grow. And as always, we'll be evaluating such opportunities relative to all of our reinvestment options, including leverage neutral stock buybacks. As it relates to our future development pipeline, we've made further progress on monetizing land parcels that have the highest and best use outside of the company's core competencies. As discussed last quarter, in April, we signed an agreement to sell a portion of our Santa Fe Summit site in San Diego. And last night, we announced an agreement to sell the land parcel at 20 Sixth Street in Los Angeles. These announced transactions, which aggregate total expected gross proceeds of $79,000,000 represent over half of our stated goal of realizing $150,000,000 from the monetization of the future pipeline, with proceeds to be realized over the next several years as re entitlement efforts are completed. The Flower Mart project, which consists of a seven acre development site in the Central Selma submarket of San Francisco, remains our single largest investment in the future development pipeline. As discussed on the last several conference calls, long term value maximization at the Flower Mart will require the creation of significant additional flexibility and optionality as it relates to both the ultimate mix of uses on-site and the phasing of development execution. Over the course of the last six months, our development team has worked diligently on a significant redesign and reimagining of the Flower Mart project that will allow us to be responsive to market conditions as they continue to evolve. As you may remember, we're currently entitled for a 2,300,000 square foot primarily office project. And while we remain very encouraged by the resurgence in office demand in San Francisco, we also remain convicted that maximizing value on this site will require a broader mix of uses than originally contemplated, which may allow for the development of certain components of the project earlier than otherwise anticipated. We have recently had constructive and encouraging conversations with the city regarding our proposed modifications to the program. While these discussions are still ongoing, we've gained greater clarity around both the approval process and the time line required to secure the flexibility we're working towards. As a result, based on the best information we have available today, we expect interest and other expense capitalization at the Flower Mart to cease at the 2025. While we will update this assumption as appropriate, we're not currently assuming any capitalization of the project in 2026. I want to conclude by thanking the entire Kilroy team for another outstanding quarter of execution across all fronts. The pace of work has accelerated across the company as leasing and transaction activity has increased, and I'm grateful for the way the entire organization has responded. At the same time, this team's willingness to innovate and embrace change is creating additional value for our stakeholders each and every day and positioning us for continued success in the quarters ahead. Elliot? Thanks, Angela. Before getting into the specifics on the transactions we announced last night, I want to expand on the long term objectives of our capital allocation strategy that Angela referenced, highlighting three primary goals. First is something we have discussed on prior calls, monetize non income producing land that has a higher and better use beyond office or life science. Second, sell operating properties that are valued at favorable levels relative to our expectations for fundamentals. Third, concentrate investments in areas of conviction, specifically submarkets with diverse and robust demand drivers, high barriers to entry and a track record of significant and consistent rent growth. These goals have guided our actions to date and as we continue to execute, we are confident that we will further distinguish the Kilroy portfolio and better position the company for outsized cash flow growth. With that said, we're thrilled to have two land sites and two operating properties in various stages of completion. In total, these four transactions will raise over $480,000,000 of gross proceeds. First on the land sales, we're under contract to sell the land at 20 Sixth Street in our Los Angeles region to a residential developer for $41,000,000 or roughly $20,000,000 per acre. Similar to our sale of a portion of Santa Fe Summit, 20 Sixth Street has a path to residential entitlements that does not require a full change of use. We expect the transaction to close upon receipt of entitlements, which we estimate to be in 2026. Next, at the very end of the quarter, we completed the sale of 501 Santa Monica in Downtown Santa Monica to an institutional owner for $40,000,000 or slightly over $500 per square foot. The building is one of our older properties and requires a substantial amount of capital due to both base building needs and leases rolling over in the coming years. In our view, the capital requirement was outsized compared to the growth prospects for the property, making this a logical disposition candidate. Additionally, we are under contract to sell a four building campus in Silicon Valley for $365,000,000 or $550 per square foot. This campus is 89% leased today going down to 65 leased in 2026 when two of the four buildings will be fully vacant. One of the vacant buildings is twenty five years old and requires both base building capital and leasing capital. The other has been leased by a single tenant and requires leasing capital, all of which adds up to a significant spend in a market that has seen pressure on rents in recent years. As we evaluated alternatives, we concluded that selling at this value generated the best risk adjusted return for shareholders. Finally, touching on acquisitions, we continue to diligently underwrite a variety of deals across all our existing markets. We do not have anything to announce at this time, but the opportunity set has improved in recent months in terms of both quantity and quality. We're optimistic that we will find investments that meet our criteria, generate little to no dilution in the short term and produce materially better cash flow growth in the medium and long term. With that, I will turn the call over to Jeffrey. Thanks, Elliot. FFO for the quarter was $1.13 per diluted share, which includes approximately $0.11 per share of one time items, including most notably a $10,700,000 lease termination fee, which contributed $05 per share to FFO net of non controlling interest. Additional one time items include approximately $6,900,000 or $06 per share, largely related to bad debt reversals and net real estate refund benefits tax refund benefits. Cash same property NOI growth in the second quarter was four fifty basis points with the previously mentioned one time items on a cash basis contributing 300 basis points. Turning to occupancy, we ended the second quarter at 80.8% down from 81.4% at the end of the first quarter. As previously communicated, this decline was expected and reflects the rightsizing and renewal by Dermtech along with the early vacate related to the 23andMe bankruptcy. It's worth noting that the second quarter occupancy statistics now exclude both the 89% leased four building campus designated as held for sale in 501 Santa Monica, which was sold during the second quarter. Accordingly, we made conforming updates to our lease expiration schedules to reflect the removal of expirations tied to these assets. While their removal negatively impacted occupancy by 20 basis points, we were able to maintain the midpoint of our occupancy guidance range due to the team's continued success in accelerating lease commencement dates across the portfolio. Looking ahead, we continue to expect a modest decline in occupancy in the third quarter, primarily due to the addition of two redevelopment projects entering the stabilized portfolio during the period. That said, we also remain optimistic that we'll see positive net absorption in the fourth quarter supported by significant lease commencements from previously executed leases. It's important to note that the spread between leased and occupied space increased to two seventy basis points this quarter, a 100 basis point improvement year over year, representing significant built in growth that will materialize in the portfolio throughout the 2025 and into 2026. GAAP releasing spreads were negative 11.2% in the second quarter and cash releasing spreads were negative 15.2%, both of which were largely impacted by a single large lease in San Francisco. While this lease was completed at lower base rents, it required limited capital and produced strong net effective rent. Notably, the lease term, which is under three years, will provide us with a valuable near term occupancy while maintaining our ability to reprice the space as the market continues to improve. Excluding this one transaction, cash releasing spreads would have been approximately positive 1%, representing a meaningful improvement relative to the prior quarter. Turning to guidance. We raised our 2025 FFO outlook to a range of $4.05 to $4.15 per share, a $0.15 increase at the midpoint. This revised guidance reflects our updated expectations for capitalization at the Flower Mart, accounting for $08 per share at the midpoint, the significant termination fee recognized in the second quarter representing $05 per share and our updated same property NOI guidance representing $04 per share, all of which were partially offset by the anticipated net impact of announced capital recycling activities. Same property NOI growth is now expected to range from negative 1% to negative 2%, a 75 basis point improvement at the midpoint. Our updated guidance range implies a deceleration in same property NOI growth throughout the second half of the year, largely due to the previously discussed impact of one time items in the second quarter of this year. In addition, we recognized significant restoration in settlement fee income in the 2024, which will create a difficult comparison for the 2025. As Angela previously mentioned, we have updated our capitalization assumptions for the Flower Mart. When we initiated 2025 guidance in February, the range of possible outcomes reflected the uncertainty inherent in the process, with the cessation of capitalization ranging from as early as June to as late as December. Given the progress we have made to date, we have updated our default assumptions for the cessation of interest and other expense capitalization to year end. We will update this assumption as appropriate, but as previously mentioned, we are not currently assuming any capitalization of the product in 2026. Relative to sources and uses for the back half of this year, we expect to utilize the proceeds from the announced dispositions for a combination of reinvestment opportunities and debt repayment. As we approach for remaining 2025 bond maturity, we will evaluate the capital markets for an opportunistic execution window. Our balance sheet is well positioned to support growth with a well laddered maturity schedule and strong liquidity, which will provide valuable flexibility as opportunities present themselves. With that, we are happy to take your questions. Operator? Thank you. We will now begin the question and answer session. Our first question today comes from the line of Jaina Gellan with Bank of America. Please go ahead. Thank you and congrats on the leasing and transactions this quarter. Can you talk a little bit about the type of buyers out there, the breadth of the bidding pool and whether you're seeing some owner occupants? And then just discussions on valuation, whether it's more of a price per square foot discussion or cap rates and and whether it's different in San Francisco versus LA? Hey, Yana. It's Elliot. So, every transaction is gonna be different, and we we touched on this a little bit last quarter with the different types of groups that, we've seen out there. And there's everything from institutional buyers to high net worth to owner users. And each group's gonna think about it a little bit differently depending on the profile of the asset. So, it's it's a little bit hard to kind of generalize. But what we've seen with the transactions that we completed were pretty good depth, frankly, across all the these different types of opportunities. And each group is very different. 20 Sixth Street, as an example, since that was going to residential developer, had a very different set of, folks that showed up relative to to 501 Santa Monica. So, we we've been pretty methodical with how we've tried to approach the disposition market. And now that we're seeing some depth there, that kind of gave us confidence early in the year to to start testing, and, you know, we like what we saw, which is why we executed. Yeah. I mean, I I just add to that. I agree with everything Elliot said. I do think you're seeing a widening out of the types of players that are evaluating, particularly office operating office assets in our core markets across the West Coast. As I mentioned in my prepared remarks, I think it really speaks to growing conviction in the continued path of the West Coast office recovery, which is a very encouraging sign, a lot more institutional buyers than what we would have seen six or nine months ago. Great. And then on kind of the use of proceeds, you mentioned reinvestment and debt repayment, but also leveraging neutral share buybacks. Can you remind us kind of what your authorized authorization is now on the buybacks? Yeah. I think the total authorization size is about $400,000,000 So we've got capacity. We had re upped that program, I think, around the time that I started. So we haven't used it. So we've got almost full authorization under that program. Thank you. Our next question comes from Steve Sakwa with Evercore ISI. Please go ahead. Yes, thanks. Good morning. Maybe, Angela, could you just provide a little bit more detail on KOP2, the activity? I think you said 100,000 feet. Is it life science? Is it traditional office? And can you maybe just broadly talk about the economics and how those deals may stack up to your original underwriting? Yes. Thanks, Steve. We're really very encouraged by the activity we've seen and continue to see at KOP. We've been talking about the kind of growing pipeline there for some time and the amount of tour activity that, that asset has seen. And we feel like the project that we delivered late last year is just really hitting the mark in terms of tenants that are looking for high quality purpose built life science product, highly amenitized and in that core life science ecosystem. So the amount of activity we're seeing has been really, really encouraging, as I mentioned in my remarks, even despite sort of some headwinds from a life science broader ecosystem perspective. What we did say on the call is we've moved to active lease negotiations with about 100,000 feet of primarily health care and life science tenants. So they're all more traditional life science health care uses. We do think that the project retains broad based appeal to a wide range of potential tenants that are in the market, including more tech uses, people that would have demand for dry labs, more office specific uses. But we do think this first 100,000 square feet we'll execute are more life science and health care oriented. So that's exciting for the project and bodes well for future growth and future phases as well. I think it's too early to talk more specifically about the economics. I think rents have held up pretty well. There's certainly just given what's happened to the broader ecosystem overall, there is more capital going into certain of these deals. But we think relative to the way this project was originally underwritten, we feel really good about the activity and how it's stacking up. But as we get leases signed, we can probably update more specifically. Okay. And then secondly, I know it's a bit early to really turn your eye to '26, but the lease expiration schedule does remain a bit elevated even though you were able to kind of remove, I think, a large expiration with the pending sale in Silicon Valley. But just how are you thinking about, I guess, retention for next year? And I guess, do you have a thought on kind of when occupancy in the portfolio may bottom? Yes. I mean, let me take that in two pieces. One, just to talk about the occupancy trajectory for 2025, and then I'll sort of touch on your broader question for 2026. 2025, and this is consistent with what we've been saying for the last couple of quarters. The Q2 decline was fully expected. We had a downsize of a tenant that had gone bankrupt and was bought by another entity. We did a downsize in the second quarter. We also had a vacate related to the '23 and Me bankruptcy. So those we saw coming, and I communicated them about them on the last call. As we look out to the third quarter, I still think we're somewhat negative net absorption in Q3, but you are going to see a bigger occupancy impact due to the two redevelopment assets coming into the pool in Q3. So we should all be expecting that. The signed but not commenced pool has now grown to two seventy basis points, which represents a significant source of growth as we look into the 2025 and into 2026. So we've got pretty significant lease commencements coming out of that pool in the fourth quarter. So I fully expect that fourth quarter of this year, we're positive net absorption. As we look into 2026, a few things to note. One, KOP comes into the pool in January. And despite the fact that we're making really good progress, I think, on leasing activity at that property, nothing is going to be billed occupancy at the time it comes into the pool. So it's going to set us back from a reported occupancy perspective, not necessarily a like for like occupancy perspective, but something we should all be prepared for. As we look at the expiration schedule for next year, obviously, we've been really diligently working on addressing those expirations. And the sale of the four building campus in Silicon Valley certainly addresses a significant portion of what we believed was going to be a vacate in 2026. The lease expiration schedule is relatively first half weighted, especially in Q2. I think if you look at the lease expiration disclosure in the Q, the leasing team is working diligently across that entire pipeline to work with tenants to understand their needs for next year and address those as much as we can. But I do expect that we're going to see some larger vacates in the first half of the year. So we'll know more as we get into the next quarter or two. But I do think retention that continues to be somewhat below our historical average is likely in 2026. It's hard to talk more specifically about the timing of an occupancy trough next year as we feel this leasing momentum across the portfolio, both the operating portfolio and the development portfolio building. So I think we need another quarter or so to be able to give more specifics about the timing of occupancy or the trajectory of occupancy within 2026. But I think those are all important considerations as you think about next year. Thank you. Our next question comes from Nick Yulico with Scotiabank. Please go ahead. Thanks. I guess first question is just following up on the activity you cited at KOP2. Can just talk about if that would be for some of the spec suites where commencement of NOI could be sooner if it's related to that space? One of the transactions we mentioned working on multiple transactions. One of the multiple transactions we're working on would be for spec suite user. We also think within the tour activity that's building at the project or is accelerated, there's additional spec suite users that, again, even if we sign in the Q3 or Q4 of this year, could potentially be first half next year occupancy. Okay. Great. And then just second question is going back to the campus that's in the works to sell. I mean, know you gave some metrics on it. Is there any way to maybe talk a little bit more about how you're thinking about the pricing? And you said that you thought it was a good price relative to if you had to release the asset. I know there was some leasing activity going on, but any more of just sort of like a cap rate type impact, stabilized yield on cost? How to sort of think about that transaction pricing? Thanks. Hey, Nick. It's Elliot. So we're somewhat bound by an NDA, so we can't get into too many specifics on the transaction. But kinda talk about how we think about all of our dispositions, is that we evaluate essentially what do we think the what are the proceeds that we're gonna get and what is our forward looking outlook for the cash flows at that particular project. And that's gonna factor in whatever leasing needs to be done, whatever capital needs to be spent, and what our view of what the the rent outlook is. And as we evaluate those, if we think that the forward looking return is not all that great, at at a particular value, then that makes sense as something we should sell. And conversely, we've looked at some where we think the the the value, is pretty attractive, and so that is something that we wind up holding. So we essentially do a wholesale analysis for for any potential disposition. Okay. Thank you. Thank you. Our next question comes from Blaine Heck with Wells Fargo. Please go ahead. Great. Thanks. Good afternoon. One of the most common questions and concerns about the market that we hear is how to think about the net impact of AI with respect to office space requirements and leasing. Clearly, the AI companies are taking space, but we've seen some of the additional layoffs from big tech companies that seem to be related to AI displacement. So, just wanted to see if you had any thoughts on on that net impact of AI. Yeah. Thanks, Blaine. I I think this is an important topic to continue to watch and evaluate. I think, as we look specifically at our markets, you've got a couple of different dynamics that I think are are difficult to peel apart. I think it's easy to look at some of the job losses that have been created, particularly coming out of the traditional tech sector and some of the language that's been used by some of the leaders of those companies to blame AI solely for those job losses. But I'd also remind everybody that we're coming off of a period where there was certainly some excess hiring that happened in the early days of the pandemic. And so I think it's difficult to disaggregate those things. I think the more encouraging thing we're seeing is really companies, not just in the tech space but across broader corporate America, really beginning and I think we're at the very early stages of this to talk about AI not just as an efficiency strategy but as a growth strategy and an opportunity. And while it's easy potentially in some places and some parts of certain organizations to think about jobs that might be automated as a result of what's happening with AI, it's much more difficult for any of us to really think about or get our arms around all the jobs that are gonna to be created as a result of what's happening. I'm really pleased with our market positioning as we all sort of begin to watch some of these trends play out and think about how different markets are going to be impacted. It's clear that markets for us, like San Francisco, obviously, most significantly, but including Seattle and including San Diego and, to some degree, and L. A, are really beginning to benefit from some of the momentum we're seeing being created by new jobs, new industries, new growth avenues that are coming as a result of AI. So it's certainly something to watch. It's something we need to be very mindful of as it relates to our longer term capital allocation strategy, but it's also something that I think this portfolio will benefit from in the near to medium term. Okay. Great. That's very helpful. And then just my second question, just touching back on dispositions. I guess how would you characterize the size of the portfolio you'd consider as noncore within the KRC portfolio? And are there any specific characteristics you're looking to get away from, whether that's by market or asset quality or otherwise? Yes. I'll start, then I'll turn it over to Elliot to elaborate a little bit more. I think when we think about dispositions across the portfolio, I just start by reiterating. We'd like all of the markets we're operating in and see potential incremental growth in a number of our markets, including Pacific Northwest, Bellevue and Seattle, including San Diego and obviously including Austin as well. So we see some real growth opportunities in those markets. We do within San Francisco and L. A, we're thinking about how to make sure that our portfolios in those markets are optimally positioned, right? And so we alluded to some of that on the call in terms of making sure that we are exposed to the highest performing submarkets within those core markets. And that will be a major part of how we think about capital allocation going forward. At the end of the day, however, all of that market commentary aside, it still comes back to what Elliot mentioned earlier, which is an asset by asset underwriting and trying to make sure that every dollar of capital we have invested in the portfolio today is going to, from this point forward, earn a return in excess of our cost of capital. And so there is a broader portfolio construction and strategy thought process here making sure we're allocated to submarkets and can deliver the kind of durability and growth we're looking for in the cash flow stream. But we also have to really think about individual asset pricing and where we can or should harvest capital to redeploy into other places. Yeah. And not much to add to that, but, we touched on this a little bit last quarter. We're essentially looking at where our fundamental outlook overlays with where there's capital. And so if we see a good match between where our outlook is a little bit more pessimistic, but there is capital that is taking the the other perspective, that makes a good disposition candidate for us. Thank you. Our next question comes from Seth Berge with Citigroup. Please go ahead. Hi. Thank you for taking my question. In the prepared remarks, mentioned that we're kind of getting to the end of some of the larger space givebacks. Just kind of on the leasing pipeline, could you give any more color on the types of tenants in the pipeline? Is it predominantly smaller to medium sized tenants? Are you starting to see a turn of larger tenants coming back into the market? Hi, it's Rob Parrott. I think it's sort of across the board. We have larger tenants that we're talking to in different submarkets. And we also have the typical deal size in a market like San Francisco, excluding the big deals, is probably in the 25,000 to 30,000 foot range, and there's a lot of activity in that range. In San Diego, where we are in North County and in Little Italy, deals again tend to be on the 20,000, 30,000, 40,000 foot size range. But if you go to some of the really stellar markets like Bellevue, where we're operating deals are over 100,000 feet. So as the recovery takes hold, you're seeing a pretty wide variety of transaction sizes and types of users. So using San Francisco as an example, everyone's focused on AI, but law firms, crypto and banks have been quite active in that market. So you've got a blend of fire category mixed with technology. Yeah. I mean, think just to add on to that, as Rob said, we're seeing broad based demand, right, in all sort of size ranges. The one dynamic I'd sort of reemphasize, and we've talked about this on prior calls, is kind of what's happening with some of these tenants that might look like small deals in the San Francisco market, but are actually second, third, fourth expansions of AI tenants that are just growing really rapidly. And when those leases come up for lease renewal or they're looking at evaluating the market again in a few years, those are going be pretty substantial companies. There's a different question between what's the size of execution, what's the size of company in the market today. Those are sort of disconnected in the market like Francisco because of this dynamic with AI companies taking the space they need today but then growing incrementally over time pretty quickly. So it's an interesting dynamic to watch and to see play out. Great. Thank you. And then, you know, I know you don't have direct studio exposure, but just in terms of LA demand, are you seeing any impact there from, the tax incentives for that market? Not just yet. I mean, think we've seen some encouraging data on productions that might be slated to come back to the market over the next couple of years. But it's been too early to see that impact, I think, near term demand just yet. Our next question comes from Caitlin Burrows with Goldman Sachs. Maybe just back to Flower I was wondering if you could go through some of the types of conversations that you're having with the city. And I guess the thought is then what's the chance that they go beyond December 31? And to the extent you don't want to specifically comment on that, just kind of what's taken it from a potential of June 30 to now December 31 and, like, kinda what's left in that potential timing that's left. Yeah. I mean, there's still a lot of variables at play here. And so what we're trying to do is provide as much transparency we can when we can provide it. And that's what we did when we initiated guidance this year. There were so many different paths this project could have taken, including we could have had, you know, the city really shut down sort of our, our hopes at getting greater flexibility and optionality on the site. So what we now know that we didn't know at the beginning of the year is that the city has been very receptive with to working with us on a revised program that would allow us, hopefully, and what we're asking for is to maintain a lot of the entitlements we have in place, which is for a very high density plan that has tremendous amounts of value in the right kind of market while also getting flexibility to change that plan or to modify that plan in a way that's responsive to what the community and the market needs in Central Selma now and hopefully can allow us to phase the development so we can see development in Central Selma market earlier than you might have otherwise. The city has been receptive. We've had conversations with them over the last couple of quarters, but including some pretty recent conversations. We expect that there will be there are additional steps we're going to take here in the back half of the year, and we'll know more and be able to provide additional updates on next quarter's call. But for right now, our current assumption is that some of these efforts are completed by year end, and we're not assuming any additional capitalization next year, but we will continue to update. Got it. And then, Rob, I know you talked in one of the either the last question or the one before that about the varying sizes of leases that you're seeing in like San Francisco versus San Diego. I guess as you think about some of the differences of San Francisco versus San Diego, but probably LA even more important, I guess how would you compare and contrast San Francisco versus those other markets and like what's driving those differences today? Yeah. Hi, Caitlin. I think the, you know, the primary driver in San Francisco is, you know, sort of starts with the VC funding that's been directed to the city of San Francisco specifically for AI. And when you couple that with the talent base that's in San Francisco, it just makes a great combination that's creating that demand. We also think that that demand is going to increase in Seattle. We've already seen NVIDIA and Databricks in our portfolio, and there's no reason that can't continue because that same talent pool is in SeattleDelvieu. Los Angeles is really a bifurcated market again, and we'd like to see more activity on the West Side. And it, to me, personally, doesn't make sense why it's been slower. But if you look at the winning submarkets in L. A. Right now, there are Century City and Beverly Hills, both of which are doing quite well. You know, Culver City is a third place sort of active market. When you look at Apple as completing their 500,000 foot campus, that's going to mean continued content production, which I would attribute to sort of related to Hollywood, adjacent to Hollywood. So those are the drivers. And I think it's, again, San Francisco, Seattle are innovation on the technology side. In San Diego, and again, sort of distinguishing our product from, I'll just say, typical Downtown San Diego older high rise product, we're dealing with companies that have thought leaders that are really developing new and better ways to think. And so you see private banking, you see Boston Consulting Group, you see JPMorgan. Some of the big companies that have expanded in our portfolio are doing that because, again, of the talent base. And then I'd be remiss to not mention also there's a really robust life science market in San Diego, particularly in UTC and Torrey Pines and Del Mar. So that innovation, although a little bit different than San Francisco because it's life science, is something that San Diego benefits from. And I would suspect in the future, you'll see some defense benefits, defense spending benefits that trickle into San Diego because it's always been a strong defense market. Thank you. Our next question comes from John Kim with BMO. Please go ahead. Thank you. On KOT2, was wondering if you could provide some color on whether or not these tenants are moving into South San Francisco or if they're just expanding or moving around within the submarket. And if you could provide any update on development deals. I think historically we were looking at this at an 8% plus. I was wondering if that's still on the table. Hey, John. I won't answer the second one, and I'll address the first one. It's Rob. It's a variety. Again, some are in South San Francisco, some are new to market. And all I would say is the most active if you look at the Bay Area as a whole in terms of life science, the most active submarket or subportion of the market is South San Francisco and The Peninsula, which is directly adjacent. So again, we'll be able to give you a lot more color when we sign these, but it's a pretty broad spectrum. Yes. I'll just again, on the return point, I addressed this somewhat earlier. I think let us get some of these deals signed and we can give some better updates on how deals are coming together and how things are looking. I think I'd emphasize the project was underwritten pretty conservatively. I think rents look pretty good, but there's certainly more capital in some of these deals than originally contemplated, which reflects not really this project, but what's happened more broadly in Life Science. So let us continue to get some of those leasing done and we can provide more updates. Okay. Fair enough. On the Matilda campus sale, can you discuss the alternatives for the campus? I know Elliot you mentioned that the CapEx requirement most likely, but was there a direct lease with the subtenant, was that an option for you? And how you weighed that versus selling the assets? And also if you could confirm what the cap rate was, the back of the envelope we get to like a low 8% cap rate, but wondering what your perspective was? Hey, John. So, as I mentioned earlier, like, we're on a pretty tight NDA, so we're somewhat restricted in what we could talk about here. But I think that you you hit on a important point, which we sort of tried to touch on in the prepared remarks, which is the campus today is is a little bit more occupied. And as we look forward, it's not gonna have that same level of occupancy. So then the question becomes, what does that look like to try to lease it up? And we evaluated a few different scenarios on what that would potentially look like. And in all of those different scenarios, we kind of concluded that to get the 365,000,000 was more advantageous than trying to lease it up, spend the capital, and get the kind of rents that we we deem as market. So, based on all of that, that's kind of how we we came to the decision that this was a transaction worth pursuing. Thank you. Our next question comes from Brendan Lynch with Barclays. Please go ahead. Thanks for taking my question. Angelie, it sounds like there could be more demand at KOB2 coming behind the 100,000 square feet you referenced. Can you provide some color on the prospects that are in the earlier phases of touring and planning? Yeah. I think it continues to run the gamut, in terms of lots of life science and health care adjacent uses, both sort of biomedical institutional uses, public biotech, private biotech, really kind of across the spectrum. And as I mentioned earlier, we're seeing also good, strong demand for more traditional tech uses, some AI uses that have needs of dry lab space. It really kind of runs the gamut. So there was definitely a meaningful increase in tour activity. And I think some of the deals that we're working now are building some real momentum at the campus. So we're really encouraged by what's coming behind it, but also very focused on getting this first 100,000 square feet signed and executed. I think I've heard you guys in the past discuss, kind of touring, moving into kind of design planning. Is there any other, prospects that are in the design planning phase now? Yes. Certainly. I think we're working with a number of different tenants on space planning behind the ones that are in active lease negotiation now. We've got sort of prospects from initial tour stage all the way now through lease drafting and negotiation. So we're pleased by how the activity continues to shape up. We're excited to feel a degree of confidence in this project that we can communicate. We expect at least 100,000 square feet of lease executions in the second half of this year, and we'll continue to work at converting the pipeline that continues to grow at KOP into active leases as we move forward. Thank you. Our next question comes from Upland Rana with KeyCorp. Please go ahead. Great. Thank you. Angela, you mentioned the £150,000,000 monetization goal, which you're about halfway there. Given the state of the transaction market, do you anticipate there could be some upside to monetizing more land? Yes. Look, think everything and I've been pretty clear about this, I think, certainly internally and externally since I started. We are really working hard at evaluating highest and best uses for every single parcel within the future land bank. We've got some parcels at KOP where we're, again, excited about what we're seeing and the potential for future growth there. It's clear to us as we talk to tenants existing at that project today and tenants that are looking at Phase two that the growth and scalability of the campus is a key consideration and a key benefit and competitive advantage that KOP has. We've talked about the Flower Mart at length. That's the biggest component of the future land bank. And obviously, we believe the path to value maximizing value maximization there is continuing to do what we're doing in terms of expanding or providing more flexibility under the entitlements and creating a program that would allow us to phase execution in a responsible way. So we're working on that. So those are two pieces of the future land bank that I would say I'd sort of put to the side and evaluate differently. Everything else, I think, we're actively looking, thinking about, working on, trying to make sure we understand highest and best use. And where that highest and best use is not within our core competencies, we're certainly looking at monetizing those parcels. So there's certainly potential for more. Let us get through the first $150,000,000 we'll continue to update and keep you posted on that. But I think we've been really proactive as it relates to addressing that future land bank and acknowledging that in certain circumstances and submarkets, the world has changed and where there's higher and best uses, we should respond accordingly. Okay, great. That was helpful. And then on the increase in demand you're seeing in San Francisco, is there an impact of companies who had moved out of the area during the pandemic that are now coming back? Or would you say it's more homegrown demand? It's a little bit less of the former in terms of companies that moved out that are coming back. I mean, there have been some headlines about that. But a lot of the demand is new company formation or company expansion. When you look at this is a Q1 transaction, but if you look at JPMorgan renewing and expanding in South Of Market, that's a really important happening, I think, in terms of just confidence in the market and confidence in the business opportunities for a bank like that. So it's across the board. And I just think companies are going for the talent. They're also going for the quality space that's in the market. And there's a real bifurcation in the vacancy rate that you see, where there's what I call leasable vacancy versus vacancy that's obsolete. And companies that are going to grow, like the AI company that we did the deal with, the two onethree, are going to look for that ability to grow. They want a quality building. They want amenities. And that's going to be the attraction for companies coming to the city or those that are already in. And keep in mind, they're all bringing their employees back to work. So they need that type of space. Thank you. Our next question comes from Omer Okusanya with Deutsche Bank. Please go ahead. Yes. Good afternoon. I just wanted to go back to Caitlin's question around Flower Mart. And again, I guess I'm still struggling to understand the change in capitalization exactly what's what's really driving that. And then second of all, if if you do end up, you know, with the local government kind of, you know, rethinking the project and you kind of get what you want, doesn't that kind of suggest you keep capitalizing in 2016 because you're going to probably continue with development along those lines? Hey, Teo. Thanks for the question. I go back to sort of how we started communicating about this when we came out with original guidance. And if you remember, what we talked about is knowing that we wanted to pursue more flexible entitlements and to, allow the flexibility on-site to be able to phase development differently. And at that time, it was not perfectly known whether or not that is something that would be palatable to the city or not. And as we've continue and so there was a a path, which we communicated, I think, pretty clearly when we came out with original guidance, where that wasn't palatable to all the different people involved and all the different constituencies, and we probably were penciled down by June 30. And so that was what was embedded in the low end of guidance, right, that we didn't capitalize for the entire second half of the year. Where we stand today is that we do think the city has been we've had encouraging conversations with the city. Those conversations are continuing. We continue to work on an active redesign and reimagining of the Flower Mart project. There are some additional steps we need to take in the second half of the year, which we can be more clear about as we take them and those things become public. But at this point, we believe that many of those activities will be done by year end, and we'll need to stop capitalizing. To your point, there's a path under which we get flexibility in the entitlements, and it doesn't it still doesn't make sense for us to commence a project at that point. And that's if we're not doing additional design work or we're not doing any of the development work associated with continuing that project, per accounting guidance, we'll have to stop capitalizing. If those activities continue, we'll be able to continue capitalizing. But that is a pretty black and white decision that relates to the substance of the activities we're taking into Flower Mart at that point in time at year end. And we're sitting here today in July. It's still uncertain exactly where we'll be at year end, and that's why we're committing to transparency here and continuing to communicate clearly about it on next quarter's call and as we move forward. That's kind of the best we can do today based on all the information we have available right now. Fair enough. Appreciate the explanation. Thank you. You bet. Thanks. Thank you. Our next question comes from Michael Carroll with RBC. Please go ahead. Yes, thanks. I have a quick follow-up on Flower Mart, and I know that was a very detailed explanation, so that was pretty helpful. But how soon do you think you could be willing to start a new development? Like you've got your new entitlement projects. Would there be a scenario where you could start a new development, especially if it's a nonoffice build? Or is that something that Hillary would be willing to do? Or would you want to bring a partner to kind of do that if it's like a different use, like a resi use type thing? There are so many questions embedded in that one question. I think it's really, it's it's a really insightful and good question. I don't we're we're gonna have to evaluate as we move forward. We're gonna have to better understand how the site plays out in totality, how interconnected any residential piece might be with a future office development project, whether or not we feel like it sort of stands alone and there are control issues across the balance of the site that selling that parcel would impair the office development or whether or not we can just monetize it entirely. Those are all questions that we'll have to sort through as we continue on the redesign and reimagining of the total plan. So it's just too early at this point, I think, to answer with any greater clarity. But I appreciate the question. And again, I'm committed to being as transparent as we can as we move forward. Okay. That's great. That's helpful. And then just lastly, I know in the prepared remarks that you mentioned that there is selective reinvestment opportunities that the company is pursuing after you kind of get these asset sale proceeds. Should we think about this as new real estate type of investments? I mean if that's the case, is this kind of like an acquisition and development opportunities? Or or what do those selective reinvestment opportunities look like? Hey, Michael. It's Elliot. So they're kind of all over the board, but not drastically different from the things that we've looked at historically. We're probably less inclined to do spec development. But I think outside of that, you know, any kind of acquisition that has some sort of value add component or maybe it's a little bit more of a a core plus type opportunity, something where we think we can bring some sort of expertise, whether that's leasing expertise or whether that's, capital expertise in a market that we think we we know well, or we think has has pretty good growth prospects. And as we sort of alluded to in our remarks, we're there are a bunch of those that we're evaluating over several different markets and submarkets, and we'll kind of see how they play out. Thank you. Our next question comes from Dylan Verzinski with Green Street Advisors. Please go ahead. Hi. Thanks for taking the question and appreciate all the comments that you guys have made related to sort of the demand pipeline, touring activity and whatnot. But I guess just one quick one as it relates sort of new leasing, obviously, very strong quarter in 2Q. I mean, do you guys give this sense for that sort of being a good annualized runway to call it new leasing of 1,000,000 square foot on an annualized basis? Or was it maybe one or two large leases that sort of drove that higher this quarter? Can you guys just talk about sort of expectations on the new leasing front? Yes. Thanks, Dylan. I appreciate it. I do think we obviously talked about a growing pipeline and some excitement we have around the acceleration of development portfolio leasing. So we feel really good about that. As it relates to the balance of the operating portfolio, I think the team is doing an excellent job really across markets at driving new leasing and really focusing on expirations we have in the '5 and into 2026. So I think there's lots of good activity building. I'm hesitant to commit to any specific number, but I think I'm more encouraged than I've been at any point over the last year and a half in terms of how leasing is shaping up and the sustainability of the types of demand we're seeing across our core markets. So definitely encouraged and now we have to put our heads down and execute. Great. That's helpful, Angela. Thank you so much. That's it for me. Thanks, Don. Thank you. Next, we have a follow-up question from Nick Yulico with Scotiabank. Please go ahead. Thanks. I just want to turn back to 2026 expirations. I think at one point you talked about like a 200,000 square foot expiration and it was a large tent that you thought would stay, but it could downsize. I just want to see if you had any update on that or any of the other expirations next year. Yeah. No update specifically on that at this point. What I did mention earlier is that, you know, we're very focused, especially in those expirations in the 2026, where many of our 2026 expirations are pretty weighted, particularly in the second quarter. I do expect that we're going to have a few larger vacates or significant downsizes in that first half of the year time frame. But we're actively working on discussions with many of those tenants now. It's just too early to say with finality. Thank you. Our final question today comes from Jamie Feldman with Wells Fargo. Jamie, please go ahead. Great. Thank you for taking the follow-up from our team. So Rob, you may have answered this in a prior response to the question, but I guess on AI specifically, given that sounds like it's a decent amount of the pipeline. Can you talk more about the exact types of buildings, locations, urban versus suburban, floor sizes, power needs, amenities and build outs we might see for those types of tenants? Is it any different from what you'd see from a typical tenant end market or in the market? Yeah. Sure, Jamie. Again, there's sort of a spectrum. The younger AI companies are gonna look for, pre built space that's ready to move into, and they're gonna look for adjacency in that space, meaning space they can expand into because they're continuing to get funding, they're growing and all that. The power needs are generally along the lines of what office users use because we're not most of our tenants that are AI in the company aren't actually using the power per se on-site. A lot of that's generated off-site or it's not R and D type space that we're leasing. And I think the typical size, if you're looking in San Francisco, having a 30,000 foot floor plate like we have at 201 Third is really important. Think we're not at the point yet where tenants are wanting these 70,000 or 100,000 foot floor plates that they wanted in the last cycle. But 30,000 feet, that's a very clean floor. These companies are no nonsense. So they want they like a rectangle. They like a central core. They, you know, wanna have a lot of open space. And, you know, the amenities that are important are the same as with any other tenant. It's outdoor space. It's usable. It's restaurants, food, beverage. It's fitness either in the building or adjacent to, you know, some of our, whatever you want, you know, business centers and things like that are extremely popular and and a big draw. In fact, at two to one third, we have some of all of those pieces that become attractive to a tenant. And keep in mind, with a younger company, having those amenities on-site means that they don't have to build in food service, for example, or, you know, a conference center or what have you. So it's it's quite similar to other tech that we've leased to. They tend to be a little more dense in their use of space, which as they grow is going to be a good thing for us and other landlords. Yeah. I mean, biggest dynamic, in addition to everything Rob just said, that we continue to point out is that these tenants are really looking They're growing very quickly, and they're looking for landlords that will work with them to accommodate that future growth where possible. And so that's been a key focus in terms of how Rob and the team have really gotten to understand exactly what they're looking for. We're also working really hard, whether it's our spec suite program or in some recent example, using existing build outs in space that might have been vacated pretty recently because these tenants are really focused on taking many of them, very focused on taking occupancy as quickly as possible. Those are all really encouraging dynamics for us as a landlord in a market like San Francisco and at this stage of the recovery. So we've really been leaning in and figuring out how to meet those needs as well as we can. Thank you. We have no further questions, and so this concludes our call. Thank you all for your participation. You may now disconnect your lines.