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Good morning, and thanks for joining this call to discuss Equity Commonwealth's results for the quarter ending March 31, 2022, and an 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 [Operator Instructions] As a reminder, this conference is being recorded.
Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of the 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 and quarterly reports on Form 10-Q for subsequent quarters for a discussion of factors that could cause 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 on the Company's quarterly earnings also include 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.
Thank you. Good morning. Appreciate you joining us. I'll review the Company's results for the quarter as well as provide an update on our disposition and investment activities. Funds from operations were $0.03 per share compared to a loss of $0.06 per share in the first quarter of 2021. Normalized FFO was also $0.03 per share compared to a loss of $0.01 per share a year ago. The growth in FFO and normalized FFO was largely the result of a decrease in G&A expense due to lower severance, the collection of a previously reserved receivable and a real estate tax refund related to a sold property.
Same-property net operating income was up 29% in the first quarter compared to a year ago, and cash NOI was 30% higher. Excluding the collection of the receivable, same-property NOI was up 5.4%, and cash NOI increased 5.5% compared to the first quarter 2021.
At the properties, leasing activity has picked up. We are seeing more inquiries and tours today than we have since the COVID outbreak began in March of 2020. In the first quarter, we signed 40,000 square feet of new leases, including renewals, and rents on those leases were up 2.8% on a cash basis and up 5% on a GAAP basis. As of March 31, leased occupancy was 83.3%. Commenced occupancy was 79.5%.
Turning to the balance sheet. We have approximately $2.7 billion of cash or more than $24 per share and no debt. With respect to share buybacks, year-to-date, we've repurchased 3 million shares for $77.7 million at an average price of $25.83 per share. Since we began buying back shares in 2015, we have repurchased a total of 19.3 million shares for $517 million at an average dividend-adjusted price of approximately $22.30. We have $198 million remaining on our existing share buyback authorization.
Turning to dispositions. We currently have two properties in the market, 1250 H in Washington, D.C. and Bridgepoint Square in suburban Austin. Both are attractive assets and well positioned in their competitive set. The market in these assets commenced a few weeks ago. Closings, if any, are likely to occur by late summer or early fall.
In addition, it's likely we will market Capitol Tower in downtown Austin in the near term. Each of the assets, if sold, are expected to generate taxable gain. We will monitor the progress of dispositions with the REIT income test in mind. Given the small size of our real estate portfolio, significant cash balance and rising interest rates, we may need to generate additional qualified income if none of the assets being marketed for sale close this year.
In terms of investments, we continue to pursue a wide range of opportunities including portfolio purchases and corporate transactions, both private and public. As we said in the past, we're evaluating opportunities in a number of different sectors, including single-family residential, industrial, office, retail and hospitality.
Every deal has a different risk profile, and we remain mindful of needing to get paid for the risk we're taking. Some of the opportunities involve substantial real estate companies that are private, and a deal would mean that EQC is the way they go public. In certain cases, the EQC team would steward the go-forward business. In other cases, the management team of the target business could lead the Company going forward.
Our analysis of these opportunities begins with fundamental questions. Should the business be public, what is its growth potential and what value can EQC add? If we're satisfied with the answers, then we'll take the time to dig further into the business to better understand the risks and warranty returns. We know that shareholders will like more clarity on timing, and a minimum of dispositions will keep us busy the next few quarters. During that time, we will continue managing this dialogue with our Board about what makes the most sense for shareholders. Markets are dynamic, and we can't predict the facts and circumstances that will inform such a decision at that time.
For example, the 10-year treasury is currently trading -- yielding around 3%, up from 1.5% roughly four months ago. Spreads are 30 to 50 basis points wider, resulting in substantially higher borrowing costs for leveraged buyers. Should rates continue to rise, that might be a catalyst for future investment opportunities. As always, we remain mindful of the cost of pursuing opportunity, continue to evaluate best course of action to maximize value, including returning the cash to shareholders. We intend to remain disciplined and are optimistic that we'll find a compelling investment.
Before we go to questions, I'd like to acknowledge Sarah Byrnes who left EQC earlier this year to pursue new opportunities. Sarah's contribution to EQC was significant, and we wish her the very best.
With that, David, Bill and I are happy to take your questions.
[Operator Instructions] Our first question is from Manny Korchman with Citi.
Hopefully, I'm not alone asking questions this time. David, you spoke about -- it sounds like you're going down the path of pursuing some private companies that could use EQC as a way of listing. That's a sharp contrast to the MNR deal which was already public. Did something change? Is it just a matter of the opportunity set that you realized that pursuing public companies just wasn't as likely an opportunity? Or are you just telling us kind of what you're looking at right now?
Yes. Thanks, Manny. I don't think anything's changed. I think it's more a matter of emphasis. We have, from the beginning, evaluated opportunities that are public and evaluated opportunities that are private. And we have, in cases, we're looking at large private real estate holdings. In some cases in the past and in some cases in our current pipeline, the existing team that owns that would take over EQC essentially back in. And the point we're trying to make is that we're open to whatever structure makes the most sense and creates the most value. In other words, it does not need to be the EQC management team that stewards the forward business.
And then in terms of the asset sales, am I right to believe that the next two assets are right behind this, and at some point, you could just be cash waiting for an opportunity? Or do you need to hold on to a couple of assets just to be a real estate company?
Manny, it's David. To answer your question, I can tell you, as we sit here today and as David referenced, we've got two in the market, and it's likely we're going to be taking our third in downtown Austin to the market. And that's kind of where we are. In terms of the fourth asset, downtown Denver, it's a great asset, great location, and there are some moving parts there. So we're continuing to work that asset. So we haven't discussed or made up any of the determination in terms of what's next or kind of what your question is getting to.
I guess, David, just from a structural or a legal perspective, is there any need to maintain assets? Or could you just be cash?
Well, I think in David's comments, he kind of referenced the one hurdle, which is the REIT income test. And that's the one that we're keeping our eyes on that as we've gotten smaller with our asset base and our cash balance has increased, combined with the rise in interest rates, the makeup of our income is now shifting more towards, I'd say, non-good REIT income. And that's what we have to focus on.
Yes. And I think I would just add to that, Manny, it's not our intention to operate with just cash looking for opportunity. I think we're -- we have been trying to move forward so that whatever direction we go, whether it's returning capital or finding the right investment opportunity, that we can do so in reasonable speed. And so we think it's a good time to sell the two assets we put in the market. They're good assets. We think we'll generate a lot of interest. But I don't -- it's not really our intention to operate with just cash.
Right. And maybe I'll ask one of Bill. Just as we think about modeling interest income from here, how much of the change in the 10-year do you actually benefit from? And maybe you could just remind us where the cash -- what instruments the cash is sitting in and how they generate income.
Yes. Today, the cash sits in a variety of banks -- bank accounts. We are -- for the quarter, earned about 23 basis points, on average, across all of the cash. That's obviously going up from this point forward. Our banks generally follow the Fed, maybe not point for point, but they follow the Fed in terms of raising our deposit rates.
And in the past, you had owned some treasury notes. Is that no longer the case? Or are you no longer interested in those?
Yes. We do not own any treasuries. We did that a few years ago, but we do not own any today.
[Operator Instructions] Our next question comes from Jamie Feldman with Bank of America.
So maybe from your vantage point, I mean, what do you -- what property types, what investment markets do you think have changed the most over the last several months with -- I mean, we saw like the Lexington deal fall out of bed. We still saw ACC getting done. And I mean, it seems like there's still some property types that have a good bid and some property types that might be a little, I think, the market has changed. I'm just curious, from your seat, what would you say has changed the most?
Jamie, it's a fair question. I don't think we have a great answer for you, other than to say that things are really, as everyone knows, difficult to sort out right now. You've got the Fed raising. You've got the horrible war. You've got inflation fears. You've got a lot of different things, COVID still affecting supply chains internationally. So what we're trying to do is use our time thoughtfully, investigate opportunities where there's a real chance to get something done. Obviously, we've gotten busier. And the dislocation hopefully generates an opportunity for us to do what we were trying to do, which is buy a good business at a fair price.
Okay. And it does -- I mean, you sound like there's just more out there today than there was a couple of months ago, obviously, given potential dislocation. That makes a lot of sense. Your comment that you at least have a couple more quarters of poking around. I mean, I would have thought that, had things not changed, you probably wouldn't even have a couple more quarters left. So is that a fair assessment that suddenly there's just more on your plate than a couple of months ago?
We've had a lot on our plate, but things are more dynamic right now. I think in our discussion with different market participants, there's still a lot of activity. There's still a lot of people talking about getting things done, but there are more questions about the ability to source financing, source attractive financing, people's willingness to take risk. So I would say the quality of the opportunity maybe is a little better, but it's hard to tell until you get further down the road and really determine what's actionable and what's not.
And do you have a different view on any property types? I mean, you look at the Amazon news from last week, whether that's news or not. Would you be looking at a Monmouth again today? Or do you feel like something would have shifted in that market?
Well, Jamie, it's David. I don't know if we have a different view on property types. It's obviously things are evolving real time. If you go back, we were always a little skeptical of pricing in the past. It may be the market's coming to us now which will create opportunities going forward. So I'm not so sure that our view has changed and just maybe the circumstances in today's world is allowing us to look at more interesting opportunities and perhaps find something that we couldn't have seen in the prior few years.
Yes. An example, Jamie, would be, as a REIT, we're going to be low levered. And when rates were where they were, someone who was borrowing twice as much of the purchase price, and we were at an advantage. That advantage has been eroded by both spreads and base rates.
Okay. That makes a lot of sense. And how much leverage are you willing to take on if you think about -- let's say you do take the Company public or just as you think about running a business, what's your target?
I think we've consistently said that we intend to operate the business, as a traditional REIT would call it, BBB leverage metrics and the balance sheet. We've also said and we have, in this building, done deals where we go a little beyond that when we have a plan to get there. So I would say modest to reasonable leverage from -- with the REIT definition.
So what would that mean for the magnitude of a deal you could do in terms of total size?
It depends if we use equity. But without equity, $4 billion to $5 billion.
Okay. And then I guess last for me, just how would you say the appetite of sellers has changed?
I think it's going to be a function of property type, right? There's still a lot of equity and debt looking for a home in real estate, but we talk about the divergence. It's even more pronounced now. There's still a lot of money looking for industrial, multifamily, life science, et cetera. Pricing may be impacted, especially the more leveraged you are. But from a seller's perspective, interest rates are still low by historical standards. So it could still be a very good time to sell. But at the same time, for a low-levered buyer like us, especially with larger transactions, we may just find ourselves to be more competitive than we've been in the past.
Okay. Sorry, one more. Just on the office market, office cycle, companies are coming back to the office. Are you feeling any more positive, less positive on that property type based on where you are in the segment?
Both. I'd say it's both, Jamie. Activity is clearly up, and David referenced in terms of tours and inquiries, but tenants have more options today than they've ever had in the past. We've also seen some false starts in our portfolio, where tenants have called their employees back to the office, indicated they'll need more space but then turns out the employees have all the leverage, and they're not coming back to the office. So I wish I could tell you I've got an answer to your question. I just think we're going to be struggling with this for some time.
There are no further questions at this time. I'd like to turn the floor back to David Helfand for any closing comments.
Thank you, everyone, for joining us. We appreciate it.
Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.