Good morning. Welcome to Boston Properties' Fourth Quarter and 2020 Earnings Call. This call is being recorded. All audience lines are currently in a listen-only mode. Our speakers will address your questions at the end of the presentation during the question and answer session. At this time, I'd like to turn the conference over to Ms. Sara Buda, VP of Investor Relations for Boston Properties. Please go ahead. Great. Thank you, good morning, everybody, and welcome to Boston Properties' fourth quarter 2020 earnings conference call. The press release and supplemental package were distributed last night and furnished on Form 8-K. In the supplemental package, the company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G. If you did not receive a copy, these documents are available in the investor relations section of our website at investors.bxp.com. A webcast of this call will be available for 12 months. At this time, we would like to inform you that certain statements made during this conference call, which are not historical, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Although Boston Properties believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors and risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements were detailed in yesterday's press release and from time to time in the company's filings with the SEC. The company does not undertake a duty to update any forward-looking statements. I'd like to welcome Owen Thomas, Chief Executive Officer, Doug Linde, President, and Mike LaBelle, Chief Financial Officer. During the Q&A portion of our call, Ray Ritchey, Senior Executive Vice President, and our regional management teams will be available to address any questions. I would now like to turn the call over to Owen Thomas for his formal remarks. Thank you, Sara, good morning, everyone. Today, I'm going to depart from my typical organization of remarks and instead summarize all the reasons why we are confident in Boston Properties' future prospects and enthusiastic about the company's growth potential at this unique point in time. As part of my comments, I will address accomplishments and challenges of the past year, current capital and property markets conditions, as well as Boston Properties' capital allocation decisions and strategy. Why BXP and why now? I will begin with three points on Boston Properties' potential for income growth, both in the short and long term from where we closed out 2020. First, our variable income streams will recover. Over the next 24 months, Boston Properties will likely enjoy one of its most significant and predictable improvements in economic conditions and leasing activity as we witness the end of the COVID-19 pandemic. Two vaccines with high efficacy rates have been FDA approved, 5.8% of Americans have already received at least one dose of the vaccine. The more easily refrigerated Johnson & Johnson vaccine is near approval, and health authorities are advising that anyone who wants to be vaccinated will be accommodated by this summer. The Biden administration is aggressively pursuing a more rapid vaccine rollout, as well as economic stimulus to help bridge the economic damage caused by the pandemic. Given the herd immunity created by a high percentage of the population either recovered from infection and/or vaccinated, infections will likely drop precipitously in the middle of the year. We are all anxious to come out of isolation and return to our normal lives. As the infection rate drops, the economy will reopen, and individuals will return to offices, restaurants, shops, theaters, and travel. Approximately $97 million of Boston Properties' FFO decrease in 2020 came from the variable income streams of parking, our single hotel, and retail customers, all of which were devastated by the lockdowns. We will likely see a strong recovery in these variable income streams in the near term as the economy reopens. Second, Boston Properties' office portfolio is stable. We have been collecting through the pandemic over 99% of our office rents owed, demonstrating the quality of our buildings and office tenants. Only 7.1% of our leases roll over this year, and we experienced 20% roll-ups on average the last three years, providing a cushion for decreases in market rent caused by the pandemic. We have signed over 600,000 sq ft of leases on currently vacant space that will experience rent commencement in 2021. We expect the non-cash charges experienced in 2020 for accrued rent balances to diminish, if not cease, in 2021. We are now recognizing rent on a cash basis for all theater and co-working tenants, as well as the vast majority of retail credits we consider at risk. We will also be delivering in whole or part three assets into service this year. 100 Causeway, 159 East 53rd Street, and 200 West Street, just under 1 sq feet in the aggregate and 95% leased. Third, Boston Properties has significant external growth drivers, which are readily quantifiable over the next four years. We currently have under development and redevelopment seven projects comprising 3.7 million sq ft and $2.2 billion in total investment. These projects are 88% pre-leased, fully funded with cash on our balance sheet, and projected to generate cash yields on cost at stabilization of approximately 7%. In addition, we recently delivered 3 Class A urban apartment complexes in Boston, Reston, and Oakland with an aggregate of 1,350 units that are only 56% leased and have substantial income upside as the economy reopens. We expect the income from delivering this development pipeline to add 3.4% annually to our FFO growth over the next four years. We also anticipate starts this year of over $800 million, the majority of which are new life science developments and conversions. Lastly, we own or control land aggregating over 16 million sq ft of potential office, lab, and residential development, which we will commence as dictated by market conditions. My next points relate to our business model and strategy. A core strategic principle for Boston Properties is to build, acquire, and own high-quality buildings. Our portfolio is dominated by Class A urban assets, many among the leading buildings in their respective markets, such as Salesforce Tower, the General Motors Building, 200 Clarendon Street, and Kendall Center. Higher-quality buildings stay more occupied and perform better in times of recession, as certain customers take advantage of lower rents to upgrade their space. For example, VTS reported from their database that tours for Class A buildings in New York City went from 38% of total before the pandemic to 54% during the pandemic. Another hallmark of our quality strategy is market selection, as we believe in the long-term health and attractiveness of our coastal gateway markets. We acknowledge the economic damage to local businesses and city budgets the pandemic has wrought, as well as individual relocations to lower tax jurisdictions. We remain confident in the attractiveness of our target markets for two basic reasons: the clustering of knowledge workers and increased barriers to new supply. The cities where we currently and aspire to operate, New York, San Francisco, Boston, Washington, D.C., Los Angeles, and Seattle, have unmatched educational, cultural, and civic resources which attract the leading clusters of knowledge workers in the U.S., particularly in computer science and life sciences. Knowledge workers have more job opportunities and are more productive when working with others in clustered environments. Future job growth and office demand is going to be driven in the technology and life science fields, where our target markets have a distinct clustering advantage. To create value in office real estate as an owner, you need rental growth, which is driven by both job growth and barriers to supply. Our markets have built-in obstacles to new development, including a dearth of available sites, difficulty in permitting, anti-development local ordinances, and cost and complexity in construction. My last point on business model is Boston Properties' fully integrated operating capability and quality of execution. In 2020, we were able to lease 3.7 million sq ft with a weighted average lease term of 8.6 years, which is around 60% of our recent annual leasing averages, while the leasing activity in our markets was approximately 40% of recent annual averages. In all our core cities, we are a market-leading participant, providing advantages in accessing new investment opportunities, procurement, and attracting and retaining talent. We are an industry leader in ESG performance as measured by GRESB, the EPA, USGBC, Energy Star, Fitwel, and others, and were recently recognized as the leading office company and second-best property company in Newsweek's 2021 Most Responsible Companies ranking. My next points relate to valuation. Because of the pandemic and the variability in our parking, retail, and hotel income streams, Boston Properties' FFO dropped approximately 15% the last three quarters of 2020 versus pre-pandemic levels, which is clearly disconnected from our stock price, which has dropped 37% over the same period. The gap is caused by expectations, specifically concern about gateway markets, addressed earlier, and the impact of work-from-home on office demand. I will reiterate that we think more remote work is here to stay after the pandemic, but concerns over the impact to office space demand are overblown. Business leaders want their employees back in the office to foster culture, collaboration, teamwork, and mentoring, and to provide more supervision. In a recent employee survey completed by Gensler, workers want to return to the office as well, where they believe they are most productive and collaborative. 52% want a hybrid model with more time to work from home for convenience and safety from COVID-19, fears of which should dissipate over time. However, 90% of those employees surveyed want an assigned workstation when in the office. While only 21% of those surveyed had a private office layout, 47% wanted it. Though employees may be working remotely more in the future, it will be difficult for employers to translate lower census into space savings due to employees' desire for more privacy and a fixed workstation. There is also a disconnect between where the private real estate market is valuing Class A office assets and gateway markets and where the public market is valuing Boston Properties. At our current share price, the look-through cap rate on our portfolio is 5.9%. High-quality office assets comparable to much of Boston Properties' portfolio are trading at sub 5% cap rates. Though office transaction volumes were down materially in the last three quarters of 2020 from the prior year, activity improved each quarter as investors returned to the market. Volumes were down 45% in the fourth quarter versus the fourth quarter in 2019, but were up 59% sequentially from the third quarter. Office was no more out of favor than other asset classes after the pandemic, as office transaction volume was 29% of total commercial real estate volume, both in 2019 and the last three quarters of 2020. There continues to be a robust market for life science real estate, as well as quality office buildings in technology-driven markets with more limited leasing exposures. Just in life science, life science is a portfolio dominated by a leasehold interest in University Park in Cambridge, sold for $3.4 billion, around $1,500 a square foot, and a mid 4% cap rate with roll-up potential. A partial interest in Discovery Park in Cambridge was sold for $720 million, representing $1,190 a sq ft and a 4.7% cap rate. In office, 410 10th Avenue in New York City sold for $950 million, which equated to $1,490 a sq ft and a 4.5% cap rate. 510 Townsend and 505 Brannan Streets in San Francisco sold for a combined $570 million, $1,280 a sq ft and a 5% cap rate. Though both buildings are leased long-term, one is being sublet in full by its user. In the Seattle CBD, a leasehold interest in 2+U sold for $700 million, $1,020 a sq ft and a 4.7% cap rate. 1918 8th Avenue sold for $625 million, $940 a sq ft, and also a 4.7% cap rate. There is material investment activity in like assets to Boston Properties. With interest rates forecast to remain low and the economic recovery described earlier, we expect transaction activity to increase and cap rates potentially to tighten for well-leased assets. Lastly, Boston Properties has the balance sheet and access to capital to take advantage of opportunities that will present themselves as a result of the pandemic. We currently have $3.2 billion in liquidity, and after the redemption of our unsecured bonds and fully funding our current development pipeline, we'll have $1.5 billion of liquidity remaining. We have been more actively monetizing in-service assets, having completed $570 million in gross sales in 2020, and we expect a similarly elevated level of activity this year. We have access in size at attractive terms to the unsecured debt market if needed, and have been developing increasingly formalized relationships with large-scale private equity partners to help us fund acquisitions. We have a reasonable pipeline of potential new opportunities in our core markets and Seattle, continue to look for investments that require leasing and/or redevelopment to take advantage of our operating skills and to create higher returns. As mentioned, we also intend to invest more aggressively into life science real estate and have 5.8 million sq ft of new development and redevelopment projects under our control, located primarily in the life science hubs of Cambridge, Waltham, and South San Francisco. In conclusion, the COVID-19 pandemic continues to create a very challenging environment for many sectors of the U.S. economy and commercial real estate, including office assets. However, the end of the pandemic is approaching, and we are confident Boston Properties will emerge with strength and momentum given our portfolio quality, income stability, growth potential, access to capital, and highly engaged management team. Doug, over to you. Thanks, Owen. I thought about just sort of stopping right there and starting the questions, but I guess I'll make some remarks and give some time for Mike as well. Good morning, everybody. As we sit here in January of 2021, we are shifting from COVID as the obstacle to a pickup in activity to vaccine, as the signal to rejuvenate tenant conversations about bringing staff back to the office and starting the leasing transaction processes. There is no question that the rapid increase in COVID cases over the last six weeks of 2020 and the beginning of 2021 suppressed leasing tours and discussions during that period of time. In the last two weeks, two large Boston companies have announced their expected return to work dates. We signed an LOI for a 70,000 sq foot tenant that's going to need space in December of 2021. Just yesterday, Amazon announced in Boston that they are committing to another 630,000 sq ft to be built office building and bringing 3,000 additional jobs to the Boston CBD. While the first half of 2021 is expected to be quiet, we are cautiously optimistic that we've been through the worst of the pandemic, and that the latter part of 2021 will have a discernible pickup in leasing transaction volume, parking revenue, and retail sales. The year-end market leasing reports that are published by the commercial brokerage organizations held few surprises, as you probably heard through many of the analyst calls. Leasing volumes were way off their historical pace, and with the significant sublet space added to the market, we saw negative absorption and increased availability everywhere. It's important to remember that there are 2 types of sublet space. First, space that comes from users that have had changes in their employee headcount and are clearly no longer going to need all that space. Then there's the second group, tenants that are being opportunistic, listing their entire premises, by the way, at no cost to them, with an expectation that they'll decide what to do if they get an acceptable, actionable offer down the road. They may reoccupy, they may relocate and transact, or they may find a way to sublet a portion of their space. We just don't know. Based on all the conversations we have had with our technology, our life science, our professional service, our legal, our financial firms, as well as the leasing brokers that are responsible for these listings, a change in workplace strategy, AKA, we're going to work from home, or we're going to go to a disaggregated workforce, that's not what's driving the bulk of the sublet activity. One thing is sure, not all the sublet space is actually available. You might find the following illustrative of that. In Midtown Manhattan, after the Great Recession, according to CBRE, from 2008 to 2009, about 24 million sq ft of space was put on the sublet market. Between 2009 and 2010, 13.6 million, or 57% of that, was withdrawn from the market. Not all space is available. The Boston Properties office portfolio ended the year at 90.1% occupied. The quarterly sequential drop is entirely due to the addition of Dock 72 at 33% leased into the in-service portfolio. As Owen said, we have 600+ thousand sq ft of signed leases, 134 basis points in our in-service portfolio that has not yet commenced revenue, and hence is still defined as vacant, but it has been leased. We completed another 1.2 million sq ft of leasing during the quarter. On a relative basis, my view of the ranking activity on our portfolio, active lease negotiations, tours, RFPs in our markets is as follows, starting with the best and moving to the least. Boston, Waltham. By the way, we don't have any available space in Cambridge. Northern Virginia, Midtown Manhattan, Princeton, Los Angeles, the Peninsula Silicon Valley, D.C., and finally, the CBD of San Francisco. During the fourth quarter in the Boston CBD, we did five leases, including another full-floor new tenant at Atlantic Wharf. The cash starting rent on this full-floor lease will be 34% higher than the expiring rent, and there are future rent increases. The cash rents on the other four leases had a weighted average increase of about 30%. We continue to have additional activity in our CBD Boston portfolio, albeit with a number of smaller tenants under 10,000 sq ft. A few are looking for incremental growth, and a few are considering letting their 2021 leases expire and are now actively engaged in short-term renewal conversations. I also want to note that we finally obtained possession of the 120,000 sq ft, two-story former Lord & Taylor building on Boylston Street during the early part of this month. This was a big win, as we believe we can find a far more productive use for this box that has been under lease since the mid-1960s to Lord & Taylor. In our suburban Boston portfolio, we completed 226,000 sq ft of new leasing, including all the remaining space at 20 CityPoint, first generation. This is in addition to the life science lease we did at 200 West Street. The cash rent on the second generation leases, about 150,000 sq ft, was up an average of 23% on a cash basis. We continue to have additional activity in suburban Boston. In Waltham, we're negotiating a 60,000 sq ft lease extension, a lease with a new tenant for a 63,000 sq ft block of space, and we're responding to a number of large life science lab requirements. At the moment, we don't have any ready-to-go vacant lab space. We hope to begin our conversion of 880 Winter Street, 220,000 sq ft, during the second quarter. Our 300,000 sq ft, 180 CityPoint lab building has been fully designed, fully permitted, and we are simply waiting final construction bids over the next few months. Turning to Northern Virginia. This quarter, we completed six renewals at our VA 95 single-story park, totaling about 218,000 sq ft. In addition to the VW commitment in Reston Next, we completed another 82,000 sq ft in the town center in Reston. In total, in 2020, we completed 1.15 million sq ft of leasing in Reston Town Center. We still have more work to do. We have a good start to 2021, with lease negotiations ongoing for an additional 60,000 sq ft block of space. In Reston Town Center, rents are basically flat to slightly down 1%-2% on the relet, since the expiring cash rents have been increasing contractually by 2.5%-3% for the last 10 years, and they will continue to do so on a going-forward basis. Our D.C. CBD exposure rests in our JV asset. Here, too, activity in our portfolio has picked up. We completed 24,000 sq ft of leasing during the quarter. We're negotiating over 120,000 sq ft of leases as we speak. In New York City, we executed our lease with Ascena at Times Square Tower for about 132,000 sq ft of office space. We completed two floor deals in the New York City market, each 31,000 sq ft at 601 Lex. One was a one-year extension, and the second was a 10-year renewal, and the cash rent decreased about 8% on that renewal. We also did four small transactions at 250 West 55th Street in Times Square Tower, totaling 26,000 sq ft. Three were short-term, and one was a 10-year deal. We're negotiating a full floor transaction at 399 Park on a space that's not expiring until the end of 2021. While we didn't do much leasing in Princeton during the quarter, we have a number of active discussions ongoing that we believe tenants will be making decisions to expand or relocate in late 2021 and are strongly considering Carnegie Center. When we talk about California, you need to appreciate the fact that the state has been strongly discouraging tenants from asking their employees to go to their offices for the last 11 months. The uncertainty level and the lack of pedestrian activity at the street plane, particularly in the CBD of San Francisco, has been more severe than anywhere else in our portfolio. This has affected tenants' appetite for making any decisions. Just to put this year in perspective, from 2017 to 2019, there were on average 14 tech company leases per year in excess of 100,000 sq ft. In 2020, there were none. Our San Francisco assets are 95% leased, and we have 280,000 sq ft expiring in 2021. The third quarter produced just three transactions totaling about 23,000 sq ft at EC. During the fourth quarter, we did another four leases, all renewals, up about 18% on a cash basis, totaling 20,000 sq ft. It's pretty slow there. In South San Francisco, our Gateway JV is planning the construction commencement of 751 Gateway, a 230,000 sq ft ground-up lab development to begin over the next few months, followed by the conversion of 651 Gateway, which will be a renovated building if we're able to relocate the existing tenant there. There's more activity in the Silicon Valley Mountain View area than the rest of the Bay Area. Two technology companies did 100,000 sq ft+ expansions during the quarter, and there are three active requirements right now in the market in excess of 200,000 sq ft. There continues to be a slow resurgence of medical device, alternative energy, automotive, the hardware side of technology that are all out looking for space. We are seeing a few of these organizations looking at our Mountain View single-story product, which is plug-and-play ready. In Santa Clara, we're going to be taking our 218,000 sq foot Peterson Way building out of service when the lease expires in the second quarter of 2021. This was a covered land play and contributed about $4.8 million of revenue in 2020. We have entitlements for a 630,000 sq foot campus, permitted and improved, ready to go. In spite of the challenging COVID-related conditions in California, in Santa Monica, we continue our renewal negotiations with our 2021 expirations, and as I said at the outset, we signed a 70,000 square foot LOI at Colorado Center from a new tenant. You may recall earlier this year, we actually did an expansion with another technology company at the Santa Monica Business Park. I purposely didn't make any comments about market rents during my remarks. With very limited activity, any conjecture about where rents will settle out is pure opinion. What I can tell you is that there will be large differences between deals cut on sublet space and direct space. Sublet landlords will have less appetite for capital and more leeway with lowering base rents or giving free rent. There will be tenants, however, that simply don't want the risk of sublet space. Will that prime tenant actually pay their rent for the full term? Is that a risk worth taking? The as-is conditions and other issues associated with that may make them very uncomfortable with those risks. There will be a very wide gap between the bid and the ask on direct space at the outset until we have a meaningful amount of direct deal comparable transactions for the market to understand. Landlords with vacant space that are courting tenants that want a new installation will use capital to entice users to this space, not necessarily face rents. Landlords working on renewals will be more aggressive with swing space, where it can be made available or lower contractual rates if the installation that's there currently works for the user. However, there will be a flight to quality in the better buildings as tenants see value in paying less of a premium to be in the best assets in these markets. Conditions are going to vary sub-market by sub-market. I'm going to stop there and yield the rest of our time to Mike. Excellent. Thanks, Doug. Good morning. I'm going to cover the details of our earnings for the fourth quarter. I'll also explain our guidance for the first quarter that we provided and some insight into our expectations for the full year 2021. We've reinstated quarterly FFO guidance, which we hope will be helpful and serve as an indicator of our increased confidence in the operating environment. Our office tenant collections remain strong, and we believe the write-offs are largely behind us. We also continue to execute on new and renewal office lease requirements, as evidenced by the 1.2 million sq ft of leasing in the fourth quarter and the 3.7 million sq ft of leasing in 2020 overall, despite the pandemic-related shutdowns. We're encouraged by the rollout of the vaccine and are confident we will see a return of workers to the office en masse, but there remains uncertainty with respect to timing. We anticipate our ancillary revenues, such as parking and retail, will continue to be weak until the population increases. Once we have better visibility into the timing, we expect to restore full-year guidance as well. Our fourth quarter results contained two charges that I would like to explain. The first is a $60 million non-cash impairment of our equity investment in Dock72, our 670,000 sq foot development we put into service in the Brooklyn Navy Yard. This investment is held in an unconsolidated joint venture where we own 50%. Because the investment is unconsolidated, GAAP requires a mark-to-current fair value. While the $0.35 per share charge is a deduction from net income, it is added back to arrive at FFO, so it has no impact on our reported FFO pursuant to Nareit's definition. Dock72 is only 33% leased, as Doug said, and while we had some promising leasing activity pre-COVID, there's little activity today and the market conditions in Brooklyn have weakened. We have increased our projected cost to stabilize, as well as modified and extended our anticipated lease-up, and the combination of this has resulted in a lower current fair value for the property. The extension of timing to achieve stabilization has a meaningful impact on fair value. We see Dock72 as a unique situation, and we do not anticipate any additional impairments in the portfolio. The rest of our development pipeline is very well leased at 88%, our in-service portfolio is over 90% leased, and honestly, most of the assets have significant embedded gains. The second charge is a $38 million, or $0.22 per share, non-cash charge to net income and FFO for the write-off of all accrued rental income for tenants in the co-working industry. While these tenants are paying rent today, we believe the ongoing length of the pandemic is stressing the sector's revenue and liquidity. As such, we do not believe they meet the standard to maintain an accrued rent asset on our balance sheet. As we discussed in both our second and third quarter earnings calls, co-working is the remaining tenant sector that we've been monitoring closely. It is possible we could face a few individual credit situations this year due to the impact of the pandemic across the portfolio, but we don't anticipate additional significant accrued rent write-offs to other sectors of tenants like we've experienced with retail and with co-working in 2020. For the fourth quarter, our reported FFO is $1.37 per share. If you exclude the accrued rent charge, our fourth quarter FFO would have been $1.59 per share, and in line with consensus and the expectations that we shared with you last quarter. Now I'd like to look forward to 2021. We have provided first quarter 2021 guidance for FFO of $1.53-$1.57 per share. At the midpoint, this is $0.04 per share lower than our fourth quarter 2020 FFO before charges. The decline is entirely due to approximately $0.10 per share of seasonally higher anticipated G&A. The first quarter is always our highest quarter for G&A due to accounting for compensation. If you look back historically, we typically record 30% of our annual G&A expense in the first quarter. The increase in G&A expense is anticipated to be partially offset by higher revenue contribution from our portfolio, including the commencement of revenue for a portion of the signed leases that Doug described. We also expect lower interest expense as we are redeeming our $850 million bond issuance in mid-February with cash on hand. These bonds have a yield of 4.3%, and there will be no prepayment charge. We're currently earning close to zero on our cash, so we will see the full benefit of lower interest expense for the second half of this quarter and for the rest of 2021. As we think about the full year 2021, there's a few things to consider. If you simply annualize the midpoint of our first quarter guidance, you get to about $6.20 per share. That does not account for the seasonality of our G&A, the reduction of interest expense from our bond redemption, or the incremental impact of leased developments coming online during the year. For modeling purposes, we suggest you consider adding the following to the Q1 annualized FFO of $6.20 per share: $0.19 per share for the impact of lower G&A for the rest of the year, $0.08 per share from lower interest expense due to the bond redemption, and $0.05 per share of incremental FFO from new developments coming online, including 159 East 53rd Street, which is 96% leased to NYU, and where we expect to commence revenue in the second quarter, 100 Causeway Street in Boston, which is 94% leased with projected revenue phasing in starting in the third quarter, and 200 West Street, our life science development in Waltham, which is 100% leased and is projected to deliver in December. Adjusting our first quarter annualized run rate for these known items gets to approximately $6.52 per share for 2021. That said, we are not providing full year guidance for FFO because there remains uncertainty in our variable income streams, including our ancillary income and our same property leasing, both of which impact revenues and occupancy. The timing of recovery from the pandemic is still unknown. It could have a material impact on the recovery of revenues from our parking, retail, and hotel. Currently, these income streams are depressed. Their contribution is nearly $30 million lower on a quarterly basis than what we saw pre-pandemic. We are hopeful that a portion of this revenue will start to return in the back half of 2021, but the timing is really reliant on the success of the COVID vaccines and a return to a safe and healthy environment in our cities. We also have lease expirations in 2021 that will impact our occupancy and same property NOI. Our rollover for 2021 is 3.2 million sq ft. As Doug described, we already have 610,000 sq fet of leases signed that will take occupancy of currently vacant space this year. We're also actively working on over 1 million sq ft of new leases and renewals across the portfolio. Overall, we expect our year-end 2021 occupancy to be flat to down 100 basis points compared to current occupancy. It's also worth noting that we have a meaningful amount of free rent that burned off in 2020 that will boost our cash same-property performance and AFFO in 2021. Specifically, at 399 Park Avenue, we had 450,000 sq ft of space in build-out and under free rent for nine months in 2020 that is now in cash rent. At the General Motors Building, 160,000 sq ft of office space and a portion of our retail was under free rent for most of 2020 and are now paying cash rent. This showed up in our results in the fourth quarter with a $10 million increase in same property cash NOI sequentially from Q3 to Q4. In summary, we're excited about the prospects for revenue and FFO growth. Our portfolio of cash flow is expected to grow in 2021. The success of the vaccine program should give rise to the recovery of our ancillary revenue streams. We have $2.2 billion of leased developments coming online over the next couple of years, all of which should drive future earnings growth and value. That completes our formal remarks. If you could open the lines up for questions, operator, that would be great. At this time, I would like to remind everyone, if you would like to ask a question, please press star one on your telephone keypad. If you are using a speakerphone, please pick up the handset before asking your question. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Nick Yulico with Scotiabank. Okay, great. Thanks. Good morning, everyone. I guess in terms of some of the pieces that you gave on 2021, it's helpful to think about. I guess maybe starting first on the point about occupancy being year-end flat to down 100 basis points. Can you just maybe explain what that assumes in terms of actually getting a retention rate on renewals versus some new leasing? I know you also said that you have already this embedded occupancy gain of, I think, 130 basis points. I am just trying to kind of square away how we should think about how you then get to a flat or down 100 basis point number by the end of the year. Nick, this is Doug. It's not as precise as you're going to want to hear, but our method of sort of coming up with that number is to understand the amount of space that we have rolling over. While we have a probability on renewals, the real variability is on how much of the vacant space that we currently have is going to, A, be leased, and B, be revenue producing. Because it has to be revenue producing, meaning we have to have delivered it in "as ready" space or in second generation and not demolished. That's what's really driving the number, to sort of flat to negative, because we just don't know what we're going to be asked to do relative to the delivery conditions of that space and when revenue is going to start. Again, we sit here today with 134 basis points of leased space that's not revenue recognizing right now, and we just don't know where we're going to be as we get to the end of the year. Honestly, we expect our transaction volume is going to pick up as the year goes on. It's going to be slow in the first half of the year, and our expectation is if the vaccine rollout goes as we believe it will, that there will be a significant pickup of that activity once people are back in school from a population perspective and people are back in their desks and people are feeling very confident about their business prospects. The third and fourth quarters are going to be back-weighted, which again, impacts that revenue number. Okay. That's helpful. Thanks, Doug. I guess just one other question, kind of twofold on 2021 and one, the decision not to provide guidance. Maybe just hearing a little bit more about for the full year, why you thought it made sense to not provide guidance, since you did, I think, give a lot of components that help us think about a potential range. I guess in terms of when you're talking about the $6.52 base, Mike, and then you talked about some uncertainty on variable income streams and same-property leasing. I guess since you did give a year-end sort of occupancy range, I guess I'm trying to just think about the same-property leasing and whether that ends up being a negative adjustment to that base on FFO that you talked about based on your year-end occupancy number. I'll try to describe it a little bit more, and look, we're trying to provide as much assistance as we can. There are some variable pieces that are pretty big that would require a wide range, I would say. On the same store, every 50 basis points of occupancy, based upon our current kind of rental rates, is about $15 million. That's $0.09 a share is every 50 basis points of occupancy. The variable income streams that I talked about could add $30 million a quarter. We just don't know when that's going to come in. I think that the hotel portion of that Which is minor. This is only $5 million a quarter. That we think is going to take longer. The parking and the retail components of that, it could snap back more quickly. It could be third quarter, it could be fourth quarter. It's just really hard for us to say when that's going to happen. Providing a meaningful guidance range to you all is just difficult at this time. We've chosen not to do that. I think I've given you a sense, just on these comments, of what our expectation is. If our occupancy is going to go down, then after you pull out the charges we incurred in 2020 from the same store, and you just think about run rate. If our occupancy goes down by 50 basis points on average, I would expect our same store to be down very slightly. We look at our lease up on a lease-by-lease basis. We've looked at all of our units. Our renewal retention has gone up, and you've seen it quarter-over-quarter during the Pandemic. It was, I think, 56%, 57% this quarter, which is pretty good. We've done that analysis to come up with kind of the occupancy views that we have based upon the activity that we're seeing today in the portfolio. Hopefully that's helpful. Just to say it a slightly different way, Nick. Let me say this a slightly different way. We're really good at understanding what's going to happen in the portfolio in the next 90 days with regards to the variable income. We're really not good at knowing what's going to happen three and six months from now. We hope that when we get to our next conversation with you, which is in early May or late April, we're going to be in a better position to know how things are going across the country from a variable perspective, but we may not know. I think we don't have the certainty associated with it, and we just don't feel we can pontificate about the recovery of the base economy in terms of how people are going to act. That's why we're sort of sticking with this quarter-by-quarter methodology right now. Okay, great. Appreciate the added details, guys. Your next question comes from the line of Derek Johnston with Deutsche Bank. Hi, everybody. Thank you. A big bright spot in leasing with demand being pretty firm for life science and biotech companies was certainly welcome. It seems that C-suite decision-making in FIRE and maybe to a lesser extent, TAMI tenants, is a bit more hesitant or muted, with commentary often including more work from home flexibility longer term. Obviously, people talk about the need potentially for less office space. What are you guys seeing in the field, and when do you anticipate FIRE and TAMI tenants to re-engage in a meaningful way? Will it be during 2021 or potentially pushed out a bit? Owen, you want to be on the soapbox first? Sure. There are a few things there to unpack. Look, I think that you're correct. The life science demand is strong. Some of the other sectors are not. I think the reason for that is, most importantly, we're in a recession, and in all recessions, leasing activity slows down. Businesses have more uncertain outcomes, and CEOs are less likely to make major financial commitments, which are leases. This is no different from prior recessions. I think office lags a bit. I think we're probably not going to get more stronger leasing activity until later in the year, when the virus dissipates, people come back to the office, and the economy's clearly in improvement. As I said in my remarks, we acknowledge the impact of work from home and do believe that workers in America and possibly around the world will want to work from home on a part-time basis more frequently. We acknowledge that impact, but we also see with CEOs, I think, the importance that they see in in-person work and their strong interest in getting their employees back to the office. The issue is, okay, what's the impact of the additional part-time work on office demand? Again, to save space, by having with people working at home on a part-time basis, you really need to do two things. You need to schedule when that time out of the office is, because everybody can't be out of the office on Monday or Friday. Two, you have to go to flexible workstations and move people around. Again, if you're looking at employee preferences, one of them is they want to work from home more. As I said in my remarks, 90% of the people surveyed in the Gensler survey said they wanted a fixed workstation. Which employee preference will be accommodated? Again, we acknowledge there's an impact from work from home, but we think it's overblown for those. Got it. No, thank you. Appreciate the color. Let's just stick on that employee survey that you guys mentioned in the remarks. I'd say to play devil's advocate, just because a worker wants an office or a dedicated workspace, does not mean that they will be granted that, especially if they prefer or demand a hybrid model. Hot desking seems to us a potential solution, especially in an AB or week on, week off model that allows deep cleaning over the weekend. I guess, what data from business leader conversations lead you to believe that hot desking is ultimately unlikely? Thank you, guys. Look, I think you have to say We all, as employers, want to accommodate our talented workforces. That survey expressed employee preference. I think business leaders across the country are going to have to sort out which employee preferences they want to try to accommodate. I talked about the fixed workstation. Working from home more is also an employee preference. I do think strongly in talking with other business leaders, there's a strong interest in having employees return to the office because of all of the diminution that's going on in terms of culture, competitiveness, creativity, onboarding employees. Again, I think this is a question that business leaders are going to have to sort out, which employee preferences are they going to try to accommodate. Your next question comes from the line of Anthony Paolone with JPMorgan. Yeah, thank you. Doug, you mentioned it's hard to know where rents are going to ultimately shake out, but you did do a lot of leasing in the quarter, and sounds like you've got a pipeline. Where would you peg the conversations around all-in economics now versus pre-COVID-19? I think it depends, Anthony. It depends on the market. I will tell you that we're getting higher rents in our life science oriented in our suburban portfolio in Boston right now than we were pre-COVID. In a market like San Francisco, all we've done is renewals, and all those renewals have been well in excess of what the current tenants are paying. It's unclear if rents have really dropped by much. I can tell you that in my heart of hearts, I do believe that we're going to see some softness in the markets that we're in. Again, I wish I could give you a firm answer, but I just can't. If you ask 100 people right now, based upon the activity that's occurred, in these cities, are rents up or down by more or less than 10%, I would say they would tell you that rents are down by less than 10%. Again, it's a net effective calculation, not a base rate versus a base rate previously. Yeah. Given the rollover in 2021, I think you have a decent amount of Boston. Do you still anticipate that you'll likely have positive spreads across the portfolio this year when it's all said and done? I think the answer will be yes. That's why I gave all that data on all the leases that we've done recently. Again, that's about what the rent was versus what the rent will be on a contractual basis, not about would the rent have been higher had we done the deal six months ago. That's an affirmative yes. Okay. Then just a question on the capital allocation side. Just curious, how do you think about, or how do you weigh the JV route as an acquisition vehicle versus the complexity it adds to the company overall versus, say, just selling assets to raise capital? Then in terms of target markets, is Seattle the only target that you're not in, or are there any others out there? I'll touch on that. We do have significant capital, but we also have significant ambition in terms of growing the company and making new investments that make sense for shareholders. We do think it makes sense to extend the equity capital we have with partners. We have a rich tradition of doing this in the company. We have a reasonably significant portfolio that's already partnered with global leading real estate investors like Norges and GIC, and we think extending that type of business makes a lot of sense. Selling assets is not an efficient way for us to raise capital. Most, if not all of our major assets have a significant tax gain, which requires a cash, or it requires a special dividend, and therefore, the retention of capital is much lower. For all those reasons, we think the joint ventures make sense. The other thing I would say on the JVs is, we are providing property services to those joint ventures, so we do enhance our yields as a result of providing those services to the joint venture partners. Thanks. The Seattle piece of it. Oh, sorry. Or other markets. Yes. I would say in terms of new markets where we currently are not in operation, Seattle is the only market that we are actively looking at investments right now. Okay. Thank you. Your next question comes from the line of Manny Korchman with Citi. Hey, good morning, everyone. Mike, in terms of the co-working exposure, can you just remind everyone where you're concentrated geographically from a co-working perspective? Is it the lockdowns in those markets that are causing you to sort of take down those accruals and sort of pause on that income stream? This is Doug, Manny. Let me try and answer that question. We've basically been approached by every operator in our portfolio, regardless of the market, about relief. We saw Regus this last quarter all over the country, put units into bankruptcy. We're now 11 months into this pandemic, and it's pretty clear that the flexible space operators' customers, obviously many of which had short-term leases, and then many of those leases have probably expired. They've been very slow to come back to work. In all, not dissimilar from the census we've seen. Our census, as we've said before, is somewhere in the high single digits to the low double digits, right? This industry is simply just facing revenue challenges. We decided that given the credit deterioration, we should be recognizing rent on a cash basis. That was the reason we did what we did when we did it. With regard to our own portfolio, we have, I think, 13 units across the country, three in California, the rest in other portfolio in Washington, D.C., and Boston. Nothing in New York. I think we have one in New Jersey. In total, it's about $50 million. We've actually reduced our exposure by about 100,000 sq ft over the last year with leases that have expired. We don't have any specific concerns about any particular unit. We're current on everything right now. We just looked at the world and said, "These guys are going to have a really rough time." We think, based upon the credit deterioration, this is the time to do what we did. Right. Thanks for that. Then as you go into these discussions with some of the longer-term new leases, have you seen them either thinking about or actually changing their physical plan? More space, less space, that hoteling concept. We've discussed on this call sort of just more topical trends. As they build out their space with 10 or 15-year leases, how are they building that out today? We have had this conversation in past calls, and I would wish I could tell you that there's been a sudden change in the sort of view that the tenants and their architects have taken. I can tell you that very few tenants are really looking at transformational design changes in their spaces across all industry types. That doesn't mean anecdotally that you won't find a customer that says, "You know what? We are going to try and do this work from home workforce strategy, but we want all of our people to be able to come to the office, and therefore we're going to need different types of larger meeting rooms and different types of breakout areas and far less quote, unquote, individual spaces." There are people talking about that, but it's the exception, not the rule to- date. For the most part, in all of the build-outs we are seeing in our portfolio right now, it's business as usual, pre-pandemic. Again, the tenants that are in place with longer-term leases have yet to do anything with their spaces relative to making a change in the way it's currently configured because they have a unique way of looking at how they're going to sort of come out of the pandemic relative to their utilization of space. I'm a little surprised, but that's the fact. We just haven't seen it. Thanks, Doug. Your next question comes from the line of Jamie Feldman with Bank of America. Thanks. I was hoping to dig into some of the markets in a little more detail. I guess just starting out on D.C., post-election and the Democrats doing well, and the budget we've seen. Any thoughts on what might change in either CBD or Northern Virginia? Ray and Peter, you want to take that one? Yeah, I'll start. Go ahead, Peter. Go ahead, talk. I was just going to say, having not been here as long as Ray, but since the late 1980s. Typically, when there's aligned houses in Congress and the administration, and certainly I think we're seeing it now with the talk of the stimulus, it always positively impacts the real estate market. How that's going to occur and where that money gets spent, I certainly think the life sciences are going to benefit, which would indicate the 270 corridor and around NIH, closer in, but also downtown. There's talk about re-energizing the FBI. Historically, it's been a positive. It's just given where we are with the pandemic, so probably a little more difficult to predict right now. I will just add to that. This is more to Manny's point previously than yours, Jamie. In D.C., relative to the four major tenants that we're constructing new headquarters for, Volkswagen, WilmerHale, Marriott, and Fannie, we're seeing virtually no change to the pre-pandemic space configurations that they were launching prior to the work from home motivation. I think everybody, all four of those, are extremely excited about getting their employees back to work. They're making virtually no plans for major downturns in the actual demand for space, and they're quite excited about the new buildings we're building. In the suburbs, we just completed perhaps one of the most successful years in Northern Virginia we've had in 20 or 30 years. If there is a pandemic impact to our suburban portfolio, we're sure as hell not seeing it. Okay, what does the leasing pipeline look like for more Reston Town Center type product? Well, specifically in Reston, we've got probably, gosh, another 200,000, 250,000 sq ft of proposals out for occupancy this year or so. Now in Reston, we're running up against a lack of available space. We still have got, gosh, about 150,000 sq ft coming on to our new project, Reston Next. That is now coming to a point in a physical condition where we can start showing the space. We think that the real activity in D.C. will continue to be suburban-focused with some, hopefully, Biden-related activity downtown. Okay. Thank you. I guess, shifting gears to the Bay Area, I mean, we all see the headlines about corporate relocation activity. I'm just curious to hear, if you think about the next couple of years, how much of a drag you think that will really have on market conditions? Bob, you want to start with that one? Yeah. Corporations have moved from the Bay Area. This happens every time there's a recession. Oracle was not a big occupier of new space or someone that was taking space consistently over the last couple of years. I think it has very little impact. In the case of HP, they've been shedding space for the last 10 years. I think, again, it has very little impact. Jamie, my additional response would be that the profitability, the revenue picture, the aspirations of the technology companies that have significant footprints in the greater San Francisco and Silicon Valley are stronger now than they have ever been. As I said to you before, in my sort of prepared remarks, it's been a really tough time in San Francisco in particular, because of the shelter-in-place orders, that move to basically asking people not to go to work if they can't help it, but being able to go if they could. We're just waiting to see what happens with regards to the aspirations of these technology companies relative to understanding that there's a heck of a lot of additional labor available because of the recession and certain things that happened earlier in the year. That residential rents have come down, so affordability is very significantly changed. That San Francisco is still going to be a great city, and that there are opportunities to expand there. It very well may be that we're surprised on the upside. We just don't know. There's an incredible amount of data associated with what will happen in San Francisco, and I think everyone right now is looking at the worst and assuming that's what the facts on the street are going to be and not looking at the opportunity side. Okay. That's very helpful. Thanks for everyone's thoughts. Your next question comes from the line of Steve Sakwa with Evercore ISI. Thanks. I guess first, Owen, I just wanted to go back to the $800 million in, I guess, projected development starts or potential development starts. I guess a lot of that's probably life science, just have you changed kind of your pre-leasing hurdles? Have you kind of changed your yields targets? What are you expecting on those projects to the extent you do start them? Yeah. Steve, on the life science right now, given the heat in the market and the success that we had with 200 West Street and the dialogue that we're having with customers, we would be prepared to launch a speculative development and redevelopment in our core life science clusters. Maybe some of these dialogues with customers will be signed before we start, but we have a lot of confidence in the market. The yield requirements have not come down, so we're still shooting for 7%. We will, and are, a lot more cautious with office. Pure office development, we certainly wouldn't launch without a pre-lease. Okay. I guess you mentioned sales might be a similar level. Sounds like maybe $500 million-$600 million. Do you have any sense for kind of markets, or how are you thinking about yields? How do you think yields would stack up? Are these sort of single-tenant, high-credit deals with long lease terms that have sort of been the flavor of the day in the market, or are these more traditional multi-tenant, say, average lease terms which really have not cleared the market? How do we think about those sales? Yeah. Well, we are already working on a couple, and we are sorting out the remaining assets that we want to sell this year. As we've discussed in the past, we do have these gains that come from the asset sales, but we are keeping our dividend flat, and we have more suppressed income. Those gains will be used to pay the quote, "regular dividend." Steve, I think the assets we will select will be a mix. There'll be assets that we consider non-core. As you know, we've been selling $200 million-$400 million of those per year, even before the pandemic. There'll be other assets that we think will meet the market in terms of some of the comparables that I described earlier and the cap rates that are being achieved. I think it'll be a mix. Okay. Mike, I guess, you've sort of given a reasonable number for earnings in 2021. It sounds like that doesn't per se contemplate the potential occupancy decline that you and Doug spoke about, but nor does it contemplate, on the plus side, some of those tenants that are currently in place that are maybe on cash accounting, where you're not really collecting a lot of rent or maybe rent at all. How do we sort of think about those two kind of going in opposite directions and influencing that 650 number? Well, I think that the occupancy impact I mentioned in 2021, if it's 50 basis points, it could be $0.09. On the ancillary income side, I talked about $30 million a quarter, which is significantly more than that. If you think about it, basically, $12 million is parking, $12 million is retail, some of which is vacated, but some of which is just not paying us right now. $5 million is hotel, which again, might take a little bit further to get back. Depending on the timing of when that stuff comes back, it could clearly outstrip any kind of reduction we might have in occupancy from the same store. I think what you're getting at is we had some tenants that are on abatements right now that are actually in occupancy. We had $19 million this quarter of those tenants. We think that those tenants who are in occupancy and open will start paying rent again. Some of those we're recognizing GAAP rent right now, some of them we're not. It's probably about 50/50 on that. Those tenants are in place in an occupancy, and we're hoping to get back to more of a contract rent basis next year as part of that overall $30 million increase. Right. Not to put words in your mouth, but sounds like those things have the potential to maybe outstrip or outweigh the potential occupancy decline if some of those really start to move in a positive direction. Yeah. They certainly do, and especially when you get into 2022, when things are expected to even normalize further. There you're going to have both starting to get more towards a full run rate on some of this stuff that returns hopefully, and you're going to have more development coming online as well. In 2022, we're delivering Fannie Mae, we're delivering Google. We've got a lot of deliveries going on. The development growth for 2021 that I described is really pretty modest. I said it's only $0.05, but that's because that stuff is kind of coming in later in the year, and we'll have a full year of that stuff in 2022. I think there's a lot, again, there's a lot of positive things that we've got going on. Great. Thanks. That's it for me. Your next question comes from the line of Vikram Malhotra with Morgan Stanley. Thanks. Good morning. Thanks for taking the questions. Two questions. First, just on the sublease market. It was interesting you mentioned these some tenants are sort of testing out the market and putting everything on the sublease market, just to hope and see what sticks. I'm just curious from your perspective, why is that occurring this cycle and why versus sort of prior cycles where we may not have seen that phenomenon? We have seen in other cycles and other front, and which is sort of was my point with regards to New York City between 2008 and 2009, right? There was 24 million sq ft that was put on and 13.7 million that was taken off. It was exactly the same thing. There was nothing different about this cycle relative to sublet space than the last cycle. Other than the fact that for the last 11 months, there has been no traction from an absorption perspective because most people have not been transacting, particularly with the kind of spaces that are on the sublet market, which are a lot of times short-term and are as is in many cases, because they do not know when they are going to need the space because they are not sure when their politicians are going to give them the okay to have their public schools open, and therefore, where the employees can feel comfortable making plans to go back to the space even if the buildings are open. Okay. Got it. Last cycle, there were also just corporates who just put their entire space on the sublease space just to kind of see what sticks. As you say, some of it, they took it back as the economy improved. That's interesting. Maybe just to second, you referenced sort of the implied cap rate at a 5.9 for BXP and the private market in sub five range. If I look at pre-pandemic in the last five years, for whatever reason, the equity market have always sort of traded versus NAV, the equity market has afforded, call it a 20% discount or so plus to NAV over the last five years. I'm just wondering from BXP's perspective, either actions you take or ways to exhibit value. Post pandemic, assuming this kind of disconnect persists, what are some of the other actions or strategies you could pursue to close this gap? Vikram, I think the key is to grow the company. I think the market values growth more than NAV. That's what we're focused on. Fair enough. Thanks so much. Your next question comes from the line of Alexander Goldfarb with Piper Sandler. Good morning. Morning up there or down there. Question. First, Owen, you mentioned back on Seattle that that's the only market that you guys are looking at. Clearly, you see a lot more growth in places like Austin or Miami. You got Blackstone looking at buying a building down in Miami. As worker preferences change and certainly Florida looks to become Wall Street of the South and Texas gets a lot more tech, at what point do some of those markets start to create the same dynamics, culture, knowledge base, et cetera, that would attract you guys to start looking at markets like in Austin or Miami, et cetera? Yeah. Alex, there are a couple things I would say. One, we acknowledge that there is some corporate relocation activity going on most recently to South Florida and to Austin. I would say a couple things. One, I think you got to dig into that a little bit more. I'm not sure I would describe South Florida as Wall Street South. I think if you actually looked at the size of the requirements that some of these larger financial institutions have in the Miami market, they're not that big. It makes a big headline, but it's not a lot of space, and it's not a lot of employees. That's one. Two, look, I think we all acknowledge Austin is a computer science cluster. There's no doubt about it. This is true in South Florida as well, the market dynamics for office investment are very different. The level of new construction and existing vacancy, even with class A space, is very high, and it's much more elevated than the markets that we operate in. Yes, you've got the growth, but you've also got plenty of supply coming on, and that has an impact on outcomes, as a real estate investor. The second question is on the dividend. Mike, if we use your implied FFO range and then deduct for all the fun stuff to get us to AFFO, it would suggest that the dividend is going to be meaningfully uncovered this year. I think you'd probably agree that no one buys BXP necessarily for the dividend. They buy it for the overall growth, especially given the low dividend yield relative to other companies. At what point does a dividend reduction become something the board would contemplate, especially as you guys talk about all the development potential in life science, where the value creation in your platform is pretty good. At what point does the dividend come under reconsideration? Look, our goal is to have a stable and growing dividend. Given all the growth that Doug, Mike, and I described on this call, we're going to grow back into our existing dividend, in our opinion. Alex, just step back. Mike said it, I thought, pretty well, which is there's $30 million of quarterly revenue that is not in our numbers right now, that absolutely is coming back. Whether it comes back in the fourth quarter of 2021 or the third quarter of 2022, we don't know. It's absolutely coming back, and we have additional development that's coming online that's going to bring significant amounts of income. We have real confidence in the growth in our taxable income and our FFO and our AFFO over the next 3 to 5 years, including 2022. Again, we hope in late 2021. We're confident about what we have going on and our ability to increase our revenues in a significant way. Just the other thing I would add to the question is, our FAD ratio is 105%. I wouldn't consider that meaningfully uncovered. We anticipate that our cash flows and our AFFO are going to improve next year, and that's without necessarily the improvement of the ancillary income, which would improve it even further. I mentioned the sequential quarter improvement in the cash flow on the same store, and there's a lot of free rent that burned off in 2020 that is going to be there in 2021. I agree with my colleagues that we're not thinking about resizing our dividend at this time. Okay. Thank you, guys. Thanks. Your next question comes from the line of Michael Lewis with Truist Securities. Great. Thank you. It looks like your tenant retention for 2020 averaged about 45%. You could correct me if I'm wrong, my real question is about the tenants that are not renewing and where they're going. Are they finding sublease space, maybe some cutting or eliminating their physical footprint or some moving to other markets? I guess the question is, are there any trends you're picking up on that front on the tenants that are moving out that are clearly different from pre-pandemic? Michael, this is Doug. I don't think there's anything that we can point to that would be a trend that we would be either encouraged by or discouraged by. It's the natural move-out of tenants based upon the age of their space, the way it was configured, and what their future plans are. We don't expect to see much in the way of changes in the profile of the kind of tenants that will stay versus the kind of tenants that will depart for whatever reason. Okay, great. How many tenants have notified you of a return date to the office? In other words, do you have a rough schedule of how repopulation of your portfolio is likely to trend in the second half, and where the physical occupancy might be at the end of this year? The answer is nobody has notified us as the landlord. What we know is that they are having conversations internally and talking about dates that are beginning in the end of the second quarter, early third quarter, and going as far into the year as the fourth quarter, depending upon the particular company and the particular location. But I would say the certainty around knowing that there will be a date, and that date is sooner rather than later is the change that has occurred over the past couple of weeks. And I guarantee you that if the vaccine rollout is effective and working, that you will see more and more companies having the confidence to tell their employees that they expect those kids to be back in their seats in those schools and getting on the buses come the fall of 2021. The colleges will be back in session in person, and there will be athletic events and things like that. It's going to be a question of simply getting through the scar tissue damage that's occurred over the last 11 months in terms of how quickly they ask those people to come back. Okay. Then I'll just squeeze in one more if I can. I just want to confirm, the active development portfolio is 88% pre-leased. Are there any tenants in there that want to renegotiate anything or maybe wish they had done their plans a little different, maybe like sublease space back to come back or any unusual risk that you see in any of those projects? Definitively no to all those questions. Okay, perfect. Thank you. Your next question comes from the line of Tayo Okusanya with Mizuho Securities. Your line is open, sir. Your next question comes from the line of Daniel Ismail with Green Street. Great. Thank you. I'm just curious, regarding co-working, does this experience change your thinking on how leases with these tenants might be structured in the future, such as a revenue share agreement? Yeah, I think it absolutely does. I think it makes it clear that we don't have a lot of appetite for doing these leases with other people on a going forward basis relative to what our current exposure is. That when we do this stuff with space in the future, it will be strategic, and we'll have explicit needs in specific buildings, and we'll probably look to do more of it ourselves. Therefore, we're sharing the revenue with ourself. On life science, we've seen life science cap rates trade inside of Class A office cap rates across your market footprint. I'm curious, in your underwriting, are you considering it as a permanent change in valuation, or does this revert to a more historical range post-COVID? I think a lot of it's driven by the fact that life science rents in a lot of the markets where we operate have gone up a lot over the last few years. When you look at an existing asset, there's a big roll-up in it, from where the building is rack rented to where the market is. That's creating lower cap rates. If that dynamic changes, I think the cap rates could go back up. There's a scarcity factor associated with it. There's not that much of it anywhere in any particular market in the country, and Owen likes to use the word, it's the hot dot. There's lots of institutional capital that's saying, "We don't have any of this stuff. We need to get some." Supply and demand, right? There's relatively little in the way of supply. There's lots of capital that's looking for it. At the moment, there's a very strong bid for it. Yeah. Thanks, everyone. Your next question comes from the line of John Kim with BMO Capital Markets. Thank you. I just had a couple of follow-ups. The leases that you signed this quarter had an eight-year term. What is your appetite to offer shorter term leases to build up occupancy? We are in the business of leasing space, John, and if a tenant wants a short-term lease, we will transact on a short-term basis. If a tenant wants a long-term lease, we'll transact on a long-term basis. We are customer-centric, and we want to do what our customers want to do. Yeah, don't forget that, again, we've had a lot of success, I think as you're pointing out, in doing long leases. If we do the short extensions that Doug's talking about, generally those don't have CapEx. We're in essence extending the tenant work over a longer lease term, which is also attractive. Do you view that as a short-term solution given where we are in the economic cycle, or could this be a longer-term trend of shorter leases, lower CapEx? I think that you have different kinds of customers with different kind of motivations. There are lots of customers who are going to say, "We think there's been a correction in the market, and this is an opportunistic time for us to do a very long-term lease." Those customers are going to want to get as much capital out of the landlord world as they possibly can, and extend for as long as they think it's appropriate. That's 15-20 years in some cases. I think there is another group of tenants that saying, "We're unsure. It's not clear to us how our business is going to perform relative to our current workforce strategy. We just want to kick the can for 18 months or two years and then look at it again, and we'll have more clarity and more confidence about our decision. Then we'll be able to make a more permanent capital decision." I think that's always gone on, and I don't think things are going to change dramatically, other than I think it's going to be a slow ramp-up this year just due to, again, the way I refer to it, the scar tissue associated with the length of the time people have not been back together in their offices. It's just going to change their decision-making framework. Okay. Mike, I just wanted to clarify with you. Do you see the fourth quarter as being the peak quarter in terms of what you've offered in rent deferrals and abatements? It sounds like you think some tenants are going to start paying rent again, but I'm wondering if you're going to be offering more rent relief as well during the year. We certainly hope so. I will say that many of our restaurant tenants, we're kind of going through the summer, because that's when we kind of have an expectation that it'll be the next period of time when maybe there'll be improvement. There is additional dollars that will occur over the next couple of quarters. Based on what we know today, it's not going to be $19 million. Because of the $19 million of those tenants, I think there's about 10 left during 2021. I guess you can never say never whether tenants are going to come to you again. At this point, we've taken care of a lot of those tenants. Great, thanks. Your next question comes from the line of Peter Abramowitz with Jefferies. Thank you. I just wanted to go back to Owen's comments at the beginning. I think the words you used were, "The most significant and predictable improvement in conditions and leasing activity," which I think makes sense coming off the base we had in the second and third quarter. At the same time, we're still coming out of a recession and a lot of office-using jobs have been lost. I'm just curious what your outlook kind of contemplates for returning to job growth and how that impacts your thinking for 2021 and 2022. Yeah. Look, I chose those words carefully, maybe the interesting one was predictable. I guess the difference of this cycle is it's not been driven by a cyclical move in the economy, it's been driven by a pandemic and a health crisis. With the vaccine progress, I think we see, and I think the world sees, a pretty obvious correction in this over the next six months. Again, knock on wood, maybe something goes wrong with the vaccines or there's a slower rollout or there's something that goes on. In essence, unlike an economic recovery, which perhaps is harder to predict. Again, if this is all about vaccinations, maybe this one is easier to predict. I think as all of us come out of the isolation that we're getting really tired of, and return to the world and to our offices, and to restaurants and to theater, and to each other, the economy's going to reopen, and I think jobs are going to come back. I think of all the small businesses that will get to reopen and restart as part of all this. We do think this year we're going to have a significant improvement in economic activity. Look, office leasing tends to lag that. We do think by the later quarters of this year, that the office activity will also elevate as a result. Right. Okay. Thank you. Your next question comes from the line of Manny Korchman with Citi. Hey, it's Michael Bilerman here with Manny. I wanted to sort of talk on two topics. One, just coming off the vaccine. Owen or Doug, are you thinking about, I guess, requirements, A, just Boston Properties employees in terms of vaccinations, any contractors, building staff, in terms of making your assets competitive for tenants to feel comfortable they're coming into a safe environment? I know you can't force your tenants, but just how are you sort of thinking about vaccine rollout and how it adheres to your public places? Doug, you want to hit that? Michael, I'll give you an undiscussed response to that. We have the view, I think, that in our particular marketplaces, the vast majority of the people who are tenants in our buildings will get the vaccine. It's hard to go from there to a rigorous requirement that people get the vaccine, but it's not something that we won't talk about, understanding what the ramifications of that are. If the vaccine is effective and the vast majority of the people get it, the vaccine will have done its duty, which is to effectively eradicate the virus, and we won't have to really worry about the issue sort of on a going-forward basis. It's not something that we haven't not thought about. Okay. Doug, you talked a little bit about the sublease space and giving the 2009, 2010 analogy for New York. The similarity is that we do have an economic crisis that's going on, but there's a big difference between the GFC and today, where people are not in their offices, right? People were still going to their offices in the GFC and people are not today. You have a lot more discussions about movement of corporations around the U.S. You certainly have a significant amount of discussions about full remote working and hybrid remote working. Look, I think you know I love being in the office and I love the interactions that that provides and the advancement in a lot of things. What gives you the confidence that that sublease space won't have a more material impact? Because it doesn't feel like it's all opportunistic. It feels as though it is much more real today as people think about the amount of square footage that they need in this new environment. I think you're asking a lot of fair questions. The answers are unknown at the moment. I guess our intuition is that as people start to go back to work, the fear of missing out, and all of the opportunities that in-person work have, will become more clear to more people, and they will start to get back on the bandwagon. Again, I am not saying that there won't be much more flexibility in the way employers treat their employees relative to requirements to be in a seat every single day of the week. I guess I'm a strong believer in, and Owen and I have talked to lots of people about the nature of the office from both a business and from a social capital perspective, and how critical it is for the growth of businesses and the growth of the individuals that are in those businesses. I guess I am more optimistic than your questions are suggesting, about the value that people will ultimately and clearly see in having people going back to work in a very significant way. Again, on the margin, is it going to be a headwind? Absolutely. I don't think it's going to be the radical disruptor that is certainly baked into, I think, the value of CBD office stocks. Right. I'm not trying to be a complete pessimistic person. I'm just trying to balance sort of the comment about looking at 2008, 2009 and 2010, and the sublease space coming back feels different than where we sit today. I understand sort of the points that you're making. Let me just give you two real-life examples of sublet space, okay? Mizuho, which moved into a new installation on Sixth Avenue, was always planning on putting their space on the sublet market, okay? I don't think that sublet space is going to be competitive any longer because of other space on the market. Is it available? Yes. Is it going to be a sublet space that's going to be actionable? I don't know. I think, if you ask the people from BlackRock, if they put some space on the sublet market, they had planned to put space on the sublet market because they took additional space when they were doing their lease, and they always had the expectation that they would have some short-term sublet space. There's a lot of that stuff that's there this time as well that people are all looking at it saying, "Oh, it must be a change in philosophy for the workforce management of that organization, and they're going to have more people working from home." I just don't think that there's as much of that as people think there is in the marketplaces. Sure, you can look at Dropbox and what Dropbox has decided to do in San Francisco. We just saw Amazon take 600,000 sq ft of new space in Boston. We saw Facebook, last quarter, take the REI building in Seattle. There are tenants on either side of the table doing contrary things at the same time. Again, I think it's very hard to make a directional conclusion. What do you think the cadence is of the return to the office, right? A corporation today, if they made the decision in March to say, "Hey, we're going to come back," I would assume there's a pretty long delay, and amount of time that they have to give people, given a lot of people may have moved, they're in different places. Maybe at that time when the workforce calls them back and they say, "You know what? I like being here. I'm going to go get a different job or go somewhere else." How do you think that cadence in your markets, in terms of corporations making the decision, and then ultimately when their workers really come back into the office? Owen, you want to take that one? Yes, sure. Look, I think the key. Our premise on this that we've described a couple of times this morning is employers want their employees back in in-person work. They believe their companies will be more successful if that's going on. I don't think they're going to push it until the environment is safe, and therefore, the infection rate needs to drop precipitously from where it is now, and I think it will, as more people get vaccinated and more people are immune because they've recovered from infection. When I think it's deemed to be safe, I do think then companies are going to be faced with the dilemma, Michael, that you described, which is, okay, we want people back and how hard are we going to push it? Because our employee base, some of these employees do like to work from home, and they want to be out of the office. I don't think they want to be out of the office full time, but they certainly want to be out of the office more. These employers are going to have to decide, what are we comfortable with? What do we need to do to be competitive in our industry in terms of in-person work, and what kind of policies should we put up to balance this competitiveness issue with the retention of talent? I think each company is going to make those decisions differently. Again, I think as the infection rate goes down, and my assumption is that'll be over the summer, I do think you'll see a lot more companies requiring employees to come back to work. I think different companies will have different policies around work from home. I would just say, Michael, that if an employee, if a human being is vaccinated and that human being is going to a restaurant to eat, they have basically said, "Okay, the stigma of quote unquote, being in the population, is now over." As we see more and more of those types of things occurring, it's going to be quite clear that the difficulties associated with asking your employees to come back to work are going to have dissipated because they're going to have demonstrated that they are comfortable being in and around other human beings in a very close, proximate way. If you're a believer in the efficacy of the vaccine, and the vaccine does what it really is designed to do, which is you don't get sick. If you're in contact with the virus, I think there's going to be a stronger desire for people to come back. Again, once we've solved those other issues, which are, we've now put people in a position where their children are going back to school, where they're comfortable going on public transportation, where all of the things that have been impediments to, at least intellectually, people coming to work, and we have a governmental programmatic desire to get people back in seats, right. As opposed to saying, "We think that people should remain as far apart as possible because we're trying to keep this pandemic in containment," which is where we are and have been for the last 11 months. Right. I was just trying to think through the timing of the corporate deciding, okay, it's now safe, we can do it, and then asking their employees. It's not like they can make the decision on Friday, so everyone's there on Monday. I would expect there's a pretty slow build to getting people back, given how long they've been out of the office. I don't know what that ramification is on leasing, on fundamentals, all the other income sources. I'm just trying to, as I assume corporations are thinking about all this, at this point, given the vaccine distribution, given the efficacy, they're all trying to come up with their plans. I just didn't know if you had more insights about if they flick the switch. All right. It's no longer opt in, it's opt out. How long that could last for as we move into that direction. I don't know how much commentary. Michael, I don't think anybody's going to surprise their employees. We're doing it ourselves. We try to give a lot of preview over how we see the world and when people should anticipate coming back to work. I think that will help in this repopulation that you described. Great. Thanks for all the time, guys. You bet. Your next question comes from the line of Tayo Okusanya with Mizuho Securities. Yeah, sorry about that earlier. Can you hear me? Yes, we can hear you. Perfect. All right, just a quick one. I know we're running long. Could you talk a little bit about just how you're thinking about dispositions in 2021, given some of what they've seen in regards to asset pricing, your uses of capital next year, and as also your leverage target? Yeah. As I mentioned in my opening remarks, we sold between $500 million and $600 million of assets in 2020. That's an elevated level for us, at least over the last five or six years. We anticipate that level plus or minus going into 2021. We have a couple of assets we're working on now. As I described, capital market conditions for office are reasonably favorable, particularly for assets with certain characteristics. I think you should count on us selling around that level this year. Great. Thank you. From a leverage perspective, Tayo, we haven't changed our views on the leverage that we think is appropriate to run the company at. It's somewhere between the mid-6s and the mid-7s on a net debt-to-EBITDA basis. The leverage is obviously a little bit higher this year because of some of the income items that we've talked about. If you look at our supplemental, our leverage is reported at 8.07 this quarter, but that's because the calculation annualizes the charges that we took this quarter. We have provided a footnote that describes that if you pull out the charges, the effective leverage is 7.26, which is within the range that we are comfortable operating in. We've got a lot of income coming in off of the development pipeline over the next couple of years that we've described in the past, where a significant amount of that money has already been spent for that development pipeline. That will naturally de-leverage us over the next couple of years. Gotcha. Thank you. We have time for one final question. That question comes from the line of Rick Skidmore with Goldman Sachs. Thank you. Mike, just a quick modeling question. How should we be thinking about real estate taxes as we go forward, given maybe what we've seen in 2020, and then sort of are you hearing anything from the cities with regards to how they're thinking about real estate taxes? Thanks. Hi, Rick. This is Doug Linde. Obviously it's market by market, right? In California, we know exactly what's going to happen because of the legislative referendums that didn't pass. That one's taken care of. In New York City, I am sure that assessments are going to go way down. We won't know what's going to happen with the tax rate. In New York, everything is sort of bled in over a five-year period of time as those changes occur. Year to year, it's not a very big change, AKA versus what it would have been were we not in this valuation challenge. In a market like Boston, there's been so much addition to the supply that we actually don't expect to see much in the way of significant rises in real estate taxes because as the assessments have gone up, but there's more base. The cities have actually reduced the tariff rate, so it hasn't been significant. Similarly, I think in the greater D.C. area, we'll obviously see they have tri-year valuations in the district, and you don't see much difference unless your building is being revalued. Net net, it's quite clear that to the extent that a jurisdiction has some fiscal issues, it's going to be looking to its real estate taxpayers to bear a portion of that. I don't think in the short term, it's going to be a meaningful detractor in our revenue or impact our margins in a very significant way. Obviously our tenants, we escalate our real estate taxes to our tenants. An increase doesn't come back to us unless we have vacancy or we have leases rolling. Only a small portion of that increase actually comes to us every year. Thank you. I would now like to turn the call back over to the speakers for any closing remarks. Thank you, operator. Thank you everyone for your interest in Boston Properties. That concludes the call, all our comments and questions. Thank you very much. This concludes today's Boston Properties conference call. Thank you again for attending and have a good day.