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DATE

Wednesday, Aug. 6, 2025, at 10 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Paul McDermott
  • Chief Financial Officer — Steve Freishtat
  • Chief Operating Officer — Tiffany Butcher

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TAKEAWAYS

  • Portfolio sale agreement-- The company has entered into a definitive agreement to sell a portfolio of 19 assets to Cortland for $1.6 billion in cash, subject to adjustments and shareholder approval, with closing expected in the fourth quarter of 2025.
  • Plan of sale and liquidation-- The board has approved a plan to liquidate all remaining assets, including remaining multifamily assets and Watergate 600, with marketing commencing in the third quarter and completion targeted within twelve months.
  • Special distribution guidance-- CFO Freishtat stated, “We estimate that the amount of this initial special distribution will be between $14.50 and $14.82 per share,” to be declared following the closing of the Cortland transaction, which is expected to occur in the fourth quarter of 2025, funded by Cortland transaction proceeds and anticipated new debt financing.
  • Aggregate distributions-- Total cash returned to shareholders from all transactions, including the regular $0.18 per share dividend, is estimated at $17.58-$18.50 per share and includes the planned initial and subsequent distributions from asset sales. This estimate is based on company projections related to the proposed portfolio sale and liquidation plan, with timing dependent on the closing of the Cortland transaction and subsequent asset sales, as described in the company's fiscal Q2 2025 earnings call.
  • Shareholder approval process-- The company intends to file a preliminary proxy and convene a special meeting in the fall for approval of both the Cortland transaction and the liquidation plan.
  • Multifamily NOI growth-- Tiffany Butcher reported that multifamily Net Operating Income increased 4.5% year over year in fiscal Q2 2025, primarily due to higher rental revenue and fee income.
  • Market performance-- Monthly effective rent growth in the Washington Metro Area outperformed the national average in fiscal Q2 2025, and the region ranked sixth nationwide for transaction volume in the same period.
  • Distribution mechanics-- Quarterly distributions will be suspended after the declared $0.18 payment scheduled for Oct. 3, 2025, with future liquidating distributions at the board’s discretion as additional sales close.
  • Occupancy levels-- Occupancy in the DMV exceeded 96%. Northern Virginia and Maryland sustained positive blended lease rate growth year to date; DC lease rates held steady year to date, chiefly due to renewal strength offsetting softer new lease growth.
  • Process transparency-- Over 80 potential counterparties were contacted during the strategic alternatives review, including institutional investors, capital sponsors, and REITs.
  • Transaction cost inclusion-- CFO Freishtat confirmed that all transaction cost estimates are already reflected in the projected shareholder distribution figures, as stated during the fiscal Q2 2025 earnings call.

SUMMARY

Elme Communities (ELME -0.47%) committed to a business model wind-down by targeting both a large portfolio sale and the complete liquidation of remaining assets, providing a clear path and associated cash return estimations for shareholders. Management confirmed that all significant transaction and operational transition costs are included in the guidance for shareholder distributions, addressing questions about possible future deductions. The company stated that the shareholder distribution estimates include projected expenses and payment of liabilities. The company is preparing a formal proxy statement with further financial details and procedural clarifications related to the proposed transactions.

  • CEO McDermott noted the board chose the current transaction path after a “robust” process involving outreach to more than 80 financial entities, following the lack of a viable entity-level offer that met value objectives.
  • Management stated the marketing and sale of the final asset pool will proceed in parallel with transaction approvals, with some asset sales possibly occurring regardless of the outcome of the main Cortland agreement.
  • Liquidity in DC and Maryland multifamily markets may be affected by regulatory processes, but the team asserted familiarity and confidence in navigating local requirements such as the TOPA and HSE processes.
  • As additional context, Watergate 600 is 82% leased, which is where Elme Communities expects to be at the end of 2025.

INDUSTRY GLOSSARY

  • TOPA: Tenant Opportunity to Purchase Act, a DC law giving tenants first right to buy their building if offered for sale.
  • HSE: High-Speed Elevator; in this context, referenced as regulatory processes in Montgomery County affecting asset sale timelines.
  • NOI: Net Operating Income; a measure of property-level profitability before financing or corporate expenses.
  • RemainCo: The portfolio of multifamily assets and Watergate 600 remaining after the Cortland transaction.
  • DMV: Commonly used to refer to the District of Columbia, Maryland, and Virginia region.
  • FAR: Floor Area Ratio; in real estate, a metric indicating the ratio of a building’s total floor area to its lot size.

Full Conference Call Transcript

Paul McDermott: Thanks, Amy. Welcome, everyone. And thank you for joining us this morning. We're pleased to report another solid quarter for Elme Communities, reflecting both the stability of our portfolio and the continued execution of our operating strategy. Our second quarter results are detailed in our earnings release and associated filings. In addition to discussing our results, I want to spend time today discussing the announcement regarding our strategic alternatives review process. Steve will provide additional financial details about the proposed portfolio sale transaction and future asset sales. Tiffany will cover our operating trends and initiatives. On Monday, we announced that our board of trustees completed the formal evaluation of strategic alternatives that had been announced back in February.

After an extensive evaluation, we have entered into a definitive agreement to sell a portfolio of 19 assets to Cortland, an Atlanta-based multifamily real estate investment development and management company. At closing, which we currently expect to occur in the fourth quarter following receipt of shareholder approval and satisfaction of other customary closing conditions, Elme Communities will receive from Cortland $1.6 billion in cash, subject to certain adjustments. The board has also approved a plan of sale and liquidation to sell our remaining assets. As such, we will be looking for buyers of all Elme Communities' remaining multifamily assets as well as Watergate 600. This plan of sale and liquidation is also subject to shareholder approval.

I want to take a moment to provide some history leading up to this transaction. Over a decade ago, we launched a strategic transformation that streamlined our portfolio from four asset classes into one, including the sale of our office and retail portfolios in 2021. We designed and built a scalable operating platform, internalized multifamily operations, and platform initiatives to improve our performance and profitability with the goal of reducing our cost of capital in order to scale our portfolio and further maximize shareholder value.

Despite the success we've had in transforming our company into a focused multifamily with strong operating capabilities, the current market environment has made it difficult to lower our cost of capital in a way that supports our ability to scale accretively. Our agreement with Cortland and the decision to sell our remaining assets came after a thoughtful and deliberate review process, taking into account the work the company has already undertaken to scale and geographically diversify our portfolio. The review process by our advisors was robust. More than 80 potential counterparties were contacted, including pension funds, insurance companies, institutional advisors, financial sponsors, multifamily managers, sovereign wealth funds, family offices, and other public REITs.

Underpinning its unanimous determination that the combination of the sale of these assets to Cortland and a plan of sale and liquidation is expected to result in the greatest value for shareholders. Importantly for Elme Communities, we anticipate a seamless transition of ownership to Cortland, enabling continuity of operations for both our residents and community team members and continuing our strong legacy of customer service excellence. We expect to prepare and file a preliminary proxy as soon as reasonably practicable that will more fully describe the proposed Cortland sale transaction and the proposed plan of sale and liquidation. We intend to convene a special meeting this fall to approve these transactions.

The Elme Communities Board has determined that these proposed transactions are in the best interest of our shareholders and unanimously recommends to our shareholders that they approve them. As noted in our announcement, we intend to commence the marketing and sale of our remaining assets in the near future with a view toward completing these asset sales over the next twelve months. This marketing process should kick off in the third quarter and certain of these asset sales are likely to move forward regardless of the outcome of the shareholder votes on the Cortland transaction and plan and sale of liquidation. Our goal, as always, is to maximize value for Elme Communities shareholders.

And with that, I'll turn it over to Steve to provide more detail around the shareholder benefits of this transaction and the subsequent sales.

Steve Freishtat: Thanks, Paul. As noted in our press release on Monday, Elme Communities intends to return net proceeds from the Cortland transaction and other asset sales to shareholders. The company intends to declare an initial special distribution to shareholders, funded by the net proceeds from the Cortland transaction and a portion of the proceeds from the new debt we expect to place on Elme Communities' remaining assets. We estimate that the amount of this initial special distribution will be between $14.50 and $14.82 per share. After considering, among other factors, repayment of all of our existing corporate debt, the anticipated amount of new debt financing, and the company's estimated transaction costs in connection with the portfolio sale transaction.

After this, subject to shareholder approval of the plan of sale and liquidation, and depending on the timing and outcome of asset sales, we expect to make additional distributions to our shareholders. Our current estimate of the aggregate amount of additional distributions to shareholders from the sale of Elme Communities' nine remaining assets and Watergate 600 is between $2.90 and $3.50 per share, accounting for, among other factors, estimated transaction expenses, payment of liabilities, and the establishment of necessary reserves to satisfy outstanding liabilities, obligations, and expenses associated with the final dissolution activities. In total, the aggregate amount of distributions is expected to be between $17.58 and $18.50 per share.

These figures include the company's quarterly dividend distribution of $0.18 per share, which has been declared and is to be paid on 10/03/2025. The tax treatment of the distributions we make following asset sales may vary depending on each shareholder's particular situation. But assuming the Cortland transaction closes, and the plan of sale and liquidation is approved by shareholders, the initial special distribution following the Cortland transaction and remaining asset sales generally should be treated as a return of capital to shareholders to the extent of their basis in their Elme Communities shares, with any excess treated as capital gain.

To the extent that the liquidating distributions are less than a shareholder's tax basis in its Elme Communities shares, that shareholder generally would recognize a capital loss on their Elme Communities shares. Additional information on both the Cortland transaction and the plan of sale and liquidation, as well as a more complete summary of the potential tax considerations and consequences, will be available in the preliminary proxy that Paul mentioned earlier. Looking ahead, the Elme Communities team expects to report on material developments relating to the sale of our remaining assets through quarterly SEC filings as appropriate. That wraps up the overview of key financial details related to the transactions.

I'll turn it over to Tiffany for an update on operating results for the second quarter.

Tiffany Butcher: Thanks, Steve. As Paul stated, we are pleased to have delivered a solid quarter with year-over-year multifamily NOI growth of 4.5%, driven primarily by higher rental revenue and strong growth in fee income from our initiatives. Our operating initiatives have driven strong growth and, combined with our strategic approach to asset management and our ongoing focus on enhancing customer service, have led to consistent improvements in our operating performance over time. I want to take a moment to recognize and thank our dedicated team members who enhance the value living experience for our residents. We believe the foundation we've built positions us to realize significant value through the announced Cortland sale.

Monthly effective rent growth for the Washington Metro Area continues to outpace the national average, and the Washington Metro ranked sixth in the nation in terms of transaction volume during the second quarter. Defense spending is now projected to exceed prior estimates, which could meaningfully offset broader federal workforce reductions in the region and ability to achieve favorable executions as we sell our remaining assets. And with that, I'll turn it back to Paul for some closing remarks.

Paul McDermott: Thanks, Tiffany. I want to take a moment to reiterate Tiffany's thanks to our entire team, both past and present, for their incredible hard work and dedication over the years. Their efforts have been instrumental in driving a successful outcome for our shareholders. Through periods of change, our teams continued to uphold and advance our brand values, delivering excellent customer experiences that distinguish us in the market and redefine what customers can expect at value-driven price points. I'd also like to extend my appreciation to our board of trustees for their support and for their thoughtful deliberation and careful selection of the path they believe offers the best outcome and greatest value.

With that, I'll hand the call over to the operator to begin Q&A.

Operator: Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press 1 on your phone. Your first question is coming from Cooper Clark from Wells Fargo. Your line is live.

Cooper Clark: Great. Thank you for taking the question. I'm wondering if you could provide more color on the building blocks to get to the $3.20 midpoint in distribution expected from the sale of the remaining portfolio. If you could break out sort of what's coming from expected pricing on the assets and kind of the offset from any expected leakage or liabilities in reserves that Steve spoke to earlier on the call. Just trying to get a better sense of what the pricing expectation is embedded in that $3.20.

Steve Freishtat: Yeah. Cooper, this is Steve. And to the extent that I can get you the information right now, the company's current estimates of the net proceeds, as you mentioned, of the remaining assets is based on a number of estimates and assumptions, which includes estimated expenses and payments of liabilities. As far as additional information, there will be more in the proxy on the estimates and assumptions that'll be more fully described when the proxy is filed in connection with these proposed transactions.

Cooper Clark: Okay. I guess just zooming in on a few of the specific assets in the remaining portfolio. If we could just quickly talk about both Watergate and Riverside and sort of how to think about those assets in a sale. I guess on Watergate, could you just sort of talk about any potential office to residential conversion for a potential buyer and what's the right way to think about the sale on Watergate? Appreciate that you bought it in 2Q '17 for $135 million.

And then also Riverside, given the density and the development upside, is that fair to assume a higher cap rate on that versus some of the DC and Maryland and Atlanta portfolio just given that it will take a specific buyer?

Paul McDermott: Cooper, it's Paul. Let's start with the Watergate. We've never, as you know, we've never formally taken the Watergate out and done a formal sales process. And we are we've really been focused on the operations and the leasing of the asset. So we're looking forward to seeing the market pricing, but we recognize that DC is still a sought-after market with, I think, as Tiffany said, alluded to it ranked sixth in the United States in terms of transaction volume. So, we will be taking those assets out here in the third quarter with a view of trying to complete the sale of all the assets over the next twelve months.

In terms of Riverside, obviously, a little bit larger asset, but we like the trends that we've seen in the marketplace. And in terms of the additional FAR that we went through, we're not going to or we'll be watching as people add if they bifurcate the transaction and look at income versus additional FAR, but we'll have a better lens into that in the coming months.

Cooper Clark: Great. Thank you. And then on the Maryland portfolio, just curious how much potential policy risk comes into play and what's the right way to think about some of the puts and takes related to Maryland specifically? And then also, question for Tiffany, if you could just sort of talk about the RemainCo portfolio and some of the trends year to date versus the kind of legacy portfolio average, whether it's revenue growth or blended rent growth?

Tiffany Butcher: Sure. So, Cooper, let's start with your question on the Maryland assets. As you know, rent control was put in place in Montgomery County. And I think that has now been baked into how investors are underwriting assets. I think it's a pretty understandable process in Montgomery County. We continue to see transaction volume in Montgomery County. So we are excited to launch the marketing process for those assets. And, as we stated in our prepared remarks, we are confident in our ability to ultimately execute successfully on the sale of those communities. In terms of your question on RemainCo, I would refer you to our supplement where we provide asset level detail starting on page 22 of our supplement.

But if you were just kind of asking about big picture trends, I would be more than happy to kind of talk about the trends we're seeing in our various markets. As I mentioned in my prepared remarks, Northern Virginia continues to be a very strong market for growth in the area. We continue to see both strong new lease rate growth as well as renewal rent growth. Maryland, we've seen positive blended lease rates growth year to date, really driven by very strong renewals there.

And DC has tended to be a little bit more flat in terms of blended lease rate growth year to date, driven by strong renewals that are covering some of the softness in new lease rate growth in the DC market.

Cooper Clark: Great. Thank you for taking the questions.

Operator: Thank you. Your next question is coming from Anthony Paolone from JPMorgan. Your line is live.

Anthony Paolone: Thank you, and congratulations on getting everything through your process there. I know you may be constrained on what all you could say, but to the extent you can, maybe Paul, can you take us a bit into the process and just what liquidity looked like as you brought the company and the portfolios out to market in terms of, you know, were there limitations on liquidity as the deal size got bigger? Or certain quality cuts of assets that had more demand versus others or just anything you can help us with to give us some context around liquidity that was out there in this process would be great.

Paul McDermott: Sure, Tony. The board, with the assistance from its dedicated transaction committee, which was comprised of all independent trustees, really conducted a thorough evaluation of all the potential strategic alternatives, including keeping Elme Communities under its current business strategy. But the goal, when we started this front, we announced this process in February, was making an informed determination that the board believed would be the best opportunity for maximizing value for our shareholders. As I think you know, we engaged financial advisers to assist with this process. And those advisers contacted everyone from, as I said earlier, pension funds and insurance companies, institutional advisers, financial sponsors, multifamily managers, sovereign wealth funds, family offices, and other public REITs.

I think the board and the transaction committee recognized our goals prior to the strategic process of being our efforts to undertake this scale the portfolio and reduce its cost of capital. And so, as we looked as operators and the management team and board looked, we were really trying to scale the business, grow the operations effectively, and make accretive acquisitions. The process did not produce a viable offer on an entity level basis at a price that the transaction committee and the board considered more attractive than the combination of the portfolio sale to Cortland and the liquidating distributions that the company would make with our plan of sale and liquidation.

I think the board unanimously determined that what we've proposed are advisable and in the best interest of the shareholders, Tony.

Anthony Paolone: Okay. Was there a dynamic where, you know, did the potential bidders wanted more value add versus more core or just, you know, the size got a little bit too big or there anything to glean from that?

Paul McDermott: I think a lot of this will be addressed in the proxy statement that's gonna be coming out. But I think you had a wide array of, as I said, we contacted over 80 capital sources, and you had a wide array of capital sources with different criteria.

Anthony Paolone: Okay. Understand. And then just second question. Anything you can give us in terms of just total costs for the transaction, either advisers, originating a piece of debt that you'll take on, just transfer taxes, anything of that nature that you could brackets around?

Steve Freishtat: Tony, I mean, in our estimates, those are factored in. Kind of similar to what Paul just mentioned, additional information regarding the transaction cost will be in the proxy statement that will be filed in due course.

Anthony Paolone: Okay. Fair enough. Thank you.

Steve Freishtat: Thank you.

Operator: Your next question is coming from Michael Lewis from Truist Securities. Your line is live.

Michael Lewis: Great. Thank you. So, Paul, I appreciate your comments. I know it must be bittersweet to maximize value in this way after all the work you and the team have done. My question, you know, assuming Cortland closes, that leaves us with 10 assets to talk about. Is there any reason you could give, you know, why Cortland left these assets out? Was there a theme I realized Watergate's a unique asset, but among the remaining apartment assets, you know, was there something about those that didn't meet their investment goals or their criteria or whatever is? Is there some reason, you know, that kinda runs through it why those assets are left out of the deal?

Paul McDermott: Michael, as I said earlier, it was a very thorough process that was conducted by our board and, with the transaction committee. And a number of strategic alternatives and combinations were considered. And, you know, as we all have said, additional information regarding all of the alternatives that were evaluated are gonna be in our upcoming proxy statement. But our board determined that the combination of this portfolio sale to Cortland plus the individual sales of the remaining assets was the right path forward to maximize value for our shareholders.

Michael Lewis: Okay. Were there interested buyers for, you know, the remaining assets as you ran the process that maybe you could go back to? And do you think, you know, does being a motivated seller impact the value now as you liquidate those assets, do you think?

Paul McDermott: From a macro level, Michael, I think that, you know, obviously, when we look back at our process, you're gonna have a wider pool of bidders on a one-off basis versus an entity level basis. So we're looking forward to commencing our sales process and getting the maximum value allowable from the market for our shareholders.

Michael Lewis: Okay. And then just lastly for me, I assume you'll be making the additional distributions as you close deals. So it won't just be one at the end. And you know, also, you know, as you run the operation forward now, you know, over however long this takes, you know, how lean does the operation get in terms of overhead and kind of continuing to run the company now the next few months?

Steve Freishtat: Yeah, Michael. As far as the distributions, you know, obviously, we'll suspend our quarterly distribution after the $0.18 distribution that we have that I mentioned in my prepared remarks in October. But future liquidating distributions would be at the board's discretion following future sales. You know, as far as, you kinda talked about expenses, and we expect some changes will be made to expenses as we conduct the sales of the remaining assets and begin to reduce the size of the company. Those estimates are in the numbers that we have talked about.

Michael Lewis: Alright. Thank you, guys. Appreciate it.

Steve Freishtat: Thank you.

Operator: And once again, everyone, if you have any questions or comments, please press star then 1 on your phone. Your next question is coming from John Pawlowski from Green Street. Your line is live.

John Pawlowski: Thanks for the time. I know you can't quantify the expected frictional cost, but I'm just confirming that the distributions you laid out to shareholders in the press release are net of all expected costs, and there aren't any additional costs that might drive a diminution in proceeds to shareholders when all is said and done.

Steve Freishtat: John, this is Steven. And you're correct that the estimates that we have include estimated expenses and payment of liabilities.

John Pawlowski: Okay. I wanted a few questions on timing of the liquidation. First, on the remaining multifamily assets, could you put brackets around like, fastest and slowest you think you can get or the next buyer could close on the DC and Maryland assets that need to go through or potentially need to go through a right of first refusal process. What's the quickest and the slowest you think the multifamily assets could sell?

Tiffany Butcher: So I can start off on that, John. Elme Communities intends to begin the process of marketing our assets, the nine multifamily assets and Watergate, starting in the third quarter, with obviously the view towards completing all of the asset sales within the next twelve months. In terms of you mentioned, you know, DC and the TOPA process, and what I would say to that is that we've been operating in this market for a very long time.

We know the TOPA process, and we do plan to take the DC assets out along with the Maryland assets sooner rather than later, given the timeline that it does take to get through both the TOPA process in DC and HSE requirements in Montgomery County. We're gonna certainly work with any tenant association and prospective buyer to progress the sale process in a timely manner. But we feel that the timelines that we have laid out in terms of being able to complete in the next twelve months are realistic, taking into account those processes.

John Pawlowski: Okay. I just question on why it would take a full twelve months. Does the twelve months just give you enough cushion and potentially dose of conservatism? Or you really think a TOPA process or a ROFR process in Maryland could really take twelve months. My understanding would be more of a four to six month process in these markets, but I could be wrong.

Tiffany Butcher: Yeah, John. When we're talking about twelve months, we are talking about, you know, the entire RemainCo portfolio, not we're not commenting on the specific timeline for any one asset. So, you know, we have laid out the view of trying to complete all of the asset sales within that twelve month period.

John Pawlowski: Yeah. One more for me. Could you share some views on the lease role at Watergate? I think 82% leased right now. Where is that leasing percentage likely to trend in the next six months? Based off of known move outs and leasing progress you're doing right now?

Paul McDermott: Well, John, we're still in discussions with our largest tenant to determine their ultimate footprint. But your 82% number is accurate, which is where we hope to finish the end of 2025. We do recognize that we have almost 9% expiring in 2026. But we hope to be successful in some of our releasing efforts on that.

John Pawlowski: Okay. Sorry. One more. Bear with me. I wanna go back to the timing. Is there anything other than a potential challenge of selling Watergate and the regulation hurdles for the multifamily, is there anything idiosyncratic in this portfolio that would take twelve months to remain co to liquidate? Again, it strikes me as a long horizon.

Tiffany Butcher: No. I mean, I think we've laid out, you know, that there will be different timelines associated with each asset in the portfolio, but we are going to begin kicking them off starting in the third quarter, and we'll be working to the sale process as quickly as practically possible.

John Pawlowski: Okay. Thank you.

Operator: Thank you. Your next question is coming from Cooper Clark from Wells Fargo. Your line is live.

Jamie Feldman: This is Jamie Feldman following up. You know, just stepping away from the transaction for a second, you know, you guys have had front row seats in probably the most controversial and interesting apartment market in the country this year, with the Doge announcements and all the other ups and downs of the market. Can you just talk us through kind of looking back at the headlines, the timing of the headlines and the impact on lease volumes across your markets across your submarkets? Think we're all just trying to understand what the real impact is. DC is kind of surprised to the upside. So far for people. Is it over?

Or maybe, you know, by the time some of these layoffs hit and people are off their, you know, the period after layoffs where they're still getting paid, like, we still have a shoe to drop. Just curious what your thoughts are in across the different submarkets within DC.

Paul McDermott: Jamie, it's Paul. I'll start, and then I'll ask Tiffany to follow-up on our portfolio and what we've observed. I think that the alarm bells that were sounded right at the beginning of the year were probably a bit overblown. In terms of our ability to continue the momentum. I think we tried to articulate that in our guidance for 2025. We did have things slowing down at the back half of the year, which we did incorporate in there, and we did factor in a number of various scenarios and outcomes that could impact both our occupancy and our pricing leverage.

But I feel that right now, you know, the market, you know, and Tiffany can get into it more. The market will either based on seasonality or some other external factors. We will see some type of slowdown. But I think, you know, if you look at Elme Communities' track record for the first six months of this year, you know, it's we've had beats and you know, we feel very optimistic about this portfolio and the assets moving forward. Tiffany?

Tiffany Butcher: Yeah. Just kinda adding on to that. As I mentioned in my prepared remarks, you know, monthly effective rent growth for the Washington Metro Area continues to outpace the national average. And we do also see that, you know, the federal defense spending that is gonna be projected to happen is now gonna exceed prior estimates, which could meaningfully offset some of the broader potential federal workforce reductions that Paul mentioned. Our occupancy in the DMV exceeded 96%. And, you know, as I mentioned, in response to Cooper's earlier question, year to date, we have had, you know, strong positive blended lease rate growth in our Virginia portfolio. And we've seen positive blended lease rate growth in our Maryland portfolio.

DC has remained DC properties remained a little bit flattish. But, you know, overall, the DMV has continued to perform well in terms of both occupancy and lease rate growth.

Jamie Feldman: Okay. Thank you for the color. And then are you able to talk us through transfer taxes by your different submarkets? As we think about the sale?

Paul McDermott: No. Jamie, I think that information will be in the proxy. Yeah. It will, of course, you know, be submitting in due course.

Jamie Feldman: Okay. Okay. And then as we think about management incentives, from a transaction, is that all baked into the fully diluted share count? Or are there gonna be incremental incentives on a sale?

Steve Freishtat: Again, Jamie, I'd say all of the transaction costs that we're estimating, you know, we'll have additional details on that in the proxy.

Jamie Feldman: Okay.

Paul McDermott: Alright. Everything is again, everything, you know, all of the transaction costs that we expect are in the estimates that we have provided.

Jamie Feldman: Right. Okay. Alright. Thank you, and good luck with the execution in closing.

Operator: Thank you, Jamie. Thank you. That concludes our Q&A session. I will now hand the conference back to Paul McDermott, Chief Executive Officer, for closing remarks. Please go ahead.

Paul McDermott: Thank you, everyone, for joining us today. We look forward to keeping you informed as we move forward with our plan to return capital to our shareholders.

Operator: Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.