This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha
office rentals still strong
“Fundamentals in our markets continue to improve with higher rents in our office and multifamily portfolios. During the quarter, we signed more than 800,000 square feet of office leases. We increased our leased percentage by 60 basis points to 92.5%, our highest since 2008.”
Paid $350 /sqft for building in Bev Hills
“On the acquisition front, after quarter end we purchased Carthay Campus for $75.3 million in an off-market transaction. Carthay Campus is a 216,000 square foot office building, adjacent to our properties in East Beverly Hills.”
100% occupancy in west LA means rents are going higher faster
“I don’t think it’s sustainable in a multi-tenant building to stay at 100%. I do think when you see that happening it’s a good sign that rents are going to move at a quicker clip than they have been leading up to those numbers.”
You give the sell side the numbers it wants and all of a sudden you’re playing a game that isn’t meaningful
“Well, I will tell you that, that’s a good question. And I certainly have asked myself that plenty this year. It’s a number that, quite frankly, you guys have asked for. And so we started giving you some time ago. And it’s very hard to take something away once we’ve been giving it to you. If you actually look back over the last few years, we have guided to that number and missed it on the high side by as much as 200 basis points many times. But of course, when you miss it on the high side nobody cares and when you miss it on the low side it’s become a very large area of focus.
Either side, I’m not sure it matters a whole lot. I have not – never spent the time, you guys put together your models and however you put them together they are numbers that are meaningful to you. And we’ve tried to give you all the numbers you feel are meaningful. We don’t go to you guys and say, you’re wrong that’s not meaningful this is meaningfully, you’re wrong, because it’s not worthwhile argument. You’re not going to like hearing that from me, and you’ll say, I know my business and our business is to try and do our best to give you the information that you ask for.
On previous calls I have certainly said I don’t feel this is the most key number in terms of determining the economic health of the portfolio or the Company. But people wanted it, so we’ve done our best to give it to you.’
Good example of how they think about some of the parameters of a deal
“why I like that deal is we own a couple of big buildings right there. I mean, like you could almost throw a baseball to where this is. And we are really full and we see the kind of tenant demand that our system is generating. And so, when that – he brought that, I’m like well, this is great because we’re going to nail this vacancy and I’m feeling very good about where we’ll go with that building over the next quarter or so.”
They’re trying to build a tower on Wilshire west of the 405
“any sane person would assign a very low probability to building a tower on the West side, probably the first tower to be build on the West side in 30 years, or 40 years maybe you can yes, probably 40 years. But being very optimistic real estate guy, of course, I expect to get it done, I mean I wouldn’t be doing all this work if I didn’t want to get it done, but I think any reasonable person say would call this a long shot, I mean this is swinging for the fences, which is something we don’t normally do as a company, but the opportunity is so special and unique and exists for us. And so I felt like we had to invest the capital and take a shot at it, which is what we’re doing.”