Financial Data and Key Metrics Changes - The company reported $0.71 per share in FFO for Q4 2025, aligning with consensus expectations, and $2.84 per share for the full year, reflecting a 5.6% growth over 2024 [4] - The company introduced 2026 FFO guidance of $2.92 per share at the midpoint, implying a 2.8% growth over 2025, marking the third consecutive year of FFO growth [10][30] Business Line Data and Key Metrics Changes - The total office portfolio's end-of-period leased and weighted average occupancy percentages were 90.7% and 88.3% respectively, with occupancy flat sequentially [12] - Leasing volume in Q4 was strong, with 39 office leases totaling 700,000 sq ft, marking the second highest quarterly volume in the past four years [13] - Average net rent for the quarter was $36.52, with leasing concessions above trend at $10.58, resulting in a lower average net effective rent of $23.18 [14] Market Data and Key Metrics Changes - In Atlanta, leasing volume increased by 5.8% quarter-over-quarter, with the company signing 361,000 sq ft of leases, the highest quarterly volume since Q1 2019 [16] - The Austin market saw positive absorption, with 1.3 million sq ft of leasing activity in Q4, the highest since 2021, driven by technology companies [17] - Charlotte's leasing activity increased 72% year-over-year, with three-quarters of that being new and expansion leasing [18] Company Strategy and Development Direction - The company aims to grow occupancy to 90% or higher by year-end 2026, with a late-stage leasing pipeline totaling over 1.1 million sq ft [8] - The core strategy remains to invest in properties that can be repositioned into lifestyle office spaces in target Sunbelt markets [9] - The company plans to remain agile and opportunistic with acquisitions and dispositions, prioritizing earnings accretion while maintaining financial strength [10] Management's Comments on Operating Environment and Future Outlook - Management noted that office fundamentals are improving, with demand growing and vacancy declining, particularly as major companies phase out remote work [5] - The company sees a robust leasing pipeline, particularly from West Coast and New York City-based companies, indicating a shift away from high-tax states [6] - Management expressed optimism about the future, citing a strong balance sheet and the potential for significant rent growth due to a shortage of high-quality office space [11] Other Important Information - The company acquired 300 South Tryon for $317 million, a strategic addition to its portfolio in Charlotte [24] - The company is under contract to sell Harborview Plaza for $39.5 million and a land parcel in Charlotte for $23.7 million, as part of its strategy to rotate into higher-quality assets [25][26] Q&A Session Summary Question: Can you talk about which markets are most supportive of development from a yield perspective? - Management indicated that Uptown Dallas and Charlotte are promising markets for development, with a focus on identifying opportunities by year-end [35] Question: Can you provide insights on the late-stage leasing pipeline and rent spreads? - Management confirmed visibility into the late-stage pipeline, expecting continued positive cash rent roll-up [37][38] Question: How are you thinking about funding the 300 South Tryon acquisition? - Management highlighted the flexibility in funding options, balancing financial and strategic aspects, with a focus on dispositions that yield comparable returns [39][40] Question: What are the underwriting criteria for new developments? - Management targets a pre-lease basis of around 50% and development yields of 150-200 basis points higher than stabilized cap rates [43] Question: Can you provide an update on leasing activity in Atlanta? - Management noted strong leasing activity across various sectors in Atlanta, with a diversified demand mix [64]