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]