Earnings call transcript Q2 2023

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

Operator

Good morning and thanks for joining this call to discuss Equity Commonwealth’s Results for the quarter ending June 3, 2023 and provide an update on the company. [Operator Instructions] As a reminder, this conference is being recorded. Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of federal securities laws. Please refer to the section titled forward-looking statements in the press release issued yesterday as well as the section titled Risk Factors in the company’s annual report on Form 10-K and quarterly report on Form 10-Q for subsequent quarter for a discussion of factors that could cause the company’s actual results to materially differ from any forward-looking statements.

The company assumes no obligation to update or supplement any forward-looking statements made today. information material. website important information www.eqcre.com, posts maybe that company on at its including The of remarks portion certain The today’s non-GAAP also quarterly financial includes earnings measures. on the company’s the these non-GAAP to yesterday’s and press Please results. GAAP measures for refer of supplemental the to containing reconciliation a company’s financial release company’s results

COO; David CFO. Griffiths, On are of President Bill Helfand, the call and and Board, Chair today CEO; Dave Weinberg,

to I David call Weinberg. would ahead. go that, With over turn Please the

Dave Weinberg

review for update Good results us. markets joining the morning, will well an company’s the I provide and Thanks on as quarter everyone. activities. for Today, capital our as investment the

partially the funds G&A quarter, in an of Zell’s share each share per in NOI in by second related the to to of a and same-property to a from $X.XX $X.XX income, $X.XX Sam interest $X.XX share increase per and from For tax largely expense. per quarter due share share in in compared income result per operations decrease were growth passing XXXX. $X.XX expense increase the offset a in increase The compensation other per and was FFO

in and occupancy decreased increase last and and this income cash average in largely $X.XX decrease per year, NOI NOI The and to Normalized a an due expense. XX.X% result ago. was share share same-property FFO same-property partially offset primarily growth income the for demolition of other to per per a was $X.XX decrease X.X% FFO in $X.XX compared a $X.XX share commenced of share share year increase normalized costs quarter. in interest compared both was increase NOI per $X.XX per in a by a Same-property pre-leasing lower to tax

on those signed were XX.X% properties XX,XXX our basis square GAAP on X.X% leases new feet basis. quarter, and and down on renewals. up Rents a cash we of a leases the At in

XX, XX.X%. occupancy occupancy XX% commenced was was As of and lease June

a to aggressive comfortable see are environment tenants lease of more some to range a short-term more leasing is continue more back space, It of for terms to terms. looking preparing committing giving some term. deals being addition we actively in others on In for spaces we leasing, and [indiscernible] with and extensions

Turning to sheet. balance the

$X.X year rates or increased $XX per currently we and We earn are of The X.XX% no our the has billion ago. interest approximately we debt. have Fed compared and cash on moved has share earning X.X% cash as a to roughly rate

We risk balances our liquidity. to actively continue in banks our daily cash among manage to maximize yield minimize and

$X past has continued our Fed’s second the increases XXXX. in second the of million income the rate grown interest the year, quarter over to quarter With from million XXXX in $XX.X

began XX.X Regarding for million share we $XXX of We repurchased capacity. buybacks, shares of have renewed back $XX.XX. our stock year-to-date. million an at a XXXX, Since million buying not repurchased any of as shares we XX total currently have and $XXX of we of June dividend aggregate an average have in price authorization adjusted

asset value. transact work classes, markets, annualized Transaction to and quarter opportunities. Owners To-date, all the there at billion investment sales With not for difficult just XX% are to trading, limited are and with willing has pipeline often our actionable Turning basis. with been creating to borrowers. the lenders are discovery slow a and things so been today’s little assets has pricing is to price an down on to catalyst there investment do modest. capital the not want nearly $XX volumes total lower continue in across or be second

like strong, industrial operating and terms of conditions potential We investments, In we range relatively decelerating. with to remaining continue asset classes. evaluate of a though wide residential still

markets. with A a know broken catalyst prolonged be access that where real growth way Against also other lack or In could one that transaction. and We believes needs sheet it’s private balance company It an or such be of meaningful a others period business will a to or a a issue. that availability capital. find scenarios hopeful remain the a a such for difficult perhaps debt long compelling we that might create do the likely the of and continue public the credit this the significant not large return challenging decent we opportunity best will this may cycle, will to we is is estate to we a asset to fundamentals classes, be patient. find the opportunity If sell For remaining invest. environment might deal backdrop, challenging range this to opportunity from meantime, properties with an during it’s last, capital. us however

and Bill questions. happy With your take are I David, that, to

Operator

[Operator comes with first Instructions] Mailman Please ahead. Citi. question go you. from Thank Our Craig

Unidentified Analyst

volume half. mentioned for But first morning. Hi, relative transaction actually [indiscernible] just I Craig. know you current that changed classes? the thinking and good at first kind are pipeline the transaction asset Or – underwriting of different your of about in return It’s to half on different deal looking of for hurdles have and kind in been all? down slow remarks, the you how you’re about is

Dave Weinberg

question. Good perhaps slowed say maybe unusual, July. quarter, – it It’s conversations Weinberg. down to little our first a bit is I’d David have not relative

year out say in perhaps it’s And are what kicking see time tend the to going more that investment of things play to into were may slow with see trying anyway. those whether our be groups also be. I’d can many take conversations preliminary their the to actionable to to translate options earlier So opportunities.

We higher that In really a environment. changed. terms it’s recognize thinking just interest rate pricing, of about hasn’t

All the baked said recognize But we’ve restate are want that’s on our calls. the pricing. prior I what trading. depending kind to sector of comps We into on where public also

figure what story most like. sectors, is, we all-in why the with story the makes out of kind but that’s And We’re And what think return looking do we and the across what looks often what how investments. it us are, begins it price then evolves base the the into the [indiscernible] about and sense. is then that often yields

Unidentified Analyst

at well private then for maybe to taking take the you Did as largest last looking a industrial at on saw that sellers at the happened deal. rentals And a you single-family have large talked to industrial you that? kind office. any transaction looking look as look a Thanks. We industrial mentioned equity sell Or call, and of are product

Dave Weinberg

but specific looked did So don’t described on reasons, have to we I not different industrial comment say, they translate for want we into But I some at. actionable we would deals portfolios, opportunity. at large what an as looked

Unidentified Analyst

and of office, still you’re just lack then on that interested the something debt availability. the of And dislocation is Great. touching Okay. given in, kind

Dave Weinberg

respect office, varies say interested than still interested I’d in Fundamentals that day. continue about to opportunities describing to we’re right say I’d now, day the more is rather in with early. office, learning transact to two yet in weaken, to are equity have willing pricing have today. them large we and should find owners to with we either be or one, think high-quality really that what portfolios

Unidentified Analyst

more that kind would status. additional special maintain Great. there I to of would of need you to dividend that status? on any maintaining REIT guess And you restructuring then kind one REIT do have Is just or a

Bill Griffiths

internal for you Sure. It’s restructuring year, as to this know, Bill. qualify generate did to gain an do we some Last year.

forward, have And a then expect options we restructuring. We looking for qualify some again to similar we by evaluating. that are ‘XX completing currently

in future don’t it but far transaction, everything that will paid to goes, expect we depends do so year. As of far any that sort as this – on we the dividend cover March we dividend the

Unidentified Analyst

thanks. Great,

Operator

comments. are closing over no would go Please [Operator to for time, like Instructions] this the floor There At David further Weinberg back questions. I to turn ahead.

Dave Weinberg

you Thank for look joining again next time. today, and we us forward to

Operator

call. This concludes conference today’s

lines your this for disconnect a at Thank great may You day. participation, and you have your time.

David Helfand	Chair of Board, President and Chief Executive Officer
Dave Weinberg	Chief Operating Officer
Bill Griffiths	Chief Financial Officer

Equity Commonwealth (EQC) 27 Jul 232023 Q2 Earnings call transcript