TIER REIT, Inc (NYSE:TIER) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 11:00 am ET


TIER REIT, Inc (NYSE:TIER) Q4 2018 Earnings Conference Call Transcript


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Greetings, and welcome to the TIER REIT Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I'd now like to turn the conference over to your host, Telisa Schelin. Thank you. You may begin.

Telisa Webb Schelin

Welcome to the TIER REIT Fourth Quarter 2018 Earnings Call. I'm Telisa Schelin, Chief Legal Officer for the Company.

Before we begin, please note that statements made during this call that are not historical may be deemed forward-looking statements that are subject to risk and uncertainties, which are discussed at length in our annual and quarterly SEC filings. Future events and actual results, financial or otherwise, may differ materially from these forward-looking statements, which we assume no obligation to update or revise as a result of new information, future events or otherwise.

Additionally, we may refer to certain non-GAAP financial measures. You can find a reconciliation of these to the most directly comparable GAAP numbers in our earnings release or our quarterly supplemental package on the Investor Relations page of our website at tierreit.com.

I'll now turn the call over to Scott Fordham, the Chief Executive Officer of TIER REIT.

Scott W. Fordham

Thank you, Telisa. Good morning and welcome to our fourth quarter 2018 earnings conference call. In addition to Telisa, with me in the room today are Dallas Lucas, President and Chief Operating Officer; Bill Reister, Chief Investment Officer; and Jim Sharp, Chief Financial Officer, along with other members of our management team.

To begin, I am pleased with our 2018 results as well as our team's accomplishments during the year, our business strategy for 2018 included the following four key objectives; one, optimize value in select investments and redeploy capital to create additional value; two, expand our active development pipeline; three, extend the portfolio's weighted average in-place lease term, and increase occupancy in the Houston market to drive sustained cash flow growth; and four, reduce leverage and extend our weighted average debt maturities.

We accomplished our 2018 objectives, most notably we sourced capital through the disposition of five non-core properties and issued approximately $138 million of equity under our ATM programs. Sourcing this capital allowed us to reduce our leverage and increase our liquidity, supporting our ability to create significant value through our development program. We selectively acquired strategic assets, including Domain Point 1 and 2 and the buyout of our partner's interest in Domain 8, which expanded our redevelopment opportunities within the domain by approximately 1 million square feet, simplified our structure by exiting a joint venture and gave us direct access to fast growing tenants who have expanded further with us in the Domain.

We delivered our Third + Shoal and Domain 11 development projects to tenants for space build out. These buildings comprise approximately 700,000 square feet in total and are 99% leased overall with a 100% of the office space leased. We furthered our development program by commencing