BDN - Earnings call transcript Q1 2018 | Brandywine Realty Trust

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen and welcome to the Brandywine Realty Trust First Quarter 2018 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Jerry Sweeney, President and CEO. yours. is podium the Sir,

Jerry Sweeney

our Right, thank you earnings everyone thank federal George Vice Good On constitute meaning Dan beginning, of Palazzo, Chief our very participating in much. Vice Johnstone, are discussed certain for Accounting me, XXXX call Executive during Tom morning Vice law. our President today's Operations; and with you Executive first forward-looking Financial the Chief securities call. this Wirth, and and and the Officer. may statements information of within President our call Officer; President Prior to quarter

believe in assurances on that we achieved. statements give reasonable results anticipated are will be Although based estimates reflected the cannot assumptions, we these

our annual For our well on further could quarterly SEC. and impact information that release reference most press as factors recent please filed our with reports the as results, anticipated

will the do, and business a As XXXX, at then we off in start line update results. with of activity, plan, on an we start our XXXX to a plan our looking quarterly great with normally is and review

strong XX% a revenue on footing. done our pending our of plan plan, on solid activity, with remains are operating lease We and pipeline

Pennsylvania. is on and our we financial have we to pursue quarter in pipeline continue this success King pre-leasing Our ample Prussia, are and sheet a balance of redevelopment strong, and with development capacity, projects, pleased Austin both

a opportunities. Market tenant in lengthy have and monitor continue The to amplify, George strong, we remained the investment value market, activities also pipeline. as continue add sale with We plan is both our for line leasing activity expectations. business to will and

sequential in lease Logan XX primarily quarter had decline occupied cash rents, perspective, points that tactics occupancy increase was on That growth From due and expiration completing our Philadelphia. the our Three Square leased. at basis net here to operational anticipated, positive flow executing growth, leasing of remains that ended an in of Our pursuing opportunities. effect we we and XX.X% business plan, XX.X% focus at creating

excess Our target mark-to-market of XX.X% to strong in X% of our was GAAP basis, quarter for range the a on a XX%.

return square of at to due quarter leasing foot range, targeted on we us for store and average our several plan was target our plan, early year. anticipated the our at of right as-is based a same a Our complete were our X.X% activity to year target expect last be foot time XXXX ranges. major basis and Based compares well, but quarter at so $X.XX XX%, target X.X% the lease GAAP to we last to in about for to target XX% without as forward expected, Speculative year-over-year. minus per maintaining within we done basis. this IBM had last fully X.XX to in end XX%. that plan of on X.XX in mark-to-market known to results are revenue our the decrease future the at square compares came cash rate line on renewal the with range, XX% at cash, cash will per the and GAAP on on range range. quarterly unchanged are annual in Leasing below remains done, year, primarily our XXXX XXXX in minus expect by quarter capital and the year as below was our per our driven renewables. retention was for we our full upper forward low square number and activity, done; XX%, footage annual This per at targeted occupancy activity, year, we year the Tenant our business annual which and end activity, based

in QX. below above be that to We expect in QX, and range and QX

projecting same rent More lease over XX% effect and several of sheet X.X% years, capital in continues combined think resulted a rents the as though, we our rents increase of XXXX we to levels. and last longer our in net sales from Balance effect evidenced importantly spend increase following XXXX growth, net has control improvements mark-to-market in over that, our to store terms, good year metrics. previous by these in amplify of some with over are programs, benefit

comfortable have staying X.X for year. X.X at target year to range and end our quarter debt-to-EBITDA end net the the within We from reduced with our are

We assets. have reduced total to debt net

cash zero the weighted reduced of ended of of on our also and with credit. $XXX $XXX XX a balance million points, line our basis quarter drawn We average cost by debt year-over-year million

acquisitions also XX days, From balance sheet of next fully previously loan any credit the do included seven XXXX recast of our several of a of exception launching announced the we for with away the recast year $XXX the a investment or not our as have our next years. an in line term perspective, in plan. Evo, to our anticipate We as dispositions lock of well million sale

asset recapitalization As market our opportunities, continually several canvassing and of we for however, are as of sell joint ventures. well always we as land the do exploring a

growth sales is and Our reducing growth, during the pre-fund as as to activity a will our that for joint proceeds continued expect maintaining focus cash momentum provide that clear we address levels. from simplification, focus well on on flow opportunities, earnings year, may venture our leverage and and continue development, any occur maintaining

made detailed all we were front, of the development through during our our progress development XX quarter, activities excellent pages and XX of set. on the On

square XX% lease at Road Project increase year That primarily Our building, at pre-leasing quarter. driven pipeline by Gulph was of XX year King overall the foot our XXX of Prussia. development end from at full XXX,XXX levels North to increased in have XX% first the end

King leasing in of through us job that also needed with about X% expansion, Prussia, bumps. a Our of annual for July goes tenant. lease occupying team square XX-year us a out has wonderful XXXX. They on presence they That did working an lease and a XXX,XXX major signed existing with a tenant with feet

we example work North renovation due generated we We year anticipate to and great needs our project submarkets. was at to Skyway. term another That parcel an know and X.X Road over during of The announced in SHI, lease. space quarter, in XXX by that accommodate million. a landfill latest structured a down second existing acre targeted We tenants moved our additional that Austin, on some recognize was slightly So in completing end return the a generated $XX.X cash-on-cash on to cost going X.X% and for we one I parking touch sold building the of up Barton stabilizing our sale. XX% the At Garza, tenant will the land sale existing of within anticipate The XXXX. to Texas, do Gulph will Tom that. cost, return of average gain

to scenario, While our tenant own we certainly wanted to own would their facility. own this build have preferred

great May to proposal a feet will about land of square with to many had project, development Skyway a construct foot have service with lease on concurrent their We relationship Barton building. years, the XXXX. entered into manager square that at in so a XXX,XXX They over occupy expire them our XXX,XXX a sale, we currently

overall mark-to-market activity on that the Given strength a the strong project and relay. on and space, do we already XX% the of we that between XX% have Austin of positive desirability market, expect the to

generated $XX will have square we of and proceeds, to that you at So been almost what zone we look final to feet. able when million do, own building, sale land continue for XXX,XXX another Garza, the office parcel, have we totaling

year we floor delivering XXXX, push on square to continue do stabilization exactly Yards at Points building in rate a leasing in New on we of our at a delay the targeted look schedule, leased We date that and our actively as we Broadmoor. next with our partner on approval though tenant year marketing to pre-lease, our project, site companies, that's return our in of expecting return XX project a mix multi-phase our success a due QX like demonstrates At work to really have Austin. replicate process, fully with still project. on Subaru XXX% project back that do Camden, project QX at cost. good leased in master of activity, that site, intention multiphase development budget and projects development from plan on at our anticipate X.X%. XXX,XXX did is plan that through the final with of under XX and That projected Four are is Campus are to other other lease. master X.X% does a the of existing XXX continues of gains foot use and harvest We Garza building in in Jersey. That Austin, for Construction the Construction it, in and the capacity type pipeline Schuylkill and and Knights lease, project year, second Broadmoor Crossing

to project of we ground. We leasehold that additional also building of investment of by deliver later In expect we that year, this when a and exercise XXXX. completion, of does upon will building XXXX. can That the tenant in in substantial expect they purchase occur have option stabilize which stabilizes August June X. contemplated comprise planned parcel That project two parcel sites acquiring land and a made our of QX ground, parcel in for parcel an additional our an would phase interest the in Schuylkill the March, Yards

development move comprise square XXX,XXX a and a in The complete process. currently actual approach, as have feet. with the is anticipate pre-lease, work, design product engineering as we third we really used development design X parking currently working evaluating any building, land range process. design substantial anticipate XXXX. of that aggregate our necessary our to Yards we end to in about forward land Phase mix, our of would also process Consistent completing site a will party that are the surface at development financing partners do general The the options. analysis ultimately starting The not and acquisition enable by construction with first lot. and being X is us Schuylkill will exploring indicated development past, without Phase with We

the land of land and standpoint, X% management So our sales, about X% inventory programmed inventory, our looking of at level. X.X% asset to target to bring which land right our with will a announced is inventory land combined of inside base, acquisitions our our from

sites, Downtown, zoning including We Austin, Colorado Pennsylvania. in in continue our Meeting, development XXX Broadmoor and other of Texas on Plymouth our to our Master Metroplex planning, and Northwest and Austin predevelopment Plan project advance several efforts

and supermajority specified that amendment of simple our certain Just year is of of as basis, with our to part recommending direct to mergers bylaws of that corporate recommended several note, an as proxy a this Business to shareholders our review and bylaws on Trust. board Act. our Declaration governance, the shareholders out the our changes final include a annual approve, our changes a The to opting accrue recommending Combination amend Maryland vote providing existing they from the right majority documents does

that, to indicated the voted, Takeover of addition to the proxy, out as our in opt Act. In Board Maryland recently Unsolicited

So of our At overview there George highlights. proxy all to the for -- Tom, operating over performance at turn items are on this it will our to approval point, by then look an financial shareholders. provide is and

George Johnstone

Jerry, advanced morning. Thank The square stages in with development square solid. remain feet and X.X Activity feet, million totals negotiation. good pipeline, in markets XXX,XXX you, properties levels all excluding our of of

generated quarter's tours of totaling XXX,XXX the slightly space XX% square During below inspections, last inventory. quarter, cover while feet, available we our these volume, XX

leases. proposals of are further with tours those of teams all leasing converting executed Our into XX% converting to proposals, XX%

shifting absorption Now quarter. lease first XXXX which Philadelphia, quarter, the our accounted for assumptions during strategic XXX,XXX vacated Verizon business the the Three its the negative contained markets In for foot to plan. at Logan, the CBD entire company's and underlying square in

ranges and discussed, done XX%. previously have the this to the four deals X% years. each city tenants. in at we different an X% cash four mark-to-market Rollover of for XX% As were next leased three average space of These of between

two XX. Our largest Cira rollover is full square June for feet floors year on the the contiguous XX,XXX of at balance roll Center, totaling

half one have remain vacant occurred for duration year. still outstanding have floors Several that for the XXXX tours space. of to-date these and Our of proposal plan we the assumes

Radnor large continue Turning approximately square good XXXX Radnor including prospects consists first in XX,XXX the of activity, over of the feet, see quarter vacates tours in feet. five levels XQ square suburbs, and outpaced XXXX. XXX,XXX pipeline Pennsylvania to to The

Gulph common area all have well, continues signed been and the leased, King dynamics recently Prussia at Road, to perform submarket. that selected demo lease XX.X% and our North currently XXX highlights of completed. Our improvements of

current overall is about feel about While Northern sentiment negative, Virginia we good position. our

We are with manageable through currently XX.X% rollover XXXX. leased,

is consecutive second square plan. for the remaining our in new are in square Virginia XXX,XXX pipeline Towards deals we of of XXX,XXX the Northern up XXXX have approximately quarter. feet, portfolio, The we year-over-year leasing feet and

Greensboro at and improvements to building at completed along those road, better the the buildings toll Tysons, recently XXXX position market. Cooperative Way within have We in

quick program generate second Week among the to continues months XX X.X%, economy for favorable large results Specs for was to occupancy. the the Our fastest ended cities. nation. Job is tenants Shifting Austin, growing seeking the in growth January

balance our on plan our While are double both for is X in we with XXXX The basis year the for that the XX% negotiations Retention space. cash venture XX%, for GAAP and of redevelopment remains complete. a business XX% growth rent Broadmoor digits. DRA JV in leased, continued joint that is within the

QX. again, a current caused the of in same same Tower, the coupled XX the second large that same same portfolio earlier annual same with store worth Street, in below third of FMC Market transitioned will quarter, our store XXXX, our growth XXXX Street, performing Avenue, in increase that terms NOI, second quarter, store and In XXXX reiterating Three when Market the Logan These It's into store. the metric XXX vacate result year, property First move-outs will half this range. factors the negative in occurred

properties store X% a and additional cash a half the XX% four on and to second on our will between basis. X% of same year range With mix, in these basis, GAAP the XX% NOI

turn business So markets. we levels on I Tom. achievement to activity the delighted and it continued our over at conclude, the this are point, with to the will And in plan

Tom Wirth

George. you, Thank

or million Our $X.XX first million $XX.X FFO diluted or totaled diluted per and share, share. income $XX.X $X.XX totaled net quarter per

regarding expect stated incremental observations operating quarter our balance year. our our first throughout met Some our operating of results ranges, general improvement our and some although, were results, quarterly the of the expectations, below we metrics

have we metrics. adjusted our result, not business of any plan a As XXXX

to were improve, and XXXX. first to fixed times continues first X.X and X.X a X% compared interest the sheet charge ratios XX% quarter balance and of our respectively, Our quarter as coverage improvement

The first helped XXXX. the a our quarter reduce us sale X.X, first to debt-to-EBITDA of of from net X% improvement Evo quarter

has net it next the year. improvement of anticipate move the quarter, our sheet in to stay Moody's, of outlook during that stable to X.X balance the within changed from quarter. debt-to-EBITDA by X.X been expect but Our range may the We our confirmed higher as to they by positive our end we

we to following the general quarter have second XXXX, forward Looking the of assumptions.

approximately plan at an $XXX,XXX. refinance change interest of maturity. of XXXX, with in seven loan that the Concurrent XXXX current date. loan, anticipate end of due million. a the credit, for will to GAAP be $XX.X residential income sequentially approximately quarter currently also the ventures initial C operating five as the the be of FFO through as million to term the we By demolition the $XXX,XXX annual portfolio be year maturity following, total refinancing to from will borrowing contribution $X to G&A be Our current million, levels second million, in generate offsetting the to from steady similar will $X.X which see with incremental with current include unconsolidated the same, million expense reduction million remained line Interest no loan and and we costs. online, we quarter, core May quarter joint from first $XX of that term with extending increase maturity which a June also of $XX.X G&A second decrease an has capitalized recast are will terms NOI, will will our FMC and our $X.X a the approximately NOI, million. our a current the facility. operations year will unsecured We $X should will

that the should land X.X rate approximately swapped borrowing the While hotel of to we were the be regarding leasing of the done quarter, year. and sale to result and included of XXXX land the the office a income forecasted our the should X.X, in both Net [ph], we certain interest would XXXX X other million recognized and and rate will development gains. sales recognize the announced and in reduce infrastructure about recast be guidance, of fees at just our be that incremental management as will half million. the transactions sales, to work $X previously and second that is during in we second of second us allow expect record residential gains complete costs comprised lower announced were components, those the we that in that interest quarter, fees Termination Garza, in the

have incremental We no ATM activity.

plan, end dividend. $XXX $XX on maintaining million Yards. $XX next million and in using $XXX on line will the of another -- for coverage XX%, cash and Phase million. hand parcel approximately coverage midpoint based land $XX XXXX of and cash with balance comprised will at for million, fund by and of to of based outlined interest million of million projects. projected XX plan X of of credit. cash The after Schuylkill to be be purchase for year, CapEx, the the on million increase our capital of year our million XX, line be $XX revenue balance below, on $XXX no of will and Our unsecured of will million our ratio cash the development on the will Based the that million capital be balances of $XX our our Usage redevelopment $XXX flow creating sources dividends, to amortization, $XXX revenue common million $X increased mortgage

improving back to over turn of will XXXX. where at now the be will to at X.X the Jerry. I end call the end be to at by year, an year coverage charge fixed we expect ratio, we for As at look X.X interest we

Jerry Sweeney

you, Thank you, George. Tom, Great. and thank

track. on is plan XXXX our So

as that ramp-up would. recognize quarter do is expected plan implicit in activity we in We XXXX execution. there just First in it our came leasing a business

fully focused We all objectives. on achieving are those

optimize pipeline the leasing the that operations through focusing our transactions. leasing our continue and we our and company on is sure with field strong we percentage, improve and we at year, this every for expected direct team lease line on, on execution George proposal As what making touched of make activity time are focused lease transactions, to think of the in opportunity to

operations, have, our shape given open Brian, So XXXX supported management property think are be our we have in great good the we the leasing questions. product very the we With field for to by floor to fully executing talent we plan. teams of operations, that delighted we'd in up the that,

we do, follow-up. limit a ask we yourself to the time, always As Thank that much. one and interest in very you question of you

Operator

And Instructions]. Craig from [Operator Markets. the now question Mailman Capital our KeyBanc first line of comes open. your from is line Sir,

Jordan Sadler

It's Sadler morning. with here Craig. Good Jordan

Jerry Sweeney

Jordan. Hi

Jordan Sadler

[indiscernible]. the regarding Question

it So what just regarding of are or optimism, few feeling the in your anticipated are tenancy, ago in months appetite line directly cadence you April, for a is we of terms space? here in increased with you the

Jerry Sweeney

compromise mind economic absorption. of where be not Hey so good. pipeline, or activity, being pursuing opportunities, positioned terms have on to we The still look the Jordan, all forward are is mean, we very seeing that mean what think we we are well their pretty a we submarkets. I portfolio. properties, some properties we throughout XX with same we continue have aggressive in the off store in I moving bullish need certainly, in -- to of accelerate I to are think those the pretty all though, leasing the

where it But We with fact in that We some D.C., to our are on that plan think the we --? are Austin our teams, leverage George in laid we is general, tenants, that George, Philadelphia, of when in you sight other in about the move good markets. execute again as touched on certainly ability talk and products. feeling or doing to we have out, even in do particular pretty or never basis. have any whether forward leasing lose have we we that

George Johnstone

we think inspections. encouraged I of are volume the space by

a to do great in continues job team converting. Our

ability want We to given direct to has good tenants go us out. the before seeing kind levels which of renew they even are of still deals, sometimes

the the both speaks with that and So that to look have, and we market at relationships brokerage community base. the in tenant

as a terms of We the point, are year in at were achievement same ago. of we kind

So laid confident I think feel that in have out. the we plan we still

Jordan Sadler

And it through then, market, asset as investment to the the relates guidance.

willing. the to on opportunity opportunity pare incremental else, capital portfolio about dense or put What can type the sell non-core, of in terms of talked today? whatever most here would raise was You be considered in environment in What remaining to [indiscernible] to else to this money portfolio the or you good work. in development

Jerry Sweeney

Great question Jordan.

as when in quarter of this a look we New have where in properties kind I buildings we includes we of our other buildings at some the some we think, categories, in in well, last couple portfolio, few remaining Delaware, of are properties Jersey, Maryland. were our and

and some sell the get continue to the part of with projects. opportunity to we we brokerage where from our to the are the business think eye there, trying buyers changes meantime, that that think plan, basis, market, I a through certainly we some refinance, add is in there those of assets level investment which something multiyear we NOI to inquiry have continue on So recapitalize look to as laid either or with fixed, opportunities have other our an out, potentially needs sales. to as on value at also to dialog or buying to joint with reverse achieve a of one some of some those our And keep we those contribution be ventures direct avenues we of community,

or other dollars some our value-add did pursue harvest to recapitalization, So pipeline for either development what there, there, to joint some go maybe acquisition candidates first we certainly near that some a portfolio, our through Evo look term can into there and refinancing, at venture are in core properties potentially that quarter. capacity similar the are We trade way opportunity. to

Jordan Sadler

you. thank Okay,

Jerry Sweeney

you. Thank

Operator

your line line Citigroup. now Sir, And is of our comes question the open. Manny Korchman from from next

Manny Korchman

you expanding, pipeline give about if remarks, morning. within tenants that good his think just flavor to market are as that of guys, are to are Hey you are those, that about talked leasing some Jerry tenants types portfolio, can your new what us tenants? the in those George,

George Johnstone

little a Logan, good with the tenant continue a Gulph do expansions. what But bit Road saw levels deal varies to quarter, Comcast Manny. a We Yeah, Three with this the bit of market. at quarter, XXX of see We market little mix, it last North to transaction.

think I seen we submarket, activity of good Virginia, nice expansion bringing and Cooperative hadn't Way blend Dulles in new submarket Brandywine a with to new both year. these at Pennsylvania that kind downtown, tenancies, new a to seeing In the at the of that city. tenants tenants some have tenants it's predominantly It's a these recently did the as of expansion Northern its tenant. way improvements. landlords renovations buildings Corner space. of Much to between similar and we our XXXX Suburbs, existing a last kind we are are moving done completed and seeing, and of the little they Greensboro, result bit from coming in new past, and we other to blends levels of

Manny Korchman

Got are especially you update on what of talked doing? give I the us environment. sort terms larger concessionary guess, you how those, could managing are you Maybe it. you are concessions And that seeing an leases with of, the in and you about,

George Johnstone

also the the the entire the the and of Yeah, I think between but rent, balancing package then term lease TI, length steps free lease requirements, concession rent on of in the with kind that. are larger we

did kind we to first to that both improvement rents good in kind leasing the the tenant again, the first we in to about the in we that that we to. capital total first deals trendline over of was commission. that free XX% of XX% XX% deals of them, so us a gained quarter. again, quarter, For of only and TIs, for a in The allocate capital quarter did ratio That the rent the are term, lease had want element the

Jerry Sweeney

Yeah.

balance think is point side. the of cost on us kind one on of kind to the need creating really to I -- I add tension, major construction of think the the that; to that's the

of some reports the seen the So time broke Philadelphia rate ability of $XX an up. mean mean, to ever. we the average -- have for I in kind actually growth asking move rents first I

you So seeing rents are direction. the move in right

not the the I of the think in have, exception, quality right products the generally kind it's right we of submarkets. product have but without we given and speaking,

are kind drive So of, pretty our good I leasing economic teams think, able to a result.

We are capital balance and capital that's always three that how to costs. about the all outlays, why us talk trying control always we of with

take trend to some unit look has that continued rate up, at in pricing, you If cases, unit a up increases. and pricing rental than trended higher

lease effect rents increasing a window, effect of, as rents. we some markets, of So move of always look, we compensate comments, step in feel trying to this the on are And kind think focused net some the we that, much nominal X% for to in direction. actually this by are we rents portfolio lengthen obviously we management others. really to up through parts, moving are ability trying I like term higher, a than lease position generally, extent do can, in and analyzing of the good is year, net mentioned over on from a But we a in standpoint, the right -- stronger negotiation in our every

a tension tends on to element basis. be capital the of controlling the balancing deal-by-deal highest So

Manny Korchman

Thanks guys.

Jerry Sweeney

you. Thank

Operator

next question line from our And of America. Bank the Feldman comes Jamie of from

line open. Your now is

Jamie Feldman

Great. Good Thank morning. you.

Jerry Sweeney

morning Good Jamie.

Jamie Feldman

hit of same NOI and back And already to to to both I you your I the similar question, focus ramp, hitting is Could baked in much guess on half your year earnings you get the in, guidance. a even how your just for -- the the requires want I to same So of versus leasing guidance? store guess targets? on store spike

Jerry Sweeney

we I that our I the Well, you -- terms in assumes know, revenues. spec mean, our hit of range think open

of in XXX,XXX are same of an is and laid same the are million fairly point. well of we to is this spec So additional that mean, kind got the in leasing, square all $X.X leasing. generate about I of at the that out leased transitioning that going have assets achieve within we The portfolio. store supplemental, revenue; as most store feet To

So hit we obviously that. need to

XX% as at We is in have footage, pipeline about and have Broadmoor square in XX% [indiscernible], got last That being it XX% in open D.C., of the the talked XX% with we in Austin. really built the about. in city, Pennsylvania,

Jamie Feldman

Okay. actually would the those -- in? the portfolio? would of piece, like already of cash is have But I how much That I into it assets assume guess, transitioning baked

Jerry Sweeney

than think this I everything other remaining million. baked in, is mean, I Well $X.X

Jamie Feldman

All right.

Okay.

Tom Wirth

mentioned look the Yeah, and still we FMC, quarter, as to Jamie, there do NOI quarterly store. expect we weren't as But we from as the same FMC, earlier increase also, we go of will our year. in throughout from first -- at coming the ramp some that that I components think come still into

As our you [indiscernible] guidance. earnings -- to into relate

Jamie Feldman

And then what mean, that thoughts some I Jerry, had point? sales mentioned know asset dilution are earnings versus Okay. I your big still at on picture assets non-core. weighing you you this consider

Jerry Sweeney

Great question.

mirror, I the of in -- the think view the portfolio as do it terms earning. lifting all really we rear we in we Jamie, look at heavy of have

opportunities. to sell on we we to assets, ability the have how that think to So modulate be and degree great surgical other a deployment we certainly more

want as we over part you range as last it predicates sheet our the right into been, major product, of get the outlined, think that and the that XXXX So right have has the quality, two we about targeted be, plan. where portfolio balance get to year the submarkets, to our right

forward side. projects to We have to got some to on make [indiscernible] want sure sales, We we and fund have development the we that know of those we move the ability capital, commitments, kind renovation underway. generate to are there,

as the and key we've So kind really we maintain to really as our on the program. as flow along drivers of cash accelerate on we two our call, growth, talked earnings do that have looking last embarked sales, issues that's the with we of one are well sheet, -- really is behind investment believe, as how balance those momentum, think, I at points are

Jamie Feldman

the then moving here. of stages of Okay. in we later kind And just are the cycle finally,

business impact might Philadelphia forward? thoughts risk Austin, Just on going supply in how and and that your

Jerry Sweeney

supply on focused always Yeah risk. look, we are

new in of kind leasing like a on that's there not are I in the I the really great the city, there XXXX feet. in XXX,XXX in projects anchored success, Philadelphia, or horizon, is last side. having greater near the or lot blocks of the than blocks office were on headquarters. space But Couple of Market Aramark six that their time terms as renovation, by seven the Fortunately of think corporate saw, larger some term square

of the So marketplace. really in lot now supply there not is right excess a

good do pretty focused very So on preanchored. But getting we we any feel that. also, much deal heavily about

is [ph] Texas, true there tremendous to thing local Austin, know, of spec I think in lot holding I moving where drivers, still and are development, are is other even same have think it's right and I well we able demand a location, a on the been anchor that that companies we start construction. if in we identify right to property, designed it's we our thoughtfully, the that perspective the before developing tenant product, be should to

of and cycle kind the that we are at anyway. in don't still changing pre-lease point XX% this certainly and really see holding to target board, across we -- the not so that And

Jamie Feldman

you. Thank Okay.

Jerry Sweeney

Thanks Jamie.

Operator

line question John comes next Stifel. from of Guinee from the Our

Your line is now open.

John Guinee

Thank I questions, you Couple for Tom. very one and Jerry much. Great. for probably one of think

the Schuylkill add look FAR you your all we feet roughly per range? what's First square your Jerry, of to rough park, ground at in your of million basis X and the sort very, land development, capitalize a in Yards, leases, if cost

Jerry Sweeney

depending in. Yeah. around the of referred upon $XX that how referred a It's parcel, The going square adds terms to, interest in range, be that and FAR. Tom of probably $XX in foot to I kind and sequences $XX in between that $XX, to leasehold

John Guinee

XX Okay. development with feet acres? about XX almost square zoning, like XXX,XXX looks what right. under FAR have under is a X.XX option industrial you of I that got for That you you noticed, Then option Can also zoning. discuss

Jerry Sweeney

or in industrial from have low That space. for a and under parcel for Northeast has of space option is we zoned long density option Philadelphia a That's time. that flex PIDC, been property under that

John Guinee

maintaining the fully, and the then been you lease million for foot maintaining and what portion. elaborate have And GAAP creating cost for a creating square mentioned revenue that percentage Can million. per and that to on $XX and what re-leasing we vacant more And your CapEx about spreads helpful will $XX I your the mark-to-market, has think revenue space on be think was per your year you revenue footage, relative etcetera, the and maintaining? re-leasing both CapEx the square year, about that is the understand than costs what been Tom, you square footage revenue that re-leasing and you. very cash on Got was your revenue you

Jerry Sweeney

our same per within square is year the XXXX, for capital as foot actually per John, creating revenue lease our maintaining. range Yeah

are you simply we of kind plan together, blended just that for year. outlined business all If range that in this have we still them

point haven't revenue basis. a So higher, foot the with is past, are in that lease have that we at at where running creating we trended had per but in least the has on cycle, a capital similar space, we requirement our year -- per square cases

Tom Wirth

And feet in revenue buckets that, our go that are can of that. John, the we square our are square in create added have that ratio we sort to through and to add bucket, on a for of maintain XX, revenue feet

cash, You can create. to trailing can which how how we and and balance is compared are of on of feet obviously feet actual maintain square to see bucket a our costs, a create -- the going square two, the how a they of between ratio many in are

John Guinee

Wonderful, wonderful. Thank you.

Jerry Sweeney

Thank you, John.

Operator

the Our line Simone Rob comes from next question from of Evercore.

open. now Your line is

Rob Simone

call. guys, for taking Hey the thanks

you maybe, you and up And the of about then different how just process? to then much on is thinking the really guys talk building maybe of that about the in curious, you tenants, JFK of that. going how kind process, One; of maybe are could in after you up carving a guys question you Just out quick mentioned wind the I important activity follow-up types and of between am that are market quick are the just that still year. planning the a by end

Jerry Sweeney

Hey the we through as of go activity lot things, is certainly great. the defining Rob, Okay, a look, mean, market I design development process.

for The our anticipate are XX% whether residential with total will XXX,XXX about balance square or through doing Gotham, that office first be somewhere kick-off. space, building it's that, a in partner, we space. apartments, and lifescience whether that's feet of thinking around is the We included programmed of

being we So that would would anticipate about and still building Phase component that range. office X in are that be thinking the I foot think we square size roughly XXX,XXX first range, in in the

Rob Simone

Got it.

square vacant wondering on, then seeing And the quickly what plan. if helpful. tenants? remained on now? comment I XX,XXX any, this And could if maybe have just that's you year, was are space activity that guys just Okay, to feet vacancy the what in on then, that's of assumed of really you right types

Jerry Sweeney

Yeah.

are of some of of tour had service, some couple gamut a financial really a law prospects. co-working we in CBD kind assets. our of most to-date, We have is There what firm, full seeing

of lot at So space June this a of And Rob, XX. till isn't time. to-date, tours active proposal one that and kind vacated

have reconfigure So upon underway some based space, seeing. we pipeline that plans to demolish also of we that and of are the deals

Rob Simone

it. Got

Okay. guys. Thanks. Helpful

Rob Simone

you. Thank

Operator

ISI. next line the of comes from Our Evercore Sakwa from question Steve

Steve Sakwa

Thanks.

your going the Amazon does decide to I hold, just large the or tag where still guess the your the find space planning, you extent going they to how about really, of back of to can't here. but kind commentary a in and planning out keep sort much ultimately sort probably how Jerry, of what like does for Philadelphia influence until the and to running, are that planning they team that locate, you Schuylkill much too that is Yards, do? comment tenant Sorry around on about

Jerry Sweeney

large Any would Yards and that impact right what thanks. as is. Steve, now, our part an Schuylkill on our planning come way would have development sequencing Yeah. of tenant our

ability tenant, I talking the a to we development even range process, beyond build. larger we through that's design what could the size just actually think about So even we with recognize, attract Rob -- were we impact go as that would our

on are like the office what we those that we a look looking the requirement a to any stay who our design would really would good We development some tenants blocks original a tenant, very sequencing into process larger the recognize a does that and do variability we high nature large basis have near out-of-market But expense successful it both tremendous a decision that with Amazon lifescience to at terms fairly So because space, we launch process. the hold is catalyst for or or large or don't close I of traditional a think think on large We to create. that do business is, any development on making really searches, market factor tenant; East profile our is other and current with Schuylkill for to them development, reinforce plan. in-market tenant tenant, term of around large that a Schuylkill negotiation floating unique a in opportunity of We use would that a of transactions, there pre-leased in region. off the space. extent the Yards, a Coast, these have opportunity a mixed Yards we Philadelphia really of

embark have to a what responsive the the in right development continue mix right do design market we transaction, process, all we and the always in So to to Schuylkill we is on actively lot tells every market the the time launch. as used in very development Yards as successful components and us,

Steve Sakwa

And kind of other of how previously who that that just I using maybe of Amazon from much jumpstarted -- of location. one has demand tenants, the curious, contemplating am kind as finalists, weren't

Jerry Sweeney

a good that's think I observation.

number it, And the making think because has, to in evaluated I shortlist that our may shortlist. approach, as some making has momentum macro very not been that companies location Philadelphia using platform before, -- of marketing have the standpoint, that a these an of think as think happening the a this on Philadelphia, exciting I broaden that successful. think, alternative focused weighs really from XX, of region, of really one, -- all I I profile things

happy much the to the think made very to marketing company offer of and attributes our large, that tremendous any maximizing shortlist. as small, into we Philadelphia that were amount wants we come that We Philadelphia So and a to advantage on can. region, we plan possibly from medium channels, has as

Steve Sakwa

me. That's it Okay, for thanks.

Jerry Sweeney

Thanks Steve.

Operator

Securities. Mizuho Anderson the comes from from of question Rich next our line And

line is open. now Your

Rich Anderson

Thanks.

XXXX, longer a be sort the what same a just Jerry, store of In being quick in sort for would assets be into here. after like if the the kind of one a steady brought parts? pool? absence of term or moving additional what the would cash have then be, X% Just whomever, what George number profile, it's So addressed a of with and you state it no occupancy growth loss, portfolio, would XXXX?

Jerry Sweeney

that's in, XXXX. current our without is the what So for X range bringing

Rich Anderson

Okay.

Jerry Sweeney

lift my the get When comments. you I in, bring to that's the gave get the to in additional when that and we out start X ranges

Rich Anderson

Oh, me. excuse

So is a steady assets? state X% of the portfolio

Jerry Sweeney

Right.

Rich Anderson

Okay.

Jerry Sweeney

Correct. Yes.

Rich Anderson

Thanks. have. all I That's

Jerry Sweeney

Great. Thanks Rich.

Operator

now any further I showing call to to would the no questions. back further Jerry for remarks. Sweeney I turn And like am

Jerry Sweeney

XXXX all of call thank you for participating plan We on and our Thanks progress second look summer. continue call. Brian, thanks you in to quarter our updating to in business during the and again. to forward the make you

Operator

Everyone, thank the a gentlemen, and program, Ladies today's This does for disconnect. conclude have you you great participating in may now day. conference. and

Brandywine Realty Trust (BDN) 20 Apr 182018 Q1 Earnings call transcript