Welcome to the 10:15 A.M. session of Citi's 2024 Global Property CEO Conference. I'm Michael Griffin with Citi Research, and we're pleased to have with us Kilroy Realty and CEO, Angela Aman. This session is for Citi clients only. If media or other individuals are on the line, please disconnect now. Disclosures are available on the webcast and at the AV desk. For those in the room or the webcast, you can go to liveqa.com and enter code GPC24 to submit any questions if you do not want to raise your hand. Angela, we'll turn it over to you to introduce Kilroy and the team, provide any opening remarks, and then we'll get into Q&A.
Great. Thank you so much, and thank you all for being here today. We're really excited to talk to you about everything that's been happening at Kilroy. As Michael said, my name is Angela Aman. I'm the CEO here. I've been at the company about six weeks, so really digging in and thrilled to be with the whole team here at Kilroy. We've got Eliott Trencher here to my right, our CFO, CIO. Justin Smart, our President and Head of Development. Rob Paratte, our Head of Leasing, and Bill Hutchison, Head of IR. So happy to talk to all of you today.
Great. Thank you so much. We're starting off each of these round tables with the same opening question: What are the top reasons investors should buy Kilroy stock today?
Great. Well, thank you. You know, it really comes back to sort of all the reasons that I was excited to join the platform. Number one, I would say this is a premier portfolio of office, life science, and mixed-use assets concentrated in some of the most dynamic markets in the country. Secondly, I'd point to the fact that this platform has arguably the best balance sheet in the office sector and is extraordinarily well-positioned to navigate the environment that we're in. And third, and this is a huge benefit to me as a new member of the team, we have an extraordinary team across every discipline of the business, from leasing, asset management, property management, development, the finance team, really across the board.
I think this team is extraordinarily well-equipped to respond to the challenges and opportunities embedded in the environment today.
Angela, you've been CEO for a little over a month now.
How has your previous experience as a CFO from another publicly traded REIT, albeit, in a different sector, kinda shaped your vision for how you view Kilroy going forward?
Yeah. Well, thanks for that. I've been a CFO in several different platforms on the retail side, historically. I think there are lots of lessons learned across, you know, lots of different unique and individual situations at each of those platforms over time. But I think, you know, as we're all, I think, very well aware, there are specific challenges that the office sector is facing today, some of which do have corollaries to different things that we've seen and experienced in the retail environment historically. One of the things I spent some time talking specifically about on our earnings call several weeks ago was the idea that the Class A market for office continues to really consolidate, and the definition of Class A continues to become tighter and tighter.
That really benefits a portfolio like Kilroy's, that is, has been so intentional, this platform has been so intentional about really concentrating the portfolio in that Class A sub-subset and not really deviating from that strategy in any significant way. This is one of the youngest portfolios in the space. We've got a very active and have had historically a very active development team, and so our portfolio is well-positioned for that continued shrinking of the definition of Class A. And you saw this in, you know, other asset classes, particularly larger format retail assets over time, where, you know, the idea of sort of creeping functional obsolescence, that, you know, B assets were more likely to slide down the quality spectrum than even with significant capital, be able to come back up.
I think, I think drawing on some of those lessons to think about portfolio construction and portfolio positioning in this environment can be very helpful. So I think that's a benefit. I'd also say, you know, retail, for most of the time, I was, I was an executive on different retail platforms. Retail was unloved, you know, the narrative around retail was extraordinarily negative for much of that time, though it's obviously much better, much better today. But I think there are important lessons about how to manage a team through some of that disruption and through some of that negative narrative in the space, and how to make sure the entire team's really oriented around performance and, and taking responsibility and accountability for the things we can't control.
One of the conversations we've had a lot, both internally and with investors at this conference, has been the idea that no landlord is really in a position to manufacture demand in any space, in any asset class. But what we can do is make sure that the team feels it can be successful by focusing on capturing an outsized share of activity that's happening in our markets. And that's a bit of a shift in terms of how you think and how you operate, and from a strategic perspective, importantly, from a tactical perspective. But I would point to those two sort of being the biggest lessons. Number one, how we think about portfolio construction and capital recycling and capital allocation, and two, how we manage the team internally.
Angela, how important is it to have a deep bench on the existing platform like the current management team is today, as you continue to learn about the portfolio and the enterprise as a whole?
Yeah, it's extraordinarily helpful. Both the depth of the team, and that's—I mean, it was one of my top three things that I think are attractive about Kilroy. It's been extraordinarily helpful as I get up to speed, the institutional knowledge embedded in this company, not just in each of those functions, but within each of our markets. It was really important to me to use that first few week period to get around to each of our different markets, and we're really in five markets across the country, really on the West Coast and on Austin, Texas.
But to get out to each of the markets, to spend time not just with the executive team and not just with the people that sit in our corporate headquarters in Los Angeles, but the talent that's embedded within each of our markets and understand their skill set and capabilities and make sure that we're all sharing the same sense of urgency, which I was very happy to see that we are around taking advantage again of the opportunities and recognizing the challenges that are ahead of us as we navigate this window.
So, there's nothing, I think, that can help somebody in my seat get up to speed more quickly than a team that not only is as broad and deep and knowledgeable as the one resident at Kilroy, but that is willing to be really engaged and transparent and candid about everything the company is facing right out of the gate. And so I've been incredibly thankful for all of that over the last six weeks.
Maybe just starting off with sort of broad macro trends in the office sector. Just given the headwinds facing the office macro environment broadly, how is Kilroy differentiated from the competition in terms of portfolio composition, tenant makeup, or any other growth opportunities?
Yeah.
Sure.
I mean, I'll start and, you know, Rob will jump in here with some more specifics on the individual markets. But I'd go back to some of my earlier comments about how intentional this company has been about holding, you know, tight to the definition of Class A, and making sure that we are operating in that premium segment of the market across each of the markets that we operate in. The fact that this company has had such a successful track record on the development side and has been such an active capital recycler means that the portfolio is really well suited to meet the needs of tenants today that continue to grow and thrive in the current environment. The company has also been very intentional historically about the amenitization of assets.
You know, when we look across the portfolio, the investments that need to be made and that many owners are rushing to make to assets to make them competitive or attempt to make them competitive in the current environment are things that Kilroy has done for a very, a very long time. I think that's extraordinarily important. I also think one of the things that John Kilroy in particular did really, really well, it was set a culture at this company of being really tenant first. When I went out and toured the different markets and met with tenants in each of our specific markets, what I heard over and over again is that Kilroy is thoughtful, creative, flexible, and easy to work with.
I've heard that from some of the most challenging, most discerning tenants in the space, and some of the largest users of space in our core markets. So that approach and offering that flexibility and creativity to the leasing process puts us in a competitive advantage. I believe now, and it will only become more important over time, but you're certainly seeing it now, this differentiation and a drive towards not just premium assets, but landlords of choice in each of our markets. Who do tenants want to do business with?
Who are they confident will be easy to work with, not just in the leasing process and not just as they go to lease and try to get leases executed in a timely way, but through the build-out of their space, through property management over time when they're interacting with our teams on a day-to-day basis over the length of the lease. And I think that that approach is a differentiating factor and will continue to be as tenants evaluate space, not just in our portfolio, but in other portfolios, where you have landlords under more stress and tenants really have to think through: Do I know how our landlord is capitalized, and can I get comfort that this landlord is gonna be with us for the duration of the lease term, and I know what to expect? Anything you wanna add?
I think Angela hit on the main points. I guess what I would say, Michael, by the way, thank you for hosting us, is that times like this are the times where you need to be directly in touch with your customers as often as they will see you. Because the thing that's very interesting is, you know, we as the supplier of space, think that the user knows everything and they know what they need. They don't. And so when you build a relationship of trust between yourself and the customer, you're able to help explore alternatives. And so some of the points Angela was making about flexibility, for example, instead of being, you know, we've always loved having 7-year, 10-year, 15-year leases. Today, that's not really something that most companies are willing to commit to, just given the uncertainty they face.
So we've adopted a different way of looking at it and working with them to maybe work on a shorter term, but some flexibility to grow as their needs become more clear. So I just can't emphasize it enough. And I think, you know, the other thing I notice in most markets is the press doesn't do anyone any favors. And, you know, San Francisco as an example, just is always getting beat up. But, you know, it's not accurate. What you're reading in the headlines. Don't believe what you read in the headlines. We're actually seeing some positive trends in San Francisco and other coastal markets. And so as those trends start to evolve and start to take hold, our job is to be there again, once again with our customers, providing the best, the best optionality for them.
As Angela said earlier, we've spent a lot of time over the years building the right kind of amenities and services in our buildings, so we think that gives us a competitive edge. The last point I'd make is, not every landlord is coming from a position of strength that Kilroy is coming from with respect to the balance sheet. We are, you know, have had conversations with other prospects that are nervous or concerned about different landlords that have different debt structure than what we have, and that is a very distinct competitive advantage.
The only last point I'd make as it relates to that flexibility that we might offer, we have to do it in a very economically sensitive way, right? So there are places where we can be a lot more flexible with the tenant and places we can't, right? And one of the things Rob's alluding to in terms of flexibility on initial lease term, that makes a lot of sense when we're talking about lower capital deals or no capital deals, where we have pre-built space or we have space we've taken back from existing tenants that's in good shape for the kind of demand that we're seeing. Then we can be more flexible and should be, I think, in the current environment in terms of lease term and things like that.
And also, as Rob is indicating, you know, try to structure leases and the stacking plan for different buildings to give some of those tenants the best opportunity to grow and expand into space later on. But we are gonna be very thoughtful and mindful about every dollar of capital signed. There's absolutely no appetite here to do negative net effective Rent deals, which I do think you're gonna see in the market. And I'd also bring that back to the point I made earlier, around market share. One of the things we're really trying to do with the leasing team is to track why we're losing deals, and there will be a subset of deals we're happy to lose because they're not economic. And that's okay, right? We need to orient the leasing team around that.
This is about getting market share, but it's getting market share in an economically disciplined way.
Great, thanks for that. Maybe just starting off on the leasing front. Have you noticed if real estate decision-makers are starting to be more willing to commit to leases, or are they still dragging their feet? And have lease terms or concessions changed at all? And, you know, curious what kind of momentum you're seeing on the leasing front?
Yeah, you know, again, I'll make a few comments and Rob will wanna chime in here, I'm sure. But it has obviously. We've been in an extended period of time where it's taken people longer to commit, or the process has been just elongated from a leasing process, particularly as tenants continue to understand and evolve what their actual needs for the space are. You know, even just to take a big step back outside of the Kilroy portfolio, I think one of the key indicators you can see of this tension and sort of the consistent evolution of individual tenants' needs for space have been in markets like San Francisco, where in the early post-pandemic days, lots of space put on the sublease market because of hybrid work or remote work.
You have seen some of that space come back off the market as tenants have continued to reevaluate their needs, have been more successful at bringing people back in, have understood what works in a hybrid environment and what doesn't, and have modified plans accordingly. That evolution, you know, as people understand their needs, has elongated the process.
I also think that because of this, you know, the desire to bring people back and the enhancement in productivity you get when people are in the office, there have been a lot more decision-makers at lots of tenants that are involved in the leasing process and trying to understand and wanna be sure they understand, you know, sort of space planning needs and location of assets and whether or not they feel like the decisions that are being made are gonna result in the best outcome for employees and ultimately productivity and driving results. So those two things, evolution of space needs, more people at each individual tenant being involved in the process, which ultimately I think is a pretty good thing, has elongated the process.
But I think what we've seen, you know, over the last few months or what our leasing team has seen, is a greater willingness to commit and to make decisions, to be decisive, to move forward as sort of, you know, some of that evolution has coalesced into more consistent thinking around what the space needs are and how that's, and how that's evolving.
Yeah, I really don't have much to add to that. I mean, tenants are operating with conviction when they haven't for probably the last two years. And that's pretty much market by market on the West Coast, and I think it's also, you know, in different markets in the US, you're seeing that. You know, I think where everybody's come from is a position in the past of, "Do we even need office?" To today, where everyone knows they need office. They're just trying to figure out what's the right format for that office, what's the right balance for their collaboration spaces, what are the right amenities to keep our employees happy?
Because as these mandates to return to office, you know, have more teeth in them, everybody's moved away from cube farms, for example, because they're trying to make the office more comfortable and more natural for people to operate in. And so that's where, you know, when you have the right amenities and you can have that conversation, you can really work with your customer to basically custom build a lease around their needs and growth for the future.
Given that tech has such a strong presence in most of your core markets on the West Coast, how are you starting to see signs of a rebound from this industry from a leasing perspective? And if tech leasing remains stagnant, do you think demand from other industries can help backfill the space and ease some of the supply pressures that your markets are facing?
We've seen improvements on the tech side. You know, certainly if you look at a market like San Francisco, about 35% of the demand over the last few months or throughout 2023 has been from tech in general, which is a little bit below sort of the proportion you would have expected historically, but improved. And a significant portion, the majority actually of that 35%, has been coming from AI-type users. So that's sort of the growing segment within tech, which means some of those traditional or more traditional tech users still have a ways to go. You know, that's where you'll see, I think, both increases on the AI side and increases in the more traditional tech side continuing to improve and evolve over time.
We have seen higher category tenants step into that void and really look again with a real focus on making sure in an environment like this, where there has been a pullback in tech, that they can continue to up-tier their space, right, and move into premium space and premium buildings. And so I think that has stepped into the void in many cases. But I think there's improvement on the tech side and continued opportunity for that to grow further.
All right. And then, Angela, you touched briefly on AI demand there, particularly for markets like San Francisco. How real is this demand, and how big of a leasing pie do you think this can become over the next few years?
Yeah, I mean, it's hard to say, but it's definitely been consistent and growing, both in terms of the percentage of leasing represented by AI users, but what their space requirements are. So Rob's mentioned in many meetings over the last couple of days that, you know, if you go back a year or so, or a little bit more than that, probably the average AI lease signed was around the 5,000-sq ft range. Over the last year, it was more in the 10,000- to 15,000-sq ft range, and that excludes some of the very large format AI deals that have been done, specifically in San Francisco. So I think you're seeing more deals, and you're seeing, you know, an increase in the size of the average deal, which is important.
There are going to be a lot of players and a lot of entrants into that space, and one thing we've been focused on, again, from a market share perspective, is understanding what the specific needs of those tenants are. As the growth pipeline for those tenants is so significant, you know, that's an area where, number one, they want. The timeline is really important to them. These are not users that want to take 6, 12 months to build out custom space for themselves. They want to find space that's pre-built and ready today.
So harnessing the inventory we have at the company already, of suites that have been already built out on a spec basis, or again, you know, space within the portfolio we might be taking back from other users that's in very good condition and with very light capital, we can quickly turn around and meet the needs of those tenants for pre-built space, is a way we can continue to lean into that demand a little bit more. And again, that's that segment in particular is where you're seeing that demand for flexibility and a desire for potential growth down the road.
I think it makes a tremendous amount of sense, again, in a low or no capital context, for us to capture some of that demand, even on a shorter-term lease basis, and get another bite at the apple from a rent perspective in three, four, five years, when we believe we'll be in a much, a much different sort of demand and rent environment. But we are really paying attention to what those tenants need from their space and how we can meet that demand within the existing portfolio and do so very efficiently.
One thing I'd add, just a point of color, I guess, is if you look at the fourth quarter in San Francisco in terms of leasing volume, it was approximately 1.3 million sq ft, and at that level, that's about where we were kind of going quarter to quarter in 2018, 2019, when things were much more clear about office space. Three very large transactions happened that totaled 800,000 sq ft. All three of them are AI firms. So there was OpenAI, Anthropic, and Hive, and there's more of that in the pipeline. I can't say today, are we going to hit again in this quarter, you know, 1.3 million or something like that, but there's more of it in the pipeline.
And you know, when you look at San Francisco and the talent base there, the bulk of employees that are adaptable or can work in the AI space, you know, developing models, et cetera, are in San Francisco, and the second city on the West Coast that has the most AI talent that these companies are looking for is Seattle. So I think we're in the very early stages. I mean, ChatGPT just became part of our vocabulary a year ago, and look at where we are today. And I just think there's going to be extraordinary growth, and at some time, at some point, at some time that no one can predict, it will plateau, but we're on a, you know, a new frontier, I think, in terms of technology and how people will use it.
We've had a couple questions come in from the live QA feed. I'll try to wrap these two into one. What is the tenant retention expectation for 2024, and what is baked in, both from a retention and a new leasing assumption, to the low end and the high end of your occupancy guidance?
Yeah, so I, I can take that. You know, when we've talked about our guidance at the midpoint, it's about 300,000 sq ft of negative absorption versus the fourth quarter of last year. And how you get there is, can be a function of all of these different inputs. So it will be a combination of the retention of the 1.1 million sq ft that's expiring this year. We've talked about 300,000 sq ft of large move-outs from 2 tenants, which we referenced on our call. To simplify things, that's kind of how you get to the midpoint. Beyond that, we are going to have smaller tenants that move out. We are going to have the leased space that is not yet occupied roll in.
There's about 125 basis points that will happen over the next, call it, 4-6 quarters. And then there'll be some new leasing. Now, for new leasing, most of what we do in 2024 will not start recognizing revenue and hit occupancy until 2025. So it's an important metric to track because it will drive future occupancy growth, but it'll have a much heavier weight in the 2025 number versus the 2024 number. The last point to make is, as we think about our rollover this year, 1.1 million sq ft, 2 tenants making up about 30% of that, leads to very binary results. Given our expectation that we talked about of both of those tenants leaving, retention's going to be on the lower end. Historically, we've been at 50%.
We were below that in 2023, and we expect to be below that again in 2024. As we look to 2025, we have only 700,000 sq ft expiring, with no tenants above 100,000 sq ft, and it's going to lead to much less of a binary outcome. And so we think the backdrop gets much more favorable.
Maybe just for upcoming space that might be expiring or that you'll need to backfill, how quickly can we expect this to happen, and what are you going to have to give up in terms of TI packages or free rent in order to get these deals over the finish line?
... Again, you know, I'm going to answer it this way: Every transaction is unique and different in terms of what the tenant need is or what our needs are. And so, the concessions that you've seen with, particularly owners that have, space that's either obsolete or moving in that direction, the main concession you see are tenant improvements, and that number has crept up. For us, we've been, you know, controlling those costs. And to Angela's point, having ready-to-move-in space, gives us ultimate control over that build-out. Excuse me. A lot of talking. Take your time. Oh, okay. So I mean, I kind of said it. I think it's just- Yeah. Free rent is not something we really look at. Tenants mostly aren't looking at that either.
It does come up, but you're not seeing the 3 years of free rent and a 10-year term. Yeah. We're just not going to do that. And IRR-driven companies may pursue that. Yeah. There will be deals like that, as I mentioned earlier, that occur in the market that look uneconomic. But for the tenants that are really, you know, and where the demand is focused in terms of true premium assets, the decision's much more about the types of assets they want to be in, the amenitization of those buildings. Right, the message to the employees about the experience that they're going to have going forward.
And you're not seeing in that again sort of tightened definition of Class A assets deals that really represent significant departures from what you've seen historically on the concession side on the free rent side and even really on the TI side. Maybe just turning to external growth opportunities, you know, how are you thinking about capital recycling for this year, and at what level of pricing are you seeing in the transaction market? And kind of following up on that, are you starting to see any distressed opportunities in the market? Yeah, I'll frame it up a little bit, and Eliott will definitely want to jump in here as well. You know, I would say if you look at our guidance, we were very clear that we didn't assume anything on the acquisition or disposition side for this year.
The transaction market remains very, very shallow, and so there's just not a lot of activity or data points that can give any of us a true sense about where market pricing is right now. There are, you know, a couple buildings that I think fit that definition of true, you know, Class A, even on that tightened definition, that are in the market or could come to the market that we've looked at and evaluated. But a real bid-ask spread between, you know, prices and levels that we think make sense and are reflective of the macro environment we're in, interest rate environment we're in, the cost of capital environment we're in, and where those things, where the sellers ultimately think those assets should price.
At this point, you know, for those kind of premium assets, I think it's largely a theoretical discussion. There's just not enough activity to point to or give a strong sense that we'll be able to find opportunities that make sense or at the pricing level that makes sense for us. On the distress side, you know, I think we need to be really careful as we think about what opportunities in that segment of the market really look like. One of the things I mentioned, and was very intentional to say on the earnings call, is that every asset that trades within a Kilroy market that sort of has, you know, a distressed or opportunistic label, you know, slapped on it, will not be compelling or interesting to us.
When you go back to my earlier comments about that tightened definition of Class A and continued bifurcation between, you know, anything lower on the quality spectrum and the increased likelihood that if you're a B or C asset, you're more likely to move down the quality spectrum than up, despite the amount of capital you might put into those assets, will make us extraordinarily skeptical about our ability to turn around broken assets. Where we would like to see distress and where we think it will be interesting for a platform like Kilroy are assets that are well-positioned today, but likely have broken capital structures.
And again, you know, we're going to watch that carefully in terms of what that looks like and whether or not we see distressed or opportunistic pricing in that segment with, again, properties that fit in sort of our quality and our quality definition, but extraordinarily theoretical, just nothing in that sort of vein coming to market right now. You know, from a disposition side, I think, you know, as I've joined the company and spent a lot of time with Eliott and his team, been really mindful, again, as I've gotten out and toured nearly all of the portfolio at this point, in terms of thinking about how we position around some of the dynamics, market dynamics, you know, we've already highlighted and talked through.
I think there will be opportunities for us in a couple. I'll say really three different buckets in terms of disposition potential over time. And to be clear, no, no dispositions assumed in guidance. And, you know, I would even say it's unlikely that we execute on anything this year, again, just because of where the transaction market is. But there will be opportunities in the portfolio for us to harvest some very attractively priced capital from some very premium assets, long-term lease to high-credit tenants, where we just can't, as a platform, add much incremental value.
If pricing is pretty sticky and we think there are compelling uses of the capital we could harvest from some of those assets, that could be a place, again, against our broader cost of capital framework, that could be a really attractively priced place to harvest some capital. The second bucket would be assets, which I think are very few in the Kilroy portfolio. I want to be clear about that. But there are some in every portfolio that are on sort of the wrong side of that shrunken definition of Class A. So we're going to be very thoughtful and intentional about continuing to recycle the portfolio and being mindful of the new environment we're in, in terms of the office market outlook in each of our spaces.
And so there are likely some sales in that second bucket. Again, the active capital recycling this platform has done puts us in a really good position where there are few of those assets, but there are some in every platform. And then the third bucket, I would say, are probably the non-income producing assets. We currently have a $1.3 billion future development pipeline, and we're evaluating all of those opportunities to understand how the market's changed in each of our, in each of those situations and whether or not the highest and best use for each of those parcels is what was originally contemplated, and what Kilroy has a strong core competency in, meaning office and life science.
There could also be opportunities in that segment for us to raise very attractively priced capital and leverage, you know, just a different and higher best use for some of those assets. Put that capital to work, hopefully more opportunistically, as the transaction market does continue to loosen up a little.
Two other thoughts to add, one on the disposition side, one on the acquisition side. On the disposition side, in addition to Angela's comments about the state of the transaction market, as we also evaluated our sources and uses for the year, we have more than enough liquidity to handle all of our near-term needs, and so to add any dispositions to that would be a luxury. It's a nice to have, not a need to have, and that was part of our thought process. On the acquisition side, while we do want to grow externally and we are going to look to be thorough at looking at those opportunities, we're also going to be mindful about how those opportunities outside the portfolio compare to those inside the portfolio.
Where is our capital and our time best used, and where can we generate better shareholder value, you know, value creation and risk-adjusted returns? So if we don't do anything, that's okay, because there's plenty of opportunity to create value.
Maybe we can just touch on the development pipeline to end the session. You know, for properties that are still in the development pipeline or have recently delivered, you know, how are you seeing leasing demand trend for these properties? I know Indeed Tower continues to lease. Any insight into here or, you know, other properties in the pipeline, and how should we think about forward opportunities, just given the current capital markets environment?
Yeah. Indeed Tower is the asset we acquired in Austin. I would say, you know, leasing demand for that asset in particular, which is really well-situated in the market, and a very premium product in a market where there's just a wide range of options, it's very well-positioned, and the demand we've seen there has been quite good. So we've got a number of tenants, you know, we're talking to in sort of the proposal through LOI stage, so additional progress there. In the in-process pipeline, I'd say, you know, the biggest project we have there is Kilroy Oyster Point Two, where we have just under 900,000 sq ft under construction.
The company, you know, made, I think, some very smart decisions during the course of 2023 to increase the amenities we're offering at Kilroy Oyster Point Two, but also to move one of the buildings to multi-tenant, and that's again in response to where the demand is in the market today. The deals that have gotten done in South San Francisco have really been tenants looking for sort of ready space and to move in with a pretty compressed timeframe in that 30, 60-day window. And so as we get closer to delivering those spec suites in the multi-tenant building in the fourth quarter of this year, we'll be much better positioned to compete for some of those deals as they come into the market. So we feel very good about that project and our relative positioning in the market.
We just need to get closer to delivering that space.
Great. If there are no other investor questions, I have my three rapid fires to end the session. What is the best real estate decision today? Buy, sell, develop, redevelop, or pause?
I'll say pause for right now. Hopefully, that answer shifts as we move into the second half of the year.
What is your expectation for same-store growth for the office sector overall for 2025?
I'll defer to Eliott on that one. What do you think?
Rent growth or same store?
Same store.
Say flat.
Feels-
And lastly, do you expect more, fewer, or the same number of publicly traded office REITs a year from now?
Fewer.
Great. Thank you so much.
Thanks.
Thanks, Michael.