BXP, Inc.

Good day and thank you for standing by. Welcome to Q1 2025 BXB Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To rejure your question, please press Star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Helen Hahn, Vice President, Investor Relations. Please go ahead.

Good morning, and welcome to BXP's first quarter 2025 earnings conference call. The press release and supplemental package were distributed last night and furnished on Form 8K. In the supplemental package, BXP has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G. If you did not receive a copy, these documents are available in the Investors section of our website at investors.bxp.com. A webcast of this call will be available for 12 months. At this time, we would like to inform you that certain statements made during this conference call, which are not historical, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Although BXP believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its Expectations will be attained. Factors and risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements were detailed in yesterday's press release and from time to time in BXP's filings with the SEC. BXP does not undertake a duty to update any forward-looking statements. I'd like to welcome Omun Thomas, Chairman and Chief Executive Officer, Doug Linde, President, and Mike LaBelle, Chief Financial Officer. During the Q&A portion of our call, our regional management teams will be available to address any questions. We ask that those of you participating in the Q&A portion of the call to please limit yourself to one and only one question. If you have an additional query or follow up, please feel free to rejoin the queue. I'd now like to turn the call over to Owen Thomas for his formal remarks.

Thank you, Helen, and good morning to all of you. Our results in the first quarter demonstrated BXP's continued strong performance given our execution and a sustained property and capital market recovery. Our FFO per share for the quarter was in line with our forecast. We completed over 1.1 million square feet of leasing in the quarter, which was 25% above the leasing volume we achieved in the first quarter of 24. Further, over the last four quarters, our leasing volume of 5.9 million square feet was 33% higher than the prior four quarters. Importantly, we made progress leasing up our development pipeline assets and completed several significant leases with important clients such as Goodwin Proctor, Cooley, and a defense technology company. We completed over $4.2 billion of financing activity demonstrating improving market conditions and BXP's strong access to capital. We released our 2024 sustainability and impact report highlighting BXP's leadership and accomplishments in sustainable business practices important to the capital providers, clients, and community we serve. Now, starting with the operating environment, the obvious question is what impacts will tariffs and other federal policies have on BXP's business? So far, the tariff program has increased volatility in the capital markets, created concerns over the potential for higher prices, inflation, and interest rates, and reduced consumer confidence, leading to more economists forecasting a recession or slower U.S. GDP growth. For BXP, the primary drivers of leasing activity are corporate confidence and in-person work behavior. Our primary concern has been that our clients may delay or terminate space requirements due to the more uncertain operating environment. This has not happened. Specifically, for the million square feet of deals where we have a signed LOI and are negotiating a lease, to date, only a single 8,000 square foot prospective user declined to move forward due to market conditions. Doug will describe our current pipeline of leasing activity, which remains robust. Federal funding cuts to the NIH and other research organizations, as well as uncertainties over FDA approvals, are causing significant concerns for the life science community and creating additional headwinds for life science leasing. If the U.S. were to enter a recession, leasing demand would undoubtedly slow, but interest rates would likely be lower and remote work would likely decrease due to a weaker labor market. Tariffs will drive up material prices, increasing construction costs. Given non-U.S. material procurement is a modest component of our construction budget and contractors are eager for new business, we don't see tariffs having a major impact on our construction estimates, and Doug will provide a real-time example of this. As mentioned last quarter, we think DOGE has a positive impact on BXP's Washington, D.C. business as federal workers and their contractors, who are our clients, return to the office. We are already seeing increased foot traffic, retail activity, and parking revenue at Reston Town Center as a result of DOGE. Moving to office market conditions, I will continue to emphasize that the premier workplace segment, where BXP primarily competes, continues to materially outperform the broader office market. Premier workplaces, as defined in CBRE's research, continue to be the highest quality 7 percent of buildings, representing 13 percent of total space in our five CBD markets. Direct vacancy for premier workplaces is just over 13 percent versus 19 percent for the broader market. Likewise, net absorption for premier workplaces has been a positive 18 million square feet over the last three years versus a negative 30 million square feet for the broader market. Asking rents for premier workplaces continue to be more than 50 percent higher than the broader market. Regarding the real estate private equity capital markets, office sales volume in the first quarter was $7.6 billion, down approximately 14% from the first quarter of last year. Though financing remains available and transactions continue to close, the current market volatility has widened credit spreads in both the CMVS and REIT investment grade unsecured markets, which should have some impact on pricing. Though several premier workplace transactions are underway in the U.S., there were few new commitments of note. Moving to BXP's capital allocation activities and new investments, we commenced the development of 290 Coals, a 670-unit, 100% market rate, multifamily development project in the Soho West submarket of downtown Jersey City. Jersey City's multifamily market is highly attractive due to its easy access to Manhattan and a less expensive housing option, resulting in robust population growth, strong demand for apartments, and resultant rent growth despite new development activity. Our partners in the project are Albanese Organization as co-developer and Cross Harbor Capital Partners as financial partner. A key attraction of the investment for us is the capital structure. where BXP will be providing $20 million in common equity for a 19.5% interest in the project and $65 million of preferred equity with a 13% preferred return. At project stabilization, the $225 million senior loan and BXP's accrued preferred equity investment will represent under 65% of the total $456 million cost of the project. And the unleveraged cash development yield on costs is projected to be more than 6%. Including development fees and carried interest earned, we project the common and preferred equity investments together will deliver total returns in the mid-teens. Construction has commenced, delivery of the initial units is scheduled for the first half of 2028, and asset stabilization is forecast for the second half of 2029. Continuing with new development, I have described our 930,000 square foot 343 Madison project in Midtown with direct lobby access to the Grand Central Madison concourse and located two blocks south of J.P. Morgan's new headquarters building. The Midtown office market is strong and experiencing rent growth with a vacancy rate under 7% for the higher quality buildings. 2022, 2023, and 2024 were all record years in New York City for leases signed in excess of both $100 a square foot and $200 a square foot. 343 Madison is the only immediately actionable office development site in close proximity to Grand Central Terminal. We have made lease proposals to seven anchor clients, primarily financial service firms, with an average requirement of 350,000 square feet. There are another 10 clients with requirements aggregating over 3.2 million square feet who have received presentations and are considering the building. We expect to launch this $2 billion project in 2025 where, as a reminder, BXP owns a 55% interest. We are in various stages of negotiation for the sale of eight land sites that will generate, if successful, net proceeds of approximately $250 million over the next 24 months. Several of these sales require re-entitlement, creating a more extended closing period. We continue to evaluate additional asset monetization opportunities. So in conclusion, BXP is a domestic business with long-term leases and a stable dividend that will not be as heavily impacted as other industries by volatility and global trade. Further, New construction for office has dropped precipitously and users are gravitating to higher quality assets, the combination creating rent growth in several of our submarkets. BXP is maintaining momentum in both leasing and new investment activity despite this more challenging market environment. With our current leasing momentum and only 3.9% portfolio lease rollover in 2026 and 5.1% in 2027, We expect to gain occupancy, revenue, and FFO in the years ahead. Development deliveries and potentially acquisitions will add additional growth. I'll turn over the report to Doug. Good morning, everybody.