A lot of the owners don’t have the money or the ability or in some cases even the desire to keep remain in the ownership. So those buildings are going to be starved for capital. Occupancy is going to be under pressure. So and those occupancies are declining. So I think it’s those three areas. Did I hit all parts of your question?
Blaine Heck: Yes, I think so. That’s really helpful color. I really appreciate that. Just switching gears for the second question. I guess how are you thinking about the Pittsburgh portfolio the near to midterm? Do you think dispositions are still likely off the table in the near term? Are you seeing any kind of signs that the transaction market might be returning there? I guess, are there any of those properties in the potential of $150 million of dispositions that you’re forecasting for the rest of the year? And then just generally maybe how do you think about the balance between waiting for a decent price to exit versus maybe selling sooner wherever market pricing is, but likely saving some capital needed for lease-up and any renovation or refreshing projects that you might have?
Ted Klinck: Sure. So with regard to Pittsburgh, it’s going to be a tough sell. My gut is and we don’t have our next wave totally identified yet. Clearly, when we announced we were exiting Pittsburgh in the fall of 2022. It’s not unlike what we did getting out of Memphis and Greensboro. It took us about three years to get out. I think the timing, the capital markets still aren’t back in my view. I think there we’ve had a lot of success selling small and medium-sized assets sort of bite-sized transactions that are easier to finance. But to sell a big transaction like a PPG, it’s a very difficult debt market today. So my gut is, we’re going to just keep focused on blocking and tackling, leasing space, and wait for the capital markets to recover.
So I wouldn’t expect Pittsburgh to be in that next 150. But certainly, it’s our desire to get out when the timing is right. And we are trying to balance do you sell it now versus waiting. But I don’t think there’s a market for that asset today. So in terms of what we do want to sell the next 150, I think it’s going to be a lot like what we’ve sold the last couple of years is going to be smaller assets that we think have liquidity in the market. And we’ve been successful selling both value-add and core assets over the last couple of years. And there’s local banks. There’s high net worth individuals got relationships that can finance these type of assets. So my gut is the next 150 is going to be multiple buildings. They’re going to look a lot like what we sold the last year or two.
And then we can use those proceeds, plow that back into the renovation capital and to use throughout the portfolio.
Blaine Heck: Great. Thanks so much, Ted.
Ted Klinck: Thanks, Blaine.
Operator: Thank you. Your next question comes from Michael Griffin of Citi.
Michael Griffin: Great. Thanks. Just curious on the renewal leasing. What are you seeing in terms of retention rates and whether or not most firms are upsizing, downsizing or keeping the same space? And is the average lease signed by size changed at all?
Ted Klinck: Hey, Michael, I’ll start out and if Brendan or Brian have anything to add. Look, our retention ratio the last couple of years has, in fact, gone down, right? But it’s not atypical of what we see in any economic downturn. Certainly, there’s been some, obviously, work-from-home, so that’s hurt. But then just the cyclical downturn as well. Companies are closing up regional shops or combining local offices or what have you. So our retention has, in fact, gone down. But if you look at our overall portfolio, we’ve had many, many quarters where our expansions are outweighing contractions. I think this quarter, we had 10 expansions, 5 contractions for a net positive 36,000 feet, expansions were 63,000 less 26,000 square feet of contractions.
And that’s if you look back just since the beginning of 2023, we’ve had 55 customers expand 21 contract over the last five quarters. So it’s a lot of the small, the larger customers are the ones contracting. Thankfully, our average-sized customer is about 13,000 or 14,000 feet. Those are the customers that a) they’re making the decisions b) they’re the ones that are still growing. So we’re seeing a lot of expansions. And these expansions are maybe 2,000 feet, 3,000 feet and the contractions, again, the contractions we’ve had have been a little bit bigger, it might be a floor or half a floor, but it’s been slow and steady for us of expansions outweighing contractions. In terms of lease size, again, our bread and butter is at 5,000 to 15,000 feet.
And that’s — again that’s — most of our activity this quarter, we had a couple of larger deals. But in general, our normal is at 5 to 15. We’re signing a lot of them. I think we did almost 100 again this quarter. So in and out, we’re signing about 100 a quarter.
Michael Griffin: Great. And then I was curious if you could just give some color on the development leasing in Dallas. It seems like Sidley Austin is moving from MNO to 23Springs. Was that always the plan when you bought the property and announced when you started the development? Or did that come about relatively recently? And what are you tracking in terms of demand on that space? Is it going to be a single user? Could it be — could you multi-tenant that space that they have there? Just maybe some more color around that would be helpful.
