Financial Data and Key Metrics Changes - For Q4 2025, the diluted FFO per share was $2.16, and for the full year, it was $9.01, aligning with the midpoint of prior guidance [7] - Same property net operating income (NOI) decreased by 6% for Q4 and 3.5% for the full year, with a cash basis decline of 1.7% for Q4 and an increase of 0.9% for the full year [10][11] - Occupancy at the end of 2025 was 90.9%, up 30 basis points from the previous quarter and 10 basis points above prior guidance [9] Business Line Data and Key Metrics Changes - The company completed $1.5 billion in dispositions across 26 transactions and achieved a total leasing volume of 1.2 million sq ft in Q4, the highest in the last year [7] - Leasing of vacant space in Q4 reached 393,000 rentable sq ft, nearly double the average over the last five quarters [8] - The average lease term for the quarter was just over 7.5 years, consistent with the prior three-year average [8] Market Data and Key Metrics Changes - The company noted that its mega campuses, which account for about 78% of annual rental revenue, outperformed total market occupancy in the largest three markets by 19% [9] - The leasing volume for private biotechnology made up about a fifth of all leasing volume in Q4, indicating sustained demand from this segment [66] Company Strategy and Development Direction - The company plans to focus on timely execution of its strategic plan for 2026, emphasizing dispositions, maintaining a strong balance sheet, and reducing capital expenditures [5] - The strategic path forward includes reducing the size of the pipeline and construction spending needs, with a goal to complete a large-scale non-core disposition plan in 2026 [16][20] - The company aims to recycle capital from dispositions and partial interest sales to support funding needs, particularly focusing on non-core assets and land [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the leasing environment, noting that while there are positive signs in venture capital funding, decision-making remains conservative among companies [31][32] - The company anticipates a dip in occupancy in Q1 2026 due to key lease expirations but expects growth in the second half of 2026 [10] - Management reiterated that the public biotech sector's recovery is critical for future leasing demand, as many companies currently have sufficient space [76][78] Other Important Information - The company achieved significant general and administrative cost savings of $51.3 million, or 30% compared to the prior year, with G&A costs as a percentage of NOI at 5.6% for 2025 [15] - The company has a strong balance sheet with liquidity of $5.3 billion and a net debt to adjusted EBITDA ratio of 5.7x for Q4 [18] Q&A Session Summary Question: Impact of VC funding on leasing outlook - Management noted that while there is sustained funding in private biotechnology, the overall environment remains cautious, and decision-making is taking longer [30][32] Question: Strategy regarding The Fenway office property - Management confirmed that retaining The Fenway office property for leasing as office space is a strategic decision based on demand [34][35] Question: Cap rate trends for dispositions - Management indicated that cap rates for non-core assets are in the mid-sixes to mid-nines, depending on market conditions and asset specifics [40] Question: Guidance for FFO in Q4 2026 - Management confirmed that the guidance for Q4 2026 FFO remains at $1.40-$1.60, representing a trough for the year [48][49] Question: Buyer types for dispositions - Management highlighted that the buyer pool includes investment funds and residential developers, with a significant portion of land expected to be sold for residential use [56][57] Question: Capital allocation priorities - Management stated that the priority is on debt reduction through the disposition program before considering stock buybacks [85]

Financial Data and Key Metrics Changes - FFO per share diluted as adjusted was $2.16 for Q4 2025 and $9.01 for the year, aligning with prior guidance [5] - Same property net operating income (NOI) decreased by 6% for Q4 and 3.5% for the full year 2025 [8][10] - Occupancy at the end of 2025 was 90.9%, up 30 basis points from the prior quarter [7] Business Line Data and Key Metrics Changes - Leasing volume for Q4 was 1.2 million sq ft, up 14% over the prior four-quarter average [6] - The leasing of vacant space completed during Q4 was 393,000 rentable sq ft, nearly double the average over the last five quarters [6] - Free rent and rental rate changes on renewed and released space were under pressure, reflecting market realities [6] Market Data and Key Metrics Changes - The company expects occupancy to dip in Q1 2026 due to 1.2 million sq ft of key lease expirations [8] - The company reiterated its year-end 2026 occupancy range of 87.7%-89.3% [7] - The Greater Boston region saw an 11% increase in tenants, marking the first increase in several quarters [33] Company Strategy and Development Direction - The strategic focus for 2026 includes timely execution of plans, maintaining a strong balance sheet, and reducing capital expenditures [4] - The company aims to significantly reduce the size of its pipeline and construction spending needs [13] - The disposition program for 2026 is expected to include a significant component of land, targeting non-core assets [21] Management's Comments on Operating Environment and Future Outlook - Management noted the life science bear market and the challenges posed by regulatory changes and market dynamics [3] - There is cautious optimism regarding venture capital funding, but decision-making remains slow among companies [26] - The company anticipates a recovery in leasing demand but acknowledges the need for more robust public biotech activity [50] Other Important Information - The company achieved general and administrative cost savings of $51.3 million, or 30% compared to the prior year [12] - Realized gains from venture investments were $21 million, down from the previous quarterly average [15] - The company has a strong balance sheet with liquidity of $5.3 billion and a net debt to adjusted EBITDA ratio of 5.7x [16] Q&A Session Summary Question: Impact of VC funding on leasing outlook - Management noted that while there is sustained funding in private biotechnology, the overall environment remains cautious, and decision-making is slower [25][26] Question: Strategy regarding The Fenway office property - Management indicated that retaining The Fenway office property for leasing is specific to that location and not a broader strategy [28] Question: Cap rate trends for dispositions - Management mentioned that cap rates for non-core assets range from mid-sixes to mid-nines, depending on market conditions [31] Question: Leasing pipeline and notable groups - Management highlighted that smaller spaces under 50,000 sq ft are in demand, but there is a lack of activity from public biotech companies [32][33] Question: Guidance for Q4 2026 FFO - Management confirmed that the guidance for Q4 2026 FFO remains at $1.40-$1.60, representing a trough for the year [34][41] Question: Capital allocation priorities - Management stated that the priority is on debt reduction before considering stock buybacks [52]