What changed in this filing

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Item 1A. Risk Factors

2025-02-11 compared with 2024-02-06 · 17 added, 12 removed, 329 unchanged (8% of the section changed)

16 unchanged sentences

Occupancy in our office portfolio decreased from 88.9% as of December 31, 2023 to 87.1% as of December 31, 2024.

Average occupancy in future periods will be lower, perhaps significantly, if potential changes in customer behavior, such as the continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements, result in reduced future demand for office space over the long-term.

For additional information regarding our average occupancy and rental rate trends over the past five years, see “Item 2.

11 unchanged sentences

To the extent that we are able to renew existing leases or re-let such space to new customers, heightened competition resulting from adverse market conditions may require us to utilize rent concessions and tenant improvements to a greater extent than we anticipate or have historically.

Further, changes in space utilization by our customers due to technology, economic conditions, business culture and/or a need for less space due to the increasing prevalence of work-from-home arrangements by certain employers also affect the occupancy of our properties.

Further, changes in space utilization by our customers due to technology, economic conditions, business culture and/or the prevalence of work-from-home arrangements also affect the occupancy of our properties.

As a result, customers may seek to downsize by leasing less space from us upon any renewal.

10 unchanged sentences

To the extent that our customers exercise early termination rights, our results of operations will be adversely affected, and we can provide no assurances that we will be able to generate an equivalent amount of net effective rent by leasing the vacated space to others.

As part of ongoing efforts to reduce waste, the U.S.

Department of Government Efficiency (“DOGE”) and the U.S.

General Services Administration (“GSA”) are reaching out to all tenant agencies with non-firm term leases to see if there are opportunities to reduce space usage.

We currently have 30 leases with 23 different agencies of the Federal government across five different markets, which encompass an aggregate of 737,000 square feet.

Properties – Customers.” While most are firm term leases that do not permit the Federal government to terminate the lease prior to the stated lease expiration date, we can provide no assurances that the Federal government will not seek to terminate any of these leases.

Our results of operations and financial condition could be adversely affected by financial difficulties experienced by a major customer, or by a number of smaller customers, including bankruptcies, insolvencies or general downturns in business .

5 unchanged sentences

In such case, our claim against the bankrupt customer for unpaid, future rent would be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease.

As a result, our claim for unpaid rent would likely not be paid in full and we may be required to write-off deferred leasing costs and recognize credit

losses on accrued straight-line rents receivable.

As a result, our claim for unpaid rent would likely not be paid in full and we may be required to write-off deferred leasing costs and recognize credit losses on accrued straight-line rents receivable.

These events could adversely impact our financial condition and results of operations.

61 unchanged sentences

• result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT;

• result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or expose us to damage claims by third-parties for disruptive, destructive or otherwise harmful purposes and outcomes;

• result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information, which hackers could use to compete against us or expose us to damage claims by third-parties for disruptive, destructive or otherwise harmful purposes and outcomes;

• result in our inability to maintain the building systems relied upon by our customers for the efficient use of their leased space;

10 unchanged sentences

Further, we face significant competition for attractive investment opportunities from an indeterminate number of other real estate investors, including investors with significantly greater capital resources and access to capital than we have, such as domestic and foreign corporations and financial institutions, publicly-traded and privately-held REITs, private institutional investment funds, investment banking firms, life insurance companies and pension funds.

Moreover, owners of office properties may be reluctant to sell, resulting in fewer acquisition opportunities.

Moreover, owners of office properties

may be reluctant to sell, resulting in fewer acquisition opportunities.

As a result of such increased competition and limited opportunities, we may be unable to acquire additional properties or the purchase price of such properties may be significantly elevated, which would reduce our expected return from making any such acquisitions.

32 unchanged sentences

• our joint venture partners may have different objectives than we have regarding the appropriate timing and terms of any renovation, sale or refinancing of properties;

• with respect to certain joint ventures, our joint venture partner has a right to sell its interest to us under certain circumstances for fair market value (less estimated costs to sell) at various dates in the future;

• with respect to certain joint ventures, our joint venture partner has a right to sell its interest to us under certain circumstances for fair market value at various dates in the future;

• with respect to certain joint ventures, our joint venture partner has a right to receive additional consideration from us or the joint venture under certain circumstances if and to the extent the internal rate of return on the applicable development project exceeds certain thresholds;

2 unchanged sentences

We face risks associated with the development of mixed-use commercial properties.

We operate, are currently developing and may in the future develop properties either alone or through joint ventures with other persons that are known as

“mixed-use” developments.

We operate, are currently developing and may in the future develop properties that are known as “mixed-use” developments.

This means that in addition to the development of office space, the project may also include space for residential, retail, hotel or other commercial purposes.

29 unchanged sentences

Our ability to borrow under the revolving credit facility also allows us to quickly capitalize on opportunities at short-term interest rates.

If our lenders default under their obligations under the revolving credit facility or we become unable to borrow additional funds under the facility for any reason, we would be required to seek alternative equity or debt capital, which could be more costly and adversely impact our financial condition.

If our lenders default on their obligations under the revolving credit facility or we become unable to borrow additional funds under the facility for any reason, we would be required to seek alternative equity or debt capital, which could be more costly and adversely impact our financial condition.

If such alternative capital were unavailable, we may not be able to make new investments and could have difficulty repaying other debt.

18 unchanged sentences

• if we loan funds to a joint venture and the joint venture is unable to make required payments of interest and principal, or both, then we may exercise remedies available to us in the joint venture agreement that could allow us to increase our ownership interest or our control over major decisions, or both, which could result in an unconsolidated joint venture becoming consolidated with our financial statements;

doing so could require us to reallocate the purchase price among the various asset and liability components and this could result in material changes to our reported results of operations and financial condition.

doing so could require us to reallocate the purchase price

among the various asset and liability components and this could result in material changes to our reported results of operations and financial condition.

Risks Related to our Status as a REIT

31 unchanged sentences

stockholders are taxed at a maximum individual rate of 33.4% (including the 3.8% net investment income tax and after factoring in a 20% deduction for pass-through income).

The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our stock.

The more favorable rates applicable to regular

corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our stock.

We face possible tax audits.

82 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors