Participants

David Helfand; Chairman of the Board of Trustees, President, Chief Executive Officer; Equity Commonwealth

DAVID WEINBERG; CFO; Equity Commonwealth

William Griffiths; COO; Equity Commonwealth

Craig mailman; Analyst; Citi

Presentation

Operator

Good morning. And thanks for joining this call to discuss equity, common health commonwealth results for the quarter ending September 30th, 2024. in And update on the company at this time, all participants are in a listen-only mode, a question and answer session will follow the formal presentation.
If you would like to ask a question, please press star one on your telephone keypad.
A confirmation tone will indicate your line is in the question queue.
You may press star two. If you would like to remove your question from the queue for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
Please be advised that certain matters discussed during the conference call may constitute forward-looking statements within the meaning of federal securities laws.
Please refer to the section titled forward-looking statements in the press release issued yesterday as well as the section titled Risk Factors in the company's annual report on form 10 K quarterly reports on form 10 Q for subsequent quarters. And in our definitive proxy statement on schedule 14, a filed-on October 2nd 2024, for a discussion of factors that could cause the company's actual results to materially differ from any forward-looking statements.
The company assumes no obligation to update or supplement any forward-looking statements made. Today, the company posts important information on its website at www.eqcre.com, including information that may be material.
The portion of today's remarks regarding the company's quarterly earnings also includes certain non-GAAP financial measures. Please refer to yesterday's press release and supplemental containing the company's results for a reconciliation of these non-GAAP measures to the company's GAAP financial results on the call today are David Helfand, President and CEO David Weinberg, COO and Bill Griffiths CFO.
With that, I will turn the call over to David Helfand.

David Helfand

Thank you. Good morning. I'd like to provide some key updates on our progress. Since our last call at the end of July, our two Austin properties and our DC property are now under contract. These assets are held for sale on our September 30th balance sheet and we recognized a $50 million non cash impairment charge in this quarter's financials.
The closing of these sales are expected to begin in early November and the buyers have posted nonrefundable deposits pricing for the three sales plus our expectation for Denver in total remains consistent with the $234 million estimate we discussed on last quarter's call.
The marketing of 1225 17th street in Denver commenced in September. So it's too early to provide an update on that process. We will provide more information on all of the dispositions as they progress with respect to our upcoming special shareholder meeting.
We've set a meeting date of November 12th for shareholders of record as of the close of business on October first to vote to approve the plan of sale as well as the related advisory vote on say on pay plan of sale requires the affirmative vote of 2/3 of our outstanding common shares to be approved.
We continue to estimate the total distributions resulting from the plan of sale will be in the 1950 to $'21 per share range. Assuming shareholders approve the plan of sale, we will adopt liquidation basis accounting for our 2024 10-K.
Under this method, assets are recognized that the amount expected to be collected and our estimated expenses including wind down costs will be accrued in full as of December 31st 2024.
The year end and future quarters. Financials will outline any changes to the estimates and a statement of changes in net assets following shareholder approval of the plan of sale and subject to board approval, we will pay off the series D preferred and declare a common distribution of '18 to $'19 per share with the payments made in early December, the exact amount of the common distribution will depend on the status of the dispositions at that time.
After all the remaining assets are sold, which we currently estimate to be by the end of the first quarter of 2025 we will distribute substantially all of our remaining cash net of reserve for any remaining liabilities.
Then sometime in the second quarter of next year, we expect to commence the NYSCD listing and SECD registration processes transfer the remaining assets and liabilities to a liquidating trust and complete other administrative tasks. With the goal substantially winding down. By the end of the second quarter, we continue to expect to qualify as a read in 2024 and 2025.
So far, the disposition process has gone reasonably smoothly but it remains a challenging time to sell office buildings. The ability to close one or more, the inability of to close one or more of our dispositions will affect the timing for the overall wind down.
We are focused at EQC on executing the wind down process prudently and efficiently. We'll continue to communicate our progress. We appreciate the support we've received from our shareholders and want to acknowledge the continued hard work and dedication of the EQC team with that David, and William Bill will take your questions.

Question and Answer Session

Operator

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
You may press star two. If you would like to remove your question from the queue for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please. While we pull for questions.
Thank you. Our first question comes from the line of Craig mailman with Citi. Please proceed with your question.

Craig mailman

Hey, good morning guys. Just some clarifying questions to start. So David, you said the series B pref is that going to be paid the same day as the initial distribution or is there, could there be a difference there? I just got some questions about when the exact timing of that would be assuming the vote goes through on the plan date that you guys have in the proxy

DAVID WEINBERG

Pay credit against the bill. The series the preferred will be paid first. And then we expect to do the common distribution, you know, a few days later.

Craig mailman

Okay. So the series B will be within that 30 day window after the vote,

DAVID WEINBERG

Correct?

Craig mailman

Okay, perfect. And then on the the asset sales, you guys have how much of a deposit is hard at this point of the total? Like is it really difficult for, for the buyers to walk away or is it an amount that you know, if they can't get financing they'd be willing to kind of eat at this point.

William Griffiths

Well, it's David, I guess it's in the buyer's perspective. Obviously, they can always walk regardless of the size of the deposit. The deposits range from 1 to 5% of the purchase prices and two of the buyers are all cash.
So it's just one that is subject to financing risk.

Craig mailman

Okay.
Perfect.
And I know you guys said these could start to close in November. And but everything could be sold kind of by the end of first quarter. It is especially for the two buyers that are all cash. Is there an expected kind of close on those as of now or just trying to get a sense of the timing of these three assets relative to the timing of kind of the initial payment. And whether that initial payment could be closer to the $'19 a share or the $'18 a share, just a pretty wide window.

William Griffiths

It's hard to say because closings are subject to certain conditions such as estoppels, etcetera and buyers have extension rights.
So as David alluded to and said specifically in his opening remarks, we expect them to begin in early November and then just kind of continue thereafter and we'll be providing updates accordingly,

Craig mailman

Okay? And, and as of now, just from a distribution perspective, you guys are sitting on close to $20.'20 of cash and then assuming these three assets close. It's what, another 80¢ or so. So you're at the full $'21 from just these three assets. And then, you know, assuming you back into it feels like Denver is about, another call, a dollar 60 of value there. So, you're getting to 20 to 60. So, are the wine down costs coming in higher than the 50 million that you guys had talked about originally or is that kind of still a good place to think about it?

DAVID WEINBERG

Well, to answer your second question, first, the wine out costs have not changed. So no, they're not coming in higher. And I'm just wondering in your math whether you've deducted the preferred
In the cash?

Craig mailman

Yes, that's a good point. I forgot that. Okay, perfect. Thank you for that, for that clarification. All right. Awesome. Thank you guys and congrats on getting these done. Thanks.
Thanks Craig.

Operator

Thank you. We have no further questions at this time, Mr. Helfand and I would now like to turn the floor back over to you for closing comments.

David Helfand

Thank you and thanks for your time this morning. As we said, we'll continue to provide updates on our progress as we execute our plan of sale.
Thank you,

Operator

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.