Core Viewpoint - The article discusses a selection of stocks with high dividend yields that are currently viewed unfavorably by Wall Street analysts, suggesting potential investment opportunities in these "hated" stocks. Group 1: Real Estate Investment Trusts (REITs) - National Storage Affiliates Trust (NSA) has a yield of 7.9% and operates 1,069 properties across 37 states and Puerto Rico, benefiting from a recession-resistant business model, although it is currently facing a 20% pullback in performance [3][4] - NSA's recent quarter showed declines in earnings, core FFO, same store net operating income, and occupancy, reflecting broader challenges in the self-storage sector rather than unique issues for NSA [3][4] - Alexander's (ALX) has an 8.5% yield and is highly concentrated, with 60% of its revenues coming from tenant Bloomberg. The company is in discussions for loan restructuring after failing to repay a $300 million loan [5][6] - Despite challenges, ALX has shown double-digit total returns in 2025, outperforming the broader real estate sector, but Wall Street remains skeptical due to dividend concerns [7] Group 2: Talent Solutions and Consulting - Robert Half (RHI) has a yield of 9.0% and operates in contract talent solutions, permanent placement, and consulting services. The company has seen its stock price drop 80% since its peak in 2022, leading to more Sell and Hold ratings than Buys [10][11] - The decline in RHI's stock is attributed to a post-COVID hiring moderation, with significant job losses reported, although the company believes the impact of AI on its business is overstated [12][13] - RHI's earnings are expected to drop by 45% this year, raising concerns about dividend coverage as the payout is projected to exceed earnings through at least the end of 2026 [14] Group 3: Crafting and Creativity Platform - Cricut (CRCT) boasts a high yield of 20.6% and operates as a creativity platform, offering machines and software for crafting. The company initiated a new semiannual dividend program despite declining profits [16][17] - The stock has seen a significant decline, leading to a yield increase above 20%, with analysts recommending selling the stock [19] - Despite a loyal user base and expected profit growth of over 20% in 2025, Cricut faces challenges with flat or declining revenues projected in the coming years, particularly if economic conditions affect holiday shopping [20][21]

Well, you've also got new insights into another belleaguered real estate sector office. An exclusive interview with the CEO of the nation's largest office rate for this week's property play. What were the insights. What were the takeaways.Well, it was a lot, Morgan. Look, we're seeing some encouraging new stats nationally on office. The office vacancy rate fell in Q3 year-over-year for the first time since the start of 2020.That according to CBRE, leasing activity was strong, driven by financial services an ...

This has been written about for three or four years, you know, the downfall of office and it was going to bring down the banking system and it hasn't. And you know, office is improving dramatically. Maybe not across the board, but it is improving.So, it's kind of hard to sit here today and say that that's going to happen because it hasn't. And I think again that the office buildings are going to resolve. As I mentioned earlier, some are doing great.I think there's an opportunity to fix up some of the buildi ...

Core Insights - The office real estate market is believed to have hit its bottom in 2024, with positive trends emerging in leasing and earnings growth for many companies [2][4][43] - There is a significant bifurcation in the office market, with premier buildings performing well while lower-quality buildings struggle [6][22][39] - The demand for office space is being driven by the return of employees to the workplace, particularly in sectors like financial services and legal services [5][52] Market Trends - S&P 500 earnings are projected to grow by 11-12% this year, indicating a healthy economic environment that supports office leasing [3] - Leasing activity has increased significantly year-to-date compared to the last five years, particularly among leading companies [4][5] - The vacancy rate for premier office buildings is 11%, which is 5 percentage points lower than the overall market, with asking rents 55% higher [13][23] Development Strategies - The focus is on developing premier workplace assets, with significant investments in new projects like 343 Madison in New York, a $2 billion project, and 725 12th Street in Washington, D.C., costing approximately $450 million [40][41] - Amenities such as easy commuting access, meeting spaces, and food options are becoming increasingly important in attracting tenants [14][16][18] - There is a trend towards converting underperforming office buildings into residential spaces, particularly in markets like New York, where tax incentives exist for such conversions [28][29][27] Economic and Investment Outlook - The office market is experiencing a resurgence in capital investment, with transaction volumes up 10-15% from the previous quarter and 60-70% year-over-year [58] - Investors are recognizing opportunities in the office sector due to lower cap rates compared to other real estate sectors, leading to a shift in capital allocation [60][61] - The overall sentiment is cautiously optimistic, with expectations that the office market will stabilize and improve, despite challenges in certain segments [43][44][46]

Financial Data and Key Metrics Changes - The company reported FFO of $0.86 per share, raising the midpoint of its FFO outlook for 2025 by $0.08 compared to the initial outlook provided in February [10][11] - Net income for the quarter was $12.9 million or $0.12 per share, with net effective rents reaching new highs [22][23] - The debt to EBITDA ratio was 6.4 times at quarter end, with expectations for improvement as signed leases convert into occupancy [23][24] Business Line Data and Key Metrics Changes - The company signed over 1 million square feet of second-generation leasing volume, including 326,000 square feet of new leases, marking strong leasing activity for eight consecutive quarters [6][7] - The lease percentage in the development pipeline increased to 72%, up from 64% in the previous quarter, with 122,000 square feet of leases signed [7][16] - The company acquired the Legacy Union parking garage for $111.5 million and sold a non-core property in Richmond for $16 million [9][10] Market Data and Key Metrics Changes - Dallas, Nashville, Charlotte, and Tampa were highlighted as standout markets, with Dallas experiencing significant in-migration and corporate expansions [17][19][21] - In Nashville, asking rates increased by more than 11% year over year, reflecting strong demand and limited supply [19] - Charlotte saw a 77% year-over-year increase in leasing activity, with a portfolio occupancy rate of 96% [20] Company Strategy and Development Direction - The company is focused on securing embedded NOI growth by leasing up key vacancies and recycling non-core assets into higher quality properties [5][12] - The strategy includes maintaining a strong balance sheet while pursuing meaningful asset recycling opportunities, with potential acquisitions and dispositions of up to $500 million [11][12] - The company aims to deliver strong embedded NOI growth from signed leases and has a healthy pipeline of acquisition opportunities [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in rising occupancy rates and strong leasing prospects, anticipating a clear pathway to higher earnings and cash flow [12][13] - The company noted that the capital markets are improving, with more institutional capital becoming active in the office sector [60][61] - Management expects elevated capital expenditures to continue through 2026 as signed leases are converted into occupancy [40][41] Other Important Information - The company has $625 million of available liquidity, with only $96 million needed to complete its development pipeline [24] - The company plans to provide its 2026 outlook in February when releasing fourth-quarter results [26] Q&A Session Summary Question: Outlook on acquisitions and dispositions - Management indicated that potential acquisitions would focus on existing markets, with a strategy of trimming non-core assets [29][30] Question: Financing for acquisitions - The preference is to use disposition proceeds for funding acquisitions, although ATM issuances remain an option [32] Question: Market migration trends - Dallas is currently leading in tenant migration, followed by Charlotte and Nashville, with strong demand across the portfolio [35][36] Question: Impact of elevated capital expenditures on cash flow - Elevated CapEx is expected to impact cash flow through 2027, but strong NOI growth is anticipated to improve cash flow levels [39][41] Question: Disposition pricing expectations - Pricing for dispositions is generally meeting or exceeding initial expectations, with more familiar capital entering the market [60][61] Question: Update on Ovation project - The company has control over the Ovation site and plans to begin vertical construction in 2027, with a focus on mixed-use development [67][69]

Financial Data and Key Metrics Changes - Funds from operations (FFO) per share for Q3 2025 was reported at $1.74, which is $0.04 above the forecast and $0.02 above market consensus [5][37] - The midpoint of the earnings guidance for the full year 2025 was raised by $0.03, now projected at $6.89 to $6.92 per share [5][39] - Occupancy in the same property pool increased by 20 basis points from the previous quarter, reaching 86.6% [21][37] Business Line Data and Key Metrics Changes - Over 1.5 million square feet of leasing was completed in Q3 2025, a 39% increase compared to Q3 2024 and 130% of the last five-year average for the same quarter [6][5] - Year-to-date leasing activity totaled 3.8 million square feet, which is 14% greater than the first three quarters of 2024 [6] - The total portfolio percentage leased for the quarter was 88.8%, a decline of 30 basis points, but an increase of 10 basis points from June 30 [22] Market Data and Key Metrics Changes - Office transaction volume in private markets reached $12.9 billion in Q3 2025, up 6% from Q2 2025 and 55% from Q3 2024 [8] - Direct vacancy for premier workplaces in key markets is 11.7%, which is 22% lower than the broader market [10] - The overall mark-to-market on leases signed in Q3 was up almost 7%, with notable increases in Boston and New York [24] Company Strategy and Development Direction - The company aims to sell 27 non-strategic assets for approximately $1.9 billion by the end of 2027, with 23 transactions either closed or underway totaling roughly $1.25 billion in estimated net proceeds [7][8] - Focus on increasing portfolio concentration of premier workplace assets in core gateway markets, with a strategy to reallocate capital to high-quality developments [10][11] - Plans to grow FFO through new development, particularly in multifamily projects, while being selective in office developments due to market conditions [13][14] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are growing and utilizing their spaces more intensively, leading to positive leasing market conditions [16] - The company expects to achieve a 200 basis point increase in occupancy by the end of 2026, supported by a strong leasing pipeline [51][68] - The overall economic environment is improving, with debt and equity investors becoming more constructive on the office sector [16] Other Important Information - The company recorded $212 million in impairments related to assets part of the strategic sales program [38] - The debt markets have improved, allowing the company to successfully access both secured and unsecured markets, including a $1 billion issuance of exchangeable notes [34][36] Q&A Session Summary Question: Thoughts on reallocating capital into premier locations and smaller markets like Seattle and LA - Management acknowledged that LA and Seattle are smaller markets with weaker leasing conditions and currently do not see development opportunities in those areas [46] Question: Confidence level regarding occupancy increases in 2026 - Management expressed confidence in achieving a 200 basis point increase in occupancy by the end of 2026, supported by ongoing leasing activity [51] Question: Recovery in San Francisco and Salesforce's investment impact - Management noted that AI demand is focused on low-rise buildings rather than high-rise, and Salesforce's commitment is seen as positive for job growth and office demand [54][58] Question: Percentage of pre-pandemic leases still to be addressed - Management indicated that a significant portion of the portfolio consists of long-term leases, and most growth is coming from existing clients expanding their space [63][65] Question: Addressing vacancy and occupancy build - Management stated that projections are based on annual expectations, with confidence in achieving occupancy increases driven by current leasing activity [68]

Financial Data and Key Metrics Changes - Funds from operations (FFO) per share for Q3 2025 was $1.74, which is $0.04 above the forecast and $0.02 above market consensus [5][38] - The midpoint of the earnings guidance for the full year 2025 was raised by $0.03, now projected at $6.89-$6.92 per share [5][40] - Occupancy in the same property pool increased by 20 basis points from the previous quarter, reaching 86.6% [21][38] Business Line Data and Key Metrics Changes - Over 1.5 million sq ft of leasing was completed in Q3 2025, a 39% increase compared to Q3 2024 and 130% of the last five-year average for the same quarter [6][5] - Year-to-date leasing activity reached 3.8 million sq ft, which is 14% greater than the first three quarters of 2024 [6] - The total portfolio percentage leased for the quarter was 88.8%, a decline of 30 basis points, but an increase of 10 basis points from June 30 [22] Market Data and Key Metrics Changes - S&P 500 earnings have been growing for nine consecutive quarters, with a projected growth of around 11%-12% for 2025 [6] - Office transaction volume in private markets improved, with significant office sales reaching $12.9 billion in Q3 2025, up 6% from Q2 and 55% from Q3 2024 [8] - Direct vacancy for premier workplaces in key markets is 11.7%, which is 22% lower than the broader market [10] Company Strategy and Development Direction - The company aims to lease space and grow occupancy, with a focus on premier workplace assets in core gateway markets [5][10] - A strategic goal includes selling 27 non-strategic assets for approximately $1.9 billion by the end of 2027, with $1.25 billion in transactions already closed or underway [7][8] - The company is reallocating capital to premier workplace assets and has launched new developments in New York and Washington, DC [12][14] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are growing and utilizing their space more intensively, leading to positive leasing market conditions [16] - The company expects to see a 200 basis point increase in occupancy by the end of 2026, driven by active leasing and market conditions [52][70] - The overall market for office space is improving, with more availability of capital at better pricing [16][37] Other Important Information - The company recorded $212 million in impairments related to assets part of its strategic sales program [39] - The debt markets have improved, allowing the company to access financing at favorable terms, including a $1 billion unsecured exchangeable notes offering [35][37] Q&A Session Summary Question: How is the company approaching smaller markets like Seattle and LA? - Management indicated that there are no current development opportunities in LA or Seattle due to weaker leasing conditions, but they would consider acquisition opportunities if they arise [46][47] Question: What is the confidence level regarding occupancy increases in 2026? - Management expressed confidence in achieving a 200+ basis point increase in occupancy by the end of 2026, supported by ongoing leasing activity [51][52] Question: How is the company addressing the recovery in San Francisco? - Management noted that AI demand is primarily in low-rise buildings south of Mission Street, and they are seeing growth in leasing activity from technology companies [54][56]

Financial Data and Key Metrics Changes - Core FFO per diluted share for Q3 2025 was $0.35, a decrease from $0.36 in Q3 2024, attributed to the sale of three projects and higher net interest expense, offset by growth in operations due to higher economic occupancy and rental rate growth [27] - FFO generated during Q3 2025 was approximately $26.5 million [27] - The company narrowed its 2025 annual core FFO guidance from a range of $1.38 to $1.44 to $1.40 to $1.42 per diluted share [29] Business Line Data and Key Metrics Changes - The company executed approximately 724,000 square feet of total leasing during the quarter, including over half a million square feet of new tenant leases, marking the largest amount of new tenant leasing in a single quarter in over a decade [10] - The weighted average starting cash rent was nearly $42 per square foot, unchanged from the previous quarter, with net effective rents at $21.26 per square foot, reflecting a 2.5% increase [18] - Rental rates for space vacant less than a year reflected almost 9% and just over 20% roll-ups on a cash and accrual basis, respectively [13] Market Data and Key Metrics Changes - U.S. office demand turned around in Q3 2025, with about 12 million more square feet occupied than returned to landlords, the first positive figure since late 2021 [5] - Five operating markets experienced positive absorption, with Washington, D.C. and Boston being exceptions [6] - The overall leasing volume in the U.S. reached approximately 105 million square feet in Q3 2025, within 10% of the 2015 to 2019 national quarterly average [6] Company Strategy and Development Direction - The company aims to strengthen its brand as the landlord of choice, driving leasing demand and increasing rental rates across its portfolio [9] - The strategy includes focusing on high-quality office spaces and leveraging a hospitality-driven service model to attract tenants [8] - The company anticipates achieving a lease percentage of 89% to 90% for its operating portfolio by year-end [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single-digit FFO growth or better in 2026 and 2027, driven by strong leasing momentum and a robust pipeline [15] - The company noted that the broader macro factors, along with successful portfolio repositioning, are expected to drive organic FFO growth [15] - Management highlighted that the demand for office space remains strong despite slow hiring and an uncertain economic outlook [7] Other Important Information - The company achieved a five-star rating and Green Star recognition from GRESB, placing it in the top decile of all participating listed U.S. companies [15] - The out-of-service portfolio is approaching 70% leased, with expectations for stabilization by the end of 2026 [13] Q&A Session Summary Question: Clarification on expansion versus contraction within the portfolio - Management noted that there have been more expansions than contractions, with 16 expansions versus two contractions in the last quarter, indicating a net positive of 40,000 square feet [36] Question: Insights on larger tenant behavior and office utilization - Management indicated that larger users are looking to upgrade their space, with some consolidating to create hubs for collaboration [39] Question: Conviction level for earnings growth next year - Management clarified that the projected earnings growth is based on organic growth within a static portfolio, assuming no acquisitions or dispositions [46] Question: Status of non-core asset dispositions - Management stated that the market remains challenging for selling non-core assets, but they continue to focus on pruning these assets [60] Question: Details on the $75 million of cash rent pending - Management estimated that about 70% of the $75 million would start paying in 2026, with a significant portion expected to commence in the middle of the year [71]

Financial Data and Key Metrics Changes - The third quarter net loss was $26.2 million or $0.15 per share, while the FFO totaled $28 million or $0.16 per diluted share, exceeding consensus estimates by $0.01 [21] - The annualized combined core net debt to EBITDA was 8.1 and 7.6, respectively, both within or below the business plan range [21][23] - The FFO payout ratio for the third quarter was 93.8% [28] Business Line Data and Key Metrics Changes - The quarterly tenant retention rate was 68%, with leasing activity approximating 343,000 sq ft [3] - The operating portfolio leasing pipeline remains solid at 1.7 million sq ft, including about 72,000 sq ft in advanced stages of negotiations [7] - The mark-to-market was -1.8% on a GAAP basis and -4.8% on a cash basis, heavily influenced by a large renewal in Austin [4][5] Market Data and Key Metrics Changes - In Philadelphia, occupancy was 94% and leased at 96%, while Boston was at 77% occupied and 78% leased [4] - The life science sector in the city is expected to drive growth, supported by a strong regional healthcare ecosystem [11] - The Austin market saw a 70% increase in leasing activity in Q3 compared to Q2, with over 108 tenants seeking more than 3.5 million sq ft [11] Company Strategy and Development Direction - The company aims to stabilize development projects and improve earnings while reducing overall leverage [31][13] - The focus is on recapitalizing high-quality, stabilized assets to enhance cash flow and open up additional capital options [13] - The investment market is improving, with institutional buyers reemerging, indicating a positive outlook for future asset sales [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating platform remains stable with limited rollover risk and strong liquidity [32] - The company anticipates that the demand for high-quality buildings will continue to grow, particularly in select submarkets [9] - Management expressed optimism about the leasing pipeline and the potential for increased NOI from development projects [31][14] Other Important Information - The board decided to reduce the dividend from $0.15 to $0.08 per share, which is seen as sustainable and allows for reinvestment [18][66] - The company issued $300 million of bonds to repay a secured CMBS loan, enhancing flexibility in leasing and managing assets [8][22] Q&A Session Summary Question: Could you go over in more detail how we should think about the timing and process of the recapitalizations? - Management explained that recapitalizations are designed to eliminate high-cost capital structures and improve earnings by bringing high-quality assets onto the balance sheet [33][34] Question: Can you clarify the leasing prospects at Uptown ATX? - Management indicated that the leasing pipeline includes both spec suites and full-floor users, with a focus on capturing Class A tenants [42][46] Question: Why did the company decide to issue unsecured notes and take out the CMBS debt? - The decision was based on the opportunity to unencumber assets, improve unleveraged ratios, and reset rates in the debt capital markets [52][53] Question: Could you provide detail on the board's decision to reduce the dividend? - The board's decision was influenced by the need to conserve capital and the expectation of increased NOI from development projects in the future [64][66]

Financial Data and Key Metrics Changes - The third quarter net loss was $26.2 million or $0.15 per share, while the FFO totaled $28 million or $0.16 per diluted share, exceeding consensus estimates by $0.01 [21] - The annualized combined core net debt to EBITDA was 8.1 and 7.6, respectively, both within or below the business plan range [21][30] - The FFO payout ratio for the third quarter was 93.8% [29] Business Line Data and Key Metrics Changes - The quarterly tenant retention rate was 68%, with leasing activity approximating 343,000 square feet [3] - The operating portfolio leasing pipeline remains solid at 1.7 million square feet, including about 72,000 square feet in advanced stages of negotiations [7] - The mark-to-market was negative 1.8% on a GAAP basis and negative 4.8% on a cash basis, heavily influenced by a large renewal in Austin [4][5] Market Data and Key Metrics Changes - In Philadelphia, occupancy was 94% and leased at 96%, while the Pennsylvania suburbs were at 88% occupied and 89% leased [4] - Boston's occupancy was at 77% and leased at 78%, expected to drop to about 74% by year-end due to a known move-out [4] - The life science sector in the city is in recovery, supported by a strong regional healthcare ecosystem [11] Company Strategy and Development Direction - The company aims to stabilize development projects and capitalize on the recovering market while reducing overall leverage [32][63] - The focus is on recapitalizing high-quality, stabilized assets to improve earnings and cash flow [14][70] - The company plans to maintain minimal balances on its line of credit to ensure ample liquidity [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the real estate market sentiment continues to improve, with strong demand for high-quality buildings [9][10] - The company anticipates a significant increase in NOI from the consolidation of 3025 JFK, expected to grow from $8 million to over $20 million in the first quarter of 2026 [25] - The board's decision to reduce the dividend was based on the need for sustainable cash flow and capital conservation [70] Other Important Information - The company issued $300 million of bonds due January 2031, generating $296 million in gross proceeds [8] - The average cost of bond debt is slightly above 6%, with $900 million of outstanding bonds having coupons above 8% [9] - The company sold $73 million of properties at an average cap rate of 6.9% [17] Q&A Session Summary Question: Could you go over in more detail how we should think about the timing and process of the recapitalizations? - Management explained that recapitalizations are designed to eliminate high-cost capital structures and bring high-quality assets onto the balance sheet, with various financing options available [34][36] Question: Could you provide some detail on the board's decision to reduce the dividend? - The board considered operating cash flow, refinancing requirements, and the cost of outside capital, concluding that a reduced dividend is sustainable and allows for future growth [68][70] Question: Can you explain why you decided to issue the unsecured notes and take out the CMBS debt? - The decision was based on the opportunity to unencumber assets, improve unleveraged ratios, and reset rates in the debt capital markets [55][56]