Ladies and gentlemen, thank you for standing by and welcome to the Brandywine Realty Trust First quarter 2021 Earnings Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there’ll be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Jerry Sweeney, President and CEO. Please go ahead.

Sarah, Thank you very much. Good morning, everyone, and thank you for participating in our first quarter 2021 earnings call. As per our normal process on today's call with me are George Johnstone, our Executive Vice President of Operations; Dan Palazzo, our Vice President and Chief Accounting Officer; Tom Wirth, our Executive Vice President and Chief Financial Officer. Prior to beginning certain information discussed during our call may constitute forward-looking statements within the meaning of the federal securities law. Although we believe estimates reflected in these statements are based on reasonable assumptions, we cannot give assurance that the anticipated results will be achieved. For further information on factors that could impact our anticipated results please reference our press release as well as our most recent annual and quarterly reports that we filed with the SEC. First and foremost, we hope that everyone is – continue to be safe, healthy, engaged and looking forward to return to some semblance of normalcy. The pandemic continues to disrupt but with the vaccine deployment being accelerated we are on a path towards that normalcy. There is more optimism about the economy opening up and we're hearing that directly from many of our 1,200 tenants. Our portfolio remains about 15% to 20% occupied, and the predominance of tenants that returned thus far are the small and medium size employers. What's interesting though is many restrictions imposed by governmental agencies are being gradually loosened by state local governments, but that happened just recently here in Pennsylvania and Philadelphia, and we believe that those changes will definitely accelerate the return to the workplace. So during our prepared comments today we’ll review our first quarter results, discuss progress on our 2021 business plan, and update you on our recent transaction development activity. Tom will after that provide a…

Thank you, Jerry. Our first quarter net income totaled $6.8 million or $0.04 per diluted share, and FFO totaled $60.2 million or $0.35 per diluted share and in line with consensus estimates. Some general observations for the first quarter, while the results were in line we did have a number of moving pieces in several variances to up to our fourth quarter guidance. Portfolio operating income totaled about $68.5 million and was below our fourth quarter estimate. The main reasons for that was lower parking revenue as work guidelines restricted people coming back to work and recommended working from home. Residential was below our expectations, our operations primarily FMC remained soft primarily from the results of those UPENN and Drexel being primarily virtual. Also snow, we had some snow removal costs that were above forecast. While we do get very good recovery we do experienced higher – we did experience higher net operating costs. Termination and other income totaled $2.1 million or $1.9 million below our fourth quarter guidance. The results were negatively impacted by one transaction that we anticipated to be classified in other income was actually be classified in other income was actually recorded as a reduction to G&A expense. Land gain and tax provision totaled about $2 million or $1.5 million above our fourth quarter guidance. We recorded a land gain associated with our contribution of our interest to the Schuylkill Yards West joint venture and that was not forecasted. We had a forecasted land gain of $0.5 million that didn't occur and was delayed and we’ll – now we anticipate occurring in the second quarter. G&A expense totaled 6.6 or $1.4 million below our $8 million fourth quarter gains. Decrease was primarily due to the reduction in our other income guidance which I just mentioned and…

Tom, thanks. The key takeaways our portfolio and the operational platform is really in solid shape. And our team has done a really a wonderful job of getting excellent visibility into what our tenants were thinking how they're reacting to the return to work timeline. And we're doing everything we can to aid them in that process including as we've mentioned on previous calls they’re doing a number of pro bono space planning exercises to make sure that they have the option of kind of evaluating how they want to reconfigure their space. Our leasing pipeline does continue to increase as tenants start to reemerge from the work from home mentality. Safety and health issues both in design and execution are really becoming tenants’ top priorities. We're hearing that for more and more prospects. And we really do believe that new developed in our trophy level inventory will benefit from this trend, a good data point as the pipeline in our development projects increased by 23% during the quarter evidencing that real focus of like the quality. And I think strategically you know we look at we have some very robust Ford growth drivers that remain very much on target. We have two fully approved Mixed-Use master plan sites that can double our existing inventory diversify our revenue stream and drive significant earnings growth. Our planned 3 million square feet of life science at - that development can create a real catalyst to accelerate the overall pace of the development of Schuylkill yards. We have a very, very attractive CAG growth over the last five years and have created a very well covered and attractive dividend that's poised to grow as we increase earnings. Private equity is abundant and the debt markets are incredibly competitive evidenced by the 65% loan-to-cost of Schuylkill Yards West, and strong operating platforms like Brandywine are gaining significant traction for project level investment as evidenced by the really strong activity we had in our Broadmoor marketing campaign. Our partnership with Schuylkill Yards West reinforces at more and more smart investors are beginning to focus on the emerging life science market here in Philadelphia. And I guess the usual land where we started which is we hope you all are doing well and that you and your families are safe. So with that, so we're glad to open up the floor to questions. We do ask that in the interest of time you limit yourself to one question and a follow-up. Thank you very much.

Thank you. [Operator Instructions] Our first question comes from the line of Craig Mailman with KeyBanc Capital Markets. Your line is now open.

Hey. Good morning, guys. Jerry, just curious on the commentary around improving kind of tours and the pipeline are you seeing any geographic kind of concentrations of better shrinks or even weakness?

George and I will tag team and, Craig, and I hope you're doing well. What's actually kind of interesting is that when we look at some of the data points actually our highest level of virtual tour activity by a wide margin occurred in Philadelphia CBD. That was probably one of the markets that we're in and had the tightest return to work guidelines in place, but that was followed by the Pennsylvania suburbs again evidenced by the restrictions in the commonwealth Pennsylvania and then net DC came in third in terms of the overall sum of the views and then Austin was in last place there but George maybe you can add some color to the dispersion of the pipeline.

Yeah. And just quickly Craig on physical tour it's kind of the same dynamic. Philadelphia outpaced physical tours by 120% in the first quarter. The pipeline again is somewhat evenly dispersed. Some of that has to do with the amount of inventory that each of our regions have. So we don't have as much inventory in some markets as others. Gerry mentioned that between 1676 and 2340 Dallas that pipeline in Northern Virginia is about 600,000 square feet and CBD again we kind of outside of our pipeline – commerce is kind of outside of our quoted pipeline statistics since it's technically in the joint venture, but the pipeline continues to build at commerce. It's right now about 120,000 square feet on both the Macquarie and Reliance givebacks and in traditional CBD again we're seeing good activity on the upcoming rollover by Comcast, Decker and Baker.

Got it. That's helpful. And just I'm kind of curious relative to past downturns is this kind of a normal pattern that you've seen where tours have increases quickly and do you think just the increased availability space broadly in some of your markets whether it be sublease or direct, do you think that Do you think there’s a lot of double counting as you know it seems like a lot of brokers and companies are saying that more activity is up pretty meaningfully for them? Do you think it's just do you think it's really a increased pool of tenants or just tenants are looking at a broader swath of space and so there's a lot of overlap in terms of what people are seeing?

Yeah. Craig that's a great question. Again George and I’ll tag team. I mean it's [indiscernible] have been through a downturn like this because we literally had the brakes on activity for almost 12 months with the only real notable deliveries being lease negotiations that were in process. So I think when we talk to a lot of brokers in all of the markets I think there is an expectation that it will be a significant ramp up. Companies are really now beginning to focus I think for the first time to a programmatic return to work timeline. So I know you know even down in Austin you know the amount of sublease space has gone down based upon reported results. Levels of activity are certainly much stronger in the first quarter than they were in the in the fourth quarter with a real acceleration month-by-month during the first quarter. I know we look at our pipeline to kind of assess the pace of deal flow. It seems there are a lot of tenants who are in the marketplace really fall into two categories. One they need to get out and sort take a look at office space, but they don't really have any time pressure to make a decision that they're trying to think through what their decisions might be in the next 9 months to 12 months. But we're also seeing a fair amount of tenants who do need to make a decision. In the near-term and we're seeing some of those timelines get increasingly compressed. But George we're seeing some of those timelines get increasingly compressed. But George what else can you add?

Yeah I think the one of the other dynamics that we're seeing you know there's a number of tenants that are kind of out looking at you know everything from existing vacancies to sublease opportunities because they're now going through you know the need or the desire to reconfigure their space. And so they're taking a little bit maybe a look - of a wider look and maybe they would have traditionally and I think you know obviously different than just a financial crisis rebound. I think coming out of the pandemic and health and safety workstation locations and turning radius within the space I think all of those things have led to an increased level of interest both virtual tours physical force et cetera.

Great. Thanks for the color.

Thanks Craig.

Thank you. Our next question comes from the line of Manny Korchman with Citigroup. Your line is now open.

Hey Jerry you mentioned I think the way you planned it was pro bono space planning. I don't know if that's for existing tenants or new tenants or the like. But what's coming out of those exercises or as you go through those. What interesting tidbits or lessons are you coming up with how space may change now?

Well I think we have an in-house space planning firm and some very good relations with some outside firms. And a number of months ago we moved to create a tenant communication. We're able to suggest to our tenants if any of them wanted to go through a space planning exercise that we would help them think through that through our internal resources without charging them. And I think that the results have been all across the board. I think that the trend line has been that tenants are definitely looking for a higher percentage of private offices, more circulation patterns, higher profile and larger workstations maybe multiple gathering areas versus one central [ph] commons. And I think, George, in terms of the numbers that we've had a couple of expansions come out of it?

Yeah. I mean, just starting this past quarter we executed two expansions within the existing tenant base both out in the Pennsylvania suburbs. We've got two others that we’ve actually advanced to lease amendments with. And again, it was just a matter of they needed to take down a little bit more square footage really more in how they wanted to alter their physical space as opposed to just internal growth within their business.

Yeah. I think one of the other data points we're hearing, Manny, and I'm not sure if you’d see this through the other companies you follow, but there is a lot of continued distance over what percentage of employees will be on near or for permanent work from home. And we’ve talked to a number of leaders of our 1,200 tenant base and we've seen that thought process evolved significantly over the last 12 months where certainly more and more companies are recognizing the value of having people together physically. And I know just anecdotally in conversations I've had with some large companies where they've been targeting X percent of the employees are going to be on work from home. They're getting a lot of pushback, I think they're hearing the employees would like the optionality of working from home but not being permanent work from home employees. And even that are in either one of those categories are creating a lot of push back about giving up a set place in the office for them to come to when they return to the office. That's why we're saying or anything like you know three quarter plus type of transition as companies really start to think through how they're going to number one sequence people back in, but then once people are in what they think the durability of concern is about the COVID-19 and its impact on the workplace.

Thanks for that. And then just on the Maryland deal, adding another sizable project to the pipeline you've got school going on. You've got Broadmoor which you're going to lane the partner. You've now committed to new mass, I guess you'd call a master plan development. Just how do we think about; A, capital funding for all that; and B, why introduce Maryland to the mix when it hasn't been a core market for you or you don't have a standing relationship or hadn't as of yet with the University of Maryland?

Yeah. Many thanks. It's a great question and thanks for raising. But from our perspective, I guess our experience has been that you know working with universities are solid long-term business that can generate both value creation and see opportunities for us. And given our work with a number of other universities, we developed a bit of a franchise in this area. So we have a number of universities always reaching out to us to bid on master plan work or provide consulting services. And I guess what we're seeing is universities and healthcare systems are often seeking outside help to say to their real estate straight so they can add value to their franchise. And from Brandywine’s perspective, engaging with these types of organizations really create great connection points for us within the entire university system from administration to faculty board members who tend to be business and civic leaders community groups who do business with the university and it really has been a great source of business development for us, community and tenant networking. And what's interesting is now a lot of these universities are now becoming incubator spaces for a number of companies that they plan on spinning out.So when we look at the University of Maryland opportunity it is [indiscernible] procedures university with a dynamic – with some very, very dynamic growth drivers particularly in quantum computing and as we assess the staging of that opportunity with the rest of our pipeline, the transaction with Maryland is obviously much smaller in scale than Schuylkill Yards or Broadmoor. We have at least a year plus to go through an approval process before we could even contemplate starting ground. We have a lot of flexibility under our transaction with Maryland in their development subsidiary, Terrapin Development Company. So we have real flexibility in terms of when we start a project and part of the project construct is we would not start that without a significant prelease. The returns we want to return there through our – or through all of our due diligence are the same as Schuylkill Yards and Broadmoor run 8% for office and mid-6%s for residential. And as I mentioned we can build this out in phases. The first phase would only be about $100 million again with every preleasing. And if I did touch on I think there’s a tremendous amount of private capital out there that is very focused on doing business with companies like Brandywine and in proven locations like university ecosystems. So even on the residential component of that transaction Maddy, we've already been approached by a number of companies looking to take that on as either investing partner or in its entirety. So we think it's a good long-term value to us. We view that differently than just a one off investment in Maryland, in the Maryland marketplace that it's really tied into an overall university system that has a lot of growth potential.

And maybe one last one for me. You talked about more conversion of space to life science. And given that those are – that converted space is very much in an office building, when you say life science, do you mean that the tenant is going to be the life science sector and using it for office space? Do you mean life science in terms of R&D space, like when you and maybe others in the states use that term life science, it can mean a whole bunch of things. So when you're talking about life science conversion and this is different for the ground up stuff, but for the conversions what do you mean when you say we're converting the outlook whatever it was eight floors, four floors to life science?

Yeah. I think as we contemplate it, I’ll give you a couple of specific examples within just Sierra. A good portion of the 47,000 square feet that's been released during their conversion is primarily office by a life science company or incubator which is 50,000 square feet, that'll have essentially 170 biology benches and private labs, 43 chemistry labs. So I'll have a small component of co-working and about 15 private offices. That's primarily a real lab space. So, when we talk about it generically and looking at the balance of that conversion opportunity we're targeting that being somewhere on a 50-50 office and lab split. Does that answer your question?

It does. Thanks George.

Okay, Emmanuel. Thank you.

Thank you. Our next question comes from the line of Emmanuel with JP Morgan. Your line is now open.

Thanks. Good morning. Jerry you emphasized this flight the quality that seems to be unfolding. Can you give a little bit more color on what that means in terms of whether it's buildings services, submarkets and also whether it moves the line so to speak in your own portfolio that brings about more non-core assets that might have to be sold in the future?

Yeah. Tony. Good to hear from you. And George and I will tag this as well. I think when we talk about a flight the quality really revolves around a couple of key pieces. One is what the existing building infrastructure is relative to all the mechanical electrical and other factors vertical transportation speed, the level of filtration systems that the amount of fresh air intake. If you think about it from our production cycle it's all the items that used to be on page 47 of the 50 page RFP which are kind of the technical specs. You know they’re now you know on page 2 or 3. So every major company and actually the larger the company the more acute the level of examination is on you know what the building can physically present from a platform standpoint. So that's kind of point one. Point two is they're really looking for the level of onsite management expertise, i.e., the building operating engineering staff, the qualifications of the property management teams, because I think this pandemic has really shown a true bifurcation of landlord service delivery platforms and those buildings that have really high quality onsite management with the technical expertise by the operating engineers really fare much, much better on that evaluation points than those that don't. So the idea of having an incented, i.e., ownership based onsite management is becoming a point of increasing examination. Third point is the increase relative to the capital investment program and the preventive maintenance programs that these buildings can present to prospective tenants. Tenants now again are very keenly focused on not just the building today but this is [indiscernible] have a track record of actually reinvesting in physical plant to make sure that those elements of the space that are very important to life, safety, et cetera, are demonstrated through a long history. And I don’t know, George, if you have anything else to add?

Yeah. And further adding onto that I think sometimes also or just the amenity programs that you can build and provide within those buildings just they sometimes merely on the fact that some of the trophy buildings are bigger than others and there’s just a flight to quality for all of those things. But the capital investment I think is a key part of it that Jerry touched on and you know we put between $6 million and $8 million of kind of base building capital upgrades into our portfolio on pretty much in an annual basis. And that ranges everything from HVAC to elevator to restroom renovations parking lot upgrades lighting, a filtration change systems and the like. So I think it's that commitment the service level that we can provide that really and then also kind of submarket location. I think some submarkets obviously have a predominance of that. So we feel good about our Radnor portfolio and that in fact it's one of the trophy inventory sectors of the Pennsylvania suburbs. Yeah and I think Tony, the second part of your question. Well I think one of the things we look back over the last several years within the company I mean we've done a pretty effective job in moving a lot of the lower quality inventory out of our portfolio. And I think that was evidenced by the last transaction that we did with a joint venture. And we kind of view those as kind of noncore for us in terms of our wholly owned operating platform. So I mean Tom, George, Dan and I and the rest of the team are always constantly evaluating on a quarterly basis relative to - the relative performance of every building within our portfolio. And what we need to do to either reinvest capital to change the NOI trajectory or whether and if we do that can we actually change the NOI trajectory or should we look to move that. So I think that will always remain a part of our capital allocation strategy to look at it and identify on a relative basis within our portfolio. What will be the laggard performers in terms of growth and capital ratios and look to \ move those out. But as we stand right now we think we have the portfolio in an extremely good position to respond in every one of our submarkets to tenants increasing focus on this quality issue.

Okay. Thanks for that. And then just one other one is on the vacancies I think you talked about that should drive $0.10 of earnings. Do you refresh us on how many square feet that is? What those are just the only track that that’s $0.10 and those specific blogs?

Sure. Absolutely, Connie. We've identified it within the wholly owned portfolio. These are basically 9 suites/buildings, the largest of being 1676 Down in Tysons. So that's we've got about 175,000 square feet left for lease down there. The next largest is a 40,000 square foot block in Radnor. That was formerly a fitness center. We've got lease negotiations going on a backfill use for that. 36,000 square feet still down in Austin, Texas that was formerly SA [indiscernible] as One Barton. We had a full flow of block at Two Logan that we've now leased. So that's kind of come off the table. And we have a 25,000 square foot block out in Plymouth meeting. And so all-in-all for that 400,000 square feet, we've leased about 100,000 square feet of that thus far. And we only had 200,000 of that 400,000 in our 2021 business plan. So we’re about halfway done with what we had in the 2021 plan, the balance of that obviously is slated to fall into the 2022 plan, but we're doing everything we can to put that space away today and just solidify the 2022 NOI.

Okay. Great. Thank you for that.

Thanks, Tony.

Thank you. Our next question comes from the line of Jamie Feldman with Bank of America. Your line is open.

A little bit about net effective rents, and where do you think if you think about your major markets CBD Philly, suburban Philly, Austin, how much you think they'd move during the pandemic, and where are they now? You think they’re stabilizing just some more color on that key topic?

Yeah. Jamie, good morning. This is George. I mean, during the pandemic I would say they really haven't moved much at all. I think some of that is – some tenants looking maybe for a little bit more of a free rent package and trading that off for the TI package. We continue to kind of assess the entirety of the concession package, weigh that up against the length of lease term, the bumps, sometimes we've seen deals where the bumps may be slower at first and larger on the back end to kind of preserve that net effective rents, but pandemic specific we haven't really seen a deterioration in that effectives.

So just to confirm, you’re saying they’re pretty much where they were in 2019?

Yes.

Okay. And this is across every market?

I would say yes for the most part. I mean, I think where you’re sometimes most challenged is this where you're – you've either got one big blocks of vacancy you’re trying to move or you've got an overwhelming amount of submarket vacancy that you’re competing with. So we've seen a little bit maybe [ph] enticing where it's gotten a little bit more competitive but we kind of assess that as the pipeline builds we kind of know where we need to be to make deals and we pivot accordingly when we have to.

Yeah. I think, Jamie, just to add to that. One of the things you are keeping a watchful eye on is that really it has an impact on that effect of rents because that really driven by the pandemic or demand driver, just really it's been the escalation and construction costs. I mean, we have seen price of steel, lumber, and number of other construction materials class really ratchet up quite a bit. And that is as we go through certain tenant pricing exercises for space the TI cost may come in north of our targets and that may create some downward pressure going forward. But it's not necessarily a rental concession per se due to the pandemic, it’s more a function of what we’re hoping will be a transitional blip in construction pricing.

Okay. That's helpful. Thank you. And then you had talked about doing maybe a 24-month forward view on expirations, are there any new move outs that you guys weren't thinking about before that have popped up, or that people have given you notice on?

No, there really aren't. I mean, the list has kind of remained the same and we can continue to chip away at that. So, yeah, no new ones the larger ones that we’ve spoken about with Comcast we’ve got pipeline on two of those three floors, two, four giveback in 2021 we’ve got pipeline on that we’ve got active deals to backfill all of the baker giveback in the first quarter of 2022 So really 2021-2022 in pretty good shape. It's really three leases over 10,000 square feet in 2021 and four leases over 50,000 square feet in 2022.

Okay. All right. Thank you.

Thanks, Jamie.

Thank you. Our next question comes from the line of Steve Sakwa with Evercore ISI. Your line is now open.

Thanks. Good morning. Gerry, I was just wondering if you could comment a little bit on Austin it seems like that market has been a big beneficiary of a lot of movement whether it’s in California. I'm surprised maybe the pipeline is in a little bit stronger, demand is in a little better there for some of the developments or maybe I think four five and what are your expectations for leasing in Austin over the next 12 to 24 months?

Sure, Steve. Well, we think the pipeline in Austin continues to build. I think the first quarter numbers this is a market- wide commentary not just Brandywine. I think it was a level of discipline with the first quarter leasing numbers coming through Austin but based on very recent conversation not just with our team but with other market prognosticators there's a big pipeline coming to a level is way up. In fact, there are some comments relative to it being back to pre-pandemic levels. Just through February Austin's created 1,800 new jobs [ph] and had opportunity Austin there's a 18 new companies in the queue who have located to Austin, 21 companies expanding. I mentioned we’ve seen a tremendous upsurge in activity at 405. Now that building's done, lobby’s pretty much complete, sky lobbies pretty much their garage is ready to open, we're getting a lot more traffic through the building is ready to be late at night. So it's getting to be much more of a recognizable stopping point on tours. So we've seen the number of tourist pick up, hopefully that translates into an increasing pipeline. When we take a look at our Broadmoor development there are a number of larger tenants in the market and we’re certainly talking to a number of those. No assurances, those deals will come to fruition or we'll make them, but we're in the fray for every major deal in the marketplace. I think in the southwest for [indiscernible] it is I think we're still waiting for some of that tour level activity to pick up. But generally we're feeling very good about where we are in Austin. I think the 405 we think has a convertible pipeline that will put that price in good shape as we enter 2022. With the marketing launch of Broadmoor, particularly with the commencements targeted at the residential start we think that will show real activity at Broadmoor and we think that will generate even more activity coming to the office building. So we’re very encouraged, I mean, tracking both through our own very talented team, the key brokers in the market, conversation with other business leaders including the Chamber Opportunity Austin and political leaders. We think Austin is in a very good position with a lot of eyes outside of Austin looking at Austin as a potential place to go.

Great, thanks. And the second question maybe just going back to your construction cost comments and kind of increase in steel and other inflation pressures how are you sort of looking at some of the nearer term development starts whether it would be 3151 or the developments of Broadmoor. Have you kind of precast to out those projects and based on current rents today do those deals still pencil for you.

Yeah. How we approach that. Yes I think Steve you know we take these projects all the way through for construction so 100% CDs, we're doing iterative pricing all the way through so we can value engineer properly. And then once we get that kind of pencils down the drawings we're pricing including now on top of GC but also that the pool of subcontractors. And it's a fairly dynamic process. So we're staying in very close touch with all of the various substrates and GCs on every one of our development projects. And what we've seen thus far is while there's been some upward pressure we've been able to keep within the relative band of all the projects still working. And certainly as we price things through with these GCs we ask them to give us a pricing metric based upon us giving them a notice to proceed within the next three and six months. So we've got a little bit of a forward window into what we think the pricing would be a quarter or two from now. We also have a team that tracks all the futures markets. So even while steel on a spot basis is up over 20% in some of the commodity level steel components futures are down. So we're certainly talking to a lot of steel fabricators is doing the same on a spot basis is up over 20% and some of the commodity level steel components you know futures are down. So we're certainly talking to a lot of steel fabricators is doing the same thing on precast curtain wall. So it's really kind of an ongoing daily process by our construction team and development professionals staying on top of all the major component parts of every one of these buildings. And I think as we stand here today I think we're in pretty good shape across the board.

Great thanks. That's it for me.

Thank you Steve.

Thank you. Our last question comes from the line of Daniel Ismail with Green Street Advisors. Your line is now open.

Great. Thank you. Just a quick one for me. Weighted average returns came in below recent averages. I'm curious about what's to say related to several large leases or it's kind of lower lease terms as to be expected for the rest of the year?

Yeah. This is George, great question and it really is just based on kind of the volume of deals and what we had in this first quarter leading to that 3.3 year average lease term is last year during really the start of the pandemic we started reaching out and did a number of one-year extension two-year extension leases where the end result of that lease then commenced with its extension during the first quarter of 2021. So you know we had done a one-year extension with Dechert at Cira Center for 12 months a year ago. So you had 109,000 square feet with only a 12-month term that kind of really skewed with commencements this quarter and now we’ve also further extended them in that lease. Well, we reported in the first quarter of 2022 when it naturally commences. So, it was really just a combination of one large lease and a number of others that were just short-term in nature kind of just expand – extend expirations as a result of the pandemic.

Okay. As you look at the rest of your pipeline and discussions with tenants there's no conscious choice to reduce lease terms as a result of the pandemic?

Yeah. Again if you call me in kind of week did you ask if there was a part of our strategy was to do shorter-term leases?

Apologies. I'm – hopefully I’m coming in better now. My question was related to our tenants consciously deciding to lower lease terms as a result of the pandemic for the rest of the pipeline.

Yeah. I can't say that they are. I mean I think again sometimes it just comes down to each individual tenant’s kind of comfort level on how long they want to go but we're still seeing larger deals still wanting that 10 to 15-year lease period sometimes they will want to negotiate an early termination sometime throughout that term but that's no different than it was pre-pandemic?

I’d just add Dan so and on the Geoge’s comment, I mean we take a look at our development pipeline thorough 10 to 15-year proposals and that is not meeting any resistance at all at this point. I think the theory behind your question I think that I’d say remains to be seen depending upon when we get full visibility into the overall market seen depending upon when we get full visibility into the overall market whether some tenants will be more of a mindset to do three-year to five-year deals versus longer-term deals. And we certainly have the flexibility to do that within our business model. But it's all about how you maintain the same as the level of net effective rents. We've had some very good success with some of our pre-built faces, offering flexible lease terms on that. So there's clearly a subset of the tenant universe that will pay a premium for a shorter-term lease. And that premium can be more than adequate compensation for the incremental capital. Look, we're already saying that at the Incubator location we're offering anywhere from one month deals up to a multiple years. And in the proposals the team has out the level of premium tied – it directly correlates to how short the term is, so we think that will be it will be a key part of every office company's business plan going forward. I just don't know how big it will be or how durable that trend line will be because we're still seeing from a number of large companies that we're talking to on the development side they still want to have their corporates their home, their cultural platform. And we're not seeing any kind of additional requests for expansion or contraction rights or even as George touched on anything that deviates from historical norms on the early termination process.

Okay. Thank you.

Thank you. This concludes today's question-and-answer session. I would now turn the call back to Jerry Sweeney for closing remarks.

Great. Well, look, thank you for participating in today’s call. We look forward to updating you on our business plan activity in our next quarterly call. In the meantime, please stay safe and healthy. Thank you very much.

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.