PSB - Earnings call transcript Q3 2019 | PS Business Parks, Inc.

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Operator

Good afternoon, and welcome to the PS Business Parks' Third Quarter 2019 Earnings Results Conference Call and Webcast. At this time, all participants have been placed on listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions]

It is now my pleasure to turn the floor over to Jeff Hedges, PSB's Chief Financial Officer. Sir, you may begin.

Jeff Hedges

you. Thank and PS joining call. Business everyone, third for you XXXX quarter Parks' thank morning, us for the Good investor conference is Financial Chief Jeff This Officer. Hedges,

John Groves, Here COO; Hawthorne, are with CEO; me and CAO. Trenton Maria Petersen,

Before call other facts statements statements that than a statements. forward-looking let These we this are of differ conference number subject me to cause materially begin, in everyone forward-looking all remind beyond included are historical of those forward-looking risks PS are actual and results which control, statements. which in to uncertainties, forth Business could from such set or many Parks' by statements of implied

whether statements speak new information, a events forward-looking no of Parks result or the date future undertakes otherwise. this statements, conference obligation to All revise as as PS or Business only of call. update of forward-looking any

For risks additional subsequent Annual the with Form PS and including Exchange could Business refer adversely XX-Q reports filed Commission, forward-looking that the by affect X-K. uncertainties to XX-K statements, Form and the on Company Form please and reports information Parks on and Securities Report about our

We to will be in website is psbusinessparks.com. certain also press Reconciliation which our GAAP supplement, and release earnings included found non-GAAP financial on financial of can measures. these provide our measures at non-GAAP

will I now to Maria. call over turn the

Maria Hawthorne

of Park the Fe the on and intersection near Industrial Jeff. located in investments Hathaway and park thank everyone, Angeles today. September, Springs, three XX-building, $XXX.X you XXX X, quarter closed major XXX,XXX the and Los County, an is Good a on outstanding both foot morning, We operations. Thanks, for million. Santé freeways, joining the had XXX. square us we Hathaway In for

user to X.X% and in in rents on for represents expectations. to portfolio this closed million who with the a sale right opportunity was park X.X square XXXX. sale expire and the add feet sale of will near-term million assets in we for point, vacant foot approximately single largest no our April October portfolio There in market. Office/Flex for This space XXXX. XX% our The line the is totaling other building Maryland. $XXX.X square value. in place On XX, a is XXX,XXX market XX% are the below are there in At This totaled

to continue The Highgate to we at construction with Compared our had are The multifamily of prior asset. XX% that I pleased launching we that in We Brentford rezoning year and quarter grew Mile NOI be occupancy begin and NOI called average will high mid-XXXX. growth received multifamily weighted XX.X%. full of a balance at second Last announced the and was Mile, development

are multitenant development we are In commence square approximately both we construction buildings cases with of which existing Class excess land both two advantage industrial updates, located in going of feet. Continuing to also XX,XXX A parks. are taking

first The Dallas, Park Airport. Business Freeport to our in DFW start mile a which in from is located is

Ports. Tacoma other proximity and Kent building, is XXX Airport next with start close located in our which Park Business SeaTac the and year, in Valley, to The late will Washington Seattle

We updates you will calls. future give on

quarter will leasing. high. cash X.X% up Operationally, and properties industrial X.X X.X%. total rate XXXX. up an confidence momentum square NOI successful continues and positive rental us through customer for million up carry commercial is the for to that set remains feet Cash lead equally our feel change and Year-to-date of confident our is We fourth

to call With that, I'll turn the JP. over

John Petersen

for and feet same XX.X% by leases. fundamentals Operating again XX.X% us of as almost overall expansions grow Maria. square million a in to QX. of signed as on our solid with including QX, retention cash basis feet. Results rent of square We helped occupancy industrial spreads XX were continued X were up our Thanks XX park net rent markets X.X%, XX,XXX production points of customers our XX% in demonstrated from

Virginia in XX.X%, at quick demand well QX our XXX by peer active set gain ahead is XX we of was XXX,XXX generated Occupancy A to a in that for which There this user market. expanded breakdown Now leases the XX%. portion signed currently XXX points by feet. of for existing jumped customers was Northern basis square occupancy quarter.

government We office wins rent office grew one Northern technology, lease due important over by expansion occupancy and Demand were X.X% square extended of square Northern negative healthcare, we of XX,XXX transactions All contractors. being minimal primarily did have over feet key in growth and renewals for costs. three as two transaction driven term and Virginia, with XX,XXX is to us in Virginia feet.

for deals, California feet XXX in the all XXX,XXX square signing average of also deal cash basis XXXX from XX%. square increased with active XXX,XXX was square of feet of size generating QX. was team QX Occupancy QX rent occupied QX Norman to discussed vacancy of growth of in our we XX.X% points feet

mentioned have activity other Northern expirations over I had call space last rent renewed larger potential solid growth each feet. and of California, three one good two. square we QX successfully Speaking in We with in XXX,XXX that the on

[Indiscernible] for leasing Southern we rent workday Small our County of write-down. XXXX per Orange market The This drive leases an team's large feet. only average averages a was California. our production rent up one XXX to with get team amazing in in QX lease XXX,XXX user demand. was an growth totaling [indiscernible] X%. signed X% demonstrates and square square deal rent in two South drove California about feet ability deals as size

of Angeles the year. rents know and out Angeles feet tight increased you in in Los a earlier in very Los XX,XXX one is as did industrial square Angeles move market Los have XX.X%. We all we

We the building. repositioned since have

interest in space lease-up. this upon We solid expect lot a of growth have rent and

Combined the transactions. rent basis XX one or Texas signed customer of San Austin business average growth and Texas portfolio. Diego due forward continued leaving points decreased square square fundamentals in rents Dallas solid to Occupancy XX over improved to foot foot X.X%. feet size. our the XX,XXX X.X% on our in deal strength and square In XXXX drive XXX,XXX team in were

space. We since have re-leased this

in in foot Colinas lease QX we that occupies a XX,XXX Las square Additionally, XXXX. signed

Heading to any Consequently, team points with of seeing Miami due a feet good producing XX.X%. trade to rent uncertainty. growth. to in slowdown XXX,XXX wars generated Florida, square XX.X% the not increased QX basis leases South signs or activity we're economic XXX Occupancy of

of Finally, of able growth square Seattle in we stellar is continued rent a tightest to Seattle country and of and XX%, the market to production. have performer fundamentals. these with XX%, XXX,XXX be top been of one advantage feet the take retention The

we buoyed by strong that million solid customer produce metrics that are and QX I into X.X demand, to with team operating to have how Looking confidence produce poised market existing knows results. vacancy, feet low square expiring a

Jeff. I'll the Now call turn over to

Jeff Hedges

JP. you, Thank

opening in or XX. remarks, September over period which and an diluted The nine-month funds XX the share, increase on while was to $X.XX same $X.XX Year-to-date pleased from to and FAD X.X% growth share same-park September we basis per are NOI of XX, X.X% the both X.X% ended in in or ended was per results. attributable the $X.XX mentioned a per Maria year period. compared nine our the increased were the cash a funds quarter primarily increased FAD FFO distribution with financial very prior-year. available increases ago, common third FFO Net over income for for As share our from common ended operations diluted months three September for months

our very are as is We our assumptions. also recent exceeded point pleased have non-same-park of or acquisitions portfolio with met all how this performing, underwritten to our

is as very The Highgate Additionally, continues our property, months well line in expectations. nine the for perform XX, our Mile, at which NOI September to with $X.X million multifamily reached ended

few I'd like now to details to sale. additional the provide related a Maryland

one occupied square classified tenant are both by foot held months is those XXX% sale held Both the September was sale of and as for same-park First, that for single portfolio. our building identical building, clarify as GSA been the pad ended office to sold we not had pad are Of classified half XX. site. previously want marketed, portfolio remain we XXX,XXX a assets nine to the opted the as GSA the site which to tenanted and and retain which in which

Turning September full. million on line have sale that now of Maryland paid the as sheet, a noticed, we to of have receipt $XX may in down With the you we balance as XX. proceeds were out

Finally, in the XX, pointing shareholders to up out $X.XX quarter third of to by shareholders dividend shareholders December of to XX. wrap on that common recently our December I'll $X.XX we declared be to quarter record Board in paid of payable and a a the fourth on paid dividend a

for we'll Operator? that, questions. open now the With call

Operator

we And from Instructions] Markets. KeyBanc Mailman first Capital Craig question our with take [Operator will

Craig Mailman

everyone. Hi

moving tenant an with kind here, on Are out Hathaway on going the demise you of kind half that you guys you your the that kind expiration getting PSP to and of you has almost your mentioned where program program? you XXXX. small feel of that the a planning Just that to you property and of do tenants and tenants you typical of in market what's is like for a typical in would in space if decide kind think keep to larger capital and bigger go have kind or do want know

John Petersen

we multitenant we're JP Right the to renew renewal rest with very industrial. negotiating supports and The that question. unable Craig, we're we're well will is user. real one come a confident real customer good Good to as now tenants. you of of park Yes if demand the and small This if to building be big are all here. we're confident, to building expect its a imagine renew first market the marketable LA is can we full that there in the unable

we space small So and renters capital amount this out. and confident to there either of way we're really just are lease

So expiration. position we that our with like

Craig Mailman

of kind to get kind XX% to the mark-to-market? that XX% the what's Okay, of timing the and rest leases of capture to

Maria Hawthorne

is speaking. churning know XXX,XXX two one and so said, then months JP years, XX in over you as the Craig, XX% the Hey park are XXX is is industrially of deal as or first of first other pretty spaces this XX% the small ownership, to

what's and the going we'll see increases So throughout the there rent on that we're confident about park.

Craig Mailman

kind you mean years, you to to on could so, the yields, And know going this where yield? wanted about but could in uplift guys you're be I I thing two think from in typically do of stabilized talk what

Maria Hawthorne

rates. coming, we year. big in you'll this mean it information market loved expensive. sizes like what yield spreading give that, and XX-building Craig, But park, great see and the with was about that market big was confident be it operating don’t we're moving successful LA definitely But and guidance was we our there. have bringing very this I that we this And a next acquisition, expiration happen team forward it deal HF and very to it like we will that's a it a [ph] a is to Craig, was various asset the

Craig Mailman

just of per -- move sense right. or your sense to a to kind I'm and uplift the mean is there the a just get it, basis could place how pennies. in on Right, month trying a get much any the I'm it on I of take what does a there to to trying rents upwards dollar pretty not of way like [indiscernible] to a state big swing upper be FFO couple model are

Maria Hawthorne

because or Yes, just big be face big would two of that XXXX course immediately, but Craig, one it that a will renew it if go does or be up. they quarters increase lease for if stark customer they size then to say then hard to three pay this

will update we again. wouldn’t and want better be talk February FFO a we give So for to I certainly space in forecasting when this

Craig Mailman

what you All XXXX, guys big any on right, have chunky moving XXX of are guess in this outside ones? I expirations

John Petersen

Yes, in as one like got I much we've California mentioned, is in that Northern Again, a couple LA for - expiring we've are big quarter. at expirations. There Hathaway. the this a got market

some plan dice, have slice could we others that, head don't to into as ’XX. is in Southern we mean, California -- our Our have there another the country. we and - big like those clear, mark-to-market. Northern those but in I I'd nothing primarily position vacancy we we've in than material couple California be and two of got just to any big Other not and have But could ones of California really these I as again, mid-year. ones, the leases we've in renewing Northern pushing a rents rest got say that's

Craig Mailman

it. Got

John Petersen

we Craig. And have, do sorry

at Business bigger one Seattle have XXX a our We Park. in

market pretty to we're is next. to with sure that So mid-year back us it come going

it. So, square over that's really up XXX,XXX a feet It's Seattle. in

Craig Mailman

Okay.

built still are square there. to are - going you another So guys you XX,XXX facility guys foot the build

So guess the you - real park? about I that demand feel good at

John Petersen

that's very the that's for park, I Yes, great years We've the building this know, and and why answer us we're quickly. or out, vacant bigger likely and we that we more building park we always do been what and building though are and space with with expiration, mostly comes like we Does park your we're one even demand is blocks industrial the pointed re-release is when has [indiscernible]. and slice high multitenant that's you'll questions? also Maria blocks. this dice than it XXs - what, do new feel see operated several about our we don't like last, That as our the bigger our in that

Craig Mailman

is now? fund It does. cost you spend developments, the an you or $XX are depending it to like bigger you're And what doing could think the to through spend that million million, on just you going on aggregate of flow $XX guys cash just

Maria Hawthorne

buildings. multitenant though these industrial Yeah, Craig, industrial still buildings, they're even are

hyper make - and will what that unique is So they're infill. them

is I'm talking It to freight park access height, that ordinarily is is airport. XX-foot the will a that from is just not have and close one would place But, that less, foot something mile Dallas will So units that unique, into we be clear about about the develop. the DFW. XX,XXX

clear waiting And T-XX That lot with square have market out Kent XX, Business XX-foot tenants, the ones have built it's is completely a height, we of the a Park, in we're and putting foot Seattle. have working a thing don't the at again, with spaces And small which, and Valley. XX,XXX we list. usually and same a

did these in few a the that that ago. confident years Miami as very development be we're we successful as So will

John Petersen

just I'm anything finance won't ordinary these Craig, developments. out the to have saying do to of we

You thoughts of of your kind of directionally are cost in accurate in terms development.

have finance do won’t ordinary we of developments. these to to Yeah, anything out the

accurate your thought kind in directionally cost are and development. You of terms of the of

Craig Mailman

Okay.

bucks like ex-land a it's roughly? foot basically, So XX

Maria Hawthorne

I up. think costs gone have

Craig Mailman

ma’am. Yes

Maria Hawthorne

so Seattle, XXX I more XXX. And to is target it a would

Craig Mailman

have land, So... already ex-land, right? guys Even of course the you

Maria Hawthorne

Yes. That’s correct, yes.

Craig Mailman

one just then from me… And Okay. one last

Maria Hawthorne

to and but more model. are XX% little those Craig, so, expensive numbers good And a we are about Dallas. than getting still more bids, Seattle expensive

Craig Mailman

same runs one Okay. but store the expenses, were just then up And last this bit were a in expenses quarter. grower, anything one, pretty consistent cash

Jeff Hedges

and patterns we seasonal bit as events business is talked quarter, somewhat about also Craig, our weather out impacted our other control. last Yes. little that or is of a are by

in little QX. that bit could there from came benefited little probably normalization tiny quarter-to-quarter some So timing be items into differences. We in a QX

it's at results indications, say results. it's always OpEx I trending what directional our quarterly our nine important to is important more a results how look So, look remind year-to-date ended perspective. for people the an well equally to better reflection is, at from year-to-date of are would And months portfolio I

Craig Mailman

Great. Thanks guys.

Maria Hawthorne

Thank you.

Operator

Manny ahead. question will go with next Please come Citi. Our from Korchman

Manny Korchman

Hi guys.

now? is should the developments as of for new other we - the it we are developments Just that are two in places think starting, there portfolio that expect about announcements kind or of new this

Maria Hawthorne

future for for XXXX. in definitely that's Manny, question mean good it. now but a redevelopment, will the for opportunities there I and be that's nothing

Manny Korchman

about then Southern those And require is in match going bunch leases a repositioning right are the large spoke trying or assets the California, simply just to Maria. JP of there? the you in space on capital or tenants it to Thanks

John Petersen

that feet two. just there's Park XX,XXX I years. square XXX,XXX is much we XX coming bought in we won't required The repositioned, one at building - one Hathaway that the foot, capital. tenant And Well, the been basically capital expiration that up. square a the That more is just require a for mentioned, had

marketing back really uptick had rent we're have And there. about that excited it And building. and, so to now and we're reposition it we we our

Manny Korchman

need those essentially? delay spaces done been there So for no That's capital of forward. from here both all timing or is

John Petersen

That's correct, correct. that's

Manny Korchman

thanks Perfect, guys.

Operator

question Wells from Blaine will Fargo. ahead. Please with Heck next come Our go

Blaine Heck

Thanks.

guys up ahead the follow with of there yield whether to guess, developments, any guys just Is are you about So how on construction? to you you targeting target to go a other not do think use determine or kind economics? I or the hurdle

Maria Hawthorne

once that's too. new I Blaine, Hey least can points you Yes. you returns higher stabilized probably And, is these than be buy XXX at days, will what it that stabilized. good product tell can a question

Blaine Heck

then cost low there, funding proceeds. helpful. you debt that's seem options of potential cost issuance, Okay, And your of in equity out to several for the low disposition potential between have different preferred guys

you maybe us Jeff, the sources funding attractiveness I relative and potential of spend So you're pipeline how thinking for both can on guess maybe out tell just acquisitions additional about for the there? development

Jeff Hedges

question. Yes, great

markets So, common, and on that, obviously in now. identifying and we you're three, eye all all keep a the us capital attractive issuing potentially debt preferred, close to are right right

we or have to given near the avenue We at that here don't markets assess in for we'll us acquisitions to So the raise for to tap point time, point time. that those point hope growth time, require a into in would capital at funding capital. us something that need have this right in what future. for And in around new is at

us heard will not debt have of for we you've is couple significantly, historically common not we equity our even remained explore to say the though of least us well. and course, cost as preferred of is that that quarters at utilized But last What potentially. attractive something

this we'll around. eye of raise a So, guidance to once to topic, keep on going all have we're we that capital close and something actually on provide

Blaine Heck

your attributable helpful. rent JP, last for negative do future weakness think or one greater near have are or negative the spreads mostly other portfolio spreads negative spreads positive to there Do this And those in those you turning that's out of any pockets you are office year. and maybe see for you Great, know, DC maybe we'll the portfolio been that? anticipate

John Petersen

you well as new know. is This for Blaine. office DC Yes not

to ones mentioned, a renewal the far remarks, that expansion. do renewal us So, especially a in ones some that I better it's talked one I large about when my of we which or a was assess of and for lease doing

So those we're they real rent came write-down. a with happy with though even renewals,

issues DC, of In not anywhere terms much anywhere else. We else that for have forward, rent all office office in of matter. are looking the don’t

I be in honest. seeing do to we’re DC more strength think

activity We’re from seeing more contractors. government

mentioned government we’re One contractor that's by and sign a their was space more of expansions a extending term, taking the seeing. I is that good and they're take, virtue

think market to parks XX% in do time to but to believe tough it to It's park is do market that we decline. our XX% can time not or to office rents vacant, in have really of office can we rent goal in do either to again rents have grow but do is expire occasionally we a its is, hard our So flat. where grow that the or park I from when that grow keep rents It's portfolio vacant, start reducing we parks and our the there. time on time opportunities rents to line DC in hold some from

from view it’s a DC but is XXXX frankly really and on really to than seeing we've our effect, So, there, Amazon good again that DC we technology, wise and production mentioned; government in anything I as that the have not view isolated we’re deals in activity contractors, had the more from no from long we’re direct seeing sectors directly time a anything. or

are don't to into in Series so… is unemployment I economy but active, X% are The and So the good there, things nationals read that, is want you the World in DC.

Blaine Heck

Got helpful, it, everyone. that’s thanks

Maria Hawthorne

Thanks Blaine.

Operator

Street Please will Advisors. Our Green next from with Frankel ahead. come go Eric question

Eric Frankel

a know the in occupancy on there the quarter in was you Can early move what that Thank the the wasn't tenant out, sure of me that late or but I occurred sold? quarter. remind portfolio the you. was I dispositions

better want rate sense entails? that to what So of I a get the and just cap

Maria Hawthorne

occupied square were moved XXX,XXX first sale. and that the XX% big that and feet the Yes the occur Eric, upon was did around about tenant quarter we in out

Eric Frankel

Okay.

of overall comment pretty you is is gave seems You or in bit negative read property of to appropriate and guys a on that valuation there that Virginia. discount? this portfolio Maryland for whether there like for know, that properties of your it portfolio experiencing through for extend kind that office/flex are special circumstances the a you rest a that Can

Maria Hawthorne

There Okay are special circumstances. yes.

out and work is and assets, where it survey was different It’s why out came to taxes. Montgomery that is off on Fairfax two very Virginia Montgomery. break a in issue So pro-business on is more first it had these as right County markets. are Montgomery getting did Virginia than we it fact County And the a way. pro-business is business Maryland and did We survey state. County lower a

very state, a is high state. Maryland Virginia tax tax lower is

don't the to So Maryland sales ascribe asset Northern Virginia.

sold, large we was when built flex Secondly, that XX% out flex commodity the tenant portfolio really as this was office. say that we a

larger office than the again, in Maryland have So in Northern office what was Virginia. portfolio tenant and we

with the type So the the as that was market well difference. product as of

play which last about, think So in acquisition, and if year industrial, we’re million Virginia seeing occupancy seeing rent like what bought was growth Northern happy. very square X.X we growth, you very, is foot that that pure

And Maryland have office quite so, suburban just But and should industrial eye. it. has cap an that on rates black right a now frankly

Eric Frankel

have would I different to better time been business isn’t meaningfully the two better bit your occupancy portfolios spread too. they between environment, all suburban been spread Virginia little all that haven’t that little but but office, a different right over that are understand a and the Right, there, that the bit fundamentals

or heading last flow direction obviously a in North industrial just and Virginia and tenant seems flex office investor versus drivers. want that offices industrial that different one heading It I another to is in have profile portfolio, XX versus year's X review direction. an economic So different in the Maryland to cash in is purchase

So we about just evaluation? should see trying what to think

Maria Hawthorne

Yes okay.

XX lot a sets the a entire So to it that redevelop lot we're eventually The of going and Eric, Mile acres. of Virginia office,

will be that, we've about So But redeveloped it a coming think more another if - honestly then about have opportunity. you will that only we’ll acres. of be five XX/XX which phases and two redevelopment

opened across street. literally Northern is of the was is part piece bigger one and of that and/or is being next that [indiscernible] built our office has in other one and Virginia year Our the lowest and Metro being office our original basis

redevelopment we feel a also have and good park Then in will that Merrifield eighth away street again of future be the Metro. really office big the flex mile from we a a down So opportunity. and

very our It are Virginia So Virginia office than located stronger Maryland. development. economic demographics the because dynamics and well that’s Northern portfolio future higher Maryland than suburban occupancy the has for in and is

Eric Frankel

have Okay couple don't if Maryland I the questions it too. other sounds you mind. a like needs train line

the development makes on certainly the Just some on it get you for sense in started market. [indiscernible] of on to building

So you few sooner, those shape in little markets years for have assets why haven’t developed bit a those great now? a been

Maria Hawthorne

– off question. the They space the be JP in able earlier good expiration sorry have build the first space is that tenant currently – we’re going I office to big building for office, not am industrial that to referenced yard Seattle the

tenant building park of flex and were can. it we is though the more starting idea, have that as we a to there then And industrial the we quite moves next until hit could Freeport finish build we last us and a flex So really the explored high our access year. we and out thinking frankly, it don’t year it park park about not

So we build didn’t we’ve announce been anything but working until knew want to we it. could on we that,

Eric Frankel

related are flex sale, there. out some those the for transactions. I know Okay is recycling final why market it And in it question Maryland from haven’t disclosed has to significantly fundamentals My appetite increase and yield, seems the It like It shape. that’s proceeds that certainly your obviously office but they is types seems the like seems but you not the helpful. also you're acquisition. great that of

fair assets easy are certainly to little a bit in competitive, appetite pretty in and Do that understand a a the have some have aggressive find any guys -- tenant more trading. that now of advantage still not the it's are they but being markets are they traffic you assets competitive and small that durable in forward? amount operating I for super you going of you

Maria Hawthorne

Farmland that’s that market back would of problem lot a XX that now parks, would further Las There of been markets at And me compression the nothing would announce [ph] please cap that February has while dairy of assets and on for more. industrial The and [indiscernible] Illinois, come rate primary sale in in and love are lots some I would Pennsylvania, Vegas is Eric, approaching I Hathaways. in rates but to more what there Reno. contribute cap come be second market then rate. because

those in frankly, aggressive. hard And business infill if be going we markets. pay And very but did we’re our attractive got them, with find So core market. it's parks - to these Hathaway, in for to retail - very that when core see our it - will as quite we we

Eric Frankel

Okay, you. sounds again. We'll good. discuss Thank

Maria Hawthorne

Eric. Thanks

Operator

Instructions] question go Please JP take Morgan. next from with We'll Tony Paolone [Operator our ahead.

Anthony Paolone

guess guys the on the a last Thank this do had you. question or did you I I you first development, to to was staff the team partner. think you there? the when residential you development do Do and have need make changes

Maria Hawthorne

just are locations going thought at future, be about appropriate thinking but other in have The we make sure the be an oversight. adding to executive that do, to to Mile, with going development but redevelopment, we not that We we're of the

the the in-house that them them, we happy but expertise. happy with need our with will working realize be this We to are We're with as continue future also in we're and very next partner joint going again. very venture we do development

to Just as a also Board too, expert. reminder we did our a add development multifamily

we So feet he's that's and industrial course mean, on Board, of millions JPs and in-house. background have we have developed the of the industrial. expertise of that I development square

good there. we're So

Anthony Paolone

how we was about G&A which higher, as of a Okay. quarter, And that we how in think then we ahead? bit should do with particularly kind roll the specifically more that think

Jeff Hedges

announce. So to there's nothing

in referenced position. you a G&A minute for our join that and that So to mid-XXXX run XXXX. you to salary a you're could shouldn't right to a through. expect would mid-level that hoping attributable That named ago that team anything hire be with be that new in regard person We're early have somebody and would kind to of role in assuming expect Maria

John Petersen

We'll - – we have as that Tony, make course, announce, we progresses announcement. we'll to and something provide of an that will search

Anthony Paolone

a being about you just quarter the higher, in number terms or? term Okay, reported that in come back bit and or down just what third does that near of

Jeff Hedges

as the the tried director we referring to we're what there so, was highlight a as in policy. release, to to the in events of retirement the related one-time change press - Yes, kind share

for but is that and attributable $X.X $X.X the so marginally the The rate stock-based terms related that change to of about to de change. run comp, minimis one-time a that. a purposes, related will higher event effect in And comp charge effect. to expense million of change, that be run And that's accounting was rate million stock-based one-time very the truly

we QX expect the line of to experienced the in what first So year. we with months come back six in

Anthony Paolone

of Okay. kind JP, sure I for a that. want number understand this And ways, but to just make just touched different on then you I

So such in in the two, other near-term? before about XQ think of renewed, in we down either that level back we but terms one some downtime larger of up should or trending how is or that maybe the gaps anticipate should XQ three expirations dips occupancy just

John Petersen

Yes, Tony.

So long really secure look high and good to at really credit, really rents. what here do we're trying terms is

all. want we it So

California where that getting there good credit yes, think there's long-term successful and some Northern high that for now be a point we've can I been time So a we market leases. at and we're particular will chance because in try in rents downtime in in

trying to we're what that's So here. do

the very we quickly, in, were going but As on yes, forward there demand full, the and with fine so My we is the tight we're keep goal make agreement strong. not to those fundamentals there to an interested may those some for downtime. to spaces a result, unable to could if come be market able we're is be spaces that deals

it downtime, some do. I So and hope fine sense? if realize we we but that with we I'm Does we don't, makes could could yes.

Anthony Paolone

Yep. if we since had good step understand occupancy very I'm to see you've like continuing kind back just near of trends trying before No, term just that on.

for Okay work about ways in I real out to we magnitude all Last three with go side order like Does it eight? handle your to interesting were this Hathaway, in return you probably to portfolio? think for thinking interesting it like be question to returns, I on an going in and Like will four probably I ask does you're know, to years you got five? out. that to on is property five guess, days if about that's just modelling a but you, it market type how core terms tried the these return, that go to of to a five what thinking Craig of need for in need

Maria Hawthorne

to Well, They've referenced But we attractive always one an Jeff rates in and open earlier that are and that to - tapping and more returns this attractive. are to never I that. have accustomed like long get been we happened remark the interest that. think for high time reference is been of a things we into

X% lower get So the what that us to X% in for allows to happy X. industrial to required we our to was in they spreads returns, materially historic core now will than range. these for past, be And X.X but in keep the markets, which right we're

Anthony Paolone

and and that That the you moved X.X something rent years of thing? up a to X out of sort kind being stabilized after few

Maria Hawthorne

Exactly.

Anthony Paolone

Thank you. Okay, helpful. That's great.

Maria Hawthorne

sure. Okay,

Operator

there further at for to to time, no Jeff questions And appear turn I'll so this remarks. closing back it be

Jeff Hedges

we look at Have to you many of a you forward a weeks. All and everyone few seeing NIRI [ph] afternoon. good right. Thank in

Operator

conclude you today's participation. does for your program. This Thank

You may disconnect. now

PS Business Parks (PSBXP) 23 Oct 192019 Q3 Earnings call transcript