Blaine Heck: Doug, your commentary around the most activ tenant groups in the market was really helpful. Can you guys just talk about how you’re taking advantage of that activity amongst medium and small financial and professional services companies. Are you breaking down any of your vacant spaces into smaller spec suites or doing anything else to accommodate that demand from small tenants?
Douglas Linde: So the answer is we are, and we are seeing, I would say, very deliberate about the kinds of things we’re doing. I’ll let Bob talk, for example, about some of the activities we have going on in San Francisco right now where what was put in front of me was a series of changes to some existing availability that we think will be very additive to the market. Bob, do you want to talk about our approach there?
Robert Pester: Sure. We have a program of doing spec suites at Embarcadero Center on the smaller spaces, and we have several that are in the works right now. And some of them are designed where they can be combined with other suites that we need larger space. And typically, when we do these turnkey, we might have to put a little bit of TI in after the fact when we find a tenant. But we’ve had great success with these smaller suites so far.
Douglas Linde: And Pete, maybe you can — you or Ray can comment on the program we’ve had in Reston, Virginia for probably the last seven years and how successful that’s been.
Peter Otteni: Sure. So this is Pete Otteni from D.C. The — yes, it was not too many years ago that the rest and town center market was not one where we had done spec suites very often, but in the intervening 24 to 48 months, we’ve done quite a few of those. I don’t have the exact number off the top of my head. But it’s in the high the number of — the number of spec suites that we’ve done out there and all with great success, many leased prior to or at delivery. And then all of them that have been delivered are leased at this point, and we have activity on the balance of them. We did a full floor of spec suite at RTC Next in addition to the spec suites in the urban core Town Center. And it’s been a very successful program out there, capitalizing on exactly this type of tenant that’s being discussed.
And obviously, we have done them in D.C. for many years. that’s a little bit more of a competitive market, but we think in the right buildings, for instance, after some good success on the leasing front at 2100 Penn, we’re likely to have some space left there where we think spec suites will be very, very sought after due to the quality of the building and the quality of the spec suites that we’ll build there.
Operator: And our next question comes from the line of Caitlin Burrows from Goldman Sachs.
Caitlin Burrows: Maybe just another one on leasing. In the quarter, you did 660,000 square feet of leasing and have talked about now an expectation for about $750 million square feet per quarter the rest of the year. So I was just wondering, are you seeing activity that specifically points to an increase in leasing activity in 2Q and beyond? And if so, what and kind of where is that? Or is it more of a general expectation at this point?
Douglas Linde: I think it’s general expectation based upon SAC, right? So I went through our sort of pipeline, and I’ve got 900,000 square feet of active leases under negotiation I’ve got 1.65 million square feet of proposals that I believe will manifest themselves into a significant number of signed leases, and it’s — we’re talking about being in April of 2023. So I’ve got another eight months ahead of me. So I feel very confident that we will be able to achieve a 3 million square foot leasing market I hope we’re going to exceed it, but it’s not based upon our projections. Our projections are 3 million square feet and that’s where it was built into our occupancy numbers and Mike’s same-store numbers.
Operator: Our next question comes from the line of Michael Griffin from Citi.
Michael Griffin: Maybe we just shift back to San Francisco, down the Peninsula probably better off submarket be curious to get your thoughts about Google announcing the pause on that mega campus in San Jose. Could you see this being a potential benefit for that Platform 16 project? I think it’s not expected to be stabilized till 2026. I know you have a relationship with Google. So any comments you can make there would be helpful.
Douglas Linde: Sure. Bob, do you want to take that one?
Robert Pester: Sure. First off, the CNBC report that came out the other day that they were stopping the project is false news. It’s been reported by the mayor on Friday and Google yesterday that they’re still planning on proceeding with the project today — or excuse me, this year. We do have a relationship with Google, whether or not they would have interest in that project remains to be seen. But we will be the first building out of the ground adjacent to their campus. So time will tell. They’re several years away from actually starting a building because they’ve got to put all the infrastructure in place person.
Operator: And I show our next question comes from the line of Vikram Malhotra from Mizuho.
Vikram Malhotra: Just two quick ones. So one, can you just remind us, are there any risks sort of with the — I think you have three or four rework leases in terms of just their performance and potentially being those being given back. And then just separately, broadly, I know you had embarked on — over time, you’ve been investing CapEx to kind of keep the buildings fresh. And I’m just wondering sort of in this environment, can you remind us sort of what the sort of CapEx outlay may look like over the, call it, the next 2 years to keep the buildings competitive?
Robert Pester: Let me answer your second question first. So your second question on CapEx is that BXP typically spends somewhere between $2 and $2.50 a square foot per year on its overall, what I would refer to as ordinary course of business CapEx. And that is defined as base building and what I would say sort of modest refreshes on our portfolio. It doesn’t include if we’re going to build a new amend center at the General Motors building or we’re going to do a new amenity center and a market or a center or we’re going to totally got and redo 1 of our lobbies. So it doesn’t include those types of expenses, which would be outside of that. With regard to WeWork, WeWork is client of ours, WeWork is clearly reducing the number of units that they have. We’ve negotiated some reductions from WeWork in our portfolio and WeWork is not likely to be in the same relative position in terms of the amount of space that they take from BXP when we get to the next quarter.
Operator: And I show our next question comes from the line of Ronald Kamdem from Morgan Stanley.
