Oct 27, 2026 earnings call — Record leasing and exchangeable notes refinancing
Raised 2026 core FFO guidance to $1.55 to $1.57 per diluted share, $0.06 midpoint increase versus original outlook.
Revenue $0.2B (est $0.1B) · EPS $-0.17 (est $-0.06)
Key quotes
"We completed 43 leases totaling over 400 thousand square feet with volume evenly split between new business and renewals."
"I am very pleased to report that during the third quarter, we issued $230 million of 2.875% exchangeable senior notes due in 2031."
"4.08 thousand Wilson is 83% leased, and has 5.5 years of weighted average lease term."
Analyst Q&A 4
reinvesting sale proceeds and AI effect on leasing
Q (Michael Lewis · Truist): Analyst asked if selling assets and reinvesting proceeds will be initially dilutive or accretive going forward. He also asked whether recent AI-driven layoffs are reducing office-using employment or leasing demand.
A: Management said redeploying disposition proceeds can be accretive but it is not easy, so they will be very picky and target assets with lease-up or modest repositioning opportunity. They noted bidder pools change by deal size and they will not chase lower-quality, long-walled core assets. On AI, they said they see no current impact: tour activity and renewals remain strong, expansions have outpaced contractions for about 10 quarters, and small and medium businesses (their focus) are less affected.
"I think the question is really can we redeploy disposition proceeds in an accretive manner?" — Christopher A. Kollme
market demand and dividend outlook
Q (Anthony Paolone · JPMorgan): Analyst asked about the nature of demand in major markets and which industries are active. He also asked about the dividend and the company’s ability to retain capital into 2027.
A: Management said demand remains strong and is driven by legal, accounting, insurance, and finance, with more tech, cybersecurity and defense showing up. They highlighted strong activity in Atlanta, Dallas, Northern Virginia, suburban Minneapolis, and Orlando, and said Boston and the District are more muted. On the dividend, the board will decide after consultation; management is not forecasting taxable income in 27 and likely not in 2028, capital needs should decline, and a dividend in 2027 is not presented as imminent but will be evaluated.
"The characteristics of that demand continues to come pretty much the same legal accounting, insurance, finance." — George Wells (COO)
rent growth, big vacancies, and disposals
Q (Nick Tillman): Analyst asked how broadly the company can keep pushing rents beyond Dallas and Atlanta, and whether that performance will persist. He also asked about large vacancies (including U.S. Bank changes) and how disposition marketing is going and whether buyer pools have changed with higher rates.
A: Management said strong roll-ups are happening across multiple markets: 20% to 40% cash roll ups in Galleria projects, 15 to 30% in Northern Virginia and Orlando, and 10% to 20% renewals in suburban Minneapolis, while DC and Boston are weaker and together make up about 12% of the portfolio. For large blocks, they have active prospects (examples: Epsilon gave back about 120 thousand square feet; they rehabbing a lower 1st floor about 125 thousand square feet with roughly 500 thousand square feet of prospects) and U.S. Bank trimmed space slightly but remains committed. On dispositions, they are marketing assets in DC and suburban Boston, buyer interest and tours remain positive, debt pricing has risen a bit, and Houston is the only disposition they project to close in 2026 while other marketed assets would be 2027 events.
"It sets up for us continuing to be able to meaningfully push rate for the foreseeable future, as I noted in my prepared remarks." — Christopher Brent Smith (CEO)
underwriting after higher rates and rent growth
Q (Dylan Burzinski · Green Street): Analyst asked whether underwriting has changed given higher interest rates and if they now use a higher hurdle or different rent growth assumptions. He also asked what drove higher cash realization in Q3 and how that should be expected to trend.
A: Management said debt capital markets directly influence underwriting and they have tempered the speed of acquisitions while watching how rates evolve; they remain engaged on about $600 million to $800 million of potential acquisitions. On cash realization, they said there was broad, portfolio-wide rent growth (net effective rents moved from $22 to 25 to 29 across recent quarters), driven by Sunbelt markets and suburban Minneapolis rather than a single tenant, and they expect $25 to $30 NERs with continued mark-to-market opportunity.
"We continue to stay very engaged on probably anywhere from call it, $600 million to $800 million of potential acquisitions." — Christopher Brent Smith (CEO)