Ted Klinck: Sure. So, just let me summarize what we did for dispositions in 2023. We closed roughly $104 million of dispos that included both land and buildings. There was four buildings, totaling $83 million and then $21 million of land in two separate parcels, as sort of a mix between single customer buildings and multi-customer buildings and then the land. We’ve sold them throughout the year, the cap rates range really high 5s for a single customer long-term lease to low 9s for the multi-customer with sort of a low wall. So, most recently, it was Ramparts in the fourth quarter, it was 97% lease building, three and a half year Walt, and that was sort of low 9 cap rates. So, I think that mix is sort of what you’ll see this year as well.
It’s going to be probably a mix of land and multi-tenant buildings may not have any single tenant. I need to think about that. But we do have about $79 million under contract and due diligence, and we think that will close somewhere in the first half of the year, and that’s sort of multi-tenant — similar to what we saw last year on the multi-tenant side. Smaller assets. Those are the ones that are easier to get done. Smaller is easier and larger harder. And so it’s a very similar mix, probably what you’ll see this year.
Nick Thillman: That’s it for me. Thanks, guys.
Ted Klinck: Thank you.
Operator: Our next question comes from Camille Bonnel from Bank of America. Camille, your line is now open.
Camille Bonnel: Hi, everyone. Good to see the progress on backfilling some of your larger expiries. Just given your strategic priorities of renewing tenants as early as possible, how are the early renewal discussions tracking in your leasing pipeline?
Brian Leary: Hi, Camille. Brian here. They’re tracking well. And one of the earlier questions, too, is why we’re maybe seeing more term in our portfolio. We’re also able to lean in on the TI. As Ted mentioned earlier, customers would trade that TI for term, and we have that ability being unencumbered by property level debt in most cases. So I think that’s kind of helped. The other thing, too, is you have that kind of captured audience. So we have that relationship. We lease our own buildings. We operate our own buildings. We manage our own buildings, and so we have that — those relationships with our customers. So it’s a little more of a natural conversation to start thinking about how to upgrade their space to make it as competitive to recruit, retain and return their talent back to the office?
Camille Bonnel: So are you seeing that activity start to pick up compared to a year ago? Because we’ve been hearing liking just continue to kick down the can down the road?
Ted Klinck: So yeah, let me jump in and try. So I’m thinking about just some of our upcoming maturities. I mean, Brian talked about it in his prepared remarks on in Buckhead, the 168,000 square feet in September, we’ve already backfilled 50,000 of that. We have over 350,000 square feet of tour activity and some interest, a lot of interest in the assets. So we feel good about backfilling that specific space. And you go up to EQT Plaza, Brian mentioned, we’ve already backfilled one floor there, and we have interest. We have proposals out on several other floors. So again, the activity has really picked up I think from mid last year at EQT Plaza, you go to Bass. Berry. We’re getting ready to start to implement high wotizing plan there.
We’re still a year out Bass, Berry, Levin [ph] in February of 2025 but we’ve got several multi-floor users that we’ve got proposals and they’re touring on. Nothing is etched by any stretch, but just the activity, seeing the tour activity pick up is pretty encouraging from our standpoint.
Camille Bonnel: Got it. And you’ve placed a big emphasis on securing additional liquidity in the past year and have been very successful at raising capital. So given you’ve pretty much covered your capital needs, how much more liquidity are seeking to raise?
Brendan Maiorana: Hey, Camille, it’s Brendan. I would say that, there’s not capital that we feel that we need to raise. But I do think if you go back to just Ted’s comments at the beginning of the year — at the beginning of the script, just talking about continual portfolio improvement. I do think we feel like there are asset sales that we likely will get done. So I think the capital raising that will get done during this year is likely to be done via asset sales as opposed to it’s going out to the debt markets, whether it’s — I don’t think we envision raising debt capital this year, but I do think we’ll get capital in the door through disposition proceeds.
Camille Bonnel: Finally, then looking at your cash flows for this next year, has there been discussions with the Board on whether this could, the dividend could be a source of capital just given the high yield? Or is the view to continue paying it as long as it’s covered?
Ted Klinck: Sure. Let me start off and maybe Brendan may want to supplement the answer. But look, it’s something we talk about virtually every quarter with the Board. As we look at our dividend, it is covered by our cash flow. And we think the dividend is an important part of total return for us. So — and we’ve been pretty proactive the last few years with respect to our CapEx spend and our cash flows have been improving. So based on the outlook that we see for the business, we feel very comfortable with the dividend at this time.
Camille Bonnel: Thank you for taking my questions.
Ted Klinck: Thank you.
Operator: Our next question comes from Ronald Kamdem from Morgan Stanley. Ronald, your line is now open.
Ronald Kamdem: Hey. Just a couple of quick ones. Staying with the dispositions. You talked about 75 in the market, maybe more to come. Any sort of sense on the cap rates on those? And — how are you guys thinking about the quality of those assets, seller financing? Just any more color on those would be helpful
Ted Klinck: Sure. With respect to what we have in the market, again, they haven’t closed, I’m hesitant to talk about cap rates. Hopefully, we’ll have something to talk about maybe next call, Ron. Seller financing, there is one building of what we have out there that we’re providing a short-term I think it’s a 12-month short-term financing, very similar to — I guess earlier last year, we did a six-month financing on one. So one small asset of that $79 million we’ll have a seller financing for one year. But other than that, it’s all equity purchase.
Brendan Maiorana: Ron, I’ll just say in terms of cap rates, I think it’s fair if you kind of looked at the cap rates and the average sort of blended for 2023. If you thought of something kind of comparable to that in broad strokes, I would say, not with the $75 million that we expect in the first half of the year. But just kind of as you think about that over the course of 2024, 2025, I think that’s a reasonable gauge to kind of use if you’re trying to model that.
Ronald Kamdem: Helpful. And then my second one is just going back to the questions on sort of the cash flow situation and so forth. So as you think about the lease expirations starting at the back half of this year into 2025, potential Pittsburgh sales. Have you guys sort of looked at an analysis of where leverage could potentially go in those scenarios and how you think about preserving cash flows under those scenarios and so forth. So the question really is just with the lease expirations, potential bid for sale, how does the balance sheet leverage sort of trend under those. . Thanks.
Brendan Maiorana: Yes, Ron, it’s a good question. So I think we are pretty comfortable with kind of where we are. Now of course, we’re going to be spending dollars on the development pipeline as we migrate throughout 2024 and even into 2025 without really a corresponding increase certainly in 2024 on EBITDA or NOI. So I think you’ll see a little bit of upward movement in the debt-to-EBITDA ratio as you kind of go throughout the year. But that is going to be then will come down as those development properties deliver and stabilize and generate significant amounts of NOI. So with all of that, I think we’re very comfortable kind of when we forecast even when we get to peak levels of debt-to-EBITDA, where we’ll be with then the embedded growth that, that number will come down.
And all the while, I think we’re very comfortable also with where our cash flows are with respect to the dividend. So I think we feel like we’ve got a lot of a lot of good growth drivers, and we’re coming at this from a position of strength if you think about dividend coverage in 2023 going forward. So I think not only do we have a lot of growth drivers with respect to kind of cash flow going forward, we’re also coming at it from a position of strength from thinking about it from 2023 levels.
Ronald Kamdem: Helpful. Thanks so much.
Operator: Our next question comes from Vikram Malhotra from Mizuho. Vikram, your line is now open.
Georgi Dinkov: Hey, good morning. This is Georgi on for Vikram. Can you just walk us through the occupancy trajectory in 2024? And can you provide more color on known move-outs over the next two years?
