Good day. Thank you for standing by. Welcome to Q1 2023 BXP Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'll now like to hand the conference over to your first speaker, Helen Han, Vice President, Investor Relations. Please go ahead. Good morning, welcome to BXP's first quarter 2023 earnings conference call. The press release and supplemental package were distributed last night and furnished on Form 8-K. In the supplemental package, BXP 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 Investors 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 meanings of the Private Securities Litigation Reform Act. Although BXP 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 BXP's filings with the SEC. BXP does not undertake a duty to update any forward-looking statement. I'd like to welcome Owen Thomas, Chairman and 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. We ask that those of you participating in the Q&A portion of the call to please limit yourself to one question. If you have an additional query or follow-up, please feel free to rejoin the queue. I would now like to turn the call over to Owen Thomas for his formal remarks. Thank you, Helen. Good morning, everyone. Today I'll cover BXP's continued steady operating performance as demonstrated in our first quarter results, the key economic and market trends impacting our company, and BXP's capital allocation activities and funding. Despite significant economic headwinds, BXP continued to perform in the first quarter. Our FFO per share was above both market consensus and the midpoint of our guidance. We increased our FFO per share guidance for all of 2023. We completed 660,000 sq ft of leasing in the first quarter with a weighted average lease term of 7.7 years and kept occupancy flat despite more challenging leasing market conditions. Finally, BXP just published its 2022 ESG report and announced our second annual ESG investor webcast for May 31st. Though the office sector is clearly facing challenges in the current economic environment, there are two underappreciated trends which we believe will have a significant impact on BXP's longer-term performance. First, the deceleration in leasing, which we forecasted last year and are now experiencing, is driven primarily by the economic slowdown, a cyclical trend rather than remote work, a secular trend. In other words, we believe the current leasing slowdown is cyclical and will recover along with economic conditions. Our clear evidence for this observation is our own leasing experience. In 2022, when the economy was much stronger and significantly fewer workers were using their offices, we leased 5.8 million sq ft, essentially a normal year just below our 10-year average level of leasing. This year, the economy is clearly weaker, but many more workers are back in the office and our leasing has slowed. Though we are not in a recession defined as negative GDP growth, approximately 75% of S&P 500 companies are forecasting lower earnings this quarter and aggregate earnings are expected to drop over 6%. There are seemingly daily announcements of corporate layoffs. With slowing growth, companies are more focused on cost control, reducing headcount, and taking less or reducing their space. In addition, capital market volatility on the heels of recent bank failures drives companies to be more cautious in capital outlays, including capital acquired for leasing new space. With more challenging economic conditions, the return to office trend continues to improve. Major tech companies have announced return to work expectations and specific policies, and many companies in a variety of industries continue to tighten their requirements, increasing the days expected in the office. President Biden has mandated a substantial increase for in-person work at federal offices. U.S. West Coast cities, though improving, remain behind the rest of the U.S. and other global business centers in their return to office work. The second underappreciated trend is office users are much more discriminating about building quality than the current market sentiment regarding the overall office asset class. The Premier Workplace segment continues to materially outperform the broader office market. Users are compelled to upgrade their buildings and workspaces to attract their workforce back to the office. Clients increasingly prefer assets with the highest quality managers and consistent and stable ownership. Buildings facing debt default do not have the tenant improvement and leasing commission capital available to complete leases and are therefore uncompetitive. Full or significant remote work is more frequently allowed in practice for support workers across industries in areas such as accounting, IT, and HR. This segment of the workforce does not as commonly occupy premier workplace assets, putting more pressure on the market for lower quality buildings. As described previously, CBRE is tracking the performance of premier workplaces in the U.S. For the 5 CBDs where BXP operates, premier workplaces represent approximately 17% of the 733 million sq ft of space in less than 10% of the total buildings. In the first quarter of this year, direct vacancy for premier workplaces increased only 20 basis points to 10.7%, while direct vacancy for the balance of the market increased 80 basis points to 15.5%. For the first quarter, net absorption for the premier segment was a negative 200,000 sq ft versus a negative 3.3 million sq ft for the balance of the market. For the last nine quarters, net absorption for the premier segment was a positive 6.9 million sq ft versus a negative 28.6 million sq ft for the balance of the market. Rents and rent growth are higher for premier workplaces, and we believe the segment captures the majority of all gross leasing activity. Including two buildings undergoing renovation, 94% of BXP CBD space is in buildings rated by CBRE as premier workplaces, which has been and will be critical for our long-term success. Moving to private real estate capital markets, U.S. transaction volume for office assets slowed materially to $6.6 billion in the first quarter, down 47% from the fourth quarter of last year. The reduction was by no means an office-specific trend, as transaction volume across all real estate asset classes was also 43% lower over the same period. Real estate values have reset down due to higher capital costs, and sellers have so far been unwilling to accept lower prices, creating a bid-ask gap, common in declining markets. Mortgage financing for office is challenging to arrange and available for only the highest quality leased assets and sponsors. Given the dearth of transaction activity, office asset pricing is difficult to determine, but there were several data points of note in the quarter. In the Seaport of Boston, ARE announced the sale of a 37% interest in a lab development at 15 Necco Street to an offshore property company for a valuation of over $1,600 a sq ft and approximately a 5.4% cap rate. The building, which is being delivered into service later this year, comprises just under 350,000 sq ft and is fully leased to a strong credit life science user for 15 years. In downtown New York City, a global property company purchased the 49% interest it did not own in One Liberty Plaza for $426 a sq ft and a 6% cap rate from a global fund manager. The 2.3 million sq ft building is 80% leased. There are several smaller non-premier workplaces currently in the market testing pricing at cap rates of 7% or greater. Regarding BXP's capital market activity in the first quarter, we completed the acquisition of a 50% interest in World Gate, a residential conversion opportunity located on World Gate Drive in Herndon, Virginia, near Reston Town Center for $17 million. The property currently consists of two vacant office buildings comprising 350,000 sq ft and a 1,200 stall parking garage, all situated on a 10-acre site. The plan, which is subject to receiving entitlements, is to demolish the two office buildings and reuse a portion of the existing garage to support a 349 unit rental and for sale residential development. BXP will serve as managing member and developer in partnership with Artemis Real Estate Partners, the current owner of the project. Development is not expected to commence until 2024. Additional new acquisition opportunities will undoubtedly grow in this environment, and we will remain highly opportunistic and solely focused on premier workplaces, life science, and residential development. We added the previously described 290 and 300 Binney Street developments to our active construction pipeline this quarter and now have underway 16 office, lab, retail, and residential projects, as well as View Boston, the observation deck at the Prudential Center. These projects aggregate approximately 4 million sq ft and $3.3 billion of BXP investment, with $1.9 billion remaining to be funded and are projected to generate attractive yields upon delivery. We have received recent inquiries about our funding sources and needs, which is understandable in the current market environment. We currently hold elevated levels of liquidity and have access to both the unsecured debt market and private secured mortgage market for select assets, albeit at higher rates and spreads than a year ago. We could also monetize select residential assets and attract JV partners into our lease development pipeline. Our internal discussions on funding strategy are not about whether we are able to access capital, but rather how to best select and sequence our capital raising options to minimize costs and maximize flexibility. Mike will provide more details in his remarks. In summary, despite unconstructive market conditions, BXP had another productive quarter with financial performance above and leasing in line with expectations. BXP is well positioned to weather the current economic slowdown given our position in the premier workplace segment, our strong and liquid balance sheet with access to multiple capital sources, our significant development portfolio in progress, and our potential to gain market share in both assets and clients due to the current market dislocation. Lastly, on an organizational matter, John Laing, our Senior Vice President who oversees the L.A. region, has elected to pursue professional interests outside of BXP. John joined us seven years ago and has been an important contributor to BXP's growth in the L.A. region. Melissa Cohen, a L.A. native and former project manager in BXP's New York office, will rejoin BXP as Head of Development for L.A. Alex Cameron, our current Head of Leasing in L.A., and Melissa will be BXP's senior leaders for our L.A. region. These changes will be effective at the end of June. Let me turn it over to Doug. Thanks, Owen. Good morning, everybody. I think it's fair to say that we are operating in a challenging real estate supply and demand environment. As Owen stated, businesses continue to make pronouncements about the importance of in-person work, but office job reductions related to the economy have impacted both supply and demand. In our portfolio, we continue to see incremental pickup in daily activity as we look at the month-to-month trend lines, and we see weekly patterns emerging based upon industry. The legal profession's got a different perspective than asset management, which is different than private equity. People are using their spaces at different times. The frequency of work, however, in the office is really about three days per week across our markets where we track the data, and this includes San Francisco, obviously, our portfolio being primarily professional services and financial services. No city is back to the levels of urban work activity that existed in 2019. We are aware of isolated instances where an organization has required all their employees to work in their existing office most of the week, and they don't have enough space, but that's just not the norm. The pendulum could swing back to where organizations find themselves short on space for their existing and future workforce, but it's not the way they're planning today. The most dynamic and expanding reservoirs of demand over the last decade, technology and life science users, are focused on profitability, cost reduction, and capital preservation. This doesn't lead to near term positive absorption. There's a lot of variability with the financial services and professional services firms' space needs. Those that are reducing headcount through layoffs are replanning their facilities with less space. It's evident that some law firms in the market are signing leases with smaller footprints as they move to a more uniform office module, while a few are actually taking additional space. The concentration of user demand strength in 2023 is, broadly speaking, alternative asset managers, private equity, venture, hedge funds, specialized fund managers. These companies are growing their teams and their capital under management. This pool of clients typically wants to occupy premier workplaces, and it's not surprising that BXP's strongest activity is at the General Motors building in Manhattan, 200 Clarendon in the Prudential Center in Boston, 2200 and 2100 Pennsylvania Avenue in D.C., the urban core of Reston Town Center in Northern Virginia, and our Embarcadero Center assets in San Francisco. By the way, we just don't have any space available at Salesforce Tower, which is why it's not on the list. The challenging office supply picture is not a New York or a San Francisco story. There is high headline availability in virtually every market across the U.S. Availability rates are at or above 20% in coastal and Sun Belt markets. These availability rates, published by the brokerage firms and reported as headlines, track all of the space in every pocket of each market. We've spent the last two years redefining our business as being developers and operators of premier workplaces and explaining why these headline numbers hold much less relevance. Owen gave the most recent data, which demonstrates the dramatic bifurcation between premier workplaces and general office space. Availability in premier assets matters, and the location and the specific attributes of those buildings matter. A client looking at 399 Park Avenue is not considering space on Third Avenue, Midtown South, or downtown. If a 20,000 sq ft client wants to be in a premier building in the Back Bay of Boston on a single floor with primarily exterior office configurations, there are limited availabilities. If a 40,000 sq ft tenant wants to be in view space north of 42nd Street and south of 59th Street between Fifth Avenue and Lexington, there are limited availabilities. This is why we could recapture a 30,000 sq ft floor at 200 Clarendon this quarter and re-lease the space as is with immediate occupancy to a new client. This is why we can lease the floor with a mid-2024 expiration at 399 Park Avenue this quarter with no downtime to a growing client at the building. Last quarter, I described the 50,000 sq ft client in San Francisco that leased space at Embarcadero Center and had two alternatives outside of a renewal. The headline information that was reported, you know, by the brokerage committees, it's true, it's factual, but it's just not nearly as relevant as people think in our business. BXP's regional teams are leasing space. We completed 660,000 sq ft of transactions during the first quarter. On our last call, we gave an expectation of 3 million sq ft for the year, which translates to about 750,000 sq ft per quarter on average. We reaffirmed this at the Citi conference in March in our public webcast. There were 57 leases across our markets. 29 leases were with new or growing tenants, 410,000 sq ft, and 28 renewals totaling 250,000 sq ft. We had 10 expansions and 3 contractions. As we sit here today, we have signed leases that have yet to commence on our in-service vacancy totaling approximately 1.3 million sq ft, and 1.2 million sq ft of that space is anticipated to commence in 2023. This quarter, we added a secondary occupancy statistic that shows the effect of these signed leases on our quarterly occupancy. Our headline in-service occupancy stands at 88.6%, and with leases signed but not commenced, it rises to 91%. This portfolio includes our in-service properties and does not include the development portfolio, which is up to 4 million sq ft and is 52% leased. We currently have leases in negotiation totaling 900,000 sq ft, and we have a current pipeline of additional active proposals totaling over 1.5 million sq ft. I would expect us to sign 95% of the leases in negotiation and more than 50% of the 1.5 million sq ft of proposals. To summarize, we have active dialogue on 1.65 million sq ft of space as we end the first quarter of 2023. If 40% of these leases are on vacant space or 2023 expirations, it should add about 660,000 sq ft of space to our occupancy. We have 1.2 million sq ft of signed leases with an anticipated 2023 commencement. Together with the leasing pipeline, this adds 1.86 million sq ft to our occupancy. Our remaining 2023 expirations are 2.2 million sq ft. We have additional activity across the portfolio and still expect to lease 3 million sq ft this calendar year. The mark-to-market on the leases in the supplemental show we were down about 3% overall, and D.C. was down 47%, which was a little bit shocking. This is due to our restructuring of a 70,000 sq ft Regal Cinemas lease in Springfield, Virginia. If you exclude the Regal Cinemas lease, the portfolio was up 2.5% and D.C. was down 10%. We were up 21% in Boston, down 9% in New York City, and up 6% in San Francisco. The leases we signed this quarter on second generation space were essentially flat across the company, with Boston up and the other markets slightly down. During the quarter, we experienced one life science default on 12,000 sq ft at Eight Eighty Winter Street, where a Forum Biotech company shut down its U.S. operations. This was one of the spaces we built on a speculative basis in 2022. We are negotiating a new lease on the space as is, with a rent that's 9% higher than the prior rent. To provide some perspective on our life science credit exposure, our total annual revenue from in-service life science clients is about $226 million, or 8% of our total revenue. 70% comes from public companies with equity market values over $1 billion. The other 30%, $68 million, is made up of 66 clients, 20 public and 46 privately funded. We've also signed leases that have yet to commence with total annual revenue of $128 million. 90% is with Roche Genentech, AstraZeneca, and the Broad Institute. Activity in the life science market continues to be slow across both Greater Boston and South San Francisco, and there is new unleased space being added to the markets. There are a few large requirements that are touring, but as I have previously discussed, the bulk of the demand is from small private companies that are looking for fully built space. Our new client at 880 Winter Street fits this profile. We are also negotiating 3 additional leases at the development project at 651 Gateway in South San Francisco, totaling 57,000 sq ft. The property will open in 2024, and each lease requires our partnership to complete turnkey spaces. BXP will outperform the market, and we will continue to lease available space because our portfolio is fundamentally comprised of premier workplaces and the majority of the demand, new and existing clients in the market want to be in these types of properties. Medium and small financial and professional service clients will make up the bulk of the leasing we complete in 2023. We completed 57 leases during the first quarter. We had 4 leases over 30,000 sq ft and only 1 above 50,000 sq ft. Occupancy gains will be captured through lots of small and medium sized leases and renewals. We will have some contractions, and we will also have some expansions. Tour activity continues to be strongest in the Boston CBD, New York City Plaza District, and San Francisco, where the concentration of small professional firms and financial firms are concentrated. I'll stop here and turn the call over to Mike. Thanks, Doug. Good morning, everybody. I am gonna cover the details of our first quarter performance and also the changes to our guidance for the year. Before I do, I would like to address a couple of questions we've received from shareholders, and we'll start with a discussion of our liquidity, our near-term capital needs, and the state of the debt markets from our perspective. There's been a lot of talk in the media about the lack of financing available for commercial real estate. While we agree that underwriting criteria is tighter and financing costs, both in terms of credit spreads and reference rates, are higher, there is financing available for high quality, well-leased premier workplace assets and portfolios. In fact, in the past six months, we issued $750 million of unsecured green bonds in the investment grade bond market and extended and increased our term loan with a syndicate of banks to $1.2 billion, providing $470 million of incremental proceeds. We are currently in a strong position with $2.4 billion of liquidity, comprised of $900 million of cash and full availability under our $1.5 billion line of credit. We do have 2023 capital needs, including funding our development pipeline and refinancing expiring debt facilities. For the remainder of 2023, we project to spend approximately $750 million to fund our developments. Our consolidated 2023 debt maturities are limited to a $500 million bond issuance expiring in the third quarter of 2023. If you extend the window into 2024, we have another $700 million coming due in the first quarter of 2024. The bond market experienced volatility and higher credit spreads in March, coming out of the bank failures over fears of a broader crisis. In April, the market has settled down and our credit spreads have come in meaningfully. We believe we could issue a new 10-year bond today at between 6.4% and 6.7%, which is inside the pricing we issued on a five-year deal last November. Credit spreads are still wider than historical levels, but the market is open, and we expect to continue to monitor it as an option for our refinancing needs. In our joint venture portfolio, we just exercised a 1-year extension on our mortgage loan for the Marriott headquarters located in Bethesda, and we have an additional option to extend it to 2025. Our remaining 2023 mortgage expirations total just $287 million at our share, and we have an extension option available on $168 million of this. The expiring mortgages are for the Verizon anchor Hub on Causeway new development in Boston that is 94% leased, and 500 North Capitol in Washington, D.C. that is 100% leased. We expect to refinance or extend these loans in the mortgage market and are actively working on term sheets. As Owen mentioned, we have a broad array of capital sources that we consistently evaluate that are available to us in varying amounts and costs to fund our capital requirements. The unsecured bond market has been a reliable debt capital source for us for over 20 years. We have a very liquid outstanding bond complex and a supportive core of fixed income investors who have partnered with us for years. As I just mentioned, the market is open, but at a cost higher than our historical levels. The mortgage market is also available to us. We have a large portfolio with over 90% of our assets unencumbered. This allows us to selectively secure assets if we want to raise capital. An appropriately leveraged and well-leased premier workplace can be financed in today's mortgage market at pricing inside our bond pricing. We're also active in utilizing institutional private equity to help fund our acquisitions and development activities. Although investors are highly selective, they continue to evaluate investment opportunities with us. We have an attractive pipeline of well-leased developments and existing properties that represent unique offerings to these investors. Asset sales are another source of capital. In the past four years, we've sold over $2 billion of properties and have efficiently recycled the capital into newer investments. The asset sales market has definitely slowed dramatically with the increase in interest rates. It is a lower probability for us in 2023. However, we have properties that we could sell, including assets in our multifamily portfolio that are more liquid in today's market. While the public discussion continues to be broadly pessimistic on real estate and the availability of capital, we continue to have plenty of flexibility with strong liquidity and multiple sources of debt and equity capital that we can turn to. Another question we've received from investors is about our dividend policy, given we are trading at a historically high 8% dividend yield. We have maintained a consistent dividend since the beginning of 2020. Our FAD provides reliable coverage of our dividend, such that we're able to reinvest excess cash flow into the growth of our business. We've been successful in selling assets annually and fitting the gains on sale within our regular dividend policy without the need for special dividends. Long term, our goal is to maintain a steady dividend and increase it over time as our developments add to our income. In the near term, a slowdown in expected sales activity would create room in our dividend relative to the REIT distribution requirements. If our outlook for the economy and the capital markets becomes more negative and asset sales slow, we do have flexibility to modify our policy. Now I'd like to turn to our earnings results. We reported first quarter FFO of $1.73 per share. Our results exceeded the midpoint of our FFO guidance by $0.06 per share. Nearly all of the variance to our guidance is from higher than projected NOI from our portfolio, with $0.05 coming from lower operating expenses and $0.01 coming from higher rental revenues and fee income. The expense savings are the result of lower energy costs due to both lower commodity prices and reduced utilization related to the mild winter in the Northeast. We also incurred lower repair and maintenance expenses than expected. As a result, we're increasing our funds from operations guidance for 2023 by $0.04 per share at the midpoint. Our new range is $7.14-$7.20 per share. Our full year guidance increase is less than the Q1 FFO beat, as we expect that $0.03 of our Q1 operating expense savings will be moved into the rest of the year in the form of lower expense recoveries and the deferral of repair and maintenance expense. The $0.04 increase in our full year guidance includes $0.03 of improvement in our portfolio NOI that is comprised of $0.02 of lower expenses and $0.01 of better than projected revenues. While we're increasing our portfolio NOI guidance overall, we remain comfortable with the same property guidance range that we offered last quarter. This includes our assumption that same property NOI growth from 2022 will be flat at the midpoint of our range. While on a cash basis, we expect same property NOI growth of 1%-2.5%. We have increased our guidance for fee income for the full year by $0.01 per share. The increase is a combination of higher construction management and development fees. We've made no changes to our interest expense assumptions. We are assuming an additional 25 basis point increase in short-term rates, and then rates remaining flat for the rest of 2023. To summarize, we've increased our guidance range for funds from operation to $7.14-$7.20 per share. The increase is $0.04 per share at the midpoint, it comes from $0.03 of better projected contribution from our portfolio and $0.01 of higher fee income. The last item I would like to cover is a reminder of the diversification and credit quality of the leases in our portfolio. Doug provided some of the details on the 8% of our portfolio leased to life science clients. If you take a deep dive on our technology clients, the results are very similar. Tech clients comprise about 17% of our revenues and over 80% is from large publicly traded companies. We have 85 leases with smaller public and private technology companies with an average annual rent of about $1 million each. Our tech and life science clients comprise 25% of our revenue base. The rest of our portfolio consists of a diverse mix of financial services companies, law firms, other professional service firms, media, real estate, retail, and manufacturing companies. Overall, our portfolio is incredibly diversified by client, by industry sector, and by geography. Our weighted average lease term is approximately eight years, which leads to manageable annual lease expiration exposure. This portfolio construction is by design, given our focus on premier workplaces that attract a high quality client base that desires longer term leases and are focused on attracting and retaining a talented workforce. Operator, that completes our formal remarks. If you could open up the line for questions, that would be great. Thank you, sir. As a reminder, to ask a question, you will need to press star one one on your telephone. To withdraw your question, please press star one one again. We ask that you keep your questions to no more than one, but please feel free to go back into the queue, and if time permits, we'll be more than happy to take your follow-up questions at that time. Please stand by while we compile the Q&A roster. I show our first question comes from the line of Steve Sakwa from Evercore ISI. Please go ahead. Yeah, thanks. Good morning. Doug, appreciate all the comments that you made on leasing. I did notice that there really was no, I guess, incremental leasing on the development pipeline outside of the two new projects that got added. Could you maybe just speak to the pipeline that you talked about? How much of that leasing that you're in discussions on is for the development? I guess, how do you still feel about the projected yields on the development pipeline today? Sure. The pipeline of unleased property, Steve, is pretty bulky, right? It's in primarily in two places. It's in Platform 16 in San Jose, which won't deliver until the beginning of 2025. As you probably can surmise, there's not a lot of technology demand in the market today, there are no conversations going on there. The other large bulky one is 360 Park Avenue South. We are starting to have conversations with smaller size tenants, so one to four floors. Hilary, I'll let you sort of comment in a second on that. The overall, and you'll notice are an increase in our costs on some of our development assets because we have pushed out the leasing time frames and therefore we're carrying those properties for a longer period of time, and obviously interest expense, you know, is meaningfully higher than when we started these projects, and that's impacting that. The returns on our development assets will be slightly lower. It'll depend on the leasing success that we have, Steve, so I can't give you a comment on how many basis points they're gonna be. Hilary, if you wanna comment on Park Avenue South. Hilary? Hilary, you may be on mute. Okay, I show our next question in the queue comes from the line of John Kim from BMO Capital Markets. Please go ahead. Thank you. You discussed extending some of your maturities on your JV mortgage set and that market overall, the mortgage market being inside bond pricing currently, which really goes against the grain of some of the issues we're hearing with the regional banks. I was wondering if you could just elaborate on how healthy that market is and who's willing to put more capital into office assets today. You know, I think that the conversation around regional banks is something that, you know, is obviously out there. They're not necessarily lenders to us on properties like ours. You know, we do have credit with the larger kind of multinational and global banks that we do business with and some of the super-regional banks, I would call them. There's life insurance companies, there's pension funds, and there's the CMBS market, which the most active part of that is really the conduit marketplace. There's been, you know, several large conduit offerings that have been distributed to the marketplace, including, I think, 3 in the last month, where the office component of those are somewhere between 15%-25%. You know, those loans are generally, you know, on an individual size, maybe $50 million-$100 million. You could do a larger loan and do a conduit, you know, say $250 million, and it gets sliced up into a couple of different securitizations. Again, I think that if you have a good quality income stream to finance in a good building with good tenants and, you know, long weighted average lease term, that will get recognized by the financing markets. We, you know, we've been talking to the market. We have term sheets on deals that we're working on where there's a desire to, you know, do loans for those types of properties at credit spreads that are still higher than, you know, what they were. They're credit spreads that are below what, you know, it's currently, you know, in the bond market right now. Not significantly below, but below. As I said, we've got a couple of these mortgage financings that we're working on that we anticipate that we're gonna execute on. You know, those are the markets that we're dealing with. You know, John, this is Doug. I just give another perspective. We have a lot of what I would refer to as highly financeable assets with long-term credit leases, and we would likely go and finance, for example, a 15-year Google lease for 5 years or a 12-year Microsoft lease for 5 years, right? We're not doing these at 75% LTVs. We're looking for a modest amount of leverage. Those types of assets, we believe, are highly marketable to the various counterparties in the lending community, be they insurance companies, be they domestic or foreign banks, be they the CMBS market. That's sort of where we're looking for additional capital. As Mike suggested, we have a maturity in a, you know, a relatively small size asset, a $100 million asset in Washington, D.C., and we had a number of term sheets from secured lenders on that. So we are seeing evidence that our portfolio is being receptive to, you know, additional secured financing. Thank you. I show our next question comes from the line of Camille Bonnel from Bank of America. Please go ahead. Hello. Following up on the leasing pipeline, can you please comment on how you classify deals in the active proposal pipeline and how this pipeline compared to last quarter or even a year ago? The way I characterize things is if we are negotiating a lease document, it's part of that 900,000 sq ft. If we have an active conversation and are exchanging letters of intent, but we have not yet confirmed a letter of intent, AKA, a meeting of the minds, and we haven't started a lease negotiation, that's sort of in that other pipeline. I would say we have slightly more stuff in the active proposals or active negotiation stage than we had last quarter, largely because some of the stuff that I thought was gonna get done in the first quarter leached into the second quarter. There are two meaningfully larger deals, meaning over 100,000 sq ft, that we thought we had a chance of signing in the first quarter that just didn't get signed yet. Our active proposal pipeline is, I would say, modestly growing sort of quarter to quarter, but pretty consistent with what it's been the last two or three. Thank you. Yeah. I show our next question comes from the line of Anthony Paolone from JP Morgan. Please go ahead. Yeah, thanks. Good morning. Appreciate all the color on capital markets and how you're trying to triangulate where pricing might be. Just for BXP, for you to put capital out the door right now, what would you all want in terms of an IRR? How would you underwrite rents and cash flow growth? Like, what would a deal that would, you know, prompt you to pull the trigger on look like? Yeah, I'd say it's Owen. A couple things I would say. One, first thing would be what is it? You know, we're not gonna go out and buy a cheap office building in the hopes that we can make it less cheap over time. You know, we're gonna focus on premier workplaces in the office segment. We're gonna continue to focus on our life science portfolio, and we're also gonna focus on residential development, probably more as a merchant builder as opposed to a long-term owner. I think perimeter is very important. And look, in terms of overall, in terms of overall cost and what we're gonna be looking for, one, it's certainly gone up. Number two, it would depend a lot on the risk profile of the asset. Number 3, what's always on our mind is our stock is currently trading at a look-through cap rate of 9%, and that's got to be a guidepost as we think about putting out new capital. Thank you. I show our next question comes from the line of Alexander Goldfarb from Piper Sandler. Please go ahead. Good morning. Owen, along those lines, in prior cycles, you guys have bought, you know, some buildings, 399, 510 Madison, you know, 100 Federal Street. You bought those in prior opportunistic times. Given the capital markets today, given Mike's comments about, you know, assessing the dividend if the disposition market doesn't open up, are you guys more keen and confident to buy assets, let's say, around Park Avenue, Grand Central, or other transit hubs? Is the company's focus more in capital preservation and therefore only stick to the current pipeline and really limit incremental, you know, opportunistic existing asset purchases? Alex, we have access to capital, as Mike and I pointed out. The key is pricing. You know, we're interested. We're open for business. We're interested in growing our company. We think we will. You know, that, 9% look-through cap rate is a guidepost for us. Thank you. I show our next question comes from the line of Nick Yulico from Scotiabank. Please go ahead. Thanks. I appreciate all the, you know, the commentary on the secured lending market. I guess, you know, a question I have is, and again, I realize this doesn't really apply to your near-term maturity schedule, but, you know, if we think about, let's say, New York City, I mean, this is a market that historically relied on, you know, very large loans that were put into the securitization CMBS market, and it's not a single tenant long-term credit building often. It's multi-tenant. The vintage of the asset will, you know, vary. You know, we're talking about $1 billion loans that got done for New York City, which seems like cannot get done right now because of what's going on with the securitization market. I'm just trying to figure out, you know, what your thoughts are about, you know, the ability for this, let's say, New York City as a market to function from a property sales standpoint, from a lending standpoint, if it is historically a market that has very large loans that can't get done in the securitization market right now. This is Doug. I don't want to get into a conversation about other people's assets. From our perspective, obviously, we don't have anything maturing anytime soon in our Manhattan portfolio. We do have two large CMBS transactions that were done. You know, they were SASB deals, but they've got long duration associated with them. I would expect that the markets will heal and that there will be capital available at a different kind, as Mike described, a different kind of a leverage point and a different kind of a pricing parameter. There is going to be equity that's required in these assets to appropriately refinance them with a capital structure that makes sense for the large loan marketplace. There's gonna be, you know, obviously some degree of time before we get there. I mean, there are obviously a lot of, you know, I guess, sort of kick the cans or workouts or other conversations going on right now. I believe with enough equity, you will be able to raise billion-dollar financings in the market. They're gonna be done at different kind of leverage points. Thank you. I show our next question comes from the line of Blaine Heck from Wells Fargo. Please go ahead. Great. Thanks. Good morning. Doug, your commentary around the most active tenant groups in the market was really helpful. Can you guys just talk about how you're taking advantage of that activity amongst medium and small financial and professional services companies? You know, are you breaking down any of your vacant spaces into smaller spec suites or doing anything else to accommodate that demand from small tenants? The answer is we are. We are being, I would say, very deliberate about the kinds of things we're doing. You know, I'll let Bob talk, for example, about some of the activity that we have going on in San Francisco right now, where, you know, what was put in front of me was a series of changes to some existing availability that, you know, we think will be very additive to the market. Bob, do you wanna talk about our approach there? Sure. We have a program of doing spec suites at Embarcadero Center on the smaller spaces, we have several that are in the works right now. Some of them are designed where they can be combined with other suites if we need larger space. Typically when we do these turnkey, we might have to put a little bit of TI in after the fact when we find a tenant. We've had great success with these smaller suites so far. Pete, maybe you or Ray can comment on, you know, the program we've had in Reston, Virginia, for probably the last 7 years, and how successful that's been. Sure. This is Peter Otteni from D.C. Yes, it was not too many years ago that the Reston Town Center market was not one where we had done spec suites very often. In the intervening 24 to 48 months, we've done quite a few of those. I don't have the exact number off the top of my head, but it's in the high 20s in terms of the number of spec suites that we've done out there, and all with great success, many leased prior to or at delivery. All of them that have been delivered are leased at this point, and we have activity on the balance of them. We did a full floor of spec suites at RTC Next, in addition to the spec suites in the Reston Town Center. It's been a very successful program out there, capitalizing on exactly this type of tenant that's being discussed. Obviously, we have done them in D.C. for many years. That's a little bit more of a competitive market, but we think in the right buildings, for instance, after some good success on the leasing front at 2100 Penn, we're likely to have some space left there, where we think spec suites will be very, very sought after due to the quality of the building and the quality of the spec suite that we'll build there. Thank you. I show our next question comes from the line of Michael Goldsmith from UBS. Please go ahead. Michael, your line is open. If you have your phone on mute, please unmute your line. Okay, we'll move on to the next question. Our next question comes from the line of Caitlin Burrows from Goldman Sachs. Please go ahead. Hi. Good morning, everyone. Maybe just another one on leasing. In the quarter, you did 660,000 sq ft of leasing and have talked about now an expectation for about 750,000 sq ft per quarter the rest of the year. I was just wondering, are you seeing activity that specifically points to an increase in leasing activity into Q and beyond? If so, what and kind of where is that? Or is it more of, general expectation at this point? I think it's general expectation based upon fact, right? I went through our sort of pipeline, and I've got 900,000 sq ft of active leases under negotiation. I've got 1.65 million sq ft of proposals that I believe, you know, will manifest themselves into a significant number of signed leases. It's, you know, we're talking about being in April of 2023, I've got another eight months ahead of me. I feel very confident that we will be able to achieve a 3 million sq ft leasing market. I hope we're gonna exceed it, but it's not based upon our projections. Our projections are 3 million sq ft, that's where it was built into our occupancy numbers and Mike's same story numbers. Thank you. I do show our next question comes from the line of Michael Goldsmith from UBS. Your line is open. Mr. Goldsmith, if you have your phone on mute, please unmute your line. Okay, we'll move on to the next question. Our next question comes from the line of Michael Griffin from Citi. Please go ahead. Great, thanks. Maybe we just shift back to San Francisco, you know, down the peninsula, probably a better off sub-market. I'd be curious to hear your thoughts about Google announcing their pause on that mega campus in San Jose. Could you see this being a potential benefit for that Platform 16 project? You know, I think it's not expected to be stabilized till 2026. I know you have a relationship with Google, any comments you can make there would be helpful. Sure. Bob, do you wanna take that one? Sure. First off, the CNBC report that came out the other day that they were stopping the project is false news. It's been reported by the mayor on Friday and Google yesterday that they're still planning on proceeding with the project today, or excuse me, this year. We do have a relationship with Google. Whether or not they would have interest in that project remains to be seen, we will be the first building out of the ground adjacent to their campus. Time will tell. They're several years away from actually starting a building because they've got to put all the infrastructure in place first. Thank you. I show our next question comes from the line of Vikram Malhotra from Mizuho. Please go ahead. Thanks. Same question. Just two quick ones. One, can you just remind us, you know, are there any risks sort of with the or I think you have three or four WeWork leases in terms of just their performance and, you know, potentially being those being given back? Then just separately, broadly, I know you'd embarked on, you know, over time, you've been investing CapEx to kind of keep the buildings fresh. I'm just wondering, sort of in this environment, can you remind us sort of what the sort of CapEx outlay may look like over this, call it, the next two years to, you know, keep so the buildings are competitive? Let me answer your second question first. Your second question on CapEx is that BXP typically spends somewhere between $2 and $2.50 sq ft per year on its overall, what I would refer to as ordinary course of business CapEx. That is defined as base building and what I would say sort of modest refreshes on our portfolio. It doesn't include if we're gonna build a new amenity center at the General Motors building, or we're gonna do a new amenity center at Embarcadero Center, or we're gonna totally gut and redo one of our lobbies. It doesn't include those types of expenses which would, you know, be outside of that. With regard to WeWork is a client of ours. WeWork is clearly reducing the number of units that they have. We've negotiated some reductions from WeWork in our portfolio, you know, WeWork is not likely to be in the same relative position in terms of the amount of space that they take from BXP when we get to the next quarter. Thank you. I show our next question comes from the line of Ronald Kamdem from Morgan Stanley. Please go ahead. Hey, just one quick one and a follow-up. Just on the asking the leasing question a different way. I thought the expectation before was for occupancies potentially to be down in first quarter, first half. It sounds like there was probably more leasing than expected. Maybe you could just comment on that. You know, I'd also love to hear sort of your comments on occupancy for the portfolio by market, specifically in the West Coast versus the East Coast. Yeah. The quick follow-up. Yeah, the quick follow-up was just on, there's been a lot of sort of news about Salesforce in the market subleasing space. I'm wondering how you guys are thinking about that for Salesforce Tower and if any other tenants potentially could be subleasing space. Thanks. That's about 8 questions, but I'll try and answer them really fast. We leased 5.8 million sq ft of space in 2022, and our expectations were for 3 million sq ft in 2023, so a lot less. The first quarter, I think, was pretty consistent with what our expectations were for the year. I don't think that there are any sort of changes on a relative basis. Regarding occupancy, we've been pretty consistent with where we've basically been saying we think our occupancy is expected to go down a little bit in 2023. I think we didn't describe exactly when that's gonna occur. There'll be some reduction in occupancy likely in the second quarter because we have some expirations. Then, the 1.2 million sq ft of space that I described that we expect to get in service in 2023 is more towards the back end of the quarter or the back end of the year, so it'll pick up again. Net, net, we think our occupancy will be relatively flat to modestly higher as we enter the end of 2023, early 2024. With regard to Salesforce Tower, Salesforce has space on the sublet market. We're not part of their conversations. They have not come to us and said, "Hey, we have a tenant that would like to do a long-term lease, and would you consider doing a sub, or would you consider taking the space back?" I'm not aware of what they're specifically is going on with their sublet, but I can tell you that their single location is likely to be at Salesforce Tower when they sort of get done with their quote-unquote subleasing the space because they've moved out of 350 Mission, and they have the majority of their space at 50 Fremont on the sublet market, and they obviously, they pulled out of the other buildings that were going to go up in that neighborhood. The, the thing that's left is SalesforceTower.com Yeah. I would just add, we have, Bob should comment on this. We have market inquiries relatively frequently for the Salesforce tower. It's completely full. One of the reasons, Salesforce is putting, floors in the tower on the market is because it's actually the easiest space to have subleased given the attractiveness of the asset. Yeah. I would just add, the building's 100% leased. It's probably the most sought after building in San Francisco for space. We get multiple inquiries every month about people looking for space in the building. Thank you. I show our next question comes from the line of Dylan Burzinski from Green Street. Please go ahead. Hi, guys. Thanks for taking the question. Just curious, you know, how you guys are thinking about buybacks or potential buybacks in the current environment. Owen, you mentioned the 9% implied cap rate that the stock now trades at today. I realize that obviously office transaction markets are fairly illiquid, if you guys were able to get dispositions to the finish line, would you guys view buybacks the potential use of that capital? Well, we think that our stock represents a very uniquely interesting investment, particularly at this point in time. Most of the inquiries we've been getting recently, and that's the reason why Mike LaBelle and I spent so much time on it in our remarks, is our access to capital and how are we dealing with upcoming debt maturities and things like that. You know, in this kind of environment, buybacks are not a priority for us. We also, you know, we have found interesting uses for the capital. We just put on our development pipeline this quarter the 290 Binney Street development that's 100% leased to AstraZeneca, and also the 300 Binney Street asset conversion. Great. Thank you. Thank you. I show our next question comes from the line of Tayo Okusanya from Credit Suisse. Please go ahead. Hi. Yes. Good morning. Thanks for keeping the call going. Just a quick one on office to resi conversion. Again, a lot of these buildings don't compete with your assets. Just curious, you know, how you guys think about that whole movement. Is it something that, you know, you're excited about? Do you think it helps BXP longer term? Just because it's not competitive product doesn't really matter to you guys. Yeah, no, I would say it this way, I think it's a very big trend that will unfold slowly. The reason I think it's a very big trend is because I think, virtually everyone benefits from it. You know, there's too much, out of, you know, there's too much obsolete office stock that something needs to happen with that stock. Number 2, there's a shortage of housing in, I think, all the cities where we operate. 3, conversions would create more, you know, appraised value and more tax revenues for the cities that we operate in. Lastly, you know, converting an existing building versus tearing it down and building something new, creates much less embodied carbon. I just think everything about conversion makes a ton of sense. The reason I say it's gonna unfold slowly is there are big challenges in doing it. You know, first of all, building has to be empty, and there's not many office buildings that are fully empty. A lot of them are 50% empty or something like that. That's number one. Number two, physical characteristics are very important. You know, particularly the bay depths in the property. You know, access to light and air is very important for residential, so very large floor plate buildings don't work as well. Lastly, economics. You know, most office buildings today are not appraised or valued at a level where a conversion is economic. I think these forces will work themselves out, over time. you know, if you just take a very small percentage of the 733 million sq ft of office in our markets and say it's converted, that's very material. In terms of BXP, we don't have any assets that are conversion candidates themselves. I do think it will represent an opportunity for us to do some residential development. you know, it's a little bit different from a typical conversion that I think you're asking me about. This World Gate investment, albeit small, that we just made, is an example of us reusing a parking garage and taking a site that's currently an empty office building and converting it into something more productive. This is Doug. I would just add that World Gate is sort of an illustrative example of what we think may happen in certain instances in certain cities, where the buildings have no intrinsic value as a repositioned, conversion, and therefore the land is really where the value is, and it probably has a higher and better use as residential. You know, there are buildings probably that will be taken down, and the sites will be then, you know, readapted as residential sites, even though they're currently, you know, commercial office buildings. Great. Why don't we circle back to Hilary on Three Sixty Park. Hilary? Thanks, Helen. Can you guys hear me now? Yes. Yeah, we got it. Thank you, everyone. Hi, it's Hilary Spann. I just wanted to add a little bit of color to the leasing activity in Midtown South at 360, in addition to what Doug has already described with regards to the pipeline that's either out for signature or in negotiation. Last quarter, I told everyone that we thought that we would be seeing more demand from 50,000-75,000 square foot tenants leading into this year, and that largely proved itself to be correct. We are currently in discussions with five tenants that range from 25,000 square feet to 75,000 square feet at the building. I think what is more interesting, and this is really just sort of a check on the spot market for leasing in Midtown South, is that recently we have toured 2 150,000 sq ft tenants and 1 200,000 sq ft tenant for Three Sixty Park Avenue South. We also toured, just yesterday, a tenant that wants to start at 30,000 sq ft and potentially has growth to 100,000 sq ft. It seems that the demand profile is shifting a little bit again toward larger tenancy in the sub-market. Obviously, that will take some time to play out as these tenants decide where they're going to go and document transactions. I think overall it's a positive signal for the market. If I looked at all of that combined with what we're trading paper and the tours that are in the market, that represents about 715,000 square feet of tenants that are in the market right now. Just wanted to share that additional detail with you. Thank you. I'm showing there are further questions in the queue. At this time, I'd like to turn the call back over to Owen Thomas, CEO, for closing remarks. Just wanna thank everyone for your time, attention and interest in BXP. That concludes the call. Thank you. This concludes today's conference call. Thank you all for attending. You may all disconnect at this time.