this is a decrease of $0.20 per share. It's primarily driven by our interest expense going down, going up, and they're on both the wholly owned and JV side. Our 2024 range is built on some general assumptions. Overall, portfolio operations remain very stable, with property level GAAP NOI totaling roughly $305 million, or an increase of around $5 million compared to the prior year. Full year impact of 2340 Dulles and 405 Colorado will benefit us about $6 million. We continue to see the lease up of 250 King of Prussia generating several million dollars, 155 King of Prussia will commence operations in the fourth quarter and generate about $1 million. Offsetting that is about $4 million of reductions due to the 2023 sales activity, including losing the state of Texas. So that $4 million is income that was in 2023, that will not be in 2024. There will also be a modest increase in the same-store portfolio. FFO contribution from joint ventures will total a - $8 million -$10 million. This loss is primarily driven by our multifamily lease up on stabilization, and will total about $9 million. Also, higher interest costs on the operating portfolio in 2023 that are anticipated to occur in 2024. G&A expense will be between $35.5 million-$36.5 million. Total interest expense, including $4.5 million of deferred financing costs, will approximate $122.5 million, due to the refinancing of the bonds, which Jerry outlined, will increase quarterly interest expense by roughly $4 million. Forecasted higher use of our line of credit, to fund development, until our speculative second-half asset sales takes place, and forecasted higher interest rates compared to 2023. Capitalized interest will decrease about $6 million- $10 million, as current development, redevelopment projects are completed and become operational. Land sales and tax provisions, we estimate between $4 million and $6 million, as we anticipate further progress on selling non-core asset parcels. Termination and other fee income will be between $10 million and $12 million, which is slightly below our 2023 levels, due to some one-time activities in the 2023 results. Net management, leasing, and development fees will be between $11 million and $12 million. Slight decrease due to lower forecasted third-party fees. Expected property sales $80 million-$100 million will take place primarily in the second half of the year, with no material dilution anticipated. We anticipate no property acquisitions. We anticipate no use of the ATM or buyback activity, and we believe our share count will be roughly 174 million shares. Looking at first quarter guidance, property-level operating income will total approximately $74 million, will be below the fourth quarter operating number by $2 million, primarily due to some of the fourth quarter asset sales and higher operating costs in some of our portfolios. FFO contribution from our joint ventures will total -$1 million for the first quarter. That's again, primarily due to the ramp-up of leasing at our multifamily project here at Schuylkill Yards. G&A expense for the first quarter will total about $10 million. That sequential increase is consistent with prior years and is primarily due to the timing of deferred compensation expense recognition. Total interest expense will approximately $26 million. Capitalized interest will be about 3%. Termination fees and other income will total about $2.5 million. Net management fee and development fees will be about $1.5 million, and we have no land gain sale projected for the first quarter to be material. Turning to our capital plan, it's pretty straightforward. It's about $660 million. Our 2024 CAD range will be between 90%-95%. The main contributors to the higher range is primarily higher interest rates and expense, and interest on the loss, and losses on our joint ventures. Looking at the larger uses, we saw about $110 million of development spend, which includes spend on 155 King of Prussia Road. We have $105 million of common dividends, $35 million of revenue-maintaining capital, $30 million of revenue-creating capital, $40 million of equity contributions to our joint venture partners. That's both for capital, but also for some recapitalization of the joint ventures that we expect to occur in the first half of the year. And then $340 million bond redemption. The sources for those are gonna be $145 million of cash flow after interest payments, $343 million of net loan proceeds, either secured or unsecured. That'll decrease our cash by about $50 million. As mentioned, at the midpoint, $90 million of proceeds coming from land and other sales, and $32 million of construction loan proceeds to offset the spend at 155 King of Prussia. Based on the capital plan above, our line of credit is expected to end the year undrawn, leaving full availability. We also project that our net debt-to-EBITDA will range between 7.5x and 7.8x, with the increase primarily due to the incremental capital spend on our development projects, with minimal project income forecasted by the end of the year. Our debt to GAV will approximate 45%. An additional metric of core net debt to EBITDA should be 6.5x- 6.8 x. As of 12/31, it will primarily exclude our joint ventures, as all of our active development projects will be forecasted to be complete. We believe the core leverage metric better reflects the leverage of our core portfolio and eliminates our more highly levered joint ventures and our unstabilized development and redevelopment projects. We believe these ratios will be elevated through the development pipeline, and we believe that once these developments begin to stabilize, our leverage will decrease back towards the core leverage. We anticipate our fixed charge and interest coverage ratios will be roughly 2.2x, which represents a sequential decrease from this year, again, due to some higher interest costs. We continue to see stabilization within our joint venture developments this year, and we hope that the leverage will then begin to improve as we go into next year. I will now turn the call back over to Jerry. Thanks, Tom. So look, the key takeaways are, you know, the operating portfolio is in solid shape. As again, we have very manageable rollover exposure through 2026. We will continue to have a relatively strong mark-to-markets, good control over capital spend, and certainly, we're very pleased with the level of leasing activity through the pipeline that we are, that we are seeing. We recognize that we are executing a baseline business plan that will continue to improve our liquidity. It will keep our operating portfolio on very solid footing, with real clear focus on leasing up our development projects to generate forward earnings growth. So as usual, end where we started, which is that we really do wish you and your families well. Michelle, with that, we are delighted to open the floor up for questions. We do ask that in the interest of time, you limit yourself to one question and a follow-up. Thank you. Thank you. If you'd like to ask a question, please press star one, one. If your question hasn't answered and you'd like to remove yourself from the queue, please press star one one again. Our first question comes from Anthony Paolone with J.P. Morgan. Your line is open. Great, thanks. I guess maybe for Tom, you know, I think you quantified the drag from the apartments being about $0.05. And so I'm just wondering if you can give us a sense, like, when those are fully stabilized, does that $0.05 drag, does it become, you know, a few cents positive? Or like, what, what's sort of the bounce off of, I guess, what seems like maybe t he 2024 is perhaps, like the worst impact of bringing those things online? Yeah, Tony, I do think it'll turn into a positive couple of cents once it's stabilized. I think there, there's two sets of timing. I think that we will have some of those hits for Schuylkill Yards taking place in the first and second quarter, since they opened up, you know, end of the third quarter. So we'll begin to see positive NOI as we look at Schuylkill Yards, as we enter the second half of the year. But first half of the year, we will see majority of those charges that we talked about. And then separately, we expect to be fully open on the project at One Uptown. So again, second, probably third quarter, you'll see some charges starting to hit there for that project, while it leases up. I think as you get towards the end of the year, though, and go into next year, you should see a couple cents of positive momentum moving into the beginning of 2025. Okay. So, I mean, we should think about almost like, you know, I don't know, $0.07 of swing from 2024 into 2025 from those? Is that, like, order of magnitude? Yes, I think that's the order of magnitude, because right now, the NOI that's coming online is being offset by our, our preferred equity and interest expense. And until that NOI and so the NOI is just not high enough in the beginning to offset that. But yes, I think it's probably going to be about $0.07 swing as you go into 2025. Okay. And then just second one, maybe for Jerry. The 4.2 million sq ft leasing pipeline that you talked about, can you maybe give us a little more color as to the nature of the tenants driving that, maybe their industries, you know, type of space they're looking for and such? Yeah, Tony, George and I will tag team it, but we really haven't seen any perceptible change in the composition of the tenancies quarter-over-quarter. You know, our primary pipeline here in Philadelphia remains life science, institutional requirements, as well as law firms, accounting firms, engineering firms, etc. You know, down in Austin, the pipeline there is actually less tech-reliant and more service-related, whether it be insurance companies, financial service firms, insurance companies along those lines. So we've seen a fairly large drop-off in the larger tech requirements in Austin. But certainly, even as we saw at 405, the downtown building, that was leased up primarily to non-tech tenants. We're actually, given the dearth of new tech requirements and frankly, the amount of sublease space in that market currently controlled by tech tenants, we've really shifted our focus, as you mentioned a couple of quarters ago, to smaller-sized tenants that are very much service-based versus technology-driven, hence the reason we're building out a couple floors. But George, maybe you can add some additional color to that. Yeah, I think you hit the nail on the head. I mean, professional services seems to be, you know, the predominant, industry leaders, you know, whether that's financial services, law firms, and then obviously, as Jerry mentioned, you know, life science almost exclusively at 3151. But professional service, you know, pretty much, you know, everywhere else around the company. And just one other point of color on that. I mean, we continue to see, you know, a lot of these traditional service firms looking for a better corporate home. So that quality thesis, we do continue to see. We think that the quality of the space we're presenting, as well as the, you know, the relative stability of our company from a financial standpoint compared to a lot of private firms, is definitely narrowing the competitive set, which is, I think, one of the reasons why we're seeing the pipeline build at such a rapid rate. The challenge we have is to get that pipeline across the finish line, and I think we're very clearly focused on that, and wanna make sure that we meet all of our leasing objectives. Okay, great. Thank you. Thank you. Thank you. Our next question comes from Michael Griffin with Citi. Your line is open. Great, thanks. Jerry, in your opening remarks, you talked about how tour activity is notably above recent quarters. How quickly could we see that actually translate into demand and leasing for space? Not quick enough for me, Michael. It's, we're putting a full court press. We are, you know, responding to a lot of RFPs, RFIs. The level of tour activity has picked up. Like, even in Austin, Texas, I mean, you know, the amount of tour activity we've seen just thus far this year, and it's only really one month under the belt, you know, is equal to about 2/3 what we saw last year. So we are beginning to see a number of, as I term, green shoots. And, you know, the major challenge of just getting them across the finish line. I mean, a data point that's helpful, I think, is, you know, our spec revenue target this year is well above what the spec revenue target was last year. We are entering this year, you know, close to 80% done on that spec revenue target. That provides a very solid basis for us to try and generate some additional leasing revenue coming in, in the second half of the year. We have also started to take a more aggressive approach on, you know, pre-building some of our spaces. Not necessarily spec suites, but doing whatever we can within our buildings to get as much done as possible so that we can compress the time, from, you know, lease execution to occupancy. We've expanded our internal space planning team, which is extraordinary. So they're able to turn space plans very quickly. Based upon those preliminary space plans, we're able to, you know, drive any long lead order times for tenants. So the name of the game is, I think, the theme that you hit on, which is: How do we compress tour-to-proposal to occupancy? And that's a whole company initiative, from our leasing teams, to our legal teams, our interiors, our space planning folks, and our construction development team. So we recognize the urgency of getting additional revenue into our portfolio. So every building has been examined to make sure that we've got every vacant space in great shape. We are tracking tour volume. We're following up at a senior executive level with all of our key prospects. So, as I mentioned, a full court press at every level of the company to continue to build that pipeline through our social media and marketing outreach programs, and then capture more than our fair share of transactions that come through the door. But you haven't seen tenants, you know, they're still taking a while to make these decisions, right? They haven't shortened their timeframe in terms of leasing decisions. You're just seeing more inbounds in the forums, is correct? Yeah, yeah, you know, I hate to give you a generalization because it really is so anecdotal. We've had some companies that make decisions very quickly and move very quickly. We've had other ones, particularly the larger ones, that tend to be a little more like over-deliberative in kind of thinking through their space. But George, do you have any color on that? Yeah, I mean, I think the cycle times have remained relatively unchanged. I do think, as Jerry mentioned, that, you know, the larger the tenant, oftentimes, that decision is taking a little bit longer because they're sometimes going through the analysis of combining several locations into one. And we've seen that with a number of tenants, kind of taking that flight to quality and, you know, "Okay, we're gonna move out of two different buildings into this one." and then, you know, going through their demographic studies of commuting times and things like that. But, you know, the one thing we're encouraged by is, in terms of, you know, converting tours into proposals, you know, we're running at about a 40% success rate. And then, you know, once we've got somebody at the proposal, you know, we're running at about a 30%, low 30% conversion to an executed lease. So we do kind of feel that, you know, once we get somebody into the building, get them comfortable with the space, we've got a, you know, a great opportunity to convert it. But again, as we've discussed, you know, the entire decision isn't solely ours. Gotcha. That's helpful. And then maybe just one on the debt stuff for Tom. For the JV debt, you know, coming due or that it's already past due, you know, you talked about kind of conversations that you're having with your lenders right now. Does it make sense to put additional financing on it, or would you almost be better off kind of handing back the keys on some of those properties? Yeah, I think that we would probably not want to put additional financing on. I do couch that by if there was a potential for us to put in capital that would be at a level that we would recover that ahead of ahead of the debt or ahead of a portion of the debt. That may be something we would consider, but I think for most of them, to put in it on additional debt or that would not be a preference. Although I will say one of the financings that we will look to do this year, we probably will look to lower the balance of that refinancing debt, and that may come in the way of contributions from the partners to refinance that property. So there is one situation where I think when we do refinance it, we will, you will see us add capital, and we do have that in our liquidity plan. The other, the others, no, it would, it would not be a situation where we put more debt on those. All right. That's it for me. Thanks, bye. Okay. Thank you. Thank you. Our next question comes from Dylan Burzinski with Green Street. Your line is open. Hi, guys. Thanks for taking the question. Just wanted to go back to some of the occupancy comments that you had talked about in your prepared remarks. So we're talking, you know, you guys came in 150 basis points below where you guys had targeted coming into the quarter. You'd mentioned 100 basis points, 50 of that being occupancy sliding into January, and 50 basis points from a portfolio sale that didn't come into fruition. So I guess just curious, what was the other 50 basis points drag on occupancy that you guys thought you had when you guys provided guidance last quarter? Yeah, Dylan, it's George. Yeah, so the third component really was just not getting pipeline conversion on a number of new deals that have kind of carried into 2024, that we kind of thought we were gonna get, you know, get those kind of executed and into the lease number. And then I guess just on that portfolio sale, can you kind of talk about, you know, was it clearly. Was it just a reason that they could not get debt, and that's sort of why the transaction never happened? Or can you just give us additional color on sort of what happened with that particular portfolio sale? Sure, be happy to. It was called an underleased portfolio, which remains in our wholly owned stack right at this point. It was really to a non-institutional-grade buyer who was fairly thinly capitalized and was looking for third-party financing. When that didn't prove out to be the case, they proposed that we take back a significant piece of seller financing, which we, as we talked on the previous call, we were willing to do. But I think the terms of that seller financing were such that we felt holding that portfolio for short term, get some near-term lease renewals done, wait for better capital market, presented a better opportunity for us to recover value. It did impact the year-end numbers. Obviously, that portfolio does impact our 2024 numbers, but we felt from a financial and a return standpoint, it was the right decision not to proceed with that sale. Great. Thanks, guys. Thanks, Dylan. Thank you. Our next question comes from Steve Sakwa with Evercore ISI. Your line is open. Yeah, thanks. Good morning. I guess just following up on Dylan's question, Jerry, just help us, like, think through what, you know, what's the confidence level that you have in the 88% on the percent leased and the occupancy for this year? Given the things you just outlined, slower, you know, time to get things over the finish line, like, just what conservatism or buffers have you put into this year's plan, maybe versus last year? Well, I think we have a high degree of confidence in the numbers we've put out. And I think it's evidenced by the high percentage of execution we already have in place, as well as a thorough review of the status of our entire pipeline. So bottom line, confidence level, very high. I think if we look at sensitivity, you know, we do have some revenue coming in from our Austin, Texas, operation, which is always a risk, just given the slow velocity in that marketplace. Now, again, as I mentioned, we've seen an uptick in activity. We again have a good, good portfolio to market, but certainly, we would expect that even if that were to be slower, we would make up for that, as we have in many past years, by increased velocity in our Pennsylvania suburban, University City, and CBD portfolios. But George, maybe you have some additional thoughts. Yeah, sure. I mean, in terms of square footage, you know, the open plan is, you know, roughly 340,000 sq ft. You know, 100 of that are renewals that we feel confident about, and then about 240,000 sq ft of new leasing. And, you know, again, we've got 55% of that new leasing coming out of Pennsylvania, both the suburban and the downtown operations, and about 42% coming out of Austin. So we think, you know, again, the fact that, you know, at $19.3 million achieved, I mean, we've kind of achieved last year's total spec revenue run rate, and we think the balance of the plan is certainly achievable. You know, we're doing everything we can every day to hopefully outperform that plan. But I think in terms of expectations, we think these are appropriate given where we are today. Okay, thanks for the color. Jerry, I think if we did the math right, you know, the leasing on the residential in Schuylkill was pretty slow in the fourth quarter. If we did our math right, maybe there was 20 leases done in the, in the fourth quarter from the last time you had reported. Is that correct? And if so, you know, why was the leasing so slow on that, on that new project? I know time of year is a little tough, but 20 in a quarter just seems abnormally low. Yeah, I think, Steve, a great question, and I think your math is always correct, If I remember correctly. But you know, we wound up, you know, our last earnings call was late October, and I think that the numbers we gave kind of reflected that leasing activity through the earnings date. So frankly, from our standpoint, just to backdrop, we were really delighted to get that level of activity because a lot of the amenity space in the buildings weren't completed until much later in the year. So, you know, we did have a slower November and December, primarily as a function of the holidays, but tour activity has picked up. There's a seasonality to it, so we, you know, we do expect to, you know, do 12-13 new leases in each of January and February and kind of move into an accelerated pace as the spring leasing season picks up. But, you know, we really benchmark that based on the number of tours. We've had as many as 7-8 tours a day coming through the project. And now, again, that it's 100% physically done. The outdoor park area is done, the lobbies are finished, all the furniture is at the amenity floor, the outdoor amenity deck is fully operational. We really do expect to see a good acceleration of that leasing velocity going into the full season. As I mentioned, you know, we do expect it to wind up being about 80%-85% leased by the end of the year. Just a quick follow-up. Are the rents that you're achieving and the concession levels consistent with what you'd budgeted, or have rents and/or concessions kind of been better or worse than you thought? No, we had a level of concessions that were in line with our pro forma to kind of do the opening occupancy levels. Right now, you know, the average rent's around $3,200 a month, and we're running right on line with our pro forma. And certainly, as we start to move into the leasing season, we hope that the concessions we were giving will disappear based upon the tour activity that we're seeing. So we have high level of confidence the pro forma that we pulled together for this project will be executed. Great, thanks. That's it. Thank you, Steve. Thank you. Our next question comes from Upal Rana with KeyBanc. Your line is open. Hi, good morning. Could you talk about some of the sequential changes you saw on the development pipeline? You know, I saw that there were some ownership increases, completions, and stabilization dates that were pushed out, and some additional leasing done. So if you can give some color on that, that'd be great. Sure. We can tag team that. You know, the increase in ownership, you know, as you may recall, those, the Schuylkill Yards and the Uptown ATX developments are in joint ventures. Those joint venture partners are preferred, so they had an obligation to fund up to their level of investment, which they've done. And beyond that, you know, we make additional capital contributions. As we make those capital contributions, our ownership percentage could change. So that's the reason for that. You know, I think where there were changes made to the development schedule, it simply reflects what our reassessment has been of the time to get space actually built out and delivered. You know, we continue to see delays at the regulatory level of getting permits approved, getting all the appropriate clearances to actually build out space. One of the reasons why I was mentioning that we're, you know, doing a lot of interior space planning and spec build-out, so we can kind of circumvent that that delay process. And, yeah, Upal, on the reason for that is we do most of those increases that that's causing us to put in more capital was really related to interest rates and in carry on the on the project. So, you know, when we started these projects, we had a certain level of even before we started, while we were working on the on the loans we had a certain level of interest based on where the curve is at the time, and that kind of got built into the budget. Certainly as rates went up a little faster than we thought, and they're coming back down a little slower than we anticipated, they've caused that part of the budget to go up, and that's what we're funding primarily. There hasn't been many increases other than just some of the interest numbers related to the loans going up, and we've chosen to fund those, as Jerry said. Okay, got it. Thank you. And as a follow-up, you know, could you talk about any updates on the vacancy reduction plan? You know, what's the breakdown of some of the assets that you plan on leasing up, selling and converting on the listed assets? I know you mentioned some of the disposition plans and timing, so wanted to see if there's any other, color you wanted to add there. Well, the full court press is on leasing a number of those properties, particularly when we take a look at some of the higher quality projects on that list, like Cira Center, 401 Plymouth Road. So there it's more of an accelerated leasing marketing outreach program. We take a look at, you know, 101 West Elm, we have commenced a significant lobby renovation there and common area upgrade that we think will help reposition that property. 300 Delaware Avenue, you know, we're evaluating the feasibility of the conversion opportunity on that project to residential, as we are with a couple of these other projects as well. So, I think it ranges across the board, but I do think we've identified a couple of those as probably more appropriate for a residential conversion opportunity versus continuing to re-tenant it as office space, and then making some capital investments in a couple of the projects as well, in their lobbies, common areas, et cetera. Great. Thank you. Thank you. Thank you. Our next question comes from Bill Crow with Raymond James. Your line is open. Hey, good morning. Jerry, first question is, when you look at the competitive leasing landscape in the Philly and Austin markets, is it your sense that your competitors are getting more desperate and urgent, and they're leasing less urgent and desperate? Where's the market stand from kind of a panic perspective? Yeah, a good, good question, Bill. I look, I think as I touched on earlier, that we are in a very good position, given the quality of the product we have and our ability to execute, both from a tenant improvement brokerage commission standpoint. And that's really been one of the wonderful things about having an unsecured balance sheet, which is why Tom, I think, touched on, we, you know, our preference to remain an unsecured borrower. It gives us really good operating latitude. I think a lot of our private market competitors have secured financings in place. They certainly, they may not have the ability to fund the TIs, or may be in the middle of loan negotiations. They may be trying to work out refinancing programs. And all that just signals a delay in execution to a tenant market that wants, in this kind of climate, particularly given the macro overtones, a high level of certainty of execution. So we think that really is a wonderful competitive advantage for us. I would not define it as a panic mode at all. I think, you know, more leasing activity. Absorption numbers still are fairly bleak in most of the markets, but you're seeing more tenants in the market, more tenants looking for higher quality space. So I think at the higher end of the quality class, those properties seem to be performing much better, to wit, our, you know, our CBD Philadelphia property is staying in the 90% lease range, certainly compared to a 20% vacancy, is the best evidence we can give that, you know, we'll continue to see deals. And even, Bill, where there is a call it a panic mode on the part of one landlord, if they don't have the right product, they're not gonna get the deal. Because the, you know, the consumer preferences, as we've talked, you know, is changing. I mean, tenants, as they're bringing people back to the workplace, want a higher quality work environment. They want a very strong management services delivery platform, which we have, and they want to know that they have confidence that their landlord is going to be there, to service them through their entire course of their tenancy. So I think the market, the macro tone seems to be a little bit more dour than what we're seeing at the ground level. But we recognize that, like, the other office companies, we need to demonstrate that change in tone through lease execution. Yeah. And that's really the focus for the company. I appreciate that. I do have a follow-up for Tom. I think if I go back to Tony's question about the cadence and the recovery of the development, the $0.07 that you outlined in stabilizations. Do you think earnings hit bottom, you know, late this year, as we kind of go through the asset sales, the refinancing, and then we build off that? Or is the $0.07 that we're gonna capture over the course, you know, into 2025, enough to keep you flat or positive in 2025? Yeah, you know, if you look at our yields on our multifamily, Bill, if once they get to stabilization, they're gonna be generating over $0.09 of NOI, right? So that's kind of like if they hit stabilization, which will occur in the beginning, the first half of 2025. Right now, we're projecting for this year, for them to do less than $0.03, you know, the $0.02-$0.025 range. So really, it's a swing between that NOI, where it is. So for example, you know, in one of our projects, the one that's gonna start up in Austin, they're gonna generate negative NOI for 2024. So when you couple that with the lease-up that's starting to occur here at Schuylkill Yards, you're getting to an NOI number that's at $0.06 below. So the fact that when you turn on both the preferred and the interest expense, that's all getting, those are where those losses are coming from. As we grow from that, $0.02-$0.03 of NOI that we're expecting over the course of this year, you'll start to hit that full $0.09 of, of earnings on the multifamily, call it, end of first quarter, beginning of second quarter of 2025. 25 +, right? Yes. We see the growth overall. Yes, that's the NOI growth overall, because we're already taking full hits on the interest and the preferred as you get into the third and fourth quarters, because both projects will be fully available and fully taking those charges. All right. Perfect. Thank you for your time. Yep. Thank you, Bill. Thank you. And our last question comes from Omotayo Okusanya with Deutsche Bank. Your line is open. Yes, good morning, everyone. I wanted to go back to the interest expense forecast for the year. Tom, the debt refinancing that you have planned for the year, that debt comes due in Q4. I'm just curious if it's gonna be refinanced earlier, which is why it's having a bigger impact of interest expense? I'm also wanted to understand the type of SOFR forecast you were using on your variable rate debt and how that's impacting your interest expense forecast as well? Sure, Tayo. So I'll start with the bonds. So a couple of points on that. One is, as we talked about on our last call, we prefer doing that bond deal a little sooner than later. However, since the last call, we have seen rates come in quite a bit. I think that our borrowing costs have probably come in on a secured or unsecured deal, at least 150 basis points. So the tone has been better for us to get a bond deal done or a secured deal done. I think, though, we would prefer getting one done earlier than later, Tayo. So if you look at that cost, if we do one in the second quarter, every quarter, we think roughly $4+ million of interest expense, in additional interest expense by taking out that bond early would occur. So if we think we're gonna do a bond deal or a secured financing in the second quarter, whether it's unsecured, secured, that will add, you know, about $8 million over those two quarters to the bond deal in mid-October. So that is a big charge. On the SOFR side, as we mentioned, we may be using the line a little bit more this year versus last year. We do have floating rate debt at the JV level. Not all of that debt is fixed, so we have been taking SOFR charges there. Then the normalization of the A and we have been using the curve, Tayo. When we go through our numbers, we do try to use the curve with a little bit of cushion on there. But I would say also, the biggest, the biggest thing in the JVs was the Commerce Square loan, which was partially in 2023, full year effect of 2024. So we're looking at roughly, we were looking at over $6 million of interest charges year-over-year because of that and because of SOFR. Gotcha. Thank you. Thank you, Tayo Thank you. There are no further questions. I'd like to turn the call over to Jerry Sweeney for closing remarks. Great. Well, Michelle, thank you for your help, and thank you all for participating in our call. Wish you a good day, and we look forward to updating you on our business plan on our next quarterly earnings conference call. Thank you. Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.