Corporate Office Properties Trust (NYSE:OFC) Q2 2019 Earnings Conference Call - Final Transcript
Jul 30, 2019 • 12:00 pm ET
rates have escalated above market. Incorporating actual results with these renewals into our forecast, we now expect renewing cash rents to roll down between 4% and 5% for the year.
Last but perhaps most important, we are reiterating our guidance for FFO per share for the full year in the range of $2.01 to $2.05. We are establishing third quarter guidance of $0.49 to $0.51. Even though we have doubled our expected dispositions for the year which, net of interest savings, causes an additional $1.5 of dilution in 2019, we expect our existing operations to more than make up for this.
With that, I'll turn the call back to Steve.
Thank you, Anthony. Recapping today's call, we've had a great first half of 2019, and we're looking forward to finishing the year with strength. Our occupancy fundamentals are gaining ground. We're on pace to achieve our highest vacancy leasing level in our history. We've already set a new record in annual development leasing, and we're guiding to a record-shattering 2 million square feet for 2019.
We expect to invest about $425 million in our development activities or a 54% increase above the midpoint of our initial guidance. Our active development pipeline contains 2.1 million square feet of highly pre-leased projects that represent more than 10% growth in our portfolio size when delivered. We've recycled development capital, demonstrating impressive margins and valuations in our development activities. And importantly, we've raised sufficient capital to fund 2019's development activity and most of 2020's expected investment.
Clearly, the succession of increased Department of Defense based budgets, commencing with the fiscal year 2017 budget passed in May of 2017, have materialized in a greater opportunity for both our operating portfolio and our development business and within the time frames we set forth in early 2018.
We attribute the elevated demand we're now experiencing for the fiscal year 2018 budget appropriated in March of '18, and that demand continues with strength into the second half of the year. Given that fiscal year 2019 defense budget was passed only 10 months ago and the recent two-year bipartisan agreement is in the process of being passed and the mission-critical nature of our Defense/IT locations is unique in our industry, we have great confidence that our shareholders will continue to benefit from the strength of the national security investments of our country for at least the next three to four years.
The strength of our capital recycling effort this year propels our company towards supporting elevated development investments with diminishing incremental equity capital needs and ultimately beyond an inflection point where we can self-fund development and deliver impressive annual FFO and cash flow growth.
And with that, operator, please open up the call for questions.