PSB
#Thanks, <UNK>.
Thank you.
That's a good question.
And the acquisition market and especially the markets that we are in really do have some of the most compressed CAP Rates.
If you think about Seattle, Northern California, Southern California, and then Dallas, Austin, and South Florida, we are seeing pricing that is well beyond the peak in all of our product types.
And now we're seeing rent rolls come out that where you have peak pricing and peak occupancies.
So you know like I said we are still disciplined.
We are looking for those opportunities.
But it's even at a lower cost of capital, the cap rates are outpacing some of the pricing we feel we could see make accretive purchases.
There isn't and what we've seen in DC, because we do look at everything, and if we found something that would work well in our markets, we would certainly buy, but some of the more distressed assets that have come to market have been very, very large tenants and configurations that don't really slice up well for our formula, but we are looking at everything.
Sure, <UNK>.
Good question.
We knew that expiration was coming from month-to-month in advance, and it was pretty obvious to us that we were going to break it down.
First of all, if we had wanted to compete for a 50,000 foot user, there was way too many options, and that market is ultracompetitive with TIs in the $60, $70, $80 range with a year of free rent, et cetera, et cetera.
And by the way, there aren't any users anyway for that kind of space.
So for us it was very obvious very early that we were going to break it up.
As I mentioned in my comments, most of our deals are under 5,000 square feet.
That's our sweet spot, and we are confident in Westpark, Tysons, in those markets that we'll be able to re-lease that space relatively quickly in that market.
You mean a big 50,000.
In our view it's a lose-lose.
The rent gets compressed.
Let's say markets for the sake of discussion are mid-20s range, that would go down to low 20s.
Let's say market for a bigger user like that on a five-year deal is say 1 to 2 months of free rent per year, and without question TIs, and has been well documented in all kind of research, would be anywhere between $50 and $80 per square foot to do a deal like that.
So you may end up giving, in aggregate, 6 to 8 months of free rent on a five-year deal, maybe you stretch out to 5 1/2, but it would be significant free rent $50 to $80 in TIs, full commission, so on and so forth, and lower rent as well.
So if you do a smaller, say 3,000 or 4,000 square foot space, assuming a normal deal, which we do these all the time as I mentioned, you're talking below $10 in TIs, maybe a month in free rent, might be a three to five year term, depending on the situation in the space, and you get higher rents.
And you may or may not pay a broker fee because often times those smaller users are represented by brokers.
Materially better economics to go small.
<UNK>, I don't think that there will be significant change to our G&A run rate.
It's running kind of in the 3.2 to 3.4, 3.5 range per quarter including LTIP.
And I would expect that to continue.
Maybe it's on the tighter side of that range going forward.
We exclude that just because we believe that excluding it gives a better perspective on the true operating trends of the property and the compensation for the expense of the people that run the assets and manage the assets is included in cost of operations, always has been.
So from an accounting standpoint, we have to kind of match that with the LTIP expense, but we believe to show the true operating results of the property, that that's the best approach.
I would tell you that the Board looks at the dividend and kind of the outlook of the dividend really on a quarterly basis to be ---+ and they're always aware of where we are.
Our focus is to keep the dividend where it needs to be from a tax standpoint, so I would tell you that we're pretty close to paying out 100% of taxable income as required.
I don't see any change in the dividend philosophy going forward.
Well it is a one time item.
In the first quarter we had about $1.8 million of snow costs that were incurred and we had in the second quarter, I think $10,000 of snow removal costs so it was all heavy burden in the first quarter for snow removal.
You're welcome.
Thank you, <UNK>.
Thank you, Shelby.
Thank you everyone for joining us, and we appreciate your interest in the company and we will talk to you in the near future.
Take care.
