Equity Commonwealth

And thanks for joining this call to discuss Equity Commonwealth's results for the quarter ending June 30th, 2024, and an update on the company. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of federal securities laws. Please refer to the section titled Forward-Looking Statements in the press release issued yesterday, as well as the section titled Risk Factors in the company's annual report on Form 10-K and quarterly reports on Form 10-Q for subsequent quarters. for a discussion of factors that could cause the company's actual results to materially differ from any forward-looking statements. The company assumes no obligation to update or supplement any forward-looking statements made today. The company posts important information on its website at www.eqcre.com, including information that may be material. The portion of today's remarks regarding the company's quarterly earnings also includes certain non-GAAP financial measures. Please refer to yesterday's press release and supplemental containing the company's results for reconciliation of these non-GAAP measures to the company's GAAP financial results. On the call today is David Helfand, President and CEO, David Weinberg, COO, and Bill Griffiths, CFO. With that, I will turn the call over to David Helfand.

Thank you. Good morning, everyone. Thanks for joining us. Rather than spend time on the company's results for the quarter, the details of which are covered in our earnings release and other filings, I'd like to provide a general update on our business. As we discussed on last quarter's call, we have been evaluating potential investment opportunities in an effort to create long-term value for shareholders. After working through our pipeline, we have been unable to consummate a compelling transaction. As a result, our Board of Trustees has determined that it's advisable and in the best interest of our shareholders to proceed with the wind-down of our operations and the liquidation of our assets in order to maximize value for shareholders. A key gating factor in the wind-down will be the timing of the sale of our four remaining properties. We disclosed last quarter that we had initiated the process to sell three of our four assets. Those properties, 1250H in Washington, D.C., and our two assets in Austin, are currently being marketed for sale. While our team is focused on achieving the BEX execution, it is important to understand that current market conditions for selling office assets are uniquely challenging. Transaction volume for the first six months of the year was the lowest since 2010 and down 75% from pre-COVID levels. Moreover, debt availability for office assets is scarce and when available is priced at double-digit coupons. Given the market environment, it's difficult to estimate both the timing and the proceeds from these sales. We're hopeful that the dispositions will generate proceeds in excess of our $234 million net book value for the assets. As it relates to the timing for the wind down, we expect to file a preliminary proxy by mid-September, recommending that our shareholders approve a plan of sale and liquidation. The proxy will be subject to review by the SEC, and depending on the length of that process, we anticipate holding the shareholder vote no later than December. We also expect to begin marketing for sale our Denver asset, 1225 17th Street. in early September, with closing contingent on shareholder approval of the plan of sale. The plan of sale will require the affirmative vote of two-thirds of our outstanding common shares to be approved. Assuming the plan of sale is approved by our shareholders, the next steps will be the redemption of the Series D preferred and a distribution of shareholders of substantially all of our cash. Then, once the remaining assets are sold, we expect to distribute the remaining proceeds shortly thereafter. This will likely be the last distribution of material value. We will then commence the NYSED listing and SEC deregistration processes and various other administrative tasks with the goal of substantially winding down the company by the end of the second quarter of 2025. We continue to expect to qualify as a REIT in 2024 and 2025. While we don't have all the answers today and timing is uncertain, we are focused on executing the wind-down process as efficiently as possible, and we will continue to communicate with shareholders regarding our progress. We appreciate the support we have received from our shareholders and want to acknowledge the hard work and dedication of the EQC team. With that, David, Bill, and I are happy to take your questions.

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