PS Business Parks Inc (NYSE:PSB) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 01:00 pm ET

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PS Business Parks Inc (NYSE:PSB) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon, and welcome to the PS Business Parks Second 2020 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 second quarter 2020 PS Business Parks Investor conference call. This is Jeff Hedges, Chief Financial Officer. With me today is our Interim Chief Executive Officer and COO, John Petersen; and our Chief Accounting Officer, Tren Groves. Before we begin, let me remind everyone that all statements other than statements of historical fact 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 business parks.com.

I will now turn the call over to JP.

Executive
John W. Petersen

Thanks, Jeff. Good morning, and thank you for joining us today. Before we get into Q2 results, I want to give everyone an update on our President and CEO, Maria Hawthorne. Maria has been out on non-COVID medical leave since April. She's recovering and remains on leave for the time being. Our team wishes her well, and we are hoping for her full recovery soon. Speaking of our team, I want to take a minute and thank each and every member of the PSB family for their tremendous efforts over the last several months. In spite of the many challenges presented by this unprecedented pandemic, our team delivered solid results, including impressive leasing production, low transaction costs and steadily improving collections. And all of our parks have remained open and functional throughout.

Our leasing team led us to an impressive 1.8 million square feet of production and first half 2020 leasing volume was almost 400,000 square feet more than the same period in 2019. Retention during the quarter was 54.8%. However, this metric was impacted by the planned move out of a 288,000 square foot single-tenant customer at our Hathaway Business Park. Excluding this move out, retention was 64.4%. Included in our Q2 production was 180,000 square foot lease in our Hayward Business Park to a Fortune 100 customer. This lease represents approximately