COPT Defense Properties

Welcome to the Corporate Office Properties Trust Second Quarter 2020 Earnings Conference Call. As a reminder, today's call is being recorded. At this time, I'll turn the call over to Stephanie Kirsten Kelly, COPT's Vice President of Investor Relations. Ms. Kirsten Kelly, please go ahead.

Thank you, Kevin. Good afternoon, and welcome to COP's Conference Call to discuss second quarter results. With me today are Steve Bedorek, President and CEO, and Anthony Mifsud, EVP and CFO. Reconciliations of GAAP and non-GAAP financial measures management discusses on this call are available on our website and in the results press release supplemental information package and results presentation posted on our website. As a reminder, forward-looking statements made during today's call are subject to risks and uncertainties, which are discussed at length in our SEC filings. Actual events and results can differ materially from these forward-looking statements, and the company does not undertake a duty to update them. Steve?

Thank you. We had another great quarter, outperforming guidance for FFO per share and same property cash NOI growth. And we're on track to achieve the highest tenant retention rate in 20 years. We affirm our existing 2020 guidance with a conservative posture and continue to expect healthy growth in 2021. Our high concentration of US government, high priority defense tenants, and essential non-defense businesses offer uniquely strong credit and cash flow advantages that have insulated our operations during the shutdowns. Regarding our operations, each of our 174 properties have operated continually during the shutdowns, and our company continues to execute our normal workflows seamlessly. 85% of our portfolio houses tenants whose mission work cannot be performed remotely. This includes 65% of our space that is either in a secure campus or has skipped environments, and another 20% that has other high security requirements. Most of our tenants have their employees working in rotating weekly shifts with longer work days to create distancing, so our building utilization is much higher than most other office environments. Across our 19.8 million square foot portfolio, our tenants' employees have experienced only 41 confirmed cases of COVID-19, which speaks to the quality of the management practices of our operating teams and our tenants' leadership. Rent collections remain relatively unaffected by pandemic shutdowns. During the quarter, we collected 99.9% of expected rents and 99.2% of rents before rent relief. July rent collections were extremely high as well, totaling 99.3% of expected buildings and 98.5% of rents before rent relief. Thus far, total rent accommodations granted to address shutdown impacts remain below 1% of annualized rental revenues. Roughly half the relief granted went to retail and amenity tenants, in exchange for lease extensions. These tenants' businesses are an important part of our tenant value proposition, and we moved aggressively to help them stay in business. Our total rent accommodations increased slightly in the past month, primarily driven by relief granted to two fitness operators in Maryland whose businesses are enduring longer shutdowns than our food retailers. During the quarter, We completed nearly 1 million square feet of total leasing and 1.6 million square feet during the first six months. Our development leasing remains strong and virtually unaffected by pandemic-related restrictions. During the quarter, we executed 276,000 square feet of development leasing, which included a large lease with the U.S. government at 100 Secured Gateway, a build-to-suit with a defense contractor for 7100 Redstone Gateway, and three 14,000 square foot expansions with our cloud computing tenant and existing data center shelves in Northern Virginia. During the second quarter, our development leasing pipeline increased to 2.1 million square feet, notwithstanding our leasing achievement during the quarter. Our development leasing pipeline remains diversified with healthy concentrations of government, defense contractor, and data shell opportunities, and we remain on track to meet or exceed our 1 million square feet of development leasing this year. Renewal leasing volumes and tenant retention rates are very strong as well. We completed 613,000 square feet of renewals in the quarter, which equated to a strong renewal rate of 76%. During the first six months, We completed 1.1 million square feet of renewals representing an extremely strong 81 percent renewal rate. We're increasing our tenant retention rate guidance for the full year from the previously elevated range of 75 to 80 percent to a new range of 80 to 85 percent. This year's renewal rate should exceed our 20-year record of 80 percent retention set in 2017. Lease economics on renewals were in line with guidance in the quarter, and for the six months, cash rents rolled down 3.2% and 2% respectively, and annual escalations on renewing leases averaged 2.4%. Vacancy leasing is the one area of activity that has been affected by the shutdowns. During the second quarter, the brokerage shutdowns caused our leasing activity ratio to decline by nearly a third, from 75% at the end of February to about 50% in early July. We achieved 70,000 square feet of vacancy leasing in the second quarter, which was 50% of the volume achieved in the first quarter. And in recent weeks, our leasing activity ratio has improved as restrictions ease. Some 2020 activity could, however, push into 2021. Regarding active developments, we remain on track with our original completion schedules. We have 1.9 million square feet under development, representing 14 separate projects that are 84% pre-lease. During the quarter, we placed into service 412,000 square feet that were 97.5% lease, and for the six months, we placed 642,000 square feet of development in the service that was 99% leased. Before year end, we expect to place an additional 820,000 square feet in the service that are 100% leased. This will bring our total for the year to approximately 1.5 million fully leased square feet and represents a total of investment of $344 million. My final comment is an update on our wholesale data center, DC6. During the quarter, we completed a new 3.1 megawatt lease with a government contractor that will bring a long-term supercomputing contract into our facility. That transaction increased DC6 to 90.6% lease. Additionally, the renewal process with the 11.25 megawatt user IS PROGRESSING FAVORABLY, AND WE EXPECT TO COMPLETE THE RENEWAL DURING THIS QUARTER. SO IN SUMMARY, OUR CURRENT OPERATIONS CONTINUE TO BE MINIMALLY IMPACTED BY PANDEMIC-RELATED SHUTDOWNS AND RESTRICTIONS. OUR BUILDINGS ARE FULLY OPERATIONAL, AND OUR RENT COLLECTIONS REMAIN EXCEPTIONALLY HIGH. DEVELOPMENT DEMAND CONTINUES TO BE ROBUST, AND AT 81% FOR THE FIRST SIX MONTHS, Our tenant retention is on track to set a new 20-year record. While the pace and volume of vacancy leasing was affected by shutdowns during the second quarter, that will not affect this year's results, and we continue to expect healthy FFO growth in 2021. With that, I'll hand the call over to Anthony.

Thanks, Steve. Second quarter FFO per share of 51 cents exceeded the high end of guidance by one cent. The outperformance resulted primarily from stronger-than-anticipated same-property cash NOI growth of 1.7 percent, driven by cost savings and deferred R&M expenses. These savings more than offset the $1.6 million of reserves we took on tenants affected by the shutdowns and a half-million-dollar shortfall in transient parking revenues. This was the second consecutive quarter in which stronger-than-expected same-property cash NOI growth drove out performance in FFO per share. While we intend to spend a penny of deferred R&M in the third quarter, the ongoing savings from building efficiencies will carry forward. Accordingly, we are increasing our same-property cash NOI guidance for the full year from the prior range of negative 1% to flat to a new range of 1.5% to 1.5%. AT JUNE 30TH, OUR CORE PORTFOLIO WAS 94.7% LEASED AND OUR SAME PROPERTY PORTFOLIO WAS 93.5% LEASED, WHICH RESPECTIVELY ARE 50 AND 60 BASIS POINTS LOWER THAN THE END OF MARCH DUE TO THE ANTICIPATED 100,000 SQUARE FOOT NONRENEWAL IN APRIL BY A TENANT IN COLUMBIA GATEWAY. EVEN WITH THIS NONRENEWAL, THE FENCE IT PORTFOLIO IS 95% LEASED. FOR THIS YEAR, WE REMAIN ON TRACK TO ACHIEVE THE MIDPOINT OF OUR EXISTING GUIDANCE FOR FFO PER SHARE OF $2.07. SLIDE 27 OF OUR PRESENTATION DETAILS THE MAJOR UNDERLYING ASSUMPTIONS WHICH INCLUDE SAME PROPERTY OCCUPANCY OF 92.5 TO 93.5% AT YEAR END AND FULL YEAR TENANT RETENTION OF 80 TO 85%. DEVELOPMENTS PLACED IN SERVICE REMAIN ON TRACK TO ADD $20 TO $22 MILLION OF CASH NOI TO THIS YEAR'S RESULTS. including the $7.5 million we delivered during the first half of the year. We expect to invest $300 to $350 million in developments for the year, which includes the $200 million invested during the first six months. Combining cash on hand with availability under our line of credit and construction loans, we have $710 million of liquidity to fund the $233 million of existing development commitments and future opportunities. and we continue to evaluate multiple options to source the $70 to $90 million of equity capital included in our 2020 guidance. Last, we are establishing third and fourth quarter guidance for FFO per share as adjusted for comparability with midpoints of 52 and 53 cents respectively. With flat to modestly negative same property cash NOI growth expected in these quarters, Incremental NOI from placing developments into service is driving the ramp up in FFO for share. With that, I'll turn the call back to Steve. Thank you.

Back in 2012, we made the strategic decision to deeply concentrate our portfolio around high-priority U.S. defense and intelligence missions in order to generate durable cash flows independent of cyclical economic activity and thereby create value for our shareholders. The value proposition of that strategy is being borne out in the strength of our performance this year. The need for secure facilities to house signals and human intelligence, missile defense, space exploration, law enforcement, and cyber activity are driven by national and global security needs, and the workers executing these missions cannot conduct their work from home. In addition to the 1.9 million square feet of active developments, we're pursuing 2.1 million square feet of new opportunities in our development leasing pipeline. We have a conservatively capitalized balance sheet and ample liquidity to fund our growth. We are uniquely positioned to whether the current business environment and our company remains on track, not only to achieve this year's guidance, but to deliver very healthy FFO growth in 2021. With that, operator, please open up the call for questions.

Thank you, Mr. Bedard. Ladies and gentlemen, if you have a question or a comment at this time, please press the star then the one key on your touch-tone telephone. If your question has been answered or you wish to move yourself from the queue, please press the pound key. Our first question comes from Craig Melman with KeyBank Capital Markets.

Hey, guys. Anthony, maybe just starting on same store. I appreciate you guys, you know, raise the guidance, but if you're looking at kind of the first half growth of 3.3% and the average growth in the back half of, you know, down 50 bips, you're already kind of well ahead of your midpoint of the, the updated same store range. Am I, are the pools the same? Is there something going on there that, um, I'm thinking about incorrectly?

I know the pools, pools are the same. There's no change in the pools at all. Part of the impact, as we mentioned in the prepared remarks, was that we intend on spending roughly almost a penny of the R&M that was deferred in the second quarter in the third quarter. And the results for the first six months of the year only have two months impact from the non-renewal at 6721 Columbia Gateway Drive. So the balance of the year is going to be impacted by that non-renewal.

But shouldn't that be reflected in your kind of down 50 bips on average for the back half of the year?

It is. So you're asking why we're not meeting.

The midpoint is a little bit higher. Yeah. It seems like you guys are kind of setting the bar at a pretty easy place to jump over it for the rest of the year.

I don't know. I wouldn't characterize it that way. I think our forecast includes the impact of the activity we have going on in the portfolio, and that reflects the impact of what's happening in the back half of the year.

Okay. That's helpful. Then, Steve, you mentioned DC6. The lease renewals kind of go in. It's progressing nicely. Is there a change in kind of the probability weight of not getting it done, or is it, you know, where does that stand today?

Confidence is extremely high. We're working on a new form of agreement that's very technical. That particular customer is working remotely, and so the process is taking some time because technical, our confidence remains very high.

Okay. And then, you know, it may be semantics, but in the presentation deck last quarter, you guys had robust growth in 21, and this quarter it's healthy. Is there any material change in kind of what you guys are expecting or any kind of puts and takes that made you kind of update the language?

No, prepared remarks we use very healthy. And I think... THE LANGUAGE CHANGE JUST REFLECTS THE FACT THAT LEASING THAT WE HAD EXPECTED TO OCCUPY IN THE THIRD AND FOURTH QUARTER MIGHT BE PUSHED INTO NEXT YEAR. AND WE WANT TO JUST BE VERY OPEN AND FORTHRIGHT. WE BELIEVE OUR OPPORTUNITIES ARE THE SAME, AND THE RENT STREAMS WILL BE ESTABLISHED. IT JUST REFLECTS UNCERTAINTY ON TIMING DUE TO THE CHANGE IN THE WAY WE'RE WORKING, REALLY. in the pandemic environment.

Gotcha. And then just one last one. Any update on Transamerica at Light Street on their expiration for next year?

Yeah, one of the reports reported them as a non-renewal, so I'm glad you brought that up. That issue is not determined by any means. We're working with the tenant. We've given them a couple different scenarios to early renew, and like all large commercial tenants, They're evaluating market opportunities. The activity slowed like a lot of leasing activity during the last month or so, but we remain confident in our value proposition. We've got the best located building with the best views and the best signage opportunity and the best amenities in the city, and we're still a good choice.

Great.

Thanks, guys.

Our next question comes from Jamie Feldman with Bank of America.

Thank you. I was hoping to get your thoughts on the election, and when you think about the different potential scenarios, whether it's a split house, Biden win, Trump win, how do you think the different scenarios could impact your business and defense spending and demand?

Well, you know by now I'm not going to make a call on who's going to win it. BUT WHAT WE LIKE TO POINT TO IS THE HOUSE OF REPRESENTATIVES SINCE 2016 WHEN IT TURNED DEMOCRATIC. AND SINCE THEN, THE HOUSE ARMED SERVICES COMMITTEE VOTES IN FAVOR OF INCREASED SPENDING HAVE BEEN EXTREMELY HIGH. AND MORE OVER, THE HOUSE HAS OFTEN RECOMMENDED HIGHER SPENDING THAN THE PRESIDENT REQUESTED. GIVEN THE that Joe Biden's been a longtime participant in Congress. We believe he's well aware of the national threats and the need to reinvest in defense, and we don't think it'll be a factor.

Okay. And then as you think about what's already been allocated, even if there was some sort of pullback in defense spending, I mean, how long is the pipeline that you know, you could still see pretty healthy demand for space, even if there's a change in policy.

Sure. So the fiscal year 20 budget got appropriated last fall late, and we're still seeing demand for that. We expect it to continue through the end of the year and into early 2021. The fiscal 2021 budget, given the election will probably be appropriated under a continuing resolution that would occur in all likelihood in November, December, and then another 12 to 24 months thereafter we'd have good demand from that budget.

Okay, thank you. And then I know you mentioned Transamerica, but you've also got Boeing and Booz Allen coming up. Any thoughts on those leases?

Yeah, we're working with Boeing right now, so we expect to get one of the three buildings renewed, and we have very high confidence to exercise their one year and the remaining two. Those three buildings support two very high-priority national missions. They're really unaffected by other matters that are influencing Boeing's business. Oh, sorry. Yeah, and we have very high confidence in Booz Allen as well.

So you're saying of the three buildings, you know they'll renew one and there's two others that'll get extended for a year? Is that what you said?

The two others, we basically did a 10-year package of opportunity for them with a firm five years and then five consecutive one-year renewals at predetermined rental rates. So they've been renewing every year and they'll renew again.

Okay. So you don't see that as space you'll get back in the next 24 months?

Not at all.

Okay. All right. Thank you.

Thanks, Jamie. Our next question comes from Blaine Heck with Wells Fargo.

Great. Thanks. Good afternoon. So just following up on the more gradual recovery in leasing that you commented on in the presentation and Your remarks, Steve, is that statement just a general one and kind of applies across the board? Or are there one or two spaces you thought might have been signed this year that might have been pushed out? And if that's the case, any color on which spaces those are would be helpful.

So it's just a general conversation. We're getting things done. We're getting things leased. Just these processes are taking longer with the need to plan space, approve plans, incorporate them into lease documents, negotiate a document, get it executed when people are not in their home offices. It's just taking longer. So it's a conservative view that if that were to continue some of the progress we would have otherwise expected to get done in the third and fourth might be pushed out a quarter or so.

Okay. That's helpful. And then, Steve, you talked about pursuing 2.1 million square feet of opportunities in the development leasing pipeline. You know, just a little color on that. Can you break it out in terms of geographical location of those requirements and kind of the mix of the type of tenant included in there?

Yeah, well, it's broad-based, but it's roughly 45% to 50% data center shell. the remaining U.S. government or defense contractor. And frankly, there's quite a few, a very large amount of conversations that we're having beyond what we've reported in the 2.1 that leads us to be very confident our development business is going to be healthy for quite some time.

All right, great. And then we'll ask one maybe for Anthony. I just wanted to touch on the $70 to $90 million of dispositions and or equity issuance in 2020. You know, if you guys decide to go the disposition route, are you guys still leaning towards data center shells into the JV? Or, you know, are there any other properties you guys have teed up? And how should we think about the timing there?

At this point, we continue to focus on raising that equity through additional joint ventures of those data center shells that we have. We think they represent the best value proposition to raise that capital in a cost-effective manner. We've got a significant amount of interest from both existing partners as well as unsolicited interest from other investors in that product type because of the fact that they see that as just an incredibly resilient cash flow stream based as they look at the current economic environment. So we're focused on that as the path to raise that capital. From a timing perspective, we would probably be in a position to raise that either by the end of this quarter or early into the fourth quarter. Great. Thanks, guys.

Our next question comes from Emmanuel Corsman with Citi.

Hey, everyone. Steve, we think about the same pipeline that you just detailed. Forgetting the data centers for a second, but if you think about the more office users, are there any conversations on changing the layout of the space, the actual per head utilization, the number of people in a space? Are they looking at larger requirements to space people out? Anything you can share just from a space usage perspective?

So some of these conversations in the 2.1 million square feet are a little more preliminary where I'm not familiar with their usage. But what's interesting is the deals that we completed in the second quarter when this, call it, impact of the COVID was hitting, those space plans really did not change. the utilization was completed and our construction specifications were the same when we signed them as they were when we entered the negotiations before the virus.

Thanks. And in terms of the retention in the second quarter, I'm frankly just a little bit surprised that the retention would have been that much better considering you gave guidance a month into the quarter. Was there anything specific there specifically that we should be mindful of in terms of that retention rate, or is it just that you got a positive surprise?

No, there's nothing specific. There were maybe a few deals that just timing related were in the second quarter versus the third quarter. In terms of the full year, it's really some activity that relates to renewals, expirations in next year that are going to get executed this year. So there really were no surprises. Thanks, everyone.

Thanks, Manny.

Our next question comes from Steve Sackler with Evercore ISI.

Thanks. All my questions have been asked at this time. Thanks.

Thanks, Steve. Thanks, Steve.

Our next question comes from Chris Lucas with Capital and Securities.

So good afternoon, everybody. I guess, Steve, just a cleanup question. On the 11.25 megawatt tenant, what is the lease expiration date for that existing lease? It's today. So I guess then the follow-up is, is there an overdraft or something that will kick in that will sort of accelerate their signature or are you expecting it this afternoon? No.

I'm not expecting it this afternoon. I wish I were. The terms of that lease are such that the lease will continue with a rent escalation as existed through the term until such time as we reach a new lease agreement.

Okay, and do you have any rights as it relates to sort of from that they can just hang? I mean, I know you want them in there, but it just seems like you'd want some certainty as well.

Well, we have a right to give them notice and terminate the lease, and they have a right to give us notice and terminate the lease. We're well beyond that. We're just working on getting the document to meet their new current standards that they've introduced worldwide, and it's a little more complicated than our typical Renault.

Okay. And then I guess there's been some news related to one of the developers in Northern Virginia that has been doing data shells with the tenant that you work with. I guess I'm just curious if you're hearing anything as it relates to your relationship with that tenant as it relates to how they're thinking about their – going forward in how they've done business with the data shells and using a third party to construct and own?

No conversation that we've had with them involves that developer and those reports.

Okay, and then last question.

Chris, I think the only thing I'd add to that is the pipeline that Steve detailed earlier in terms of the allocation between shells and government and contractor opportunities that we have include, continue to include a healthy pipeline based on discussions that we've had, we continue to have with that tenant.

Okay. And then while I have you, Anthony, just, I hope I didn't miss this, but just on the EPS guidance bump, is that just related to higher likelihood of, of proceeds from the, from asset sales?

No, it's, it's actually it's, we take a relatively conservative bent on depreciation expense estimates at the beginning of the year. So it's really getting that amount in line with what our actual amounts have been for the first six months of the year.

Okay, great. Thank you.

Our next question comes from Peter Abramowitz with Jefferies.

Yes, thank you. And apologies if I missed this and prepared comments. But just noticed some changes in the development budgets in Redstone this quarter. Is there anything in particular driving that? Is that kind of due to change in scope of the projects or is that something that kind of will have an effect on the yield you expect there?

So good question, good pickup. As we wrap up the tenant improvement work for the variety of tenants that we're completing in Alabama, There's a true-out process between what's tenant expense and what's landlord expense. And overages above our tenant improvement are added to the development budget, and they're either going to be repaid in lump-sum cash from the tenant or amortized over the life of their lease in the rent stream. And we're wrapping up all that and delivering those buildings right now. So that's where it occurred. In fact, though, this last quarter, our ability to drive price reduction and, you know, construction work that we've been punching out has been very strong, and we've actually been able to juice the yields on several of those buildings through cost reductions for the benefit of both us and our tenants.

I assume you meant you were able to increase the expected yields.

Yeah.

Gotcha. And then just one other one on the developments. Those expansions in your existing data center shell assets, what sort of kind of incremental return are you expecting on the expansion?

Those returns are consistent with the developments that we do with that customer programmatically. So those are expansions for the existing tenants there?

That's correct. Okay. That's all for me. Thank you.

Our next question comes from Rich Anderson with SMBC.

Hey, thanks for the afternoon, everyone. So I imagine you've might have scheduled this call on July 31st thinking, hoping DC-6 would have been done and you'd have that announced. That's just a guess, I don't know. But even if I'm wrong or right, is there anything about the process of TC6 that in the very recent past, even like as recently looking back just in June or so, that they've been kind of coming back and tweaking the requirements that have caused this delay, or is it truly all just a work-from-home kind of situation?

Well, it's work-from-home, and my analogy is translating French to English. They have a set of specifications that they want incorporated in, and the documents that we use in that facility to document our lease terms and our operating offerings, restrictions, and it's just complicated. So we're working through that, and we're working at the schedule of availability we can get with our people. But the conversation is harmonious, and we're confident.

Okay. I just wonder if they're using this date as sort of a leverage or something. Anyway, moving on. So in terms of markets, you're quietly awesome in San Antonio. Huntsville is probably exceeding your expectations prior to the company moving in there. You had some unforced errors in other expansion markets, Colorado Springs, perhaps Aberdeen.

Hey, that's not fair, Rich. I wasn't even here back then.

Well, you said something about 2012 earlier in our conversation. And I'm wondering if there's anything on the radar screen in terms of expanding your horizons outside of the Maryland, Virginia, D.C. corridor into some of these other alternative markets, if there's anything interesting out there. Perhaps you won't tell me the name of the market, but if you've at least got your radar up.

Well, we always have our radar up. And, you know, we aim to serve the customers in the priority missions that we have. And to the extent that they had needs we could fulfill elsewhere, we'd follow it. We don't expect that to happen in the next few years. But we're being very disciplined on the types of missions we serve and, you TO STICK INTO OUR GAME PLAN. WE'VE GOT JUST, IF YOU THINK ABOUT WHAT WE SAID ON OUR DISCUSSION, WE GOT ALMOST TWO MILLION SQUARE FEET UNDER DEVELOPMENT RIGHT NOW. 2.1 MILLION THAT WE DISCLOSE IN OUR DEVELOPMENT PIPELINE, AND THERE'S ALMOST TWO MORE MILLION SQUARE FEET OF CONVERSATIONS WE HAVE. SO WE ARE NOT LACKING OPPORTUNITY TO CREATE GREAT VALUE AND MODERATE GROWTH FOR OUR SHAREHOLDERS.

Is there a schedule-based realignment coming?

No, it hasn't really. It really is not. There's nothing scheduled, and there haven't been further conversations that got anywhere about further BRACs.

Okay. And then the last question I have is... I think you guys have greater physical occupancy in your buildings because of the secure nature. If this was brought up earlier, I missed the very beginning of the call. But what is the physical occupancy today? Has there been any issues with spread? And maybe, you know, the alternative to that is if there hasn't, it's creating some level of confidence that it might be okay to be going back to work. I'm just curious if you could just give some color on that.

So we don't have a number to tell you occupancy from day to day, but we have a feel, and it ranges from in our regional office very low to some parts of our defense IT very high. And as I said, the common, you know, call it the average working condition is rotating weeks on an A and B schedule, red or blue, black or gold, whatever that customer uses. and working longer hours. So, you know, all the customers are being respectful of the need to create distancing, and they're doing it with partial rotations. And then in terms of virus, we've only had a couple of buildings that had more than one, and generally it's one pops up you know, every so often. But the predominant of those cases are single occurrences in a single building.

Okay, that's great. And could you envision a greater need for your product in the future because those social distancing becomes a reality within their four walls, or is that perhaps a bit too much to ask for?

Well, it could be an outcome. Undoubtedly, there's discussions that are occurring that we've participated in about what we could do to help various customers respond if they decrease the densities of usage at various sites. I can't tell you that's going to happen, but it could be a possibility. Great, thanks very much. Thank you, Rich.

Again, ladies and gentlemen, if you have a question or a comment at this time, please press star then the one key on your touch-tone telephone. Our next question comes from .

Yes, good afternoon. So heading into 2021, you know, focusing on vacancy leasing, development leasing, renewal of the 11.25 megawatts, at least hopefully sooner rather than later. Anything else we should just be thinking about as we kind of all start switching our focus in the back half of 2020 into 2021?

Those are the three primary factors.

All right.

Good to know. Thank you. All right. Thank you, Taylor. And I'm not showing any further questions at this time. I'd like to turn the call back over to Mr. Bedore.

Thank you all for joining our call today. We are in our offices this afternoon. If you'd like to talk to us, please coordinate through Stephanie with a follow-up call. Thank you.

Thank you for your participation in today's Corporate Offers Properties Trust second quarter 2020 conference call. This concludes the presentation. You may now disconnect. Good day.