PSB - Earnings call transcript Q1 2021 | PS Business Parks, Inc.

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Operator

Good afternoon, and welcome to the PS Business Parks' First Quarter 2021 Earnings Results Conference Call and Webcast. At this time all participants have been placed in a listen-only mode and the floor will be opened 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

Thank you. thank PS joining call. Business and first for everyone, XXXX quarter Parks' morning, you us for the Good investor conference is Financial Chief Jeff This Officer. Hedges, Chief our With Officer, Accounting Officer, Petersen; President is me Chief and Groves. today and our Mac Operating Chief Chandler; Trent Officer, John our Executive

risks PS everyone a let forward-looking could differ those uncertainties, obligation call to other are Parks Parks' and statements. or from all These only than or number in by statements statements new are undertakes revise we or begin, implied update Business speak whether events to statements, that included conference future any of such otherwise. Before call. forward-looking of are cause this as result to subject of materially statements of me remind which of as Business PS forth All information, date a forward-looking of statements, historical set fact results no statements. many the forward-looking in actual conference forward-looking beyond which control this

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

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

Mac Chandler

am hosting first pleased morning PSB and welcome be earnings Thank team. our my the to call. Good you, I QX Jeff. call alongside to

weeks. and results. Business or a welcome take like prepared our our and could customers culture the for to I'd deep a From past three my over shared achieving warm my Before first half values I from special passion sense thank team day, supporting turning to a a Parks' moment these to remarks, PS and

will the learning journey have PSB I but stronger more plenty, and on for and I a our collection As our as on we will rent results, an to provide look markets on as and well the the developments provide JP rundown even of our on our financial weeks will an as update build me, and listening call, sheet. of excited today's quarter and highlight ahead On Jeff future. collectively months ahead first progress, I'm commentary balance legacy results,

executed strong million momentum quarter robust was our Our quarter in by well this the XXXX. us for lease first production. and XXX positions We XXXX, highlighted for since fronts best leases nearly positive quarter production was first X feet, many square

X.X% duration of economic short broad-based properties in-fill growth lease recovery. our demand capture QX our led the in portfolio industrial are cash by with Our at X.X%. rent from This well to our seen is a positioned

to operating as our positioned platform, uniquely sheet. industrial provides, most the supply that market more widely growth said is our out is foot. industry-leading our PSB customers and per the an Our It quarter, leasing. square of appreciate feel XX to to cash and In the is buyers industrial acquire including transaction our multi-tenant in impressive portfolios that and flow. of first That acquisition can industrial due markets. known of truly fact rate hands-on retention the leads constraint landscape within product our costs it deal deep and knowledge operations were all And efficient specific our seek our long-term coastal that competitive XX% a strength in $X.XX customers transaction this approach this portfolio costs proprietary inaugural to the even balance parks expanded quarter you experienced and so

positioned best focused now external turn growth a while will allocation are taking to to I long-term fresh maintaining always. to our the at create look over approach capital We we our as disciplined are assure to properly approach call and also JP. that value to

John Petersen

Thanks, Mac.

on As results QX overall all and of reflected fundamentals. strong you know demand touched as product is for our industrial robust Mac

me the through and industrial Seattle, fulfillment First, This XX.X% through with walk and Interest remains market XX%. logistics growth markets. QX our by Starting XX% of our overall our industrial activity you product the of retention in let driven in hot demand is is high leased. rent users. sector came and in

and good needs. our portfolio space our growth of Northern In XXX-business gains over construction-related logistics had growth portfolio. warehouse Silicon We for which driving warehouse was year. and industries XX,XXX includes in it foot up and in market XX,XXX demand the visibility square square to rent the rent quarter Valley including California, throughout industrial the Increased economy have which a our opened was foot team with has expect more high gradually California as a broad-based an we activity park at companies with this better deal vacancy that all-time Northern rent lease the XX.X%, represents and activity, about XX%, certainty

Hayward, multiple expect foot to that space have we the parties to right leased in interested XXX,XXX find of remain credit next and vacancy in patient our quarters. the Regarding square couple user, have

general, healthy, tech QX of businesses logistics, our Industrial last XX many a occupancy XX at located in mile in and at industrial done was to times construction The California is Southern Our firms, smaller have Dallas, was months. XX.X%. square by and Austin. plus is Austin our well building foot reopening in about Southern to is benefited this In demand as growth in has economy and users, the rent flex Austin. was XX,XXX Northway by rent was to strong in momentarily. our will and and Austin benefited In in the QX medical Texas, was seeing XX% demand other occupancy the the especially early as strong rest team was companies, we California discuss which from primarily The lower-than-average influx and last before. relocating will Pretension potentially Freeport parks from in the construction the year, XX.X% of getting industrial X.X%. plan Occupancy building of in In evidenced to local and boomed flex Occupancy due be activity growth from XX.X%. Las we Austin portfolio Colinas. our economy. back building demand our import/export in XX.X% the I and the in reposition strong Royal subdivide good reopening for new was as Dallas is Tech development, activity of

at growth Northway. our In release for lag with XX.X% Our occupancy QX continues industrial expectation to occupancy Washington Tech regions other the perform we coming our XXXX, of Royal portfolio X.X%. is and Metro, and vacancies in of will as Dallas remainder at look rent that well in to

office Our peer however, have is office in the occupancy that increase was able In demand recent as MICC existing to growth industrial will the the at business of news, where and over small reopening three demand well markets. we still of are Florida, of XX.X% set, among but and on than Occupancy park from lagging our ahead good we product and The is recapture be logistics, suburban open that portfolio continues. foot from seen demand. our This confident economy office for has local portfolio. our was both with million industrial X.X% users feel distribution, new XX.X%, is square levels. all our of strongest pre-pandemic XX.X% was fundamentals customers at most, e-commerce. coming longer Occupancy services, was demand driving rent economy the been and

industrial few only than one vacancy square larger have highlighting a tenants. clearly feet square and of XX,XXX We small vacant recovery feet under X,XXX only units the

this heavy led Importantly, to us has highs push at rents to demand all-time MICC.

Regarding building projects, is well our to in development above XX% industrial expectation. performance The development is Freeport foot on leased square with our track return our underwriting. our XX,XXX exceed Dallas rents

leased tracking have interest it our the We industrial await this building development. have square are still on and we rest year. final the Seattle, permits of excellent to foot XX,XXX In fully in

is permits While frustrating, in planning expect of the Virginia secure deliver project first do Brentford, in quarter Tysons, in deliver this to mid-XXXX. multi-family are our and summer XXX-unit the delays XXXX. units this development the permit to we

Northern Finally, on are front, sale parks marking disposition the in Virginia. business to we for

Herndon. office in a Monroe square The first, located Business XXX,XXX foot seven-building, Center is park

foot poised with XXX,XXX The is no our flex second for us pressure strong center, to meet is these a sale to there non-strategic our is Buyer park to demand and opportunistically Chantilly. The pricing is transact. office-oriented in square consistent of Parkeast expectations. parks is divest corporate assets. That said, two strategy

Jeff. the I will Now over call to turn

Jeff Hedges

share. per million, our common begin an for I'll overview three JP. the was quarter. share, you, $XX.X with months or XX, million per FFO of common in income or ended shareholders at allocable results financial $X.XX to Net an March Thank $X.XX the diluted resulting $XX.X for

the Same lower During impact weighted by roughly income was Park from from Same XX.X% the average lease $XX.X portfolio partially was quarter recent production. the versus And which cash in slightly was net QX occupancy, to rent Park X.X%, prior year. our attributable revenue the which XX.X% cash of free operating million, in concessions year. prior muted Same Park growth XXXX, was above flat average

which given As we releasing benefited a increase in continue million to or March QX FAD available X% was to production, for spreads for NOI. months Park levels, certain renewal the ended our use with the low XXXX. lease of $XX.X our few to XX, for team's experienced capital stands of incurred partially X.X% to three past distribution, efficient the healthy is NOI Funds timing stabilized new capital FAD, continued quarters. recurring push from benefit of occupancy transaction quarter, improvements. back representing portfolio our from Same part This attributable during the at in capital a associated reflection also expenditures and but registered of

NOI quarters. quick to moment on our relief. measured rent in to on now provide historic return basis commentary average rent consistent with I’ll collections percentage that some recurring a is and expectation future Our of will levels take more capital a

rent consistent levels. collections the pre-pandemic with third consecutive were For quarter,

and have a lifting deferral this challenges. rollout, And by occurring and with we repayments collected collected all XX, million of left our are to billed experienced stimulus still activity. deferral customers have rent billed from to We be generated to of economic related a continuing this revenue. handful we through of in March environment the prior But minimal vaccine we have adapted be XX.X% new Further, regions. the of face XX.X% our $X.X restrictions to vast abatement repaid of to The customers similar to pandemic of QX benefit momentum have scheduled or well-positioned majority year. quarter,

with present our Turning opportunities now balance remains ended we’ll utilizing and our fund acquisition $XX.X projects with of undrawn. to million sheet. cash sheet, during credit cash continue facility hand our quarter rely themselves. the unrestricted cash credit We on as developments, development and funded and We cash free to the including quarter our flow balance to appropriate flow, facility on free our as the

Lastly, we first point record I’ll the shareholders $X.XX in of $X.XX that XXXX that, per quarter. common XX second a to paid declared our out June With dividend of June recently of turn And the the share dividend paid in I’ll Mac. on of share Board XX. call be to to on quarter per shareholders to a back

Mac Chandler

Thanks, Jeff.

zeal been critical of back, long-term most flow. I’ve balance over has portfolio assets to most an not the of creating learning by culture that cash entrepreneurial leadership is the and balance find the value engaged perfect team, Looking had and a and sheet ingredients innovative requires free hard in proven opportunistic realizations easy recipe master. It to bolstered one the and markets an with desirable years well-located of an

the and well, all it ingredients. necessary the recipe has PSB Fortunately, knows

create open happy to the that, and We With call up questions. value for employees. shareholders customers, to long-term continue we’re its for

Operator

you. go Manny now questions. Thank is Instructions] come Citi. for will ahead. from open floor with first the Please And [Operator question And our Korchman

Manny Korchman

as guys. and Good the do that long and longer back weeks future know – on reflect topics those being you the weeks things history you balance time sheet, been just job, you but touched thought company? on on seat, of the the at maybe you about there approach of a only morning, the it’s I CEO few those for thoughts PSB’s share of taken the for call, three sit the Mac, some over least this you initial from that. And together, how sort all the

Mac Chandler

to you a of these going mastered here a But assets time. our it’s do really, we’ve understanding for that. really is people, our XX, operating second some I’m portfolio take And things, difficult others platform getting Thanks, by Manny. getting by and multi-tenant make know Operating know time as that. encouraged I’m to Yes. well-known how is to it’s we none. day and to decisions And processes, only ability, many really business. really In our early spending days, just our hard to our lot around and been mentioned. that’s

I has sheet not. and development, to that we it’s through. discussing growth, of impressive external allow balance make very but a of could a internal our be working easy, think is growth acquisitions, find lot potential creatively then us it to And we’ll look obviously there’s really lot out redevelopment and it angles be through opportunities, really

not grow marketplace. any we’re make – our and advantage smartly ready that pronouncements strategy competitive big that. this digging or further anything positioned I’m But making sure to I’ll into advantages to to well in of on changes we wisely and and be So, the the take that have like

Manny Korchman

the company. or that. neither internal Thanks Jeff I company the from guess, nor you for came broader to

level Do this to property a you the getting that to the using equity think the be investors sheet going balance that’s it company? And whether so the more, at balance it’s be for should the the corporate you same looking more do been second, opportunity be level debt that of and sheet back history sort of just more? think of to diversify going

Mac Chandler

going it’s Well, possible. And all at of to certainly course, angles. look we’re I think

and a just we’d sort that only But well us. preferred ill have recognize be history long one advised playbook. stock We of issuing to worked card that’s very we the in have for of

time. with to a it to at has do the different with and going And that opportunities the to things. We’re do at pricing to look of lot has come us

smartly Funding through There’s to So, everything. flow. be of unsecured. run the cash be sort we we’ll equity. and today accretive in us approach grow for through through take whether to it step provide hand. at but flow know lay opportunities that’s long-term the back It we’re our in what ultimately, business no and our card, it for make all we're disposition. looking first It through cash obviously could until could be going preferred, reason the out are is and what a But that that debt, secured, look investments exactly investment. could every That's

Manny Korchman

of Thanks. JP. lot Hayward you mentioned JP, a a And turning activity to second, call. the for for one in back last

we release lot a and again. about spoke at about projects? last trying activity Is activity talking the You're of all moved have that to also rents same since that the time

John Petersen

activity. the it's question, up in answer To first rents the activity Not have And moved. And yes, is, last reopens restrictions, your credit. no cetera. lot, et or doing in long-term. different work new be going we secure mentioned We're in it's months, they simple a selective new answer there. like There's as see on three deals. economy want less but moved – over we're, the the to activity. starting right I remarks, more me, space, to my we're We're little pretty this the But for excuse so a deal to four

of activity like there, there the level to that do but patient we're working I be So, seeing.

Manny Korchman

all. Great. Thanks

Operator

go take from with Blaine our question Please will Wells Fargo. Heck ahead. next We

Blaine Heck

just the out Good another one out have little bit a it's for your XX%. Probably leases And there. to of JP, you of XXXX, as between looking XXXX, wanted end of I expiring. XX% morning now I'm end almost then retention the Thanks. by talk about almost think and Great.

think the And outs stand known tenants of? a that should any sense retention space you now, do be be the that for that what those I'm So, then get is or to we for on or you there – expire? right trying might chunks leases as just move fence of large expectation are aware

John Petersen

the But think, the I the and And as to. normal schedule to good the rest expiration in the expirations. forward we fairly of good we're really don't in I comments, Austin earlier any my so, is, Blaine. news looking that have for really on in traction well you starting make that's know. touched not we a like, some a on larger ones our one us we're of larger Yes, ones but couple

we these to you've market even to year is ability as or markets improving our that three, capture mark expirations or rents So, like about. over the talked improving two we what next and

So, those rent us we growth you explorations from can the that good looking forward stay year hitting And next two, or deals as to us. with seeing as are these capturing in really pretty come retention our to interest tell over and stats, like us. to our customers existing we're want

our solidifies, the through business As they've made it pandemic.

becomes and higher lower as transaction So, you retention, know, it with costs.

us liked here next it's kind way in the for the shaping year us two. of or we So,

Blaine Heck

inclined some for you having guess robust Okay, you it strategy that your development you I And start demand your might has maybe just development you current give on more great. success ever then of any landholdings capacity are can industrial development? product as the to And That's recently, that guys through been? as talked sense much you how Are additional us spec with afford helpful. of industrial with side?

Mac Chandler

those already bit as specifically even industrial. there, we may like there there. We but anything. I these ready me might let to have yet. it's and wants where not we've evaluating we what in can done and in it's about not time, land a have we've success, What for been redevelop talk Blaine, other few at that in. take some what talk see extra to if that. ready in find We're we're Freeport, about our We're some, for But in we – parks? touch have extra done if – Do Well, evaluating a And looking exactly that. we've else development parks entitled terms we space, to jump anybody be of We're or Seattle. then that things, here not of it done but awhile our quite or mean, can do

traction liked we the I if in that opportunity better. seeing we're we expect liked be and but the same Seattle will Dallas and not So,

your that question? does So, answer

Blaine Heck

Jeff, can some Yes, Maybe preferred, one October. so that if are in fit in, I got that's helpful. one you've last one, callable

missed thoughts this Sorry we but those can this, be whether your updated to redeemed expect later you should if year? just on and I us give them

Jeff Hedges

Yes. Hi, close of be day, deployment that are in those point other Blaine, as take may needs to look capital also we potential always closer that where that at when evaluate front a get we do, at We'll that our in point. time. when rates we'll what capital a callable, little given us at are, opportunities become

callable say certainly not possibility, give would that in a today of those we've but I done here to a take to as they opportunity to we us guidance later as position opportunistically expect And close this year. type consider that. do there the is when very look that we we're at certainly, with prefers refinance, to if in an do become any carefully. But So may past, is will what

Blaine Heck

Thanks helpful. Very guys.

Operator

with Mailman Capital go We'll our Markets. Please KeyBanc question Craig next take from ahead.

open. is line Your

Craig Mailman

Hey on and impact we guys, just kind clarity here of the FFO. here for outs timing about the of a think potential the want some and two expectations as little XXXX bit sales of assets move

Mac Chandler

Mac. is this Craig, Sure.

We such time. pricing more doesn’t, me, we're a second going looking and those. that a price is and to this Just and close. those the of we’ll we’ve to buyers year long too on no selling meet strong if closing. can for move-outs. it's would gotten assets. And to buyer been these our touch pricing well But can really meets these very it opportunistic get color we've reasonable won’t I JP our timing. half wish expectation unless think of some And certainly sale But it the with These pressure given looks these think assets. so terms. sell the transact assets we expectations. for those like are reason and opportunistic assets these I and assets a and the do is we for they upon quite be We're well, the do to the an – good marking I presuming demand And we’re under is

John Petersen

move-out the mean, Craig? mentioned You you Texas, in that

Craig Mailman

just… then Austin, Austin, to lag kind In of said, you and we Dallas expect

John Petersen

Yes.

Craig Mailman

specifically guess of then I others. impacts some from the Austin the

John Petersen

Austin we’re that’ll get the these the some – or spaces into as when where time attention, the because split tenant year, bigger And two it’s we’ll to three and bigger for spaces some to release later back spaces, that. the be this space But building this different It’s purchased do to we once – take when we to this to Yes, there. we has that and access we I already bringing down Austin in get time we to first because was – to we us. opportunity asset the the mentioned in of have that.

was down So, back, other… get on we’re do into and the looking that building forward here, sub then manageable which chunks, helped more we’ll into Craig, to divided get and me what

Craig Mailman

Well, expire? right? is, FFO? once down do that what year, the to to come of like So, sounds question it for FFO? will the the so out Because be the and it it impact What’s does XX,XXX the rest when does

Jeff Hedges

Hey Craig, this is Jeff.

tenant will year. Our a – is our certain it’s over this XXX,XXX of the – expectation month. about expectation point, at third quarter the of per NOI little this in not And vacate a but XXX it’s

John Petersen

just back do to then Craig? want that, to me talk you Royal Tech, And about on come

Craig Mailman

decent and that any impact on going of timing to have FFO big Yes, – other magnitude? Yes. some just ones kind are other

John Petersen

Yes. that it that bigger time The FFO as to takes just spaces Royal potentially the that. to bigger talked through work have about and smaller subdivide they’re mentioned, Tech Northway down There’s they’re no longer, little chunks. will we other into are the big haven’t impact. and those an and a take work do flex And move-outs going bit spaces reason to just that I

through to longer – get that. So take that’s a going just it’s bit to

right story two with work a good Dallas But and that and, So, our but parks. through we’ll way XXXX. activity those throughout in now there’s that’s

Craig Mailman

of and there good spike point any added going be there’s we That’s I you in. a just get are kind it, chunk a of big timing perspective, a on this deferrals Okay. and to been guys be normalizing year under excluding And in think it, income? a of then spike the of and from quarter rents one where in quarter But said Jeff, have to – a as the not one kind to going comp going just deferred come is about as, then back that because same-store, helpful. the to think we debated you

Jeff Hedges

Yes. Thanks Craig.

As it relates was the to we of activity say let repayments, new very the all, first as in QX disclosed press and well, minimal. in just Q, the release deferral me

were and through our that that expectation remainder So, the is – that new deferral of activity minimal will remain year. this

through bit a scale the little this and any throughout natural a particular Although it upon that’s it in so subject of kind we broadly year, over now and year, with of what perspective, the December happens of aside pretty smooth That quarter. million from calendar the April be economy diminishing but repayment be left pandemic. the $X.X and this end course, to very that’s year, a XX, X the diminishes remainder between lumpy from to have billed won’t

pretty million be three $X.X So, spread pro-rata quarters. I that would that expect next will the much over

Beyond XXXX, of to we have about XXXX Craig, be and scheduled in be deferral repaid to repayment $XXX,XXX beyond.

Craig Mailman

lastly first quarters? happen going And given quarter, had guys you which recoveries the did removal to bigger this costs subsequent weather, you in Okay. a then just that made Is the quarter? get sense, this guys snow much

Jeff Hedges

at work And performed Well, true-up is we our a remainder itself out on over booked calculation was of so the kind effectively – build of the typically, there end the in budget year. that’ll basis, the no a of year. the recoveries QX true-up

the built the true-up billing are snow by end next and of be that typically all the costs what a the in if then year quarter CAM there’ll So, year. removal first tenants exceeds responsible our has of for been other

you’re think a in quarter. a here corresponding QX, is the effect expense not the increase in reimbursement but in operating of necessarily timing expense here is I revenue making point there higher was bit that a So, where that

Craig Mailman

you. Thank Great. right. All Okay.

Operator

our We JPMorgan. will Anthony ahead. question next Paolone go take with Please from

Your line is open.

Anthony Paolone

you. Okay. Thank

around of just the leasing you some the First to outs also and question move JP. tie for the is some talked comments together trying about. opportunities I'm of that

end you chance occupancy said you maybe that the Can set comment could just the back maybe is get further activity of sweet think by whether that I circumstances such year. like quarter, of spot last that a XX% still get your you there's out? this to you and there is or of on

John Petersen

Yes, Tony.

lease I think I there. we're think already think Seattle, and seeing we big seen I helps space four – touched getting need on is, first the space which a a which built what to will. And lease Norco, we've think there's is I track on, get in to yes, this We a momentum year bit of in And quite that even months really what we'll that the and we're number. is January. I

wasn't is If to week We're COVID crazier, was volume January, And tour week. you're up to really increasing little now a thinking by back economies opening. starting see various open, including California.

have And customers collecting we there. chance the to our it. that customers, on a think expanding, are we're Mac our do I all get so, really rent, And touched

every I that. woodshop, So, ability pretty lot a but I Yes, it's broad got think of have think we've based. to we do

see doing. But get yes, spaces there and I that to too. I a space, which we reposition fundamentals couple I we're our chances our like the support markets to Our have mentioned of in

So, yes, this have we I for there get chance think a to year sure.

Anthony Paolone

Okay. that the like mean, open slightly and geographies, does process to mean? said, really And take maybe so different But Got forth. more property on other, as it. then you types, the and investment side, across at we everything what Mac, should or that looking contemplating for you're I

Mac Chandler

that love the the in. that's We'd those markets. markets say is would broad we're We I based. you That's expand those on mean, We a do I really maybe Well, little everything enjoy table. markets. But well in this. I'll tell to

and consider While those. we those markets we look venture prudently. into selectively other and at Yes, new will

has surrounding about. with portfolio located, there core to properties that But them. have risk that also have as consider, appropriate matured Regarding our our they has which enjoy as exceptionally we'll properties them many to density unique us in, assets, sometimes we're basically is well, new mean, and returns, opportunities types. adjusted and re-purposing that so are present our within growth are all and decades we diminished redeveloping for mean, is But population and other what's supply and we'll property so – those rent consider markets creative the growth continue really And I now. business well opportunities I opportunities filled two occupancy. for really those our are what well. high

years work our on. will that's lay of to – plan part we'll to is be on that take going all But focus to what but it starting out, So, will we're a all many that all realize that.

Anthony Paolone

In kind of or much potentially like year, process the could year half perhaps are the there dispositions in of scratch? of into of maybe that here of second starting pipeline the from you potential sort you've the balance walked that over investment a offset, the is this

Mac Chandler

Well, say scratch. I from wouldn't

of positioned continue market knowledge years the some got work in on to on looking assets do and we we We is that constantly, nothing close have capture of that we – think mentioned, two here. uniquely these close That's fact got on we're pursue and with relationships, we've those market really in we'll experience on. lots sale, to great that the those. off market the asset are opportunities. to That we're if an of and a there And at identified ready immediate market of well. own. and that properties team we said, talented those lot and as properties that we would about But We've that to There is a have replace we're sell.

will itself that of over all time. play out So,

them realize As properties market pursue you to as into the puts allows that close that them. know, market, and and us

Anthony Paolone

have a past think. then anticipate I think the there year? was do you envisioned or some to place, Do of the and guess you just all consideration side, for to of in of the for do on rate what you it. this, over CIO, that I sort about G&A Jeff balance run team think I Jeff, the the in Got and one And then, last

Mac Chandler

that. Sure. I take can

that person in on pursue to focus a team, primarily and definitely person are who's We looking we'll continue can to who – to executive, board. bring senior who's that investments. on our bring And someone

definitely, really candidate take And experience anything. time growth. hire initiative background assess that's the the a to before scope, We of don't some So supports for that No, that I not need, announced we really is and and in part avenue supports person that this to person. have wings. that appropriate want of

something working be that share when with to to announce I’ll So, sure we’re ready and closely we’ll that. be

Jeff Hedges

expense to year have have compensation and the going what on out our Yes. And a the team, of know, these out uncertainty individuals stock-based G&A laid QX G&A that, any this the guidance this from it’s question, potentials, it’s then when part QX to will perspective, last hard onboarding, inherent result going may given what to here a implications on are timing primarily as increased max some we in just going and QX. as to quarters that’s just forward. you the which second in of in real I point join though give individual and of three or Mac Tony, your occurred

rate fairly think as G&A you expect any a run now reflection, year. things. the year. I that but we’ll team by potential reflection the our us So, And later our know, But should QX good otherwise, for join this onboarding be a with is G&A course, is lumpy members you of that that, going QX be fairly is impacted always to of good certain of right

Unidentified Analyst

Thanks. great. Okay,

Operator

next take Instructions] from Green Tibone our ahead. with Vince question Please go We’ll Street. [Operator

open. is line Your

Vince Tibone

moved Mac And on West congrats new the to and Coast. the role

like would – consider how transition may there? explorate you terms on just disposition evolve one larger side any me, flex or deals would see office, and First for to either and Mac you industrial the acquisition the overtime how mix to in do of be you portfolio

Mac Chandler

starting I to going that, chance growth of do with long in growth. the think on and I’m have in limited the dig to definitely the we over best is, team. compounded the mix with that and right the that portfolio markets mean, is term we’re a capitals Well, mix providing provides outsize right that the

general, best. don’t That I Certainly, that that. pattern yet share, you’ve don’t the at deeper in towards And look a we’ve we’re as of terms leaning change. the to anything but, shifted hard the to we’re makes sense I have that’s a expect office. all in That’s seen world. industrial, we’ll refinement, But, in towards. where mix direction a take some the to we’ve going lean sold where performing off we’re So, into that.

Vince Tibone

the me fair your recover? I needs of portfolio Do in the change by One persisting to sense. out a fundamentals dynamic traditional that get gears. in flex Well, fully switching what amount. and more for over Makes grow portfolio lagged mind industrial to near flex you see to term the

Mac Chandler

sure. Yes,

we distribution it in is that. depending at Let or The building I’ve stuff. to over Flex designed for is because is for, where assembly, a the lab, it is a of me what it flex the better many used on told really kind that office less is stab have was it take which of our parks. years this and is, you

just to happens is Dallas and office. especially a heavily so the have, parks flex we it’s of So, flex couple vacancy more concentrated then in

as these like to those So, going more which it earlier, build-out, location less in assembly, those I still and flex kinds things. more touched spaces or We like warehouse convert we’re the we assets. but get the we has typical is the I to still assets, distribution, office think and back more back, of on

and help that to going was originally it array will wider how attract we’re back So, a towards users. us migrate of designed,

our we’ve is of That’s what we’ve that’s back. spaces So before these done got kinds plan.

some that mentioned So, we Does as to markets. earlier of designed I all these It’s originally. still how just of flex in help? were spaces, like our they where, the repositioning demand

Vince Tibone

Yes, helpful. that’s very Thank you.

Mac Chandler

Sure.

Operator

further closing no be Chandler will remarks. at call Mac to for over turn a this appear questions time. to any does There I back the

Mac Chandler

enjoy your to please you or for rest the I forward time everyone virtually of look least you in soon, today. seeing your day. at person and Thank hopefully

Operator

conference a this Thank wonderful line Please conclude this disconnect at does time you. have your and And today’s call. day.

PS Business Parks (PSBXP) 28 Apr 212021 Q1 Earnings call transcript