Investors continue to allocate capital to U.S. spot Bitcoin exchange-traded funds, prioritizing the asset even as broader crypto market sentiment oscillates between caution and bearishness. Bitcoin ETFs attracted net inflows of $457 million on Thursday, marking the third-largest single-day inflow since October 8—trailing only the $523.98 million seen on November 11 and the $477.19 million on October 21, according to SoSoValue data. The major contributors to Thursday’s net inflow were BlackRock’s IBIT wi ...

Core Insights - The U.S. government long bond futures may experience a rally due to unforeseen events that could lead to a flight to quality, which historically lifts bond prices and lowers long-term yields [1] - The U.S. bond market and currency are viewed as the most stable for global reserves, suggesting potential upside during turbulent times [1] Bond Market Performance - Long bond futures were at 117-10 on September 10, 2025, while the TLT ETF was priced at $89.40 per share [2] - As of late November, both bonds and TLT were marginally higher but remained within their trading ranges as the debt market prepares for 2026 [2] Historical Trends - The bear market for the 30-Year U.S. Government Treasury Bond futures began in March 2020 at a high of 191-22 and reached a low of 107-04 in October 2023, indicating a sideways trading pattern closer to the 2023 low [3] - Since 2024, bonds have traded within a narrow range of 110-01 to 127-22, despite the Fed reducing the short-term Fed Funds Rate to a midpoint of 3.875% [4] Interest Rate Dynamics - Although the Fed cut rates by 1% in 2024 and by 50 basis points in 2025, longer-term interest rates have remained in a narrow sideways trend, indicating stagnation in the bond market [4] TLT ETF Analysis - The iShares 20+ Year Treasury Bond ETF (TLT) moves in correlation with long-term U.S. government bond futures [5] - TLT has fallen over 54% from its 2020 high of $179.70 to an October 2023 low of $82.42, trading within a range of $83.30 to $101.64 in 2024 and 2025 [6] - As of late November, TLT was priced at $90.52, just below the midpoint of its trading range, reflecting elevated long-term U.S. interest rates [6]

Financial Data and Key Metrics Changes - The company reported Q3 revenue of $1.8 billion, an increase of 8%, with organic revenue growth of 9% [6] - Adjusted EBITDA rose 11% to $160 million, and adjusted EBITDA margin expanded by 23 basis points to 9% [6] - Year-to-date adjusted EBITDA margin improved by approximately 70 basis points compared to the previous year [3][12] - Adjusted EPS grew by 26% year-over-year to $0.29 from $0.23 [6] Business Line Data and Key Metrics Changes - The leasing business grew by 9% in the quarter, with the Americas leasing growing 11% [7][8] - Capital markets delivered 20% year-over-year growth, with the Americas revenue growing 16% [9][10] - Services revenue in the Americas grew by 6%, while EMEA services grew by 17% [10][11] Market Data and Key Metrics Changes - In EMEA, leasing grew 9%, with strong performances in the UK and Spain [9] - APAC leasing revenue declined by 6%, but strong performance in Singapore and Australia helped mitigate losses [9] - Industrial properties built after 2020 recorded 196 million square feet of net absorption, accounting for nearly all industrial net absorption [9] Company Strategy and Development Direction - The company is focused on organic growth and has raised its 2025 adjusted EPS guidance to 30% to 35% growth [3][14] - Investments are being made in data and AI infrastructure, project management, and retaining top leasing talent [4][3] - The company is building a global capital markets platform and expanding its services offerings [19][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth into 2026, particularly in capital markets [19] - The company anticipates full-year leasing revenue growth towards the high end of the 6% to 8% guidance range [13] - Management noted strong momentum in the business, supported by strategic growth investments and improved operational performance [14] Other Important Information - The company prepaid an additional $100 million in debt, bringing total debt repayment to $500 million over two years [3][13] - The company ended the quarter with net leverage of 3.4x, the lowest since Q4 2022 [12] Q&A Session Summary Question: Insights on Americas capital markets growth and advisor hires - Management indicated they are in the ramp-up stages and anticipate continued growth into 2026, emphasizing the building of a global capital markets platform [18][19] Question: EMEA margins and year-over-year performance - EMEA margins increased by 170 basis points, with management noting that previous quarter benefits from FX and incentive compensation timing did not recur [20][21] Question: Factors supporting stronger services growth in the Americas - Management highlighted strong performance in project management and design and build services, particularly in the UK, Ireland, Netherlands, and Spain [23][24] Question: Capital allocation strategy regarding debt repayment and organic growth - Management stated they are balancing deleveraging with organic growth investments, emphasizing the importance of free cash flow conversion [34][35] Question: Expectations for services business margins and profitability - Management expressed confidence in continued growth and profitability, focusing on moving up the value chain and improving client retention [31][33] Question: Recruiting environment and talent acquisition - Management noted that recruiting has not become more expensive and they are receiving interest from top talent in the capital markets sector [38][40] Question: Cross-selling initiatives within the company - Management is implementing incentives and cultural changes to promote cross-selling across business lines, referred to as "Plus One" [43][44] Question: Positioning to capture benefits from the flight to quality in real estate - Management highlighted a significant increase in larger deals and strong demand for Class A buildings, which aligns with their strengths [48]

Investment Rating - The report indicates a muted investment activity in the office market, with prime office yields remaining stable at 6.50% across the UK cities [6][18]. Core Insights - The leasing market remains resilient, with occupier activity reaching 1.4 million sq ft in Q1 2025, reflecting a 27% increase compared to the same period in 2024 [9][10]. - Larger requirements are driving occupier demand, with three leasing transactions exceeding 100,000 sq ft, the highest since Q4 2020 [11][12]. - The technology, media, and telecommunications (TMT) sector accounted for 20% of space leased, representing the highest proportion of occupier demand [13]. - A 'fight for quality' is evident, with 52% of total space leased being new and grade A, and a vacancy rate of just 3.0% for this segment [14]. - Investment volumes fell significantly, reaching £151.8 million, a 71% decline quarter-on-quarter and 38% below the 5-year Q1 average [15][16]. - The absence of high-value sales is noted, with 95% of transactions below £20 million, indicating limited liquidity at the upper end of the market [17]. - Prime pricing has stabilized, with yields remaining at 6.50%, reflecting a 25 basis points compression year-on-year [18][19]. Summary by Sections Aberdeen - Occupier take-up increased by 94% year-on-year to 61,942 sq ft, although 16% below the 5-year average [26]. - Grade A availability fell by 6% quarter-on-quarter to 122,134 sq ft, reflecting a 32% decline over the past year [26]. - Investment activity reached £7.7 million, 37% below the 5-year average [26]. Birmingham - Occupier take-up totaled 75,522 sq ft, a 45% fall quarter-on-quarter and 60% below the 10-year average [34]. - New and grade A space accounted for 81% of leasing activity [34]. - Investment activity reached £27.1 million, 40% less than the previous quarter [34]. Bristol - Occupier take-up was 92,995 sq ft, reflecting an 8% fall from the previous quarter [42]. - Grade A availability stood at 304,347 sq ft, stable quarter-on-quarter but 142% above the 5-year average [42]. - Investment activity totaled £35.8 million, 52% below the 10-year average [42]. Cardiff - Take-up reached 94,068 sq ft, 5% above the 5-year average [50]. - Grade A availability dipped to 291,760 sq ft, a 7% fall from the previous quarter [50]. - Investment activity reached £24.6 million, 77% above the equivalent period in 2024 [50]. Edinburgh - Leasing volumes reached 99,373 sq ft, 12% above the 5-year Q1 average [58]. - Grade A availability increased to 700,435 sq ft, 19% above the equivalent point in 2024 [58]. - Investment activity was £3.3 million, following the sale of 48-50 Melville Street [58]. Glasgow - Occupier take-up totaled 158,567 sq ft, 79% above the equivalent period in 2024 [66]. - The total market vacancy rate stood at 9.3%, down from 10.3% a year earlier [64]. - No office investment transactions occurred in Q1 2025 [66]. Leeds - Take-up reached 241,282 sq ft, a 53% increase quarter-on-quarter [73]. - Grade A availability fell to 140,362 sq ft, 48% below the 5-year average [73]. - Investment activity was £16 million, solely from the sale of the Mint Building [73]. Manchester - Leasing activity totaled 319,995 sq ft, a 14% increase from the previous quarter [81]. - Grade A availability fell by 9% quarter-on-quarter to 549,245 sq ft [81]. - Investment activity was £13.6 million, reflecting a 66% year-on-year fall [81]. Newcastle - Occupier take-up rose to 257,476 sq ft, 292% above the 10-year quarterly average [88]. - Grade A availability stood at 221,528 sq ft, a 17% fall compared to the previous quarter [86]. - Prime rents remained stable at £32.00 per sq ft, with a 31% increase since the pandemic [88]. Sheffield - Take-up reached 39,992 sq ft, 51% below the previous quarter [95]. - Grade A availability rose to 307,300 sq ft, 121% above the 5-year average [95]. - Investment activity reached £23.8 million, 76% above the 10-year quarterly average [96].

Financial Data and Key Metrics Changes - The company reported core FFO of $0.17 per share for Q1 2025, exceeding consensus by $0.01 [6][24] - First quarter same store growth was negative 4.1% on a cash basis and negative 5.4% on a GAAP basis [24] - The leased occupancy rate of the same store portfolio was 86.2%, up 140 basis points from the prior quarter [26] Business Line Data and Key Metrics Changes - The company executed leases totaling approximately 284,000 square feet, marking the strongest first quarter of leasing since 2019 [7][16] - The weighted average term for leases signed during Q1 was 12.9 years [16] - Approximately 60% of leasing activity occurred on vacant space, with 24% on space scheduled to expire in 2025 [18] Market Data and Key Metrics Changes - In New York, the Manhattan office market showed significant improvement, with new leasing activity reaching the highest quarterly total since Q4 2021 [9] - Financial services tenants represented over half of new leases of 10,000 square feet and greater in New York [9] - In San Francisco, AI-based companies accounted for approximately 20 deals totaling more than 275,000 square feet, indicating a growing importance of the city as an AI hub [22] Company Strategy and Development Direction - The company is focused on maintaining strong tenant relationships and securing renewals to meet the needs of existing and prospective tenants [14] - The Paramount Club continues to be a significant differentiator in the market, enhancing tenant satisfaction and retention [12] - The company is cautiously optimistic about the San Francisco market, noting improvements in leasing activity and a favorable business environment [13][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged recent shifts in the broader economic environment but noted no disruption to leasing activity [8] - The company expects ongoing absorption of space in its submarkets to support increased leasing and improved deal economics [20] - Management reaffirmed earnings guidance and expressed confidence in the recovery of the New York portfolio [24][27] Other Important Information - The company closed the sale of a 45% interest in 900 Third Avenue, raising approximately $95 million in net proceeds [14][27] - The debt at quarter end, excluding noncore assets, amounted to $3.25 billion at a weighted average rate of 4.26% [28] Q&A Session Summary Question: Future capital uses and sources - Management indicated a disciplined and opportunistic approach to capital uses, considering opportunities similar to the 900 Third Avenue transaction [31][32] Question: Details on the new law firm lease at 1 Market Plaza - The law firm lease at 1 Market Plaza is expected to command rents in excess of $120 per square foot, reflecting strong interest in high-quality space [35][36] Question: Activity in the San Francisco market - Management expressed cautious optimism about San Francisco, noting increased leasing activity and a positive shift in the business environment [41][44] Question: Update on large tenant expirations - Management is in advanced discussions for backfilling space from Visa and Morgan Lewis, indicating progress in managing lease expirations [46][47] Question: Guidance on leasing volume and same store NOI - Management explained that the lack of change in same store NOI guidance is primarily due to the delayed commencement of leases [49]

Financial Data and Key Metrics Changes - The company reported core FFO of $0.17 per share for Q1 2025, exceeding consensus by $0.01 [6][24] - First quarter same store growth was negative 4.1% on a cash basis and negative 5.4% on a GAAP basis [24] - The leased occupancy rate of the same store portfolio was 86.2%, up 140 basis points from the prior quarter [26] Business Line Data and Key Metrics Changes - The company executed leases totaling approximately 284,000 square feet, marking the strongest first quarter of leasing since 2019 [7][16] - The weighted average term for leases signed during Q1 was 12.9 years [16] - Approximately 60% of leasing activity occurred on vacant space, with 24% on space scheduled to expire in 2025 [18] Market Data and Key Metrics Changes - In New York, the Manhattan office market showed significant improvement, with new leasing activity reaching the highest quarterly total since Q4 2021 [9] - Financial services tenants represented over half of new leases of 10,000 square feet and greater in New York [9] - In San Francisco, AI-based companies accounted for approximately 20 deals totaling more than 275,000 square feet, indicating a growing importance of the city as an AI hub [22] Company Strategy and Development Direction - The company is focused on maintaining strong tenant relationships and securing renewals to meet the needs of existing and prospective tenants [14] - The Paramount Club continues to be a significant differentiator in the market, enhancing tenant satisfaction and retention [12] - The company is cautiously optimistic about the San Francisco market, noting improvements in leasing activity and a favorable business environment [13][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged recent shifts in the broader economic environment but noted no disruption to leasing activity [8] - The company expects ongoing absorption of space in its submarkets to support increased leasing and improved deal economics [20] - Management reaffirmed earnings guidance and expressed confidence in the recovery of the New York portfolio [24][27] Other Important Information - The company closed the sale of a 45% interest in 900 Third Avenue, raising approximately $95 million in net proceeds [14][27] - The debt at quarter end, excluding noncore assets, amounted to $3.25 billion at a weighted average rate of 4.26% [28] Q&A Session Summary Question: What should be expected regarding capital uses and sources in 2025? - Management indicated a disciplined and opportunistic approach to capital transactions, similar to the sale of 900 Third Avenue [31][32] Question: Can you provide details on the new lease with the law firm at 1 Market Plaza? - The law firm is expected to pay rents in excess of $120 per square foot, reflecting strong interest in high-quality space [35][36] Question: How is the San Francisco market performing amid current uncertainties? - Management remains cautiously optimistic, noting increased leasing activity and positive discussions with local authorities [44] Question: What is the status of large tenants facing expirations in 2026? - Advanced discussions are ongoing for backfilling space from Visa and Morgan Lewis, with optimism about leasing activity [46][48] Question: Why was there no change in same store NOI guidance despite increased leasing volume? - The delay in lease commencements is primarily responsible for the unchanged same store NOI guidance [49]

Financial Data and Key Metrics Changes - The company reported core FFO of $0.17 per share for Q1 2025, exceeding consensus by $0.01 [5][21] - First quarter same store growth was negative 4.1% on a cash basis and negative 5.4% on a GAAP basis [21] - The leased occupancy rate of the same store portfolio was 86.2%, up 140 basis points from the prior quarter [22] Business Line Data and Key Metrics Changes - The company executed leases totaling approximately 284,000 square feet, marking the strongest first quarter of leasing since 2019 [6][14] - The weighted average term for leases signed during the first quarter was 12.9 years [21] - In New York, the portfolio was 87.4% leased on a same store basis, up 240 basis points from the last quarter [18][22] Market Data and Key Metrics Changes - In New York, Manhattan's office market showed significant improvement, with new leasing activity reaching the highest quarterly total since Q4 2021 [7] - In San Francisco, leasing activity marked the strongest first quarter since 2019, with AI-based companies accounting for approximately 20 deals totaling over 275,000 square feet [19][20] - The San Francisco portfolio was 82.3% leased on a same store basis, down 150 basis points from the last quarter [20][22] Company Strategy and Development Direction - The company aims to maintain strong tenant relationships and secure renewals while focusing on high-quality, well-located office spaces [12][21] - The Paramount Club continues to be a significant differentiator in the market, enhancing tenant satisfaction and retention [10] - The company is optimistic about the recovery in San Francisco, driven by the evolving political landscape and demand for office space [11][40] Management's Comments on Operating Environment and Future Outlook - Management noted that despite recent economic shifts, there has been no disruption to leasing activity [6] - The company expects ongoing absorption of space in submarkets to support increased leasing and improved deal economics [17] - Management remains cautiously optimistic about San Francisco's recovery, highlighting increased leasing activity and constructive conversations with local authorities [40] Other Important Information - The company closed the sale of a 45% interest in 900 Third Avenue, raising approximately $95 million in net proceeds [12][24] - The debt at quarter end, excluding noncore assets, amounted to $3.25 billion at a weighted average rate of 4.26% [24][25] Q&A Session Summary Question: What should be expected regarding capital uses and sources in 2025? - Management indicated they are considering all options and remain disciplined and opportunistic regarding transactions like the one at 900 Third Avenue [28][29] Question: Can you discuss the 32,000 square feet law firm lease at 1 Market Plaza? - The upper floors generally command rents in excess of $120 per foot, and there is increasing interest from law firms looking to upgrade their real estate [31][32] Question: How is the leasing activity in San Francisco? - Management noted that while the market is improving, it may take time to see significant results, but there is optimism regarding increased leasing activity [40][41] Question: What is the status of large spaces facing expirations in 2026? - Management is in advanced discussions for backfilling spaces from Visa and Morgan Lewis, and they are optimistic about the activity level [44][46] Question: Why was there no change in same store NOI guidance despite increased leasing volume? - The lack of change is primarily due to the delayed commencement of leases expected to transfer into occupancy [47] Question: Is there a trend of larger tenants returning to the market? - Management confirmed that there is increased activity from large tenants, particularly in premier buildings in Midtown [52][55]

Financial Data and Key Metrics Changes - The first quarter FFO was $0.14 per share, with a net loss of $27.4 million or $0.16 per share [5][23] - The capital ratio was 12.2, slightly above the business plan range for 2025 [9] - The CAD payout ratio for the first quarter was 169.4%, significantly elevated due to deferred tenant improvement allowances and accrued preferred dividends [30][21] Business Line Data and Key Metrics Changes - The quarterly retention rate was 55%, with leasing activity approximating 340,000 square feet [6] - The operating portfolio ended the quarter at 86.6% occupied and 89.2% leased, with Philadelphia at 93% occupied and 96% leased [7][8] - The mark to market was 8.9% on a GAAP basis and 2.3% on a cash basis, both above business plan expectations [8] Market Data and Key Metrics Changes - In Austin, occupancy is at 75%, impacted by early terminations [8] - The life science sector is recovering, with a strong regional healthcare ecosystem supporting growth [13] - The demand for high-quality office space is increasing, with a notable flight to quality trend [12] Company Strategy and Development Direction - The company aims to stabilize its development projects, with significant progress made in residential developments [15] - The focus is on maintaining minimal balances on the line of credit and ensuring ample liquidity [10] - The company plans to capitalize on improving real estate market conditions and has a strong pipeline of leasing activity [11][34] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic uncertainty is affecting decision-making but has not significantly delayed larger prospects [40] - The company remains optimistic about increased leasing activity in Austin as the tech sector revitalizes [14] - The overall sentiment in real estate markets is improving, with a solid operating foundation established [10][34] Other Important Information - The company anticipates no property acquisitions and plans to recapitalize developments as they approach stabilization [29] - The projected capital plan for the year totals $180 million, focusing on development and redevelopment projects [30] - The company is targeting a midpoint of $50 million in sales for the year, with a mix of institutional and private equity buyers showing interest [62] Q&A Session Summary Question: Pipeline details, particularly in Austin - Management noted increased tour activity and interest from technology and financial service companies, with a mix of smaller and larger space requirements [38] Question: Decision-making process amid macro uncertainty - Management indicated that while decision-making is slower, larger prospects have not paused due to macro conditions [40] Question: Leasing pipeline breakdown - The operating portfolio pipeline is between 1.7 and 1.8 million square feet, with strong leasing activity in Philadelphia [46] Question: Economics of the office to residential conversion at 300 Delaware - The conversion is expected to yield around 7.5%, with minimal NOI loss due to the property being under-leased [54][56] Question: Changes in buyer pool composition and pricing - The buyer pool has shifted towards institutional quality buyers, with a significant increase in their market share [62] Question: Capital provider appetite for multifamily projects - There is a higher visibility and depth in the market for residential properties compared to office products [68] Question: Impact of Spark Therapeutics layoffs - Management confirmed that Spark has no early termination rights on their lease, and the company remains committed to its operations [88]

Financial Data and Key Metrics Changes - The company reported a net loss of $43.3 million or $0.25 per share for the fourth quarter, with FFO at $29.9 million or $0.17 per share, impacted by non-cash impairment charges totaling $23.8 million or $0.14 per share [27] - FFO results were 3% below guidance and 6% below consensus estimates, primarily due to timing and other factors [27] - The company ended 2024 with $90 million in cash and no outstanding balance on its $600 million unsecured line of credit [10][30] Business Line Data and Key Metrics Changes - The wholly owned core portfolio was 87.8% occupied and 89.9% leased, showing sequential improvement [5] - Leasing activity for the year approximated 2.3 million square feet, with 783,000 square feet of leases executed in the fourth quarter, the highest quarterly activity in 2024 [6] - The operating portfolio leasing pipeline remains strong at 1.8 million square feet, with 163,000 square feet in advanced negotiations [9] Market Data and Key Metrics Changes - In Philadelphia, Class A properties accounted for 66% of all lease deals signed in 2024, with the overall CBD portfolio being 93% leased [12] - The CBD recorded 1 million square feet of transactions during 2024, with Brandywine capturing 49% of all office deals [13] - Austin's leasing momentum remains positive, with over 81 tenants actively seeking more than 2.5 million square feet of space [13] Company Strategy and Development Direction - The company aims to leverage improving real estate market trends and position itself for future growth, focusing on liquidity, portfolio stability, and lease-up development [14][42] - 2025 is viewed as a transitional earnings year, with a focus on stabilizing development projects and maintaining minimal balances on the line of credit [15][21] - The company plans to recapitalize or exit several operating joint ventures to reduce debt attribution and improve liquidity [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of the operating platform and the quality of developments, despite the current lack of visibility on income timing from development projects [42] - The company noted that tenants are behaving more cautiously due to macroeconomic uncertainties, but discussions with major prospects are ongoing [46][47] - Management highlighted that the overall real estate markets are improving, with a solid operating foundation laid during 2024 [11][12] Other Important Information - The company achieved a tenant retention rate of 63%, exceeding the original target of 51% to 53% [5] - The 2025 FFO guidance is set at a range of $0.60 to $0.72 per share, with a midpoint of $0.66, reflecting a decrease from 2024 levels [21] - The company anticipates a CAD payout ratio of 120% to 150% for 2025, influenced by deferred tenant allowance payments [38] Q&A Session Summary Question: Have any of the larger tenants at 3151 or Uptown ATX gone elsewhere? - Management confirmed that no major prospects have been lost to other buildings, but decision-making timelines have been protracted due to macro uncertainties [44][46] Question: What confidence does the company have around rents and timing to hit yields? - Management indicated that it is more of a timing issue than a pricing issue, with a strong flight to quality observed in the market [48][49] Question: What would be the difference between JV FFO losses for 2025 versus stabilized levels? - Management estimated that income from JVs could ramp up to over $50 million once stabilized, compared to $10 million to $12 million in 2025 [56] Question: Why is the guidance range for 2025 so wide? - The wide range is due to uncertainties in leasing and recapitalization opportunities, with potential upside if leasing occurs faster than anticipated [72][76] Question: Will the $24 million deferred tenant allowance impact only 2025? - Management believes that the deferred tenant allowances will not spill over into 2026, as most have sunset provisions triggering in 2025 [80][84]