PS Business Parks Inc (NYSE:PSB) Q3 2019 Earnings Conference Call Transcript

Oct 23, 2019 • 01:00 pm ET

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PS Business Parks Inc (NYSE:PSB) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon and welcome to the PS Business Parks Third Quarter 2019 Earnings Results Conference Call and Webcast. [Operator Instructions]

It is now my pleasure to turn the floor over to Jeff Hedges, PSB's Chief Financial Officer. Sir, you may begin.

Executive
Jeffrey D. Hedges

Thank you. Good morning everyone and thank you for joining us for the third quarter of 2019 PS Business Parks investor conference call. This is Jeff Hedges, Chief Financial Officer. Here with me are Maria Hawthorne, CEO; John Petersen, COO and Trenton Groves, CAO.

Before we begin, let me remind everyone that all statements other than statements of historical facts included in this conference call are forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond PS Business Parks' control which could cause actual results to differ materially from those set forth in or implied by such forward-looking statements.

All forward-looking statements speak only as of the date of this conference call. PS Business Parks undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

For additional information about risks and uncertainties that could adversely affect PS Business Parks' forward-looking statements, please refer to the reports filed by the company with the Securities and Exchange Commission, including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K.

We will also provide certain non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to GAAP is included in our press release and earnings supplement, which can be found on our website at psbusinessparks.com.

I will now turn the call over to Maria.

Executive
Maria R. Hawthorne

Thanks, Jeff. Good morning everyone and thank you for joining us today. We had an outstanding quarter on both investments and operations. In September, we closed on Hathaway Industrial Park for $104.3 million. Hathaway is a 10-building, 543,000 square foot Park located in Santa Fe Springs, Los Angeles County near the intersection of three major freeways, the 5, the 105 and the 605.

This market is 1.5% vacant and in-place rents for the park are approximately 20% to 30% below market. There is a single-user in the largest building totaling 288,000 square feet, who will expire in April 2020. This space represents a near-term opportunity to add value.

On October 8, we closed on the sale of the 1.3 million square foot Office-Flex Portfolio in Maryland. The sale totaled $148.8 million and was right in line with our expectations. At this point, there are no other assets for sale in our portfolio for 2019.

We continue to be pleased with NOI growth at Highgate at The Mile, our multifamily asset. Compared to prior year, NOI grew 73% and weighted average occupancy was 95.6%. Last quarter, I announced that we had received full rezoning of the balance of The Mile, and that we are launching our second multifamily development called Brentford and construction will begin in mid 2020.

Continuing with development updates, we are also going