What changed in this filing

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Item 4. Controls and Procedures

2022-10-27 compared with 2022-07-28 · 17 added, 23 removed, 104 unchanged (28% of the section changed)

Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, our management carried out an evaluation, under the supervision and with the participation of our Managing Trustees, our President and Chief Operating Officer and our Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended.

Based upon that evaluation, our Managing Trustees, our

President and Chief Operating Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

and 15d-15 under the Securities Exchange Act of 1934, as amended.

Based upon that evaluation, our Managing Trustees, our President and Chief Operating Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Warning Concerning Forward-Looking Statements

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Forward-looking statements in this Quarterly Report on Form 10-Q relate to various aspects of our business, including:

• The duration and severity of the COVID-19 pandemic and its impact on us and our tenants and our tenants’ ability and willingness to pay us rent,

• The extent to which certain alternative work arrangements such as work from home will continue and the impact that may have on demand for office space at our properties,

• The extent to which changes in office space utilization, including remote work arrangements, will continue and the impact that may have on demand for office space at our properties,

• Our expectations about the financial strength of our tenants,

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• Our belief that we are in a position to opportunistically recycle and deploy capital,

• Our expectations that the diversity and other characteristics of our property portfolio and our financial resources will result in our ability to successfully withstand the COVID-19 pandemic,

• The likelihood that our tenants will renew or extend their leases and not exercise early termination options pursuant to their leases or that we will obtain replacement tenants, on terms as favorable to us as our prior leases,

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• Our ability to successfully execute our capital recycling program,

• The expectation that, as a result of the COVID-19 pandemic and alternative work arrangements such as work from home, leasing activity may remain volatile until office property market conditions meaningfully improve and stabilize,

• Our ability to pay distributions to our shareholders and to maintain or increase the amount of such distributions,

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• Our ability to pay interest on and principal of our debt,

• Our ability to maintain sufficient liquidity during the duration of the COVID-19 pandemic and any economic downturn that may result in response to current inflationary conditions or otherwise,

• Our ability to maintain sufficient liquidity during any economic downturn that may result in response to current inflationary conditions or otherwise,

• Our credit ratings,

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Risks, uncertainties and other factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, FFO, Normalized FFO, NOI, cash flows, liquidity and prospects include, but are not limited to:

• The impact of conditions in the economy, including the COVID-19 pandemic and its aftermath, increasing interest rates, inflation and a possible recession, and the capital markets on us and our tenants,

• The impact of conditions in the economy, including increasing interest rates, inflation, geopolitical risks and a possible recession, and the capital markets on us and our tenants,

• Competition within the real estate industry, particularly in those markets in which our properties are located,

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federal income tax purposes, and

• Acts of terrorism, war or other hostilities, outbreaks of pandemics, including the COVID-19 pandemic, or other manmade or natural disasters beyond our control.

• Acts of terrorism, war or other hostilities, outbreaks of pandemics, or other manmade or natural disasters beyond our control.

• Our ability to make or sustain distributions to our shareholders and to make payments of principal and interest on our indebtedness depends upon a number of factors, including our receipt of rent from our tenants, our future earnings, the capital costs we incur to lease our properties and our working capital requirements.

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• We may fail to maintain, or we may elect to change our distribution rate.

Our Board of Trustees considers many factors when setting distribution rates, including our historical and projected income, Normalized FFO, cash available for distribution, the then current and expected needs and availability of cash to pay our obligations and fund our investments, distributions which may be required to be paid to maintain our qualification for taxation as a REIT and other factors deemed relevant by our Board of Trustees.

other factors deemed relevant by our Board of Trustees.

Accordingly, future distribution rates may be increased or decreased and there is no assurance as to the rate at which future distributions will be paid,

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• Our belief that there is a likelihood that tenants may renew or extend our leases prior to their expirations whenever they have made significant investments in the leased properties, or because those properties may be of strategic importance to them, may not be realized,

• Our belief that our recent leasing activity and negotiations for vacant or expiring space may suggest that there is an improving demand environment for office space may be incorrect or the demand for office space may decrease,

• Overall new leasing volume may remain volatile.

In addition, if the COVID-19 pandemic, a significant level of alternative work arrangements, including work from home, and current inflationary conditions continue for an extended period or worsen or if a recession occurs, our tenants may become unable to pay rent or they may elect to not renew their leases with us.

• Overall new leasing volume may be impacted if a significant level of remote work arrangements and current inflationary conditions continue for an extended period or worsen or if a recession occurs.

Also, our tenants may become unable to pay rent or they may elect to not renew their leases with us.

Further, some of our government leases provide the tenant with certain rights to terminate their lease early.

Budgetary and other fiscal pressures may result in some governmental tenants terminating their leases early or not renewing their leases.

In addition, the COVID-19 pandemic has caused changes in workplace practices, including increased remote work arrangements.

In addition, certain changes in office space utilization following the COVID-19 pandemic, including increased remote work arrangements, continue to impact the market.

To the extent those practices become permanent or further increase, leasing demand for office space may decline.

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however, increasing the maximum borrowing availability under our revolving credit facility is subject to our obtaining additional commitments from lenders, which may not occur,

• We have the option to extend the maturity date of our revolving credit facility upon payment of a fee and meeting other conditions;

• We have two options to extend the maturity date of our revolving credit facility upon payment of a fee and meeting other conditions and we currently intend to exercise the first of such options;

however, the applicable conditions may not be met,

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• Any development, redevelopment or repositioning projects we undertake may be unsuccessful, may require greater capital expenditures or other costs than we project or may take significant time to complete, including as a result of inflation, supply chain challenges or otherwise,

• We believe that we are well positioned to weather the present COVID-19 pandemic conditions in the economy and the real estate industry.

However, the full extent of the future impact of the COVID-19 pandemic to us is unknown and we may not realize similar or better operating results in the future,

• The business and property management agreements between us and RMR have continuing 20 year terms.

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• It is difficult to accurately estimate leasing related obligations and costs of property development, redevelopment or repositioning and tenant improvement costs.

Our unspent leasing related obligations and development, redevelopment

or repositioning costs may cost more and may take longer to complete than we currently expect or than we planned when the project was commenced, and we may incur increased amounts for these and similar purposes in the future.

Currently unexpected results could occur due to many different circumstances, some of which are beyond our control, such as the COVID-19 pandemic and its aftermath, economic conditions, including increasing interest rates, high inflation and a possible recession, other changes in the capital markets or the economy generally, changes in our tenants’ needs for leased space, the ability of the U.S.

Our unspent leasing related obligations and development, redevelopment or repositioning costs may cost more and may take longer to complete than we currently expect or than we planned when the project was commenced, and we may incur increased amounts for these and similar purposes in the future.

Currently unexpected results could occur due to many different circumstances, some of which are beyond our control, such as economic conditions, including increasing interest rates, inflation, geopolitical risks and a possible recession, other changes in the capital markets or the economy generally, changes in our tenants’ needs for leased space, the ability of the U.S.

and state governments to approve spending bills to fund their obligations, acts of terrorism, war or other hostilities, natural disasters or climate change and climate related events.

The information contained elsewhere in this Quarterly Report on Form 10-Q and our 2021 Annual Report, or in our other filings with the SEC, including under the caption “Risk Factors”, or incorporated herein or therein, identifies other important factors that could cause differences from our forward-looking statements.

The information contained elsewhere in this Quarterly Report on Form 10-Q and in our 2021 Annual Report, or in our other filings with the SEC, including under the caption “Risk Factors”, or incorporated herein or therein, identifies other important factors that could cause differences from our forward-looking statements.

Our filings with the SEC are available on the SEC’s website at www.sec.gov.

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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-Q

Item 4. Controls and Procedures