Brandywine Realty Tr (NYSE:BDN) reported first-quarter financial results on Thursday. The transcript from the company's first-quarter earnings call has been provided below.
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Summary
Brandywine Realty Tr reported first quarter results in line with its business plan, maintaining all full-year operating and financial metrics unchanged.
The company achieved 94% of its speculative revenue target, with first quarter FFO at $0.11 per share, aligning with consensus and management guidance.
Portfolio occupancy was at 88.3% and leasing at 89.9%, with expectations for improvement throughout the year.
Brandywine Realty Tr has $305 million in potential sales under agreement to enhance liquidity and reduce debt, with closings expected in the second quarter.
The company plans to maintain minimal balances on its line of credit and anticipates refinancing opportunities for bonds with high coupons.
Future guidance includes maintaining a 55-cent full-year FFO midpoint and executing a sales program to reduce leverage and improve credit metrics.
Management is focused on strengthening balance sheet metrics and exploring share repurchases on a leverage-neutral basis.
Full Transcript
OPERATOR
Ladies and gentlemen, thank you for standing by. Welcome to the Brandywine Realty Trust first quarter 2026 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session and to ask a question during the session you would need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised and to withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Jerry Sweeney, President and CEO. Please go ahead, Jerry.
Jerry Sweeney (President and CEO)
Thank you very much. Good morning everyone. Thank you for participating in our first quarter 2026 earnings call. On today's call with me are Dan Palazzo, our Senior Vice President, Chief Accounting Officer and Tom Worth, our Executive Vice President and Chief Financial Officer. Prior to beginning, certain information discussed on the call today may constitute forward looking statements within the meaning of the federal securities law. Although we believe the estimates reflected in these statements are based on reasonable assumptions, we cannot give assurance that the anticipated results will be achieved. For further information on factors that could impact our anticipated results, please reference our press release as well as our most recent annual and quarterly reports that we file with the SEC. During our prepared comments today, Tom and I will briefly review first quarter results and frame out the key assumptions driving our 26 guidance. After that, Dan, Tom and I are available for any questions. So to move into our presentation from an operating portfolio management and liquidity standpoint, the first quarter produced results very much in line with our business plan. As such, as noted in our supplemental package, all of our full year operating and financial metrics remain unchanged from our original 26 business plan. And while the first quarter was relatively quiet from a transaction announcement standpoint, was very busy from an activity perspective. Quarterly highlights include we've achieved 94% of our speculative revenue target. At the midpoint of our guidance, our first quarter FFO was $0.11 a share which was in line with consensus and management guidance. We have narrowed the full our full year FFO guidance While maintaining our $0.55 full-year midpoint. Our portfolio recycling and debt reduction program is progressing very much on schedule with approximately $305 million of potential sales under agreement and in various stages of due diligence with pricing right in line with our guidance. We expect, and we'll talk later, but we do expect the majority of these transactions to close in the second quarter. Looking more closely at first quarter operations, solid operating metrics reinforced our strong market positioning and tenants continued flight to quality perspective. Our Wholly owned core portfolio is 88.3% occupied and 89.9% leased. Our year end occupancy and leasing percentage will improve throughout the year as we anticipate having positive net absorption for actually the first time in several years. As further evidence of our improving markets forward leasing commencing after year end total 182,000 square feet with most taking occupancy in the next couple quarters. We have achieved, As I noted, 94% of our spec revenue target which is $16.4 million which is running ahead of last year. Leasing activity for the quarter totaled 422,000 square feet, including 268,000 square feet in our wholly owned portfolio and 153,000 square feet in our joint venture portfolio. The wholly owned leasing activity is our highest level since 4Q24. Tenant retention was around 45%, very much as expected since we know there'll be a number of known move outs throughout the course of the year. Capital ratio is below our target at 6.4% really driven by a low as is no capital deal within one of our portfolios but will remain our capital for the year will remain within our guidance range. Our GAAP mark to market was 4.1%. Cash mark to market decreased by 2.6%, both below our annual business ranges. But we anticipate improving results in the next three quarters and as such are maintaining our full year guidance range. Same store results were a positive 0.8% on a GAAP basis and 3.3% on a cash basis, both above our current guidance ranges. Cores in 1Q26 exceeded 1Q25 by 80%, so continued uptick in overall leasing activity. We also continue to experience a good conversion rate from these tours. For the trailing four quarters, 53% of our tours converted to a proposal and from proposal 37% converted to an executed lease. Just a couple of other additional comments regarding Market Dynamics in Philadelphia, which includes our Central Business District and University City portfolios. We're now 94% occupied and 96% leased with only 6% rolling through year end 2028. Our Commerce Square joint venture property is now 93% leased, bringing our overall combined Philadelphia holdings to 95% leased. So overall activity levels in our core, CBD and University City markets remain very strong and we continue to outperform our market share. As noted in the last call, we've captured more than double our market share in each of the last five years and this trend did continue in 1Q26 with 41% of all new leases signed in this market was at a Brandywine property in the Pennsylvania suburbs. Overall we're about 90% leased and we continue to see solid levels of pipeline prospects for the existing vacancies. Austin is 70% occupied. That continues to lag the rest of our portfolio and creates a 340 basis point drop in overall company leasing levels. Tor volume, however, did increase 15% over prior quarters. The operating portfolio leasing pipeline is up again this quarter by 200,000 square feet from last quarter and remains solid at 1.7 million square feet. That does include about 314,000 square feet in advanced stages of negotiations. It does not include the leasing pipelines we have on either 3151 or our project at One Uptown. And we also believe our marketing position in Philadelphia will continue to improve as we monitor office to residential conversion projects. We're currently monitoring more more than 5 million square feet or approximately 11% of the total office inventory in the CBD converting from office to residential or other uses. That 5 million square feet is comprised of 1.2 million square feet that has recently been converted, 1.3 million square feet in active redevelopment and 2.5 million square feet of project have been announced during the planning phases. From a liquidity standpoint, we remain in solid shape with only $65 million outstanding balance in our line of credit and $36 million of cash on hand. As previously noted, our multiple year plan is designed to return us to investment grade metrics as such, and you'll hear more from Tom we plan to maintain minimal balances on our line of credit. The execution of our sales program will reduce overall levels of leverage and as a point of note, almost 50% of our outstanding bonds have coupons north of 8% which we also believe provide good refinancing opportunities for us over the next several years. In the second quarter we will repay the 3025 JFK construction loan with a lower priced seven year financing that is approximately $100 million at a rate in the mid 5s and that transaction once accomplished will be on the securing the residential component but unencumbering the commercial component of that property for inclusion in our unencumbered asset pool. We're also in the process of extending our current unsecured line of credit and term loans and plan to complete those extensions in the next couple quarters. And as we'll outline in the next few moments, our active portfolio recycling program will have a majority of the sale proceeds being used to further improve all of our balance sheet metrics that Tom will walk you through. We do anticipate our CAD ratio continuing to improve during the second half of the year after we fully burn off the remaining tenant improvement costs relating to leases done between 2020 and 2023. As a reminder on our 3151 project, we did acquire our partners interest in 4Q25. That did have the temporary impact of raising our leverage levels. The pipeline on that project is up 200,000 square feet from last quarter and does stand at approximately 1.2 million square feet and has roughly broken down 50% office and 50% life science. Discussions with a number of prospects are very active with several key proposals outstanding. As a reminder, we don't have any real lease commencements or revenue generating from 3,151 in our 26 business plan. At one uptown we're now 63% leased which is up from last quarter. The pipeline now stands at over 230,000 square feet with tenant sizes ranging between 50 and 60,000 5,000 50,000 square feet. We do have six proposals outstanding aggregating just shy of 100,000 square feet and we continue to see the pipeline and the velocity of decision making accelerate at our one Uptown project. In addition, as we talked last quarterly call in anticipation of our 27 lease expirations at the existing buildings in our Uptown development, we will be commencing the redevelopment of one of those existing buildings. That building 902 is about 160,000 square feet. We anticipate in completing that renovation in the late second quarter or early third quarter of 27 and since our marketing launch of those projects, we have generated approximately 1.2 million of additional square feet of prospects. We do expect to deliver pricing levels below the rents required for new construction and also as some of our larger prospective tenant requirements advance if they do. We'll also have planning underway for similar renovations for several other existing buildings. From a capital market perspective, our business plan does project 280 to $300 million of sales activity. We anticipate closing most of those sales within the next 60 to 90 days. We currently, as I noted earlier, have $305 million under agreement and in due diligence, and we also have several other properties in the market exploring sale exits. We do plan to recapitalize both 1 uptown and Solaris during 2H26. These recaps could provide a range from a complete sale to a parapassuit joint venture where Brandywine retains a minimal stake and recover significant capital to lower debt attribution and increase liquidity. And in fact on Solaris center we're already in the marketplace exploring some potential refinancing options. From a broad standpoint, the vast majority of our sale proceeds will reduce debt, continue to improve liquidity and further strengthen all of our credit metrics. And also while the clear priority is to lower leverage and return to investment grade metrics, we do anticipate, given where our stock price is, utilizing a portion of those sales to repurchase our shares while lowering our leverage levels across the board. We do have about $82 million available under our existing share repurchase program and we anticipate the debt reduction program will commence during the second quarter concurrent with the receipt of sale proceeds. The response from the market on assets listed for sales have been very strong. What we have under agreement of sale there's been considerable interest with the typical marketing process producing between 7 to 10 qualified bids. All buyer types were engaged including institutional investment managers, other institutional investors and significant interest from private capital. So with that, Tom will review financial results for 1Q26 and the outlook for the second quarter of the balance of the year.
Tom Worth (Executive Vice President and Chief Financial Officer)
Thank you Jerry. Good morning. Our first quarter net loss was 48.9 million or $0.28 per share. Our first quarter FFO totaled 20 million or $0.11 per share, in line with our fourth quarter guidance and consensus estimates. Our net loss was impacted by one time non cash charges for property impairments totaling about 11.9 million or $0.07 a share. Some general observations from the first quarter profit level NOI of 70.2 million was $800,000 above our current reforecast due to better margins throughout the portfolio. GNA expense was above forecast by 300,000 primarily due to compensation expense. Other income and term fees were $2.2 million or $300,000 below budget primarily due to lower income from our retail operations and third party fees were 2.6 million or 1.1 million above forecast primarily due to higher third party leasing fees. Other forecasted results were generally in line. Looking at our debt metrics, first quarter debt service and interest coverage ratios were 1.7 million, both below incrementally below our fourth quarter results. The decrease is primarily due to lower interest capitalization from 3,151 which did increase interest expense. Our first quarter annualized combined and core net debt to EBITDA were 9, 1 and 8, 3 respectively. Based on our forecasted sales and debt reduction, these level leverage levers will decrease during the balance of the year. Regarding our portfolio during the fourth quarter we did remove one property from our core portfolio that is being held for sale. That property totals 116,000 square feet. During the second quarter we will add 250 King of Prussia Road, our 168,000 square foot life science property located in Radnor submarket that will be added to our core portfolio as we anticipate stabilizing that property in June at 100% occupancy. From a liquidity standpoint, we continue to maintain a solid liquidity position with 36 million of cash and 65 million outstanding on the secured line of credit. Unsecured Line of credit at the quarter end from the sales activity, we are anticipating 290 million of wholly owned sales at the midpoint which is weighted towards the first half of the year and those cap rates continue to price at roughly 8% on a cash and a little above that on a GAAP basis. As Jerry touched on, we now have 305 million of potential sales in various stages of due diligence and the anticipated proceeds will be used to reduce debt and continue our path towards investment grade. We also intend to use a portion of the proceeds to opportunistically buy back shares on an earnings neutral basis on financing activity. The 178 million at 3025 JFK the $178 million consolidated construction loan matures in July 2026. We plan to complete a secured financing on the residential portion of that property totaling $100 million and use the proceeds from that loan and the unsecured line of credit to unencumber the office portion of that portfolio. The $100 million seven year secured financing will be fixed at a rate all in rate of roughly 5.7% on the credit facility. Our unsecured line of credit has an initial maturity date in June of 2026 with extensions through June of 2027, and we are working with our bank group to amend and extend the facility ahead of its maturity. Capitalization of the ATX Joint Ventures as our joint ventures continue to lease up and cash flow improves, we anticipate recapitalizing those projects on a peripassu common equity joint venture basis during the second half of 2026 with our ownership decreasing to a minority stake or an outright sale. We announced our intent to extend two existing loans on those ATX projects and while we still anticipate closing on those transactions in the second half of 2026, we felt extending the loans will allow us time to run the sales process without concern about the maturity dates. The recapitalization of both projects should generate between 40 million and $50 million of cash that we will use to further reduce our wholly owned leverage and will be slightly accretive to earnings and improve leverage for the balance of the year. Due to the timing and change in ownership structure being later in 2026, we have not included any benefit of these transactions in our FFO guidance. We feel incrementally more positive about executing our land sales program this year, but we have not included any land gains or losses in our results. Focusing on the second quarter guidance, property level operating income will total about 72.3 million and will be about 1 million3 above our first quarter. The incremental improvement is primarily due to increased NOI at our CBD portfolio and the stabilization of 250 King of Prussia Road. These increases are partially offset by startup costs at the Radnor Hotel project which should open during this quarter. FFO contribution from our joint ventures will be a negative 900,000 for the second quarter. The decrease primarily due to higher interest rates on some of the floating rate debt. GNA expense for the second quarter will total about $9.5 million. The sequential decrease is consistent with prior years and is primarily due to the timing of our deferred compensation recognition. Our full year range of 36, 37 million remains intact. Our interest expense including deferred financing costs will approximately 43 million which includes about 700,000 of capitalized interest, termination and other income will total about 2.5 million. Net third party fees will approximate 1.5 million. Interest income will be about $400,000 and our diluted share count will be about 180 million. Again, the second quarter results and share count did not take into account any potential sales and share buybacks. Turning to our capital plan, our capital plan for the balance of the year remains active and totals about $450 million. Our first quarter 2026 CAD payout was 92.7%. However, our payout will remain within our business. However, our payout ratio for the balance of the year will remain within our 70 to 90% range as expected as we expect incremental improvement in the payout ratio as FFO improves during the balance of the year. Looking at the larger uses for the rest of the year we will refinance 3025 JFK with the construction loan, utilize 140 million of debt and share buyback. Development spend will be about $50 million. We have 42 million of common dividends. Our revenue maintain and revenue create will both be revenue maintained will be 25 million and revenue create will be 25 million with 15 million of equity contributions to primarily fund Tenant Leasing at 1 uptown and Solaris extension. The sources are going to be. The sources to offset those uses are going to be 80 million of cash flow after interest payments, speculative asset sales totaling 290 million and 100 million of loan proceeds from our Vera residential project financing. Based on the capital plan, we anticipate having approximately 10 million of net outstanding on the line of credit. We anticipate net debt to EBITDA will be within the range of 8.4 to 88 and our fixed charge coverage will be about 18 to 20. Implicit in these ratios is the execution of our sales program and the recapitalization of the ATX developments. These ratios will continue to be elevated until increased revenue comes online from our development projects, particularly 3151, which is now a $250 million wholly owned investment which is currently producing operating losses. As these developments stabilize, our leverage decrease will further accelerate. And as we anticipate those leverage metrics will improve as the year progresses. I will now turn the call back over to Jerry.
Jerry Sweeney (President and CEO)
Great, Tom, thanks very much. So as we look ahead, our operating platform enables us to capitalize on improving real estate market conditions. Our plan for 2026 shows earnings growth over 2025 and we expect further improvement growth in 2027. And as we continue to push occupancy levels across the board, as Tom touched on generate results coming out of our two remaining office and life science development projects, we certainly expect that there will be incremental NOI that will be available for strengthening our balance sheet and for other uses. So the groundwork's been laid and we'll continue to build on this momentum to drive long term value. And with that we are delighted to open up the floor for questions. As we always do, we ask that in the interest of time, you limit yourself to one question, a follow up. So, Michelle, we're happy to open the floor for questions at this point.
OPERATOR
Thank you. As a reminder to ask a question, please press Star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. And our first question comes from Nick Joseph with Citi. Your line is now open.
Nick Joseph (Equity Analyst)
Thanks, Jerry. You talked about the active transaction market and lots of buyer interest in the bidder pool there. So how does that inform additional asset sales from here beyond what's currently under contract?
Jerry Sweeney (President and CEO)
Yeah, great question. I think it actually is very helpful for us because we actually by design put a fairly broad range of product in the marketplace to kind of test we thought the investor sentiments might be. I think certainly given the velocity we saw in each of these sales and the fairly competitive final bid processes we went through to generate the price we were targeting, I think we certainly, as I even touched on in my comment, have a number of other properties that we're thinking about that are in the market for sale or going through the underwriting to see what those BOVs might be as we put those in the marketplace. But certainly I think the breadth of response we got, ranging from tier one institutional investors to large private equity funds to traditional high net worth family offices to syndicators, was a hoped for result. We weren't sure with some of the properties we put in the market what the bid list would wind up being, and they wound up being a lot more robust than we thought they would be. So I think certainly with the debt market showing some signs of stability depending upon the day of the week, it is, I think that has given buyers, I think, a lot more comfort of underwriting some of the assets we put into the marketplace. So I think it was all good news from that front. Certainly we're very happy to be sitting here where we are with this many properties under agreement, going through final due diligence and with closing schedule for the next 60 to 90 days to kind of help us execute the debt reduction and liquidity program we put in place. So I think another good sign of the office market recovering from different capital sources makes sense.
Nick Joseph (Equity Analyst)
And if you do lean into it more, how would you balance additional buybacks versus leverage reductions beyond what's currently contemplated?
Jerry Sweeney (President and CEO)
Yeah, look, I think that the primary objective, as both Tom and I touched on, is to improve the credit metrics. That's by far the number one objective. You know, as we, as we talked last quarter, you know, buying out our preferred partners positions, the Schuylkill Yards project temporarily raised leverage. Our number one goal is to get those leverage levels back to what we've outlined in our business plan. And certainly to the extent that pricing is better, we generate more sales velocity and we see a clear path towards achieving those balance sheet metrics. I think then we certainly, recognizing where the stock price is, want to deploy some capital there, as Tom mentioned, on a kind of leverage neutral, earnings neutral basis.
OPERATOR
Thank you, thank you, thank you. And our next question is going to come from Mainez Ibeck with Evercore. Your lines open.
Mainez Ibeck
Yeah. Hey, thanks for taking the question. Just wondering if you could expand a little bit on the interest that you're seeing. For the 902 building in Uptown, ATX, and if the interest you gathered so far is mainly new to market tenants or existing tenants in the market, just like, help us understand maybe a little bit.
Jerry Sweeney (President and CEO)
Yeah. Good morning. Sure. Happy to walk through that. Yeah, we, as we talked last quarter, we announced to the kind of leasing marketplace that given the significant uptick in zoning capacity we're able to achieve at One Uptown and the pending departure of a large tenant, we really focused on how we could reposition several of those assets at a very attractive price point for the tenant market. That approach was very, very well received from the marketplace. So we have a couple of very large prospects we're talking to. Most of them are in market, but several of those have significant expansion requirements. Some of the newer tenants to market that we're seeing, Mainez, are really on the existing one uptown pipeline. But the larger prospects we're talking to about the renovations of the 900 buildings are mostly in market, but a couple with significant expansion and or consolidation opportunities. So I think we've been very happy with the response we're getting. I'd say there's a fairly high level of active substantive dialogue with several of these users. Who knows where that goes? But the signals are very positive and we've really ramped up our planning efforts to make sure that if we do in fact get substantive results from these prospects, that we can move forward with these renovations fairly expeditiously. Got it.
Mainez Ibeck
That makes sense. I appreciate it. And maybe a quick follow up on Philly and the life science market there. Just was curious to hear if there's any update on how you just feel about the life science leasing, which I know it's been challenging over the last year. If those tenants are coming a little bit back now out again in 2026? Just was wondering how that's tying up.
Jerry Sweeney (President and CEO)
Yeah, I think we are seeing the proverbial green shoots in the life science market capital flowing a little bit better. Of course, there's a macro overhang of regulatory risk, but definitely an uptick in tone and the pipeline, as I mentioned, for 3151. We have a couple of larger institutions that we're talking to that are real in their requirement but slow in their execution pace. And we have a number of smaller life science companies that we continue a very active dialogue with about making 3151 their home. And then, of course, we've seen an uptick in office tenant requirements Given the tightness of the class A office market in Philadelphia. I mean, certainly when we're sitting in our Philadelphia trophy class properties at 95 plus percent leased with really a dearth of available space for the next couple years, we've been able to pivot some of those prospects over to look at 3151. And the tone of those conversations is constructive as well. We are certainly looking forward to getting some leases executed there. As Tom touched on generating revenue coming out of 3151, certainly given the size of the pipeline we have, we see visibility on the near term horizon. But it's a very important part of our balance sheet strengthening program as well.
OPERATOR
Thank you. And the next question will come from Dylan Brzezinski with Green Street. Your line is open, guys.
Dylan Brzezinski
Thanks for taking the question. Just going back to sort of the dispositions. Jerry, you mentioned that it's sort of a mix of different assets, but are you able to sort of share like, you know, percentage of assets that you guys are looking to sell as core versus non core within the overall grand loan portfolio?
Jerry Sweeney (President and CEO)
Yeah, I think we have one asset that we would consider to be core that we're selling and the rest are, I wouldn't say are non core, but they're less than core core. Look, our approach today on the sale program as we outlined last quarter, was to put a variety of assets in, in the marketplace to really test the investor appetite across all different asset sizes, weighted average lease terms, age, sub market positioning, et cetera. Because one of our objectives really was, as we get through this first phase of sales, was to really start to get some insights into how we view the investor marketplace for the next four to six quarters as we look forward to our business plan execution in 27 as well. So by design we put a wide range of properties out there. Dylan and I think we've got the response on a previous question that we were hoping to achieve.
Dylan Brzezinski
Great, that's helpful context. And then just going back to 3151 market, I see the yield still remains at 7.5% yield on cost. I don't think that's changed over the last several years. Can I just talk about sort of confidence in hitting that given life science, leasing costs are obviously much higher today. I know some of the office related, but just sort of curious.
Jerry Sweeney (President and CEO)
No, I think as we go through the pro forma exercise and model in some of the existing deals we have in place, we still feel confident about hitting that target. The timing of that of getting leases exit has been really one of the the more challenging aspects that we face. But we've had no real price resistance. And certainly what we've been able to see, even with the softening of the life science market, are proposals that do reflect the higher level of tenant improvement costs, show that we're able to get a higher going in rental rate, lower free rent concessions, and frankly, longer lease terms, which generate the effective rent targets that we're after.
Dylan Brzezinski
Perfect. Thanks, Jerry. Have a good one.
Jerry Sweeney (President and CEO)
Thanks, Dylan, you too.
OPERATOR
Thank you. And as a reminder to ask a question, please press star 11 on your telephone. And our next question is going to come from you. Paul Rana with KeyBanc Capital Markets. Your line is open.
Paul Rana
Great, thank you. Jerry, you mentioned you have six proposals out on one uptown that totals around 100,000 square feet. Do you have any sense on the probability of those getting done and any potential timing that you could provide on those proposals? If those were to get done, that could bring lease percentage up to over 90%. So just want to get your thoughts there.
Jerry Sweeney (President and CEO)
Yeah, well, we certainly feel optimistic and I think we're pragmatic in assessing that. So our hope is that we get at least half of those across the finish line and do another full floor at uptown. As we talked about on previous calls, we have, you know, our anchor tenant has a call right on one of the remaining floors that is exercisable later this year. So we're tracking that very carefully. And then on the other floor, we're also given the success we had on doing spec suites in that building, we're also building out another floor as well. So I think we've got all the mechanics in place supported by the pipeline to show continued occupancy gains in that property quarter over quarter.
Paul Rana
Okay, great, that was helpful. And then I appreciated comments on the recapitalization of one Uptown and Insularis in your prepared remarks. But could you expand a little more on that and how demand has been there and anything that's shifted from what you had originally anticipated for from earlier this year?
Jerry Sweeney (President and CEO)
Yeah, happy to. And I'll start with Solaris, the residential project. I mean, there we really achieved a significant acceleration of lease up in light of the fact that apartment market demand drivers and supply imbalance was fairly weak. So our approach was to accelerate people taking occupancy and to do that, we actually provided some significant concessions to get that done. So the initial year 1 Overall rental levels were below our target. So now we're heavily into the renewal season and we're getting about a 16% uptick across the board on our renewals. So that has been a very positive indicator on future NOI growth and the retention rate has been fairly positive as well. So with those data points, we've already started the process of talking to a number of high quality institutional investors about recapitalizing that project with us. So feedback there has been very supportive and certainly we expect to get that recap done sometime in the third quarter per our plan, maybe even a little bit earlier. But that's kind of the plan at this point. One Uptown look, we continue to get a lot of good activity in institutions that want to partner that project with us. From our perspective, though, and Tom touched on this, you know, we want to get a couple of additional leases done because that's really the value creation proposition for us. So we have no concerns at all about the ability for us to execute on the recap on either Solaris House or One Uptown, given the feedback we've gotten thus far. And frankly on A One Uptown, given the pipeline, we have to get that project closer to the 80 to 90% lease range. Hopefully that answers your question.
Paul Rana
Yeah, that was great. Thank you so much.
Jerry Sweeney (President and CEO)
Thank you. And I show no further questions in the queue at this time. I will turn the call back to Gerry for closing remarks. Great. Well, Michelle, thank you for your help today and to all of you, thank you very much for participating in our first quarter call and we look forward to providing a further update on our business plan progress during the second quarter call. Thank you very much and have a great day.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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