Core Viewpoint - The Democratic Republic of Congo (DRC), the world's largest cobalt producer, is set to end its months-long export ban and implement a strict export quota system starting October 15, 2023, which aims to manage cobalt supply and stabilize prices in the market [1][5]. Group 1: Export Quota Details - The new regulations allow mining companies in DRC to export slightly over 18,000 tons of cobalt for the remainder of the year, with annual export quotas set at 96,600 tons for 2026 and 2027 [2]. - This quota is significantly lower than DRC's projected cobalt production of nearly 220,000 tons in 2024, which accounts for about three-quarters of global output, indicating that future export quotas will not meet even half of the anticipated production [2]. Group 2: Quota Allocation and Adjustments - The export quotas will be calculated based on each company's historical export volumes, and 10% of the authorized export volume for 2026 and 2027 will be allocated for national strategic projects [3]. - The regulatory body, ARECOMS, retains the authority to adjust overall quotas based on market trends or the potential for local processing of cobalt hydroxide into higher-value products [3][4]. Group 3: Market Impact and Price Recovery - The export ban, initially implemented in February 2023 due to a price drop, has led to a price rebound of over 60% for cobalt, with prices for cobalt hydroxide more than doubling since the ban [5]. - The DRC's policy shift is interpreted as an effort to consolidate price recovery and establish market dominance, which will significantly impact the cost and supply chain strategies of global electric vehicle manufacturers and battery producers [5]. Group 4: Future Market Balance - The DRC government aims to achieve market balance through the new policy, with a target to reduce global cobalt inventories to approximately one month's demand [6]. - However, analysts warn that strict supply controls and high prices may drive battery manufacturers and automotive companies to accelerate the development of cobalt-free battery technologies, potentially diminishing DRC's strategic importance in the global cobalt market in the long run [6].

Financial Data and Key Metrics Changes - The company reported a first quarter FFO of $0.74 per share, with same property net operating income increasing by 2% on a cash basis [5][29] - The midpoint of the full year guidance has been raised to $2.79 per share, reflecting a 3.7% growth rate over the previous year [6][37] - Same property GAAP NOI grew by 4% and cash NOI grew by 2% compared to the previous year [29][32] Business Line Data and Key Metrics Changes - The company completed 539,000 square feet of leases during the quarter, achieving a 3.2% cash rent roll-up, marking the 44th consecutive quarter of positive rent roll-up [5][18] - The average net rent for the quarter was $35.87, with average net effective rent at $25.06 [19] - The portfolio was 90% occupied at the end of the first quarter, up from 88.4% a year earlier [9] Market Data and Key Metrics Changes - The existing supply of office buildings is declining, with JLL reporting a removal of 10 million square feet from the US office inventory since 2024 [7] - Leasing volume over the past twelve months reflects 89% of typical pre-pandemic activity, indicating a steady increase in demand [8] - The broader Atlanta office market showed positive trends, with a strong leasing activity of 213,000 square feet [21] Company Strategy and Development Direction - The company is focused on both internal and external growth opportunities, prioritizing investments in lifestyle office properties in target Sunbelt markets [8][12] - The strategy includes a mix of debt, structured transactions, joint ventures, and property acquisitions, while maintaining a strong balance sheet [11][12] - The company aims to capitalize on compelling opportunities arising from market disruptions, with a focus on high-quality lifestyle office assets [10][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the office market is rebalancing, with a shortage of premium space expected soon [14] - The company remains optimistic about the future, citing strong demand across markets and a solid balance sheet to navigate uncertainties [10][15] - Management highlighted that many companies are still catching up on leasing space post-pandemic, creating pent-up demand [11] Other Important Information - The company has seen no impact on the leasing market from recent tariff discussions, with demand remaining robust [10] - The company’s liquidity position is strong, with only $39 million outstanding on its $1 billion credit facility [36] - The company anticipates potential capital deployment into compelling investment opportunities, although this is not included in current guidance [38] Q&A Session Summary Question: Will the company see rent spikes due to robust demand and declining supply? - Management believes that improving demand alongside declining supply will eventually lead to positive improvements in leasing market and rental rates [40][42] Question: Is there a pipeline of acquisition opportunities? - Management noted an increase in owners exploring sales, indicating a greater volume of opportunities, although there is a bid-ask spread due to market disruptions [44][46] Question: What industries are driving the leasing pipeline? - The leasing pipeline is diversified, with strong presence from legal, technology, and financial services sectors, particularly in Atlanta and Charlotte [52][53] Question: How does the company view new development opportunities? - Management is cautious about new developments due to high construction costs but sees potential in markets like Austin where demand is strong [56][57] Question: Are there any trends in leasing concessions? - Management indicated that concessions are starting to level off, which may lead to improved rental rates in the future [42][100]

Financial Data and Key Metrics Changes - The company reported a first quarter FFO of $0.74 per share, with same property net operating income increasing by 2% on a cash basis [4][29] - The midpoint of the full-year guidance has been raised to $2.79 per share, reflecting a 3.7% growth rate over the previous year [5][36] - Same property GAAP NOI grew by 4% and cash NOI grew by 2% compared to the previous year [29][32] Business Line Data and Key Metrics Changes - The portfolio was 90% occupied at the end of the first quarter, up from 88.4% a year earlier [8] - Leasing activity included 539,000 square feet of leases completed during the quarter, with a 3.2% cash rent roll-up [5][18] - Average net rent for the quarter was $35.87, with average net effective rent at $25.06 [20][21] Market Data and Key Metrics Changes - The existing supply of office buildings is declining, with JLL reporting a removal of 10 million square feet from the US office inventory since 2024 [6] - Leasing volume over the past twelve months reflects 89% of typical pre-pandemic activity, indicating a recovery in demand [7] - The broader Atlanta office market showed positive trends, with a strong leasing activity of 213,000 square feet [22] Company Strategy and Development Direction - The company is focused on both internal and external growth opportunities, prioritizing investments in lifestyle office properties in target Sunbelt markets [7][12] - The strategy includes maintaining a best-in-class balance sheet while capitalizing on market disruptions to find compelling investment opportunities [11][15] - The company aims to enhance geographic diversification over the long term, with potential investments in markets like Dallas, Charlotte, and Nashville [95] Management's Comments on Operating Environment and Future Outlook - Management noted that the office market is rebalancing, with a shortage of premium space expected soon [14] - There is optimism regarding the leasing market, with expectations of improved rental rates as demand increases and supply tightens [41][66] - The company remains well-positioned to navigate macro uncertainties due to its strong balance sheet and market presence [10][36] Other Important Information - The company completed three significant transactions during the first quarter, including the payoff of a $138 million mortgage loan [34] - The liquidity position is strong, with only $39 million outstanding on a $1 billion credit facility [35] - The company anticipates potential capital deployment into compelling investment opportunities despite macro uncertainties [37] Q&A Session Summary Question: Will the company see rent spikes due to robust demand and declining supply? - Management believes that improving demand alongside declining supply will eventually lead to positive improvements in leasing market and rental rates [39][41] Question: Is there a pipeline of acquisition opportunities? - Management noted an increase in owners exploring sales, indicating a greater volume of opportunities, although there is a bid-ask spread due to market disruptions [43][46] Question: What industries are driving leasing activity? - The leasing pipeline is diversified, with strong presence from legal, technology, and financial services sectors, particularly in Atlanta and Charlotte [52][53] Question: How is the company approaching new development? - Management evaluates new development opportunities against acquisition opportunities, considering the risk-adjusted return [55][56] Question: What is the impact of office removals on the market? - The company sees broad-based removals across markets driven by obsolete space, which is being repurposed or demolished [61][62] Question: Are there any notable trends in leasing concessions? - Management indicated that concessions are trending down, with lower tenant improvement allowances and free rent due to the quality of the portfolio [100][101]