Tejal Engman:

Thank you and good morning everyone. Please note that our conference call today will contain financial measures, such as FFO, core FFO, NOI, core FAD, and adjusted EBITDA that are non-GAAP measures as defined in Reg G. Please refer to our most recent financial supplement and to our earnings press release both available on the Investor page of our Web site and to our periodic reports furnished or filed with the SEC for definitions and further information regarding our use of these non-GAAP financial measures and reconciliation of them to our GAAP results. Please also note that some statements during this call are forward-looking statements within the Private Securities Litigation Reform Act. Forward-looking statements in the earnings press release along with our remarks are made as of today, and we undertake no duty to update them as actual events unfold. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. We refer certain of these risks in our SEC filings. Please refer to pages nine through 24 of our Form 10-K for a complete risk factor disclosure. Participating in today's call with me will be Paul McDermott, President and Chief Executive Officer; Steve Riffee, Executive Vice President and Chief Financial Officer; Tom Bakke, Executive Vice President and Chief Operating Officer; Drew Hammond, Vice President, Chief Accounting Officer and Controller. Now, I'd like to turn the call over to Paul. Paul McDermott: Thank you, Tejal and good morning everyone. Thanks for joining us on our year-end 2017 earnings conference call. Washington REIT continues to deliver core FFO and same store NOI growth, while recycling assets and navigating our regions uneven real estate fundamentals. We grew core FFO by 3.4% year-over-year in 2017, and are guiding to further growth at the midpoint of our 2018 core FFO guidance range. If achieved, 2018 would be our fourth consecutive year of core FFO growth despite recycling over a billion dollar of legacy asset since the management transition began here in late 2013. We grew 2017 same store NOI by 6% on a year-over-year basis, driven by 8.9% growth in office, 3.6% growth in multifamily, and 3.3% growth in retail NOI. We project further same store NOI growth in 2018 as our portfolio continues to outperform the DC Metro region on both net effective rent growth and occupancy. We have also de-levered and strengthened our balance sheet to end 2017 with a net debt-to-adjusted EBITDA ratio of approximately 6 times, and have improved our core FAD dividend payout ratio to approximately 82%. We are outperforming our markets, because we have consistently allocated capital out of legacy assets that have recent inflection points in their NOI trajectory and into assets where we can create value, grow NOI and strengthen our balance sheet. And finally, we apply research to focus on the highest risk adjusted growth segments within the DC Metro region, which remains a market of clear winners and losers. Let me discuss our 2017 asset recycling through the lens of our capital allocation strategy and within the context of our region’s real estate fundamentals. Washington REIT continues to strategically shift away from single tenant exposure and towards the mid-sized leases where we are able to create a differentiated value proposition and return for lower than market total concessions and higher effective rent premiums. In the DC Metro region, demand for small and mid-sized leases is growing faster than it is for large leases. Our research shows that the percentage share of leases below 25,000 square feet has grown from 63% of leasing in 2012 and 2013 to 80% of leasing in 2016 and 2017. During which period, there were 9.3 times more leases below 25,000 square feet than above. This strategic objective is supported by our recently executed agreement to sale 2445 M Street for approximately $100 million in September of this year. The competitive market will have a glut of large block vacancies with JLL estimating approximately 7:1 ratio supply-to-demand in 2020. The outlook beyond 2020 remains challenging as new construction augments the existing stock of large block vacancies. The district has a limited number of large users, which are typically law, accounting or financial services firms. Although, demand from large tech companies is rising and law and accounting firms are expecting business growth due to the passage of tax reform where largely to specifically, we expect competition to intensify the already high leasing capital cost to increase and for our IRRs to further erode. We determine that a redevelopment of 2445 M Street, a 292,000 square foot office asset with large 32,000 square foot floor play needed a minimum prelease commitment of 125,000 square feet to justify the base building redevelopment cost, which range from $20 million at the low end to approximately $60 million for Class A status. The TI and concession package for these leases would have been approximately $225 a foot, with two to three years of downtime under the most optimistic re-leasing scenario, and negative cash rent spreads at the lower end of the redevelopment cost spectrum. Our analysis concluded that this redevelopment risk was disproportionate to the potential returns it offered. We believe a conversion to multi-family, which came with lease earning and entitlement risk would have been the assets’ highest and best use given its location. This however was challenged by its 145 foot floor depth, which is more than double the 65 foot floor depth that is typical to multifamily buildings. The only viable design solution was to cup a deep crescent into the size of the building and remove a large portion of the building's floor area in order to reduce depth and allow more light. Unfortunately, this drop a conversion economic returns, which were already thin due to the Washington DC's 20% affordable housing requirement to levels that we believe would have been unacceptable to our shareholders. With the recent rise in value add investment capital flowing into Washington DC, we received multiple LOIs from private opportunistic leverage buyer’s desires of redeveloping and repositioning 2445 M Street themselves. The bidders preferred to purchase the asset empty or as close to empty as possible, because any cash flow receipts prior to the redevelopment would add to their cost basis and erode their highly leveraged redevelopment returns. We believe there is no opportunity cost associated with executing the sale of 2445 M Street in September of this year. Following the advisory board’s departure announcement in late 2015 the price a redeveloper would pay for 2445 M at any time thereafter was going to be $1 for $1 adjustment of the assets remaining cash flows against the sale proceeds, for which the buyer economics have remained broadly unchanged since late 2015. We therefore continue to fully explore all alternatives before executing this sale to a redeveloper. We believe our timing may have benefitted from an increase in value add investment capital flows into the district where the Class B share of downtown sales in 2016 and 2017 since been almost 40%, up from 25% five years ago according to JLL data. The sale of 2445 M Street demonstrates our commitment to allocate capital out of legacy assets with uncertain near term value creation potential and significant repositioning risk and the move away from single tenant exposures. We expect to reduce our office portfolio single tenant exposure from 26% down to 13% on a square footage basis following the execution of our announced asset recycling this year. Our two remaining single tenant exposures are at 1776 G Street in Washington DC with the World Bank whose lease expires on December 31, 2020, and the John Marshall 2 in Tysons, with Booz Allen Hamilton whose lease expires on January 31, 2026. We feel optimistic about the long term prospects for both of these assets. 1776 G Street is strategically located next to the World Bank headquarters and two blocks from the White House. John Marshall II has the low market rent is approximate to the Greensborough Metro Station and adjacent to the 4.2 million square foot Borough Town Center development, which will feature the region's largest wholefoods, a six storey multiplex, several multifamily buildings, and a parkland setting. Before I move onto Arlington Tower, I would like to share our observations on the investment climate for Class B value-add multifamily assets in this region. We remain firmly committed to growing Washington REIT's multifamily portfolio as we continue to see long term value creation potential for the Class B unit renovation strategy with covered land plays. That said, Class B multifamily assets and portfolios being broadly marketed in this region are at prices that leave no room for value creation and therefore have limited NOI growth potential. Our research has proactively identified a targeted list of Class B multifamily assets that meet our value add criteria and are located in submarkets with strong long term growth prospects for value oriented products. Furthermore, our acquisitions is working hard to evaluate these future off-market opportunities. While growing Class B multifamily remains a strategic priority, our foremost commitment is to create value for our shareholders. We believe Arlington Tower provides us with unique opportunity to do just that. From a strategic perspective the acquisition of Arlington Tower furthers our objective of building a higher quality multi-tenant office portfolio in some markets that are best positioned to capture growth in both the near term and over the long haul. To our ownership of 1600 Wilson Boulevard and Bennett Park and Rosslyn, we have been paying close attention to the resurgence of the submarket even before we sourced Arlington Tower. Rosslyn is rapidly transitioning from a nine to five government and defense contractor hub to an amenity risk 24-hour urban center. The transformation began with multifamily as 4000 units were added to the Rosslyn-Ballston corridor over the last five years. As a younger and more vibrant demographic moved into Rosslyn, 200,000 square feet of retail amenities followed. Today, approximately 42% of Rosslyn's residence are 25 to 34 years old and 86% of residents hold a college degree or higher. Collectively, they addressed corporate’s quest for talent and are helping Rosslyn attract a wide variety of professional services firms. According to Cushman & Wakefield data, 435,000 square feet of leases committed to Roslyn in 2017, its best leasing year in 10 years. Moreover, gross office rents in Roslyn have risen 24% over the last two years as the share of non-GSA leasing has continued to rise. The private sector comprised 85% of the total lease square footage of Rosslyn in 2017 according to Cushman & Wakefield data. Arlington Tower is a 398,000 square foot 19 story building located in the heart of Rosslyn, two blocks from the Rosslyn metro with panoramic views of Potomac River and monuments. The asset has a walk score of 95 and offers immediate commuter access to I66, Route 50 and the George Washington Parkway. Arlington Tower has been extensively renovated over the past five years with capital improvements of approximately $18 million with nearly $4 million spent on creating a unique roof-deck enclosed by glass railing and outfitted with a catering kitchen in order to lever some of the best views in the DC metro region. Less than 10% of office buildings in Rosslyn have roof decks reviews that are accessible to all tenants in the building. Views remain the one amenity that can't be replicated. And assets with waterfront views in the DC Metro command a double digit rent premium on average according to JLL data. Arlington Tower has a well diversified tenant base with no single tenant occupying more than 15% of the assets total square footage. And it has a manageable lease expiration schedule. The approximately 70,000 square feet of lease expirations in 2019 enable us to create value with expect suite leasing strategy focused on creating flexible safe solutions with shared amenities and an increased speed to market where tenants pay a premium for all three. We've had tremendous success at our expect suite leasing strategy at 1600 Wilson, which offers $40 rent and is 98% occupied. We feel confident that this strategy will work in Arlington Tower, because there are a limited number of Class A small suites in Rosslyn that also rents in the $51 to $50.5 gross range, and among those Arlington Tower is the only building with views according to Costar Data. We believe we can achieve a 7% to 10% premium on a TI investment of approximately $80 per foot for our flex products. Our target customers for Arlington Tower are the mid-sized office tenants in Northern Virginia looking for image at a reasonable price and those in DC that have fewer Class B options due to occupancy gains and increasing rents. Rosslyn office tenants closest to possible proximity to DC along with the cachet of being a premium private sector submarket in Northern Virginia that is home to the life of Nestle, the Carlyle Group, Gardener, Sinclair and Politico. Moving on to our research based focus on the highest risk adjusted growth segments within the DC metro region. We continue to focus on small and midsize office tenants, both of the image conscious and the value conscious ends of the spectrum, as well as value conscious multifamily renters. In a market of winners and losers, we believe these segments are long term winners in the DC metro region, because even though they're growing, they are likely to remain underserved by new and existing supply. The redevelopment of the Army Navy building focused on image conscious small and midsized office tenants, delivered on their underserved need for shared amenity space and is now 91% leased with rents that have exceeded our underwriting expectations. Over 85% of our office square footage is composed of floor plays at or below 26,000 square feet and caters primarily to our region's growing base of small and midsized office tenants. The majority of our DC same-store office portfolio offers a small and midsized value conscious office tenants rents that are in the mid 40s to mid 50s, a pricing sweet spot where vacancy continues to fall and net effective rents continue to rise. Finally, our Class B multifamily strategy continues to deliver robust performance in a region with a high cost of living and limited value oriented housing options. We grew Class B multifamily average monthly rent per unit by 250 basis points year-over-year in the fourth quarter with 460 basis points of year-over-year rental rate growth at Riverside. We also grew fourth quarter Class A average monthly rents per unit by 120 basis points year-over-year despite more than 10,000 new unit deliveries in 2017. Our multifamily portfolio is significantly outperforming our region where Class B rents grew 70 basis points and Class A rents were flat year-over-year in 2017 according to Delta Associates. There are three drivers of our multifamily outperformance. First, our portfolio and particularly our Class B portfolio, is located in submarkets with strong current and future fundamental. Approximately 74% of our units are located in Northern Virginia and are not directly competing with the largest wave of Class A supply that is being delivered in the district. Within Northern Virginia, 43% of the future delivery pipeline from 2018 to 2020 is concentrated in the Silverline submarkets where we have limited multifamily exposure. Our portfolio also benefits from its proximity to major job centers, particularly in Alexandria where Riverside Apartments, the largest asset in our portfolio, is close to the National Science Foundation and the Patent and Trade Organization and across the river from MGM National Harbor, now one of the largest private sector employers in its county. In Arlington, the Wellington is one mile from the Pentagon. Second, our Class B unit renovation programs are performing well and have strong future growth prospects. 76% of our Class B units are in submarkets with greater than average affordability gap between Class A and Class B multifamily. Overall, our Class B portfolio has a weighted average rent gap that is double the market wide A versus B gap. And third, we are capitalizing our in-house research and hands-on pricing model to closely manage each asset’s competitive position in the submarket in order to optimize our portfolio’s rental income growth potential. As a result, we have driven renewal trade-outs higher by 357 basis points and new lease trade outs higher by 175 basis points in full year 2017. Now, I would like to provide leasing updates on some of our key growth drivers. As mentioned, we are 91% leased at the army navy building. We are seeing strong preleasing activity at Watergate 600 where the lobby renovation is now complete, and we are touring or trading proposals with approximately 315,000 square feet of prospects for 70,000 square feet of vacancy on the top three floors of the building that are currently leased to Blank Rome and have a lease expiration date of December 31, 2019. These top floors of vacancy offer spectacular panoramic views of the Potomac River and the monuments, and are receiving solid interest from media users, consulting firms and law firms. In retail, we have seen strong activity at our new development at Spring Valley Village, where were 50% pre-leased after signing two strong food service operator brands for the ground floor and are seeing demand from a verity of personal and business service users for the second floor. We have signed an LOI for the 28,000 square feet of HHGregg vacancy at Hagerstown. The 23,000 square feet of HHGregg vacancy at Fredrik is seeing interest from discounters in the 12,000 to 15,000 square feet range, and we will likely divide the space to accommodate multiple users. We expect those vacancies to be released this year. To conclude with the DC Metro region’s growth prospects, the recent passage of tax reform followed by the two year budget deal, are both very positive milestones that are expected to stimulate new demand in our region. Our portfolio drives its largest share of NOI from Northern Virginia, which is the biggest regional beneficiary of a budget deal that is expected to increase defense spending by approximately $165 billion over the next two years. Our 2018 asset recycling has increased our office portfolio’s exposure to Virginia by approximately 11% on a pro forma NOI basis. Approximately 52% of our portfolio office NOI is driven by our Virginia assets, more than a third of which are currently leased to defense contractors. As importantly, approximately 74% of our multifamily NOI is driven by our North Virginia multi-family assets, which directly benefit from job growth in Northern Virginia. As a result, we believe Washington REIT is well positioned for the regional growth that is likely to be driven by the recently passed legislation. Now, I would like to turn the call over to Steve to discuss our financial and operating performance in the fourth quarter. Steve Riffee: Thanks Paul and good morning everyone. 2017 Net income attributable to controlling interest of $19.7 million or $0.25 per diluted share was below 2016 net income of $119.3 million, which included $102 million gain on the sale of the suburban Maryland office portfolio. Fourth quarter net income of $2.3 million or $0.03 per diluted share included $25 million gain, primarily related to the sales of Walker House offset by the recognition of $28 million imperilment charge to reduce the carrying values of 2445 M Street and Braddock Metro to their estimated fair values. Our 2017 core FFO of $1.82 is 3.4% higher than $1.76 we achieved in 2016 due to Watergate 600, the Riverside Apartments and revenue led same-store NOI growth of 6% overall, which was driven by 8.9% office, 3.6% multifamily and 3.3% retail same-store NOI growth. This growth more than offset the impact of the sale of the Suburban Maryland Office portfolio in 2016, Engility Corporation's lease expiration at Braddock Metro center at the end of the third quarter 2017 and the sale of Walker House at the beginning of the fourth quarter of 2017. For 2017, our expenses as a percentage of revenues improved by 110 basis points year-over-year to 35.6%, driven by lower utility and repair maintenance costs due to the sale of the Suburban Maryland portfolio, as well as the continued reduction in controllable expenses in the same-store portfolio. We delivered $113 million of core funds available for distribution or core FAD in 2017 and a payout ratio of 81.6%, which was better than the mid 80s core FAD payout ratio we had targeted at the beginning of last year. We reported core FFO of $0.44 per diluted share versus $0.43 in the same prior year period, largely due to the same drivers as outlined for the full year where we grew NOI, while improving the quality of our portfolio by recycling out of commodity suburban assets and into quality metro centric assets such as Watergate 600 and Riverside that are performing well for us. Sequentially, fourth quarter core FFO was lower than the third quarter due to Engility Corporation's lease expiration at Braddock Metro center at the end of the third quarter, the sale of Walker House at the beginning of the fourth quarter of 2017, normal seasonality in the multifamily portfolio, as well as higher weather related seasonal expenses in the fourth quarter. We grew same-store NOI by 6% year-over-year in 2017 and 2.3% year-over-year in the fourth quarter, primarily due to same-store average occupancy gains in office, as well as higher rental growth in multifamily. Starting with office, same-store NOI grew 2.5% for the quarter and 8.9% for the year, which was driven by 160 basis points of average occupancy gain. Approximately 40% of our fourth quarter year-over-year rental revenue growth was driven by the Silverline Center with the rest spread across the portfolio with new lease commencements at 1775 Eye Street, 2000 M Street, 1776 G Street, 1901 Pennsylvania Avenue, Fairgate at Ballston and 1600 Wilson Boulevard, some of which were offset by no move-outs to Quantico, which grow same-store ending occupancy lower on a sequentially basis. Overall, office ending occupancy declined by 100 basis points to 90.1% due to the expiration of Engility Corporation's lease at Braddock Metro Center. The office portfolio was 95% leased at year end. We drove strong office rental growth for the new leases this quarter as we leased the majority of space to small and midsized users, which represents our core office tenant base. We signed approximately 22,000 square feet of new office leases in the fourth quarter of 2017, driven by leasing of the Army Navy building and 1901 Pennsylvania Avenue, and committed the $11.74 per foot per year term and tenant incentives, largely due to higher leasing costs for several unique spaces, including one build out of the low grade space at 1901 Pennsylvania Avenue. We achieved strong rent roll ups of 17.4% on a GAAP basis and 5.9% on a cash basis. We signed approximately 49,000 square feet of office renewal leases in the fourth quarter of 2017 with one large lease roll down at Quantico, resulting in flat GAAP spreads and 12.2% lower cash spreads. Our office tenant retention rate in the fourth quarter was approximately 68%. With only 5.7% of space rolling in 2018, our main focus is on leasing our 2019 and 2020 lease expirations, particularly at Arlington Tower and Watergate 600. Following our 2018 asset recycling, we have reduced our 2019 lease expirations by over a third and expect to have less than 12% of rentable square feet expiring in 2019. Moving on to retail. We grew full year same store NOI by 3.3% with fourth quarter same store NOI was broadly flat on a year-over-year basis as rental growth and lease termination fee income offset 360 basis points of year-over-year average occupancy decline, mainly related to former HHGreg Spaces that are currently in lease up. Sequentially, average occupancy declined by 100 basis points due to lower seasonal special leasing in the fourth quarter. Our retail portfolio was 91.2% occupied and 94% leased at quarter end with good activity on vacancies and the opportunity to grow occupancy in 2018 and 2019. During the quarter, we leased approximately 22,500 square feet of retail space and drove approximately 8% GAAP and 5% cash roll ups on new leases. Renewals were up 15.4% on a GAAP basis and 11% on a cash basis. We paid no tenant incentives on renewals and standard incentives on new leases. Finally, multi-family same store was up 3.6% for the year, and 4.3% for the quarter. On a per unit basis, the same store portfolio ended the fourth quarter 94.8% occupied with overall occupancy at 95%. In the fourth quarter, we've renovated 20 units at the Wellington and 76 units at Riverside. As a result, at quarter end, we had 308 units left to renovate at the Wellington and 438 units left to renovate at Riverside. The Wellington unit renovation program is now 55% complete, while Riverside is 49% complete. We continue to generate a mid-to-high teen return on costs on the renovation dollars that have been invested at these two assets to-date and expect these programs to continue through 2018 and into the first half of 2019. Now, turning to 2018. Our core FFO guidance is expected to range from $1.82 to $1.90 and does not contemplate acquisitions beyond the announced purchase of Arlington Tower. While dispositions could range from $180 million to $240 million, including the completed sale of Braddock Metro Center and the planned sale of 2445 M Street, as Paul mentioned, we expect to complete the sale of 2445 M Street in September this year for proceeds of approximately $100 million and have completed the sale of Braddock Metro Center for net proceeds of $79 million. Our guidance includes the following assumptions; same store NOI growth of 2.5% to 3.5%; office same store NOI growth of 4% to 5%; multifamily same store NOI growth of 2.25% to 3.25% in a quarter; and retail same store NOI growth of 1% to 2% as we expect to backfill with HHGregg vacancies this year with rent commitments in 2019. We expect our 2018 same store NOI growth to be heavily weighted to the third and fourth quarter; in office as leases commence; in multifamily, due to the higher anticipated first quarter expenses, followed by continued revenue increases from the renovation programs in the second half of the year. Retail comparisons in the early quarters are more challenging due to vacancies created by the second quarter 2017 HHGregg vacancy, while stronger growth is expected in the second half of 2018, including additional lease commitments. We project office non-same-store NOI, which includes Watergate 600 purchased in 2017 and Arlington Tower purchased in 2018 as well as 2445 M Street, which is now held for sale to range between $35.5 million and $37 million, including approximately $7.5 million to $8 million for 2445 M Street depending on the timing of the sales transactions; our interest expense is expected to range between $51.25 million to $52.25 million; G&A is expected to be between $20.5 million and $21.5 million our capital plan for 2017 assumes approximately $45 million to $50 million of development spending predominantly for the Trove where we have executed a guaranteed maximum price contract that insulates us from escalation and construction pricing. Finally, we are targeting a core FAD payout ratio of 80% for 2018. Our focus remains on maintaining our balance sheet strength. We expect our net debt to adjusted EBITDA to be in our target range of 6 to 6.5 times by the fall following the completion as 2445 M Street sale, but it will temporarily be higher until the sale is completed and the Arlington Tower acquisition contributes to EBITDA. And with that, I will now turn the call back over to Paul. Paul McDermott: Thank you, Steve. Although, real estate fundamentals in our region have been challenging throughout this cycle, we believe this period will be viewed as a pivotal phase in the metro region transformation to a private sector land economy. As of today, the private sector is already the region’s job generator. And while the federal government will remain a significant part of the metro economy, we expect it will have a steadying rather than driving influence on real estate fundamentals going forward. Our confidence stems from the quality of our region’s workforce. We ranked first out of the 15 largest metros for workforce, education and entertainment according to the Fuller Institute. It is this workforce that has brought the likes of Netflix and Amazon Web services to the region, and that has secured the region’s three spots on the Amazon HQ2 shortlist. George Masons University’s analysis of almost 6,000 job posting at Amazon, Seattle headquarter since 2010 reveals that the Washington region has approximately two to four times the national concentration of workers in the top four categories of jobs that Amazon is hiring for. These are software development, management, engineering and R&D and business development. These will remain the jobs of the future, not just for Amazon but for corporate America. The DC Metro region is among a handful of regions that has the talent pool depth to fill them. We expect continued demand for all of our asset classes as the virtuous cycle of private sector job growth further augments the region's workforce. Furthermore, Washington REIT's long term strategy is to be a principle provider of high quality well located and value oriented asset throughout the DC metro region, particularly in the multifamily space. And every decision we make is designed to increase our ability to achieve this goal. Now, I would like to open the call to answer your questions. Operator, please go ahead. Operator: At this time, we will be conduction a question-and-answer session [Operator Instructions]. Our first question comes from the line of Dave Rodgers from Robert W. Baird and Company. Please proceed with your question. Dave Rodgers: Paul, maybe I'll start with you just on the acquisition outlook. I think you've obviously closed Arlington Tower here early in the year. Curious what else you might be looking at, what else is on the horizon and what the DC pipeline is looking at that’s going to fit what you'd be interested here in 2018? Paul McDermott: I think first just to give you a context of what we're seeing, and I don't want to protract the answer. But why don't we talk about little bit about the markets and what we're seeing right now, and then talk about how strategically we would overlay an acquisition strategy on that. I think right now if you're looking at DC and I'll pick on office first, I think probably the most active area we're seeing is really along the Toll Road. We're seeing deals come out there and a lot of capital out there chasing, office products along the Silverline. And they're really underwriting real rental growth. So in the suburbs, that's clearly probably one of the hottest pockets. Downtown here, I think we're seeing no shortage of people willing to pay up for best in class office. I'll pick on 1440 New York, 4.5 cap over 1,200 foot, 1900 G, over 1,250 a foot. Interestingly, all of these renovation buildings that we've seen appear on the landscape over the last 24 to 36 months, not seeing any of those hit the market. I'd say the other hot product in our region is obviously value add multifamily. And I think -- and the reason this is so important to talk about with our strategy, we're seeing people come in buying-in in the low fours and letting underwriting drag them to upper fives or a six. I think the miss number Dave that we see there is a lot of that renovation capital that I think the new capital believes they need to put into those assets, to achieve the type of value add returns that we're seeing, mid upper teens, in the Wellington, and Riverside. We think that that capital the way we've underwritten those specifically in some of the submarkets, that's just to maintain their current rents, that's not to really get any juice. And we're also seeing some of product that it’s come up in the multifamily space, not in the submarkets that we'd like to see where we typically see those wider than average affordability gaps. So what does that mean for us, we still want to move forward with the multifamily strategy the class B renovation strategy with the covered land plays. Our multifamily team here has identified off-market opportunities. We're going to continue to look at those but we have to be sensitive to where our currency is right now, and what the true opportunity is. I would tell you that in terms of capital coming into Washington DC, we've taken a new all of and asked them to point out on some of the fundamental flaws in the region. We're clearly seeing no shortage of capital come in, no shortage of capital, both on the foreign and domestic front coming into Washington DC. I'd say about 75% of capital we see chasing downtown product right now Dave is foreign. Some of it's in suburbs. We saw middle-eastern with Dallas Metro Center. Seen German Capital was Israeli Capital. Most of the value-add multifamily capital has been domestic, so that's who we would be competing against. I think the biggest thing that people have not -- that isn’t on people’s radar screens, which will clearly be a lot more in the forefront or the emergence of the debt fund. That was a topic at recent MBA CREF Conference. They are very aggressive. They're tightening spreads on life companies and banks, and they are definitely pushing up LTVs. I think the number that I've read Dave was on 100 funds raise, and have about $40 billion to place. And out of all the capital raise last year, about a quarter of that was raised for debt. And the reason why these guys are going to be sneaky good this year is, they don't have the reserve requirements that the banks and the life companies have. And they don't have the risk based models in place. So we think that's going to continue to throw a lot of product to our market this year. But again, if we had our traverse, first and foremost, we would like to continue to augment the multifamily stocks that we have. And if we could pick something, something like the Riverside and the something the Wellington. But again, we have to cognizant of our current cost of capital and where our stock is. Dave Rodgers: Just as part of your answer, do you think that it's making more sense as you move forward and you guys have stabilized your operations that you would look at joint venturing and partnering with more people as there is more capital in that market? Paul McDermott: Yes and no. Let's talk about that a little bit. I mean, we want to be -- we are investment grade and we're trying to be sensitive to how the rating agencies look and how the accounting rules work for debt consolidation. But I think we're always looking at opportunities to scale the business and grow the footprint. But I just want to make sure that what some of the capital that we're seeing being allocated to joint ventures right now. We want to make sure it's realistic and that you can actually place some of that programmatic capital that’s out there. We said it before bigger isn’t better, better is better. And we're trying to make sure that we do the right deals for our shareholders. And I don't want to put Washington REIT in a position where they have a gun to their heads, because -- we've been approached by private equity funds to do programmatic JVs. And we don't want to put ourselves in a mother may I situation with a large money partner. And we also want to try to control our own destiny and make sure that the agendas are completely aligned for our shareholders than not necessarily a financial institution being our partner. Dave Rodgers: And then may be one follow up for Tom, just the comments about Watergate and the activity that you're seeing to backfill the 70,000 square feet at the top. Can you give us a sense of where economics are relative to what's in place? Tom Bakke: Dave, I think as mentioned in the commentary that we’ve got the lobby renovation complete. The activity is spiked up with that, seeing good demand from tenants in media, in consulting, some law firms again, being very interested in views and the iconic nature of the asset. Our mark to market on the rents is slightly up, may be two or three bucks. But we’re pricing the asset in the $60 range, mid 60 for some floors and we're seeing no push back on pricing. And I think it’s just unique asset as we've discussed before. Operator: Our next question comes from line of Michael Lewis from SunTrust. Please proceed with your question. Michael Lewis: My first question is about concessions in the market. It looks like your TI and incentive spend looked a little high about $7.8 million. I look back the last few years, I couldn’t find the quarter where you guys spent that much and it wasn’t that heavy at least in quarter, something you could just comment on it. Tom Bakke: A lot of that was filled little bit by some of the unique spaces that we had to lease, that we got done frankly. We were happy to get them done one was a below grade space at 1901, that had been sitting vacant for some time and so that was a big one. We had to stuff some extra capital into that. And then some smaller unique spaces that again some over installations at 1901 drove up to numbers there where we had to do little more base building in the capital investment there. So I think it was just a skewed quarter for us. Michael Lewis: My second question, I wanted to ask, I guess it’s that time to have all the companies about potential stock repurchases. Your stock hasn’t been at the steeper discount to NAV since it looks like very brief in 2015. So the question I guess is really about potential stock repurchases, but also may be that ties in. Do you consider selling more assets to arbitrage that? And I guess that fits into a broader question about uses of capital right here. Steve Riffee: For this time, in the cycle that’s a good question. Sure everyone has to answer it. Look from our perspective, all of our capital allocation decisions have been focused on creating long-term value for the shareholders and keeping the balance sheet strong. We are certainly analyzing it along with all of other capital allocation scenario. So I really think all parts of your question really do tie together. But if we were to do that, it would have to be on the leverage neutral basis, because we believe in these recently choppy days, it’s even more important to have a strong balance sheet and a path to keep it strong. For us to do that on a leverage neutral basis, that would mean probably the incremental proceeds would come from asset sales. And the only debt that we could pay down say with such proceeds alongside of a buyback to keep it leverage neutral, would be our cheapest term debt. In the blended returns and doing that are in the buys. So then we look at where we are allocating capital how do we think about what we have been doing and how we still think about things, even at today's prices. First thing is we're allocating capital to our renovation programs and we're still generating returns in the high teens. Right now, we're underway with our Trove development and when we look at our unlevered IRRs that we're still calculating that those are creating long term value with -- and they're also synergistic to other properties that we have there in the market. So right now, it doesn't look like that would be the best allocation of our capital but it is obviously something that we have to evaluate alongside everything else. Michael Lewis: And then lastly, we're all thought that best corporate governance practices are to split the roles of Chairman and CEO. I thought maybe you could talk about the decision to combine those at Washington REIT, and your thoughts on that. Paul McDermott: So let's start out with good governance. Our current Chairman, Tuck Nason, who has been in that role for five years, we noted that at the end of his appointment this was probably a good time to look at that seat and look at new candidates for that seat after 60 months. Tuck by the way and all the members of the Board are the main drivers of the transformation that has taken place at this company over the last four years. And so I think the thought process was that we'd like to continue that transformation of the company at all levels and maintain what we have achieved over the last 48 months. I think if you were staying with good governance and best practices, you would immediately, if you combine those roles, you would immediately name a lead independent director, and we have done that also. Tuck will assume the role of the lead independent director, assuming that both appointments are approved in our Shareholders Meeting in May. But what I would also reiterate is that you will not see any material impact on the operations of this company through this appointment. Operator: Next question comes from Jed Reagan from Green Street Advisors. Please proceed with your question. Jed Reagan: I guess, just following up on Mike's question there. Do you have a share buyback authorization in place at the current time or is that something you're talking about at broad level? Paul McDermott: We have not put one place, but it is that time where administratively we're starting to do our line recast, have to file our shelf, have to renew the direct program probably have to technically set up the ATM program. So it is something that we'll be talking to the Board in the near future as to whether or not they intend to put one in place. But we have a lot of administrative re-filings and all that that we have to evaluate over the next month or so, Jeff. Jed Reagan: It looks like you've got up to about $60 million in incremental sales possible in the disposition guidance. Can you talk at all about what that might include, maybe by property type or region at least? Paul McDermott: We have the sales in terms of Braddock and 2445, which we already outlined. If we were to sale another asset, I would like to continue to recalibrate the portfolio, make it more multifamily centric. So that would lead us to probably sale an office asset. And we're evaluating those prospects right now, Jed. Jed Reagan: And can you give any color on the average lease term of the corporate drive assets in Stafford? And how is activity for remaining vacancy there? Tom Bakke: You wouldn’t bring up Quantico, would you? That's a defense contractor building typical terms are five year terms. And when we do get them without termination options that's always a bonus but a lot of them have a kick outs after three years. So I maybe -- the answer to the question is the average term is five years and so your churn 20% of your tenant base every year. But we additionally have our biggest vacancies down there as well. We've got about 70,000 feet to lease down there as well. And so we've got our handful of that asset. Jed Reagan: And what are your expectations for cash rent spreads in 2018. And can you talk about where the portfolio sits relative to market today just rent wise? Tom Bakke: So if I'm in the DCB office portfolio, we've got -- we don't have a lot of vacancy but where we do have some opportunity to lease space are mark-to-markets on the B office is generally couple of bucks up on a cash basis, and of course that are on a GAAP basis. Moving into Virginia on the Silverline assets we have, which are in Rosslyn, Ballston and then out in the Herndon. We've got probably 3% to 5% cash up in those assets, GAAP is probably closer to 8 to 10. Again, this is on the small amounts of vacancy we do have. We do have some leasing at Fairgate and some at Monument II. Good activity at Monument now the defense contractors starting to percolate. Alexandria, those rents are flat on any of those roles. And I think that then Watergate and Arlington Tower, we've talked about those. Jed Reagan: And just last one from me, if I may. Just in terms of the decision on 2445 and the acquisition of Arlington Tower, I appreciate there is obviously very different rich profiles there. I guess I'm curious just what kind of levered return of buyer 2445 might be able to achieve versus what you think you can achieve at Arlington Tower. And then to what extent was cash flow stability a key consideration for making that change. Tom Bakke: I think, the last statement you made was a key one. I think we looked at -- we took 2445 to the market with a -- pretty much most to 2017 with both, a Class A renovation and a Class B plus renovation. We had a really good schemes. The market was receptive. But we looked at probably five large law firm preleases and none of them wanted to go the west end unfortunately. We had one that was really interested in the building. And there were some decision makers that like the west end but at the end of the day, they are going to new construction, which is seemingly the case on pretty much all of these law firms, that’s either new construction or the top floors of a pop top, which is technically new construction for those floors. So as we look at the numbers on 2445, when we put our model together, we look at return on cost and especially tried to bridge the downtime that you're going to have there. And our return on cost metrics at 2445 were probably at best to five if not below a five. And then you look at a leverage buyer, how are they looking at it, if they -- because we've seen some of the performance. I think they believe that they can lever the asset up and Paul talked about these debt funds, and that they can still get to their low to mid teens leveraged IRRs, I don’t think we believe that ourselves. The seller at Arlington Tower, they were at the end of the fund. And so that was motivation for them on that sale and I think their levered IRRs on that were achieved. So I'm not sure what their rate was. Paul, anything to add? Paul McDermott: No I think that covers it Tom… Jed Reagan: And what about your return expectations for that asset? Tom Bakke: We going in above a six, low six and we should stabilize in the mid sixes on that. Operator: [Operator Instructions] Our next question comes from the line of Chris Lucas from Capital One Securities. Please proceed with your question. Chris Lucas: On the backfilling of some of the retail boxes, just curious as to when we should be thinking about when rent commencement might begin? Tom Bakke: The activity has been good. Unfortunately, these are long drawn out deals as you well know. And we’ve been working on -- we've had an LOI pretty much done for the space at Hagerstown since late last year, and we're still in lease negotiations. And these deal seem to drag out and we’re hoping that we're going to have GAAP rent starting in the last half -- second half of the year, but it’s anybody's guess on that. And then on the Frederick Crossing space, we've got to probably do two deals in that box and those are probably again last quarter is probably what it is looking like. Steve Riffee: Chris this is Steve. I'll just add, just in general when we look at not just the former HHGregg spaces, our guidance presumes that we'll have some lease commencements in the third quarter and more in the fourth quarter. So that's why we think retail is a little bit back ended for the second half of the year in terms of its same-store growth. Chris Lucas: And then I guess maybe bigger picture question, I was at a presentation recently that one of the brokers made a comment that was pretty interesting from my perspective, anyways. They noted that the spread between phase and net effective rents is the largest they've ever seen in the market, and it's uniquely large relative to other major markets. I'm just curious as to how or whether or not that approach has infiltrated at this point the Class B office market? Tom Bakke: Has not really affected Class B. And in fact, we've been seeing concessions still trend down, basically we've seen about a month of free rent drop off of the table in the segment. That being said, I do think some -- you guys have asked these questions over the last couple of years on whether the glass box As are going to start dropping rate and/or drive the concessions to a point where B has to respond. We're anticipating that that could happen, but we haven't seen it yet. And that spread you talked about, it’s just basically comes in concession packages, keeps seemingly go up in the A segment. Steve Riffee: Chris, the only thing I'd add to what Tom said, I mean he's spot on. I think the reason the B space and the reason we have been as focused as we have on the small to midsize users, we just haven't seen those type of widening concessions. As a matter of fact, it's actually going the other way. If I were to look at the B space from -- let's pick on since the industry sequestration from 14 through this year, 25 B buildings have been pulled offline about 4 million square feet. We, Tom in particular is definitely seeing concessions compressing in the B space, rather than going the other way. And that's just -- there's a lot of demand for those price points that we talked about Chris at $45 to $55 pricing sweet spot. And we don't see -- obviously a lot of this new product that's trying to unplug in that pricing delta and trying to reconstitute with something with a seven in front of it, we don't see those being successful. Tom also mentioned we haven't seen anybody jump down. I hate to keep going back to that, that number we throw out. But when you look in DC and you see that average tenant size is 6,000 square feet, we're just not seeing the glass boxes or quite frankly some of -- even the unimproved days break ranks, break pricing ranks for that small of a size of tenant. Operator: Ladies and gentlemen, we have reached the end of our question-and-answer session. I would now like to turn the call back over to Mr. McDermott for final remarks. Paul McDermott: Thank you. Again, I'd like to thank everyone for your time today and we look forward to spending time with many of you as we get back out on the road for our NDRs next month.