Brandywine at Nareit REITweek: Strategic Moves Amid Market Shifts

On Wednesday, 04 June 2025, Brandywine Realty Trust (NYSE:BDN) presented at the Nareit REITweek: 2025 Investor Conference. The company discussed its strategic focus on high-quality office spaces in Philadelphia and Austin, while addressing challenges in older properties and the life science sector. Brandywine aims to return to an investment-grade rating, despite potential short-term dividend coverage issues.

Key Takeaways

• Brandywine is focusing on high-quality office properties, with 80% of its NOI coming from Philadelphia and 20% from Austin Tech.
• The company plans to deleverage and regain an investment-grade rating by recapitalizing joint ventures and strategic asset sales.
• Aiming to increase its life science exposure to 25% of its portfolio amid sector challenges.
• Dividend may be slightly uncovered in 2025, with plans to return to current levels by 2026.
• Austin’s occupancy has decreased to approximately 75%, prompting evaluations of asset sales.

Company Overview and Strategy

Brandywine Realty Trust is a key player in the office REIT sector, primarily operating in Greater Philadelphia and Austin Tech. With a 12 million square foot portfolio, the company is developing mixed-use projects like Schuylkill Yards in Philadelphia and Uptown ATX in Austin. The development pipeline is valued at nearly $1 billion, divided into 21% office, 42% residential, and 27% life science. Capital recycling remains a core strategy, with $300 million in sales last year and a $50 million target for this year. Brandywine has $600 million in liquidity with no bond maturities until late 2027.

Office Market Dynamics

Brandywine’s CBD Philadelphia office portfolio boasts a 96% lease rate, with 60-80% of new leasing activity from tenants upgrading to higher quality spaces. Despite an overall vacancy rate of 18-20% in Philadelphia, half of this is concentrated in less than 10% of buildings, many of which are being considered for residential conversion. New office space supply is expected to grow modestly by 30-50 basis points annually until 2030. In Austin, occupancy has decreased from 95% pre-pandemic to about 75%, leading Brandywine to assess whether to lease or sell its properties.

Life Science Sector

Brandywine is targeting a 25% portfolio exposure in life sciences, despite facing challenges from NIH grant reductions and lower biotech market valuations. The sector has seen $10 billion in NIH cuts and $1.5 billion in National Science Foundation grants on hold. Nonetheless, large pharmaceutical companies continue to invest in cell and gene therapy sectors to bolster their patent pipelines.

Financial Strategy and Balance Sheet

Brandywine aims to regain an investment-grade rating by deleveraging through recapitalizing development joint ventures and reducing ownership stakes. Interest carry costs have risen from $75 million in 2022 to $135 million currently. The company plans to recapitalize all joint ventures and remove a CMBS loan by the end of 2026.

Dividend Policy

The dividend may be slightly uncovered in 2025 due to high tenant improvement allowances and preferred structures in development deals. However, Brandywine plans to restore the dividend to current levels by the end of 2026, with the Board reviewing the policy annually.

Conclusion

For a detailed understanding, readers are encouraged to refer to the full transcript of the conference call.

Full transcript - Nareit REITweek: 2025 Investor Conference:

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: Okay. I think all set, ready to begin here. So I’m Michael Lewis, Managing Director and Lead Office REIT Analyst at Truist Securities. I have the privilege today of introducing the management team of Brandywine Realty Trust. Directly to my right, Jerry Sweeney, the President and Chief Executive Officer Tom Worth, directly to his right, Brandywine’s Chief Financial Officer and on the end there, Dan Plaza, Chief Accounting Officer.

Brandywine Realty Trust, ticker BDN, is an office REIT headquartered in Philadelphia, about a $750,000,000 equity market cap. I didn’t check this morning. And the format here, I’m gonna turn it over to Jerry for a little bit. I’m gonna ask some questions. And if there’s a question in the audience, feel free to raise your hand.

I will leave some time at the end here for some Q and A from the audience as well. So before we get into market fundamentals and other topics, thought maybe, Jerry, for the investors out there that might be less familiar with Brandywine, maybe you could give a brief overview of the company and your strategy.

Jerry Sweeney, President and Chief Executive Officer, Brandywine Realty Trust: Great. Thank you very much, Michael. And thank you all for attending. A quick snapshot of Brandywine. We’re, as Michael mentioned, office company domiciled in headquartered in Philadelphia.

And we’re really a two market company. We had about 80% of our NOI coming in from the Greater Philadelphia marketplace and about 20% from Austin Tech. We have a small percentage of operations coming in from Metro DC as well as New Jersey and Maryland. But it mentioned we’re primarily an office REIT, very stable, high quality portfolio. Owned portfolio is about 12,000,000 square feet.

Big concentrations in Philadelphia’s Central Business District, University City Philadelphia and the Pennsylvania suburbs. And we’ve really begun to diversify our product mix over the last couple of years. We have a couple of very large mixed use developments I’m sure we’ll talk about. One in University City Philadelphia where we were awarded the master development rights by Drexel University to build about a 5,000,000 square foot mixed use development called Schuylkill Yards. It’s adjacent to our Sears Center and Sears Center South developments, which adjoin Thirtieth Street Train Station, which is the third busiest train station in the country.

We also have a very large mixed use development that we call Uptown ATX in Northwest Austin. That project really just commenced construction a couple of years ago. We delivered our first two projects, a residential and an office product last year. We also just received approvals from CAPP Metro, which is Austin’s regional rail authority, to build a train station at Uptown ATX. So as we when we build out that development, which will take a number of years and could be as high as 17,000,000 square feet, it will be Austin’s First transit serve development.

So our current development pipeline is just shy of $1,000,000,000 It’s comprised of 21% office, 42% residential, 27% life science and some retail components as well. But as we look at our forward development pipeline, it’s primarily a mix of office, life science and residential. We’ve been an active recycler of capital over the years. Last year, we sold about $300,000,000 worth of properties. This year, we’ve targeted about $50,000,000 of sales.

And our balance sheet is in very good shape. We have just shy of $600,000,000 of liquidity. No bond maturities coming up until late twenty twenty seven. And we have every expectation of taking advantage of some of the distressed opportunities we see in the marketplace over the next couple of years. So with that, Michael, I’ll turn it back to Yes.

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: Fantastic. So I thought since we’re talking about office real estate, obviously, a downturn in the last few years, maybe we’re at a point here where things start to look up. But maybe you could just talk a little bit about cap off for us the work from home, the hybrid work strategies and now kind of more talk about return to office. So maybe the question is talk a little bit about office leasing demand in Philadelphia and Austin and how you’re kind of positioned to capture more than your fair share.

Jerry Sweeney, President and Chief Executive Officer, Brandywine Realty Trust: Yeah. It’s actually been a great evolution over the last couple of years. I mean, we’re seeing the vast majority of our tenants are back, at least three, many four, and some moving to five days a week. But I’ll give you some stats that might help reinforce that. I mean, our CBD Philadelphia office portfolio is 96% leased.

We are getting the highest rents we’ve ever gotten. Between 6080% of our new leasing activity around the company is coming from tenants who are moving up the quality curve. And when you really take a look at bifurcation of office space, it’s been pretty interesting in the last couple of years. Like when I take a look at Philadelphia, the overall vacancy rate is between 1820% depending upon what brokerage firm numbers you use. 50% of that vacancy is in 10 buildings.

So less than 10% of the buildings in the marketplace comprise 50% of the vacancy. And we’re seeing that in the other sub markets in as well. So it’s really become a story of have and have nots. So as people are bringing their employees back to workplace, we’re seeing more and more companies migrate to higher quality office. So from a net effective rent standpoint, controlling capital costs, absorbing a vacancy loss, I think the top quality office product is doing incredibly well.

And we see that trend not just in CBD Philadelphia, but also out in University City and the suburban markets as well. And interestingly, we’re starting to see our competitive set begin to shrink for two primary reasons. One, we’re seeing a number of buildings that are functionally obsolete being taken out of service and become candidates for residential conversion. And then some of the older buildings are also undergoing some financial distress, which really takes them out of the marketplace for active leasing activity. Just for example, in Philadelphia just yesterday, about a 900,000 square foot block of vacant office space was traded to a company who’s going to take that out of office inventory and use that to create about 600 to 700 residential units.

So as we’re looking at the existing market conditions that we’re in, given our top flight inventory, our ability to raise net effective rents, juxtapose that again against the inventory set shrinking over the next couple of years in all of our markets. And then add on to that, that the forward supply pipeline is incredibly small using any of the firm’s forecast. I mean, they’re projecting between now and 2030 only between a 30 to 50 basis point annual addition to the office stock annually. So we think the high quality office product will do very well, and we’re seeing that statistically within our own portfolio. We think the next couple of years portend even more success going forward.

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: Great. So you may have already addressed this question in a way, right? You talked about the highest rents you’ve got and good net effective rents. Some office REITs are seeing a cash flow crunch as they spend a lot of money to release portfolios back to pre COVID levels. Are you seeing a similar thing, a mismatch between kind of economic leased and cash paying leased?

And is there kind of a cash gap there for you as well?

Jerry Sweeney, President and Chief Executive Officer, Brandywine Realty Trust: I think in some cases, is, Michael. But I also think we have moved in a number of our markets to doing away with gross free rent and moving to net free rent. So where we need to give free rent, the tenants are paying operating expenses during that period. And then in other situations, we’re moving to a significant stepped rent program. So from day one, the tenant is paying rent to obviate the cash flow crunch and then stepping up the rent over term.

So I think we can’t do that in every market or in every product. But I think in some of our properties that are north of 90% leased, where there’s a dearth of available space and we have more prospects looking in that space than we have space available, we’re able to really drive, I think, economic returns quite nicely. Now when we take a look at Austin has a bit of a disequilibrium right now between oversupply and under demand. So in that marketplace, we’ve seen our occupancy levels go from 95% occupied pre pandemic down to about 75% leased today. So in that market, we’ve actually done a lot of analysis to take a look at for each of these buildings, how long will it take to lease up the properties, how much capital will we need to put in.

But then taking those two data points, say, okay, what’s the real net present value to us of that building? So it takes five years to lease up. We’re putting in twenty one million dollars of capital. We discount that back. How does that value that net present value equate to what we think we can sell the building for today?

And in a number of cases, that NPV equals kind of current market value today. So we have a number of properties in Austin that are up for sale. That eliminates kind of the cash crunch for us, shows where we can allocate the capital that we don’t need to spend in those projects, put it in the higher returning projects, and then kind of takes that as a value trap that some of these office buildings may have over the next couple of So it’s really a very much of a submarket dynamic, taking a look at where we can really move rents, where we can kind of compress concession packages, where we can at the one extreme and the other extreme, where do we actually need to recognize the reality of what we think a couple of these buildings may be worth. So it’s a lot of quantitative analysis, really understand the marketplace here. And that’s why I think one of the benefits we have is a vertically integrated company is we’ve a great research team, great leasing people, great product, great on-site property management.

So we have great visibility into every one of our 1,200 tenants in terms of what they want to do, what they’re thinking, where they want to expand or their relocation opportunities. So it’s very, very much a day in, out communication program with the marketplace and our tenant base.

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: In terms of supply, I imagine there’s going to be very few office buildings built for a while. And I can think of two ways that impacts you, right? So first, it should allow demand to outpace supply, which is a good thing for you as an existing landlord. But second, development’s a meaningful part of the company strategy. So you talked about development a little bit at the very beginning, but maybe give us some more thoughts on does this limit your external growth potential in the near term or what the plans are for development?

Jerry Sweeney, President and Chief Executive Officer, Brandywine Realty Trust: Yes. Look, I mean, we have a large forward development pipeline. For right now, our focus is very simply on leasing and stabilizing the existing development pipeline. And I think we’re making very good strides on that. We have one of our recently delivered projects at the Schuylkill Yards, a mix of residential and office.

The residential is 98% leased. The office is 82% leased. So very good progress there. Our residential project down in Uptown, ATX in Austin just we just delivered that. That’s running ahead of pro form a at 72% leased.

We’ve actually done 100 leases in the last sixty days. So demand drivers there are really picking up. We have a 350,000 square foot office building that’s in lease up right now. We have a pipeline of about 600,000 square feet. And then a building that we literally just delivered a couple of months ago in Philadelphia, a life science building that we are in the process of leasing up.

So the major focus right now, despite the fact that we have a very large forward development pipeline, is actually leasing up the existing pipeline, generating NOI there. We have partnerships in a couple of those properties, recapitalizing those partnerships, and then we’ll focus on forward development. We’re still continuing to do some planning activity on those developments. To wit, we just recently had two significant events for the company. One is our Uptown ATX development.

Just got up zoned again by the city of Austin given its mass transit capacity. So we have the ability to do a lot more square feet there than we originally anticipated. And then in Radnor, Pennsylvania, 1 of our core suburban markets, the Township just passed a master a comprehensive master plan that gives us the ability to kind of create a mixed use development and increase density in our 2,000,000 square foot Radnor development. So development will always be part of our future. But certainly, based upon where capital markets are, leasing dynamics, the major folks that come right now is to lease up these developments, recapitalize them in an accretive manner, potentially take advantage of some of the distress that we’re seeing out there through bridge financing or distressed acquisitions.

And then we’ll worry about the development pipeline when market conditions are a bit better.

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: Great. You mentioned one of the life science buildings. To ask about that specifically. So you had set a goal to move the portfolio from about 8% life science today to 25. Maybe give us a sense of life science fundamentals today and if 25% exposure you think is still the right amount or if you’re starting to shift those goals a little bit?

Jerry Sweeney, President and Chief Executive Officer, Brandywine Realty Trust: We think 25% is the right target for us given our large concentration in Philadelphia. Sometimes with goals, life intervenes. So I think we’re hoping to get to 25% a little bit sooner than I think we will. I mean, the life science sector has certainly taken some hits over the last couple of years. But I think the long term demand drivers are still very much in play.

Philadelphia has really three major medical research centers, University of Pennsylvania and their health care system, Children’s Hospital of Philadelphia, the Wistar Institute. There’s a few other ones like Jefferson and Temple. But it’s primarily those three. They’ve been a fairly large recipient of NIH grants over the last couple of decades. Of course, the new administration in Washington has really started to take a hard look at what they’re doing with NIH grants.

So there’s been a cutback in that since January. Certainly with the NIH issuing the 15% indirect cost override for future NIH grants, that’s put a bit of a squeeze on that as well. So certainly there’s been almost $10,000,000,000 of NIH cuts since January or grants put on hold. In addition to that, there’s been about just shy of $1,500,000,000 National Science Foundation grants put on hold. So that does have an impact on the dynamics in the sector.

And then particularly on the institutional side where there’s large NIH recipients like University of Pennsylvania Medical System. But then we look at our target market to grow our life science exposure, which is kind of on the private life science side where they’re trying to raise capital. That’s been impacted significantly by the fact that you still have about 150 publicly held life science companies that are trading below cash value. So there’s been a huge pullback in the biotech sector from public market pricing. So of course, if you think about trying to raise capital as a private life science company, the pricing you’ll be able to achieve has been seriously impacted by where the public market valuations are.

So when I take a look at the life science building we recently delivered in Philadelphia, we have a very large pipeline of deals. A number of those deals have advanced to the point where we’re ready to sign leases. But the reality is we’re not going to sign the lease and the tenant won’t be in a position to sign the lease until they complete their fundraising cycle. So a lot of fundraising is underway. We’ll see how that continues to go.

I mean, the science is amazing. And I think you’ll continue to see some amazing scientific breakthroughs, particularly in the cell and gene therapy mode. We’re dealing with companies in our portfolio that are dealing with cell and gene therapies that can cure lupus, cure hemophilia. So there’s a lot of diseases out there that still don’t have FDA approvals in place for. So the forward pipeline, I think, is pretty significant.

When you take a look at the large pharma companies, which 80% of the world’s pharma companies have large concentrations in the Philadelphia region, 60% of pharma patents are cliff vesting in the next five to ten years. So there’s a huge push by pharma companies to invest capital into the life science, particularly cell and gene therapy sectors, to try and grow their patent pipeline over the next few years. So right now, we think the underlying long term demand drivers are very, very constructive. And I think pretty much in line with what we thought. But certainly with, I think, the political overlay, the cutback in some of the government programs, the uncertainty related to what the near term outlook is for some of those programs and then compound that with the dislocation in the biotech public market valuation space is going to take a little bit longer than we initially anticipated.

But look, when we take a look at all this science coming out of those three major institutions in Philadelphia, pretty amazing stuff. And that capital will find its way to support that. I think we started a 70,000 square foot incubator a few years ago of 14 different companies, some sponsored by major pharma companies. We have graduate level labs we put in place that are doing very, very well. Where I think the gap has been in the last twelve months is there was a greater expectation that some of these companies that are in graduate level space, a 5,000, 10 thousand, 15 thousand square feet, would be able to raise significant capital and grow into 30,000, 50 thousand or 75,000 square feet.

That last piece is what’s really been on hold of the last couple of quarters.

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: Got it. My next question is about asset value. So I know you’re always testing the market with potential dispositions. When I was preparing these questions, I estimated your stock was trading at a 12% implied cap rate. So what do you think asset values are today?

And do you have disposition plans?

Jerry Sweeney, President and Chief Executive Officer, Brandywine Realty Trust: We actually think it’s at a 14% cap rate just for public consumption. No, look, I think one of the real interesting dilemmas right now in the office space is what are the effective valuations. A couple of data points. We sold $300,000,000 of properties last year at cap rates ranging from the high 6s to 11%, purely a function of the weighted average lease term, the credit of the tenant, the occupancy levels. So pretty wide range in terms of what’s been pricing in the public marketplace.

So that’s data set one. Data set two is a lot of the properties that have traded in the office sector have been some of the lower quality buildings. So you really haven’t seen a lot of the trophy class buildings trade. You’re seeing some of that in New York here. You saw one in Austin A Few Months ago.

But for the most part, a lot of the headline trades are lower quality properties. Like in fact, when we knew we were going to a very tough point in the cycle and we were taking a look at our multiple year business plan, we really had a couple of key predicates. One was to make sure we covered all of our financial exposures, got all of our refinancings done and made sure that we maintained sufficient liquidity to fully execute our business plan and take advantage of opportunities. Second predicate was do no harm to our best assets. We have some very high quality assets and trying to jam a sale on those in today’s marketplace will not get optimal pricing.

So I think there still needs to be a fair level of price discovery in the office space. So we’re looking forward to the second half of this year and next year showing some more clarity on that. We’re seeing more and more institutional investors come back in the market for high quality office. The debt markets from a bank and CMBS standpoint and HD standpoint seem to be working very well compared to they were a year ago. So we think the confluence of increased investor appetite, the financing market showing more depth, And then I think a growing recognition of the fact that there’s been a real bifurcation of quality product in the office space.

I mean, the A space is generating much higher effective rents, much higher occupancy levels, lower rent concessions versus the area the product is functionally obsolete. So one of the reasons why we did so much sales last year was to kind of test the piece of where pricing is. Then we got some good data points on that. This year, our target is to sell about $50,000,000 My guess is we’ll do more than that. But again, we’re putting a wide range of assets on the market for sale to see what the market will bring.

And similar to the exercise they outlined that we do in Austin, before we put anything on the market, we know or we at least think we know what the value of that asset is to us through doing a whole range of financial projections with high rent growth, low rent growth assumptions, different capital assumptions. So we kind of have a box that we think the value of the asset really does mean to us. And that’s the discipline that helps us move forward with our disposition program. So short answer is we’ve got some visibility on stuff that we sold. We track everything in the market.

We think actually you’re going to see pricing of office product increase over the next couple of years as the financial markets and investor appetites continue to increase.

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: Thanks. I’m going to ask an open ended question about the balance sheet for whoever wants to take it. What can you tell us about your financing strategy, your target leverage, access to capital, cost to capital?

Jerry Sweeney, President and Chief Executive Officer, Brandywine Realty Trust: Yes. I think maybe, Tom, you and I can tag team that. Look, I think one of our objectives is we lost our investment grade rating a couple of years ago with the downgrade of the office sector. So as we look at our financial plan going forward, we plan to return to investment grade company as soon as we can. We’ve had an active dialogue with the agencies.

We understand what they need from us to achieve that objective. And look, one of the simple factors for us as you look at the company is back in 2022, our debt costs, our interest carry costs were about $75,000,000 With about the same level of debt today that we had back then, that interest carry cost is 135,000,000 So we saw a big so when you take a look at it, we saw a big impact on our fixed charge coverages. We wish our NOI grew at twice the rate that our debt costs grew, but it hasn’t. So you had that squeeze in our fixed charge coverage as well as the EBITDA multiple. But Tom, maybe you can explain some of the tactics we look to do over the next year or two.

Tom Worth, Chief Financial Officer, Brandywine Realty Trust: Yes. As we look at the balance sheet, part of what is going to help us delever also is taking a look at these development joint ventures. As Jerry mentioned, just shy of $1,000,000,000 where we have construction loans, preferred partnerships that are not optimal structures for us to maintain. They put a burden on our fixed charge. They put a burden on our EBITDA.

And it’s taking cash out of the company’s wholly owned balance sheet and putting into these joint ventures. So part of our goal this year as we put in our business plan is to start to recapitalize these joint ventures and either sell some of the pieces, make our ownership percentage lower and go into more of a pari pursue structure. And as you do that, you’ll see us have some of those losses come away and then see cash coming back into the balance sheet to help recharge it. So a part of that goal between now and let’s say the end of ’twenty six is to recapitalize all of those ventures. As we do that, you’ll see those metrics start to come back in line.

Probably still have to do some asset sales and have some other proactive things to do. We have one CMBS loan we’d also probably want to take out before the end of twenty twenty six. So there’s a number of levers we’re going to try to pull between now and the end of twenty twenty six to help bring the balance sheet back into compliance where we can meet with the rating agencies.

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: At NAREIT, I usually like to ask all the companies about their dividend policy and their payout and whether it’s secure. Think this is an interesting time because in office REITs two of the office REITs I cover relatively recently enacted dividend policies of only making one minimum payment at the end of the year to maintain REIT status. Maybe remind us your dividend policy, again, when I made these questions, it was a 14% dividend yield. So maybe give us some color on what you’re thinking as far as the dividend is concerned.

Jerry Sweeney, President and Chief Executive Officer, Brandywine Realty Trust: Yes. I think before the ’25 business plan came out, we had a pretty well covered dividend, and the plan was to keep that in place. As you look to the ’25 plan, we had two factors come into play. One was we had historically high number of tenant improvement allowances come due that related to leases that were done back as early as 2021. Then we also in some of the development deals that Tom had mentioned, we have preferred structures.

So from financial reporting standpoint, even though we’re not paying those preferred dividends or the return on that preferred capital, we need to reflect that in our income statement. So 2025, our dividend will be short of being fully covered in line with our historical 75% coverage ratio. But as we look at our ’twenty six plan going forward, we believe we can grow back into the current dividend level by the end of twenty twenty six through some of the lease up of the development projects and a few other things in the company. So management and the Board look at the dividend policy every year. It is a very high yield.

We do have room from a taxable income standpoint to adjust that downward if we so choose. But given our business plan is right now showing the ability for us to move forward and cover that dividend, we thought that given the dislocation of the stock price, we hear from a lot of our shareholders that the dividend is an important component to them of the return of the total return metric. So we believe we have sufficient liquidity today. We have plans put in place to grow back to that dividend level. And we’ll see how those business plan execution points work out over the next several quarters.

And we always have the ability to adjust that down if we feel it’s appropriate.

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: Great. So I have more questions, but since we only have a little bit of time left, I thought I’d open it up to the audience, see if there’s any questions in the audience. Otherwise, have to listen to me ask another question. So I wanted to ask one. The question I get asked recently about Brandywine is what NVIDIA is going do in Austin.

So I know you have some space to lease in Austin. Maybe it’s not specific to NVIDIA, but is there any update on that topic that you could share?

Jerry Sweeney, President and Chief Executive Officer, Brandywine Realty Trust: Well, I can’t really talk about any one specific company as you might expect. But you knew that when you asked the question, right? But I think what we’re seeing in Austin in our development process is really very positive. The pipeline has been increasing significantly. We are starting to see a number of the tech companies have come back into the market.

I mean, think what happened a few years ago is you had a number of tech companies that were hiring at a significant pace during the pandemic, take down really large blocks of space that they ultimately wound up not necessarily needing. So that created kind of the sublease deluge in that marketplace. I think it’s hurt that overall market recovery. To a great degree, that’s burning off. And we’ve actually seen in the last couple of quarters a number of larger tech comes come back into the market.

The company you mentioned is one of them. So they’re definitely in the marketplace looking for space. We have a couple of financial service companies as well as a few other tech companies with fairly large space requirements that have come out in the last quarter or so. So we still despite the disequilibrium condition that exists in Austin today, I think we still are very, very confident of the long term demand drivers coming out of that marketplace. And we hope to be able to post a couple of good results in the next couple of quarters at One Uptown that kind of demonstrate the depth of that demand.

Michael Lewis, Managing Director and Lead Office REIT Analyst, Truist Securities: So you could all probably see we’re getting the red light here. I don’t see questions in the audience. I want to thank Brandywine for participating and thank the audience, of course, for joining us today. Have fun at the rest of the conference. Thank you,

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