Owen Thomas: Yes. Let me — that was a lot to unpack there, but let me take a stab at it. So first of all, castle data is highly used in the media and I think in the financial community. And I think it’s a very imperfect measure of office demand. It’s a decent measure of perhaps footfall in an urban area over a period of time. So what do I mean by that? Many of the owners of premier workplaces don’t use castle systems in their buildings. So we’re not really exactly sure which buildings are being measured. It doesn’t take into effect that the office market is less occupied today from a leasing standpoint, and it also looks at data over the course of the whole week, which is less relevant for office occupancy, what you really need to focus on its peak days.
So I know everybody uses it, but it’s not really a reflection of our experience, which is the following. We have turn style data for roughly half of our 55 million square feet under management. And we have carefully picked out same-store data for buildings that are essentially the same level — has the same level of leasing as they did in March of 2020 as they do today. And when you look at that data in New York, our buildings are basically at the same level of turn style swipes, Tuesday or Thursday, as they were in March of 2009. So New York is basically back. The other thing that’s interesting is Friday was already slow before the pandemic and Monday is coming up. So there’s — I actually say New York is basically back to the way it was. Certainly, three days a week.
Boston is at about 75% on that measure and the only place where it’s really lagging is in San Francisco, which is about 45% or 50% for those peak days. And peak days are important because if you’re a user of space, you need to have space for your people when they’re all coming in. So it’s not across the whole week, it’s what is it on the peak days. So again, we see improvement. As I tried to say over and over in my remarks, we think the issue, the reason our leasing is slower today is actually not because of work-from-home. It’s because of the earnings growth of the clients that we serve. We’re a — we’re a provider of services to businesses, not consumers. Those businesses are not growing their earnings. And if they’re not growing their earnings, they’re not hiring people and they’re not taking space.
I think as earnings start to grow again, which frankly, we’re seeing right now in the first quarter, our leasing will pick up. And I think Doug did a very good job of articulating some of those green shoots that we’re already seeing that we should experience later this year.
Rodney Diehl: And Rich, just from a — from a sort of macro thesis perspective, I think what is 100% clear is that new construction is not part of the vernacular in 2024, 2025, which means unlikely you’re going to see buildings delivered that aren’t already under-construction and there is stuff under construction, but you’re not going to be seeing new buildings delivered in any of these Metropolitan areas for the next five plus years, right. That’s how long it takes to build a building. Look at the time frames associated with these press releases about a potential new building in Midtown Manhattan. And so if our thesis continues to be accurate and Owen has described the difference between the premier and sort of the other portions of the office inventory, there is going to become less and less premier space and the premier space will continue to pick up its occupancy, its leased percentages and we will see the fruits of that in the properties that we have in all of our marketplaces.
And again, I hark back to sort of this dislocation that’s occurring, what we’re seeing in Washington DC relative to the number of buildings that people would deem to be “A to A minus buildings” that are incapable at this point of making a leasing transaction because there is no capital available because the buildings are “underwater” defined as there’s too much debt and the equity holders are saying, we’re not prepared to put capital in for the benefit of the lender. It’s changing the characteristics of how leasing is occurring. And Jake, maybe you can spend a minute talking about sort of the dynamic of where tenants can look if they want to go into a building in a market by the way, which has a very significant availability problem still.
Owen Thomas: Yes, I would just maybe second what Doug just noted in that. We are seeing really great activity across all of the buildings in our DC and Northern Virginia portfolio. The weight of the troubled assets and the dislocation in our region is really kind of playing to our favor. And most of our buildings are preeminent workplaces and there’s definitively a flight-to-quality, but there’s also a real flight-to-certainty across the brokerage community who wants to do deals with somebody who can do deals. So we’re seeing that playing out in our favor in our region for sure.
Operator: Thank you. And I show our next question comes from the line of Caitlin Burrows from Goldman Sachs. Please go ahead.
Caitlin Burrows: Hi, good morning. Maybe just occupancy at 535 Mission, which is a newer build lead platinum has fallen below 60%, I think related to WeWork. So, Doug, I know you talked about how south of market is lagging a bit, but can you talk about the demand at that vacancy? And then bigger picture, how does that inform your view of the health of demand at the highest end of the market in ahead of first-generation leases rolling over at that building and sales force in the coming year?
Douglas Linde: Sure. Sure, Caitlin. I’ll make a brief comment and let Rod describe it. So WeWork actually is in negotiation to remain in all the space that we have with them at that building. And we have an expiration with Zillow – Trulia/Zillow that consolidation, which occurred earlier, and that’s where the majority of the availability is. And Rod, you can describe sort of leasing prospects there and how things are looking in our portfolio in South America.
