Operator: Good morning, and welcome to the Office Properties Income Trust Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kevin Barry, Senior Director of Investor Relations. Please go ahead.
Kevin Barry: Good morning, and thank you for joining us today. With me on the call are OPI's President and Chief Operating Officer, Yael Duffy; and Chief Financial Officer and Treasurer, Brian Donley. In just a moment, they will provide details about our business and our performance for the second quarter of 2025. I would like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on OPI's beliefs and expectations as of today, Thursday, July 31, 2025, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, which can be accessed from our website, opireit.com. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we will be discussing non- GAAP numbers during this call, including normalized FFO and cash basis net operating income or cash basis NOI. A reconciliation of these non-GAAP figures to net income are available in OPI's earnings release presentation that we issued last night, which can be found on our website. And finally, we will be providing guidance on this call, including normalized FFO and cash basis NOI. We are not providing a reconciliation of these non-GAAP measures as part of our guidance because certain information required for such reconciliation is not available without unreasonable efforts or at all, such as gains and losses or impairment charges related to the disposition of real estate. I will now turn the call over to Yael.
Yael Duffy: Thank you, Kevin, and good morning. On today's call, I will begin with an overview of our portfolio before discussing OPI's second- quarter leasing and disposition activity. From there, Brian will review our financial results and outlook. As of June 30, 2025, OPI's portfolio included 125 properties totaling 17.3 million square feet with a weighted average remaining lease term of 6.8 years. We ended the quarter with same-property occupancy of 85.2%. Approximately 59% of our revenues come from investment-grade rated tenants or their subsidiaries. The U.S. government is our largest tenant, representing 17.1% of our annualized revenue. As we have long telegraphed, OPI's financial performance has materially declined as leasing challenges in the office sector have persisted. Specifically, annualized revenue of $398 million is down $85 million or nearly 18% compared to a year ago. Interest expense in the second quarter of $53 million is up $14 million or 37% year-over-year. We have little room under our debt covenants, which restrict us from refinancing or issuing new debt. Nearly $280 million in debt principal payments are due in 2026, and our total liquidity is $90 million of cash. Despite these ongoing challenges, we continue to lease and operate our properties while simultaneously exploring options to address our financial commitments and reduce costs. To that end, earlier this month, OPI's Board of Trustees made the decision to suspend the quarterly dividend, allowing us to preserve approximately $3 million of cash annually. Turning to leasing activity. In the second quarter, we executed 15 leases totaling 416,000 square feet at a weighted average lease term of 5.4 years and at rental rates that were 6.4% higher than prior rental rates for the same space. Renewals accounted for 2/3 of our activity and secured over $7 million in annualized revenue. Concessions and capital commitments of $3.53 per square foot per year declined 24% quarter-over-quarter. We have 1.3 million square feet of leases scheduled to expire through 2026, representing $30 million or 7.6% of OPI's annualized rental income. The majority of these expirations are related to single-tenant properties, and we expect 742,000 square feet or $11.2 million of annualized revenue will not renew. Today, our leasing pipeline totals 2 million square feet, of which over 60% is attributable to renewal discussions. Any leasing that results in positive net absorption will likely come from our multi-tenant properties, where the infrastructure and building amenities to attract new tenants already exist. Turning to dispositions. Earlier this month, we sold one property totaling 56,000 square feet via auction for $2.2 million, excluding closing costs. As property valuations continue to decline and the potential buyer pool targeting office acquisitions is limited, dispositions remain challenging. We have found that transaction timelines have significantly lengthened and often require a relaunching of marketing efforts as buyers are unable to transact. Despite these dynamics, we continue to evaluate disposition opportunities that may mitigate occupancy risk and reduce the carrying costs associated with vacant properties. I will now turn the call over to Brian.
Brian E. Donley: Thank you, Yael, and good morning. For the second quarter, we reported normalized FFO of $9.4 million or $0.13 per share, which came in $0.02 above the high end of our guidance range as a result of lower-than-anticipated seasonal operating expenses. This compares to a normalized FFO of $4.4 million or $0.06 per share for the first quarter of 2025. The increase on a sequential quarter basis was driven by higher NOI as a result of lower operating expenses and stronger performance from our hotel at 20 Mass Ave in Washington, D.C. Turning to our outlook for the third quarter of 2025. We expect normalized FFO to be between $0.07 and $0.09 per share for Q3. The decrease sequentially from Q2 was primarily driven by lower NOI related to lower rental income, higher operating expenses and the seasonally weaker quarter expected from our hotel at 20 Mass Ave. We project recurring G&A expense to be approximately $5 million for Q3, and our current estimated quarterly interest expense run rate is approximately $52 million, consisting of $41 million of cash interest expense and $11 million of noncash amortization of financing costs. We expect same-property cash basis NOI to decrease 7% to 9% as compared to the third quarter of 2024, driven by tenant vacancies. This NOI guidance does not include any potential changes to our same-store portfolio. Year-to-date, we have invested nearly $28 million in capital expenditures. For the second half of 2025, we anticipate approximately $43 million in CapEx comprised of $10 million of building capital and $33 million of leasing capital. At quarter's end, we had 3 properties with a carrying value of $8 million classified as held for sale. In July, we sold one of these properties, which was encumbered by our 2027 senior secured notes for $2.2 million, excluding closing costs and used the net proceeds to pay down the principal balance of that debt. Today, we have 3 properties under agreement to sell for $28.9 million, excluding closing costs. We currently expect 2 of the 3 properties to sell in September 2025 for $10.7 million and the third property to close in 2027. Turning to the balance sheet. Our total liquidity today is $90 million of cash. We're currently projecting cash from operations to be a use of $45 million to $55 million during the balance of 2025, including capital expenditures. Given our liquidity position, financial covenant constraints under our debt agreement and debt principal payments coming due in 2026, we continue to evaluate options to address these maturities with our financial adviser. That concludes our prepared remarks. Thank you for joining us today. Operator, you may now end the call.
Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.