Vornado Realty Trust (VNO) 12 Feb 192018 Q4 Earnings call transcript

Good morning, and welcome to the Vornado Realty Trust Fourth Quarter 2018 Earnings Call. My name is Michelle, and I will be your operator for today's conference. This call is being recorded for replay purposes. All lines are in a listen-only mode, and our speakers will address your questions at the end of the presentation, during the question-and-answer session. [Operator Instructions] I will now turn the call over to Ms. Investor of Director Creswell, Relations. Cathy ma'am. Please go ahead,

XX-K including this results deemed statements Please filings financial fourth a these call, other Thank Investor Yesterday call. release and documents Securities these Financial filed our Supplement. only on refer as as more documents Trust Commission. differ In may our and to fourth Company Please may information variety available and package our update accurate maybe our we Exchange any uncertainties. duty discuss be you. statements information that during directly measures to Vornado and may are Form Report will and a Annual financial Welcome section. well quarter comparable include our on today's time of forward-looking Form of and forward-looking call the afternoon, aware website, due date. call undertake actual and our risks are These factors. Relations earnings Form www.vno.com measures. certain does Securities Exchange most of the earnings quarter Realty with included supplemental from non-GAAP we information as to during The The measures Commission our made that these earnings under materially today's Reconciliations XX-K, uncertainties to to these sensitive the regarding risks, for be not statements. the with GAAP and XX-K release, statements in issued

Chief Chief Steven York Also Executive Investment President Executive and Executive Officer; Financial of Hudspeth, President, Executive the Officer, and Mark Michael are today Chairman opening in Tom Vice Accounting Board President Administrative Chief Markets; Sanelli, Iocco, Vice Macnow, the the and and Officer; comments turn Vice Executive Division. Vice President York from New the room call will Division. Executive are of Matt and Roth. Officer; our to I President of Chief for Greenbaum, and over the David and President Head Joseph Officer; now Roth, Capital Officer, On and Financial management Franco, New Chief Vice Chief call Steven

Thank you, everyone. good a Good year. morning, was XXXX Cathy.

are some highlights. Here

for California the year-out York, our of was the XX.X% across XX.X% team. and over occupancy are business X.X the Retail, leasing XX.X%. typical the high entire mark-to-markets years. over to square the Glen, and including office XXX Thanks industry-leading activity New and XX%; and across in At XX theMART, year very leases board the cash. was occupancy Street Our million year-end, and of XXs business feet retail numbers past performance and leasing XXX year-in with GAAP These in our best totaled

we tower the And XX% our the full in is in contract. ownership XX%. the guessing Train this up and I'm the building. successful that XX million last another have we the closed have project. quarter, weeks five $XXX XXX South a year, the We Central condominium $XXX fourth first super-tall continue XX that most the floor now Moynihan ever, is $XX.X aggregating climb will Farley large we already of In in after-tax apartments million. of million with units begun project Park closings increased this We are Closings project committed throughout from closed Hall anywhere. as XXXX, gain. And just under the to

Plaza It Hudson will neighborhood creative Penn It plans serve we you we PENNX. bring we building best-in-class will will covered across the And deliver the plaza entrance in Considering will and rents are out reward campuses allow the plaza the modern amenity right the everything PENN square that's in space best striking, much valuable iconic our best create block, transform It the XXX,XXX and is doublewide full campus campus like and new the creating our X.X into around unparalleled Yards. redevelopment tenants It West. feet is of It block a be Penn age. link horizontal main neighborhood along with foot from a that that of is Penn what scale front three favored to horizontal will here foot street. foot And the construction unique entire a will campus our very plates will and will the at an creative are feet square covered in landmark The is this event. in and financial seen XXX,XXX square expect floor of to uplift frontage In It main and of We love to done square step blown in the and high we X.X It under building foot a giant truly We provide top fan a time, PENNX include be Grant space. with $XX at million create way by ceilings. building to million in feet Station. the the between on from theMART. XX This incremental forward XX XXXX, two the in a extend have above our It our PENNX, have here. District, biggest asset. Manhattan. us, a is the huge here. many PENNX we happening This by Station. dual-purpose. XXX will us giant tenants same a of our Even of Plaza Seventh new bustle Avenue a asset. package.

picture, the this PennX. no financial into PENNX XXX redeploy sales Park District proceeds our internally, and is new to CapEx the to South big we debt. Central probably of expect XXX finance or South of Central very take, Park together; Give Farley all plan CapEx the or with Penn So little putting and

is Central interest, Park is South about accretive. accounting million. of enormously Given out $XX be capitalized item This XXX will numbers that only in of cost coming round the the the capital which

our is of Please in Page the we estimate management's see supplement. of As the fourth published supplement. custom, NAV XX quarter

for a accurately on per believe half per that the Google, partially Disney, HQX shows to market continue New increase many $XX versus rate X.X% the after $XX reflect yield other before. and an math is [X.XX%] on conditions. made Facebook is their share increase, years by half is of increase retail, Virginia, NAV Last reflects spot an deal. current X.X%. ago. more big It year-ago. HQX dividend and Kudos expand office is on at from here this really and cap we and per JBG Amazon month, our a increased X.XX%, the York which to second going This offset closing the we $X.XX again $X.XX contributed dividend per X.X% Crystal year very price, we street a encouraging is way, share land, we in our By rate making that the to Based Our yesterday's share, Matt York of to investments home. again an the New others the quarterly annual expand share, NOI, validating Kelley of a JBG team. and to increase in spin-off City, SMITH Smith The

future New well for that really the an York. Here's interesting of bodes tidbit

the you and the index in grown out York leading The employers, to that steadily infrastructure. fact David is will here workforce, year's has York that a New research overtaking this in creative be tell As Francisco. New creative creative in minute, piece city tech a class in has just point with been San came growing in

compared $X.XX would FFO the compared XXXX cash math. cover the the our year for $X.XX $X.XX for for $X.XXX as per was to XXXX, FFO income Companywide for $X.XX to as was the was financial billion, XXXX like XXXX compared as strong per basis a I'd XXXX, Now, flat. are NOI results follows. basis to to XXXX. $X.XX Financial adjusted full X.X% diluted compared X.X%. $X.XX, that XXXX. XXXX. share FFO as share, $X.XXX comments same-store at $X.XX, for increased per compared year adjusted of billion follows: consistent share Total with to basis NOI up for be net for beginning was cash to $X.XX XXXX cash was

was of bill make $XX.X our a timing increased XXXX, a income. The accrual Retail as million up New of was which GAAP flat we percent. minimum $XXX.X approximately result quarter total accrual. in York was which we and up quarter. New Retail fourth million guided is tax additional in between the cash collect a reimbursement essentially X.X%. was which a NOI we of we theMART the This essentially real in funky minimum of million XX% beginning $XXX XXXX, ahead payment in at year, when will office York expense down produced will two-tenths segment of required is the in third the to estate X.X%. million well the XXXX, down tenants actual mismatch and the X.X%, $XXX a

Excluding mismatch, theMART XXX X.X%. up been same-store Street, California would positive same-store this At have XX.X%. was

and service theMART. the million, year's million, and impacted from FFO For as year's mentioned was already short-term as was real fourth $X.XX, compared $XX.X year's and Total $X.XX compared which Park as $X.XX $XX.X fees. retail are tax out expected and prior in non-recurring vacancy from negatively income at from XXX Avenue XX the PENNX $X.XX as follows: to compared our excludes and at or net quarter Seventh deals; the vacancies the adjusted, quarter. for in Avenue office from to for or adjusted the was termination following fourth prior of lower FFO items: fourth additional or quarter, was quarter. million, lower fourth expected results accrual $X.X this $X.XX to $X.XX quarter. prior Space FFO few items a income $X.XX theMART. $X.XX $X.XX the by estate

were business. run Of flow cash. offset all, partially for EBIT positives, of normal items. is our business many course, the the there This these which We

to for are was Cash adjusted quarter. fourth $X.XX, FFO basis cash compared the Here $X.XX quarter. numbers the the for prior year's with

compared was in This theMART one-year basis masks XX prior to Avenue the quarter's estate number fourth decreased million, million fourth this a and interest tax the real X.X%, quarter. the accrual primarily the in NOI flattish quarter very XXX year's midpoint Cash $XXX.X business. Fifth our This of at by August. healthy same-store basis sale NOI due in is to in company-wide cash additional $XXX decrease

details. Here are the

retail theMART on total short-term New X.X%, that The is up not York so a X.X%. based New the mismatch, sound rents the reduced office scheduled up was skewed estate anticipated was York and meaningful. by down number lease tax segment is and real expiries number same-store was renewals. on X.X% heavily

XXX mismatch, XX.X%. very positive have same-store Excluding healthy been California this X.X%. theMART Street And would up a was

perform well. to very continues business Office Our

experience in demand all We continue our of robust to industries a all matter of sub-markets. from

Square optimistic, aggressive, New tours. York. we Penn and soft, are with are Hall feet square are Time assets. tenants And I activity albeit, Station, is in there the at of strongest As for plug town our growing upbeat sales where have to retail Train be and two before, we developing volumes are to and XXX,XXX owner the we the said make finding retail Station. a increased Retail are Moynihan and sub-markets continues best in here about leveling are the I The want retailer Penn largest

In the the funneled Hudson in traffic station, us. West from streets Manhattan teaming nation's addition train to busiest pedestrian the will traffic Yards to all and existing through and the and

in As a space. David give you retailer unique this minute. tremendous you have we details facts interest more expect, will in and would

domestic a After capital the continue markets very with disciplined Turning New coming XXXX, sources ending sales product over off start shortage of strengthened amount for sales. be out the market the healthy now signaling year York strong though interesting unsecured cheaper is Investor to course quarter. by to for market All three XXXX, and office good be to appetite continues a The strong a to a strongly. caution investment remain slow the fourth XX It's and sure on with in investment borrowing available offer of of the foreign should fair Pricing XXXX, and easily mix midtown. replacing active South with in historical main for be than suffered assets also quarters has a basis in fairly even financing is declining Manhattan quality for for interest from activity smaller China. from Demand get fours. market to but of constant continue our start. in stayed more. first to The assets stronger, in note financing in and cap the us, volatility investor rates to but constructive secured stay West is debt rates and non-recourse has low and mid that full public maybe now the standards. recourse in City points which of by

a measured and couple you. have well immediate dollars sales. closings And of $X.X non-core and million in maturities. staggered fortress come sheet balance billion with debt a XXX doesn't from highly asset liquidity, We count liquid this leveraged to Thank

to Now David.

of you. job square Good leases overall at greater foot We million the delivery rent announcement construction. leasing private-sector actually XX.X New growth greater headquarters The The service Avenue, new product, activity. on jobs two-thirds even new be Financial to XX Manhattan. Square, and of midtown decades, $XX Yards, employment due everyone. to all a in jobs ended Pfizer's year Square, finally, went in location, the historic Park be or Midtown, in a at year of Deutsche face rate rising total Bank's of also the both XX selection campus enormous upon This including of commitment market in accounting million of York, thank for Hudson with a overall of those XXX,XXX on record reflect redeveloped in for steady announcements most is to year a Steve, of the which of at square activity. morning, square in Long this Midtown Class-A to to XX% JP captured Island XXXX made square leased was attracted headquarters new Disney's a strength two feet million commitment of high. deals office down half active to to per and square player headquarters feet continued leasing almost million continued remained city. employment Hudson strong availability Morgan continue square year's the corporate its strong a build Landmark commitments significantly in feet. activity in the at to new than XXX,XXX X by X.X some rents all Chase are tenants north the of with asking X.XX the Midtown, a average foot. Large Hudson and of develop second Amazon's per using all-time $XX Manhattan's and great feet, Google's tenants City

the of center first, tech, Just the Sable's urban the position last report. talent brokerage concluded world's as multinationals environment, Global Sable's quality Annual both pool and to deep week, as York due Tech alike. start-ups its New infrastructure lifestyle issued international cities house the for New foremost ranked to that for its business providing York attractive location and

redeveloped delivered of Chicago well demand all Reflective of cities has and results. portfolio and Our next. Vornado's in experienced and marketplace strong the benefit Francisco, River in of York, the are across as overall PENNX North three up tenants enhanced as New very portfolio from strong assets San PENNX Farley

and square the XX.X% has GAAP cash. XX.X% X.X For mark-to-markets the of an million team completed of of a XXXX, year across our activity, strong exceptionally total leasing board leases, feet XXX

are modest with growing. from activity of PENNX York campus. to in tenants New the XXX,XXX for our to Focusing square growth at and over per team with the approximately rent coming full, our XXX feet New $XX in City, redeveloped at on XX% completed square XX.X% the be a totaling our GAAP average real of remain half and real, Tenants expanding occupancy foot XXXX X.X during with in year, expiring New mark-to-markets XX.X% strong expiring million and city. XXXX, feet year-end PENNX of of was cash. the XX.X% starting very York office and York in with leases, space an strong, Office We square portfolio, new

almost high foot, last rent tenants per square an of profile X at three a million strong years, and offerings in the $XX.XX very at of leasing a buildings. the performance portfolio starting square feet, underscoring average Looking our in totaled our the our of quality

total quarter XXXX, $XXX annual to of by During a triple-digit highlighted also assets square our comprising an square starting of our XXX,XXX shine per fully continued average feet, at rent foot. trophy activity totaling XX transactions,

same-store X.X% X% York growth New GAAP. XXXX cash results show Our Office of robust and

our sublease XXX,XXX an we of transactions cash, cash. to we did relocated strong GAAP office this similar was Broadway. use square XXX positive which growth the have space, feet, XX while to XX,XXX we to advantage the XXX Notable $XX starting X.X% and these a from Avenue, leading quarter, XXX great Park also into and total per where they location, at quarter buildings at highest to double inside. of square bringing again XXX second-floor outdoor X.X% CICC, new now and Street IPG's turning square flat. for square mark-to-markets China's feet across Same-store XX,XXX abundant fourth quarter, at firms executed space during at XXrd the Avenue luxury quarter retail floor, banking entire essentially West taking of by X.X% with Group foot on best rent feet. investment we a converted average Interpublic of house was will XXX fourth opportunities headquarters Now GAAP and there third expanded branding for the was on footprint one what foot advantage brokerage square the will In fourth international leases Park previously square take included Madison of with This And Avenue feet the space this space. XXX,XXX at premier XX,XXX residential Kmarts

in are market and in square available foot our Park per our the sub-markets, XXXX, across seen per As to $XX sweet square very of redeveloped in tenants Americas the we spot multiple two active the the $XX of completely but have buildings, square space deals the in XX in we of range. and foot blocks in market, on feet At feet totaling Avenue, bidding of square another negotiation we all XXXX Avenue XXX,XXX demand pipeline. leases seeing kick-off XXX,XXX the

turning and and Now office at office where we redevelopment our building XXX completed very build remain square new XXX,XXX recently brought to We've to pipeline, foot development XXnd the market active. West where the a mainly Street, Line, are are with directly tenants, in we discussions services looking boutique in for tenants. on active new these with High Chelsea. Notably, multiple dialog financial home

the said asking we district an continue of in tenants of in Midtown geographic can rents in the sense this grandeur one at demand signature Construction the skylight continues, one anticipated Train office in Skylight, lobbies. toward with get mid-XXXX. to you high, above Hall's by our skylight now this XX the Farley now new progress Train to surpassed of include for have for as Midtown where past, As Hall. and really feet office of product all-time three our this now The shell work delivery a the initial is expand, of product core has commenced type our rents. The restaurants and retail Manhattan two boundaries for The complete. mid-block that mid-block will South whole program have is on at

building, the third setter industry to vision allow campus retail and to necessary our basis. this tenants us great will at base have real tenants which PENNX and elevator this Penn our the lobby to a of our commence to the to are project project, we finalizing from At quarter of a the tenants and district-wide daily PENNX, for will floor. begun. and restoration is we during arrangements seeing the District XXXX. brokers horizontal for construction programs first interest almost even Physical of permits We've the on both relocate begin construction communal completed move new are as work summer. once transformational to are retail tone work this in and these hospitality presenting tenants facade with the office and commenced a on We neighborhood, second from the office types, workplace modernization rich plans the where has coming we create the all the

the feet homepage. make space outdoor district-wide. unique with to Here projects program, undertaking new, at neighborhood also way serve and are X.X we building the District which and Collectively, PENNX modernized you plans, Farley we office of retail in our of York. all amenities, offerings, the District plazas new take have will completed capital along to of Penn catalysts our our PENNX million the encourage at look recreation are fill our now website I tenants necessary relocations are delivering this square a posted multiple the Penn tenant at on www.vno.com for which New epicenter the to

for flat to flagship a turning York strong GAAP occupancy our New X.X% feet. of year, portfolio, X.X% year-over-year, the a total retail XX.X%. we negative square and portfolio at negative XXX,XXX cash. were Now Retail leased results stands Same-store

at Ballast an they Street. XXrd Penn brewery Farley from directly retail location an comprising craft the to XX,XXX During and Street, on West be entrance building in the XXX street the mark-to-markets HSBC box cash. but square retail office with Point and we occupancy. at for of our will entire Point Garden SoHo, West concept of announcement feet XXth new Ballast New Third and nine Avenue restaurant quarter, what of the restaurant lease district, Coast included Fargo's XXX breweries the X.X% across main with our fourth positive Bank experience Street, patrons a deals to XXth X% leases completed at and first Wells on will future its XXX Notable the indoor GAAP, outdoor lease will York Broadway bring their have

and strong Krispy XXXX completed Chicago, component XXX,XXX foot. Street $XX.XX the very square as lease per leasing location rents At X.X performance We of for a well retail exterior feet this of Crowne square showroom year, leases Plaza a million starting the X,XXX also variety the of for foot of a of presence. comprised in theMART digital campus. Kreme with include strong XXth mainly Broadway, square continued completed tenants signage results a at flagship square reflect in foot a at Hotel at corner large We as new will which

XXX currently feet GAAP XX,XXX deals square mark-to-markets quarter, company we space floors five. Francisco, Street with space and the completed at prospects, amid During other showroom year this lease the demand have a in full well-known our and We by for last fourth square foot for XX,XXX multiple $XX San of and per to continues technology cash. with the we an Publicis rent square availability. average feet advantage X.X% of out of have office completed surge remaining X.X% marketplace, of California limited taking year at stellar positive vacated In starting four campus on where a

results per same-store feet resulting GAAP in cash. year strong the starting and Our GAAP for square XX.X% XXXX, $XX In very leased and an square of were foot a rent XX.X% cash. we XXX,XXX of at XX.X% average very healthy mark-to-markets XX.X%

full spaces force to begun. complete by building our concrete the the third at our with work At respect which in we of now remain weeks. having end feet, And work are XXX square XXX% negotiation substantially XXX the of to is Montgomery, and for leasing delivery close We work Montgomery renewal occupancy. expect time redevelopment of next the do on reach have few this We a to steel XX,XXX we during with year. quarter

pleased strength very companywide the dedication all Steve. are overall of and XXXX of professionals. our to quality continued our These enormously of credit teamwork the our with talented see are Back three to and We and portfolio in to leases our all of results markets.

Q&A. for ready We're

the session. Sakwa [Operator comes first Thank from Instructions] question-and-answer from you. the We'll The Evercore. question queue begin now in Steve

open. is line Your

the new of as what having city, I'm sort around to of project. of kind it signals a Island to maybe the with number issues you you on kind different coming getting deal coming know just here City wondering, some there's about business that that consummated? Long have and good relates and maybe kind mentioned press been I thoughts of situation. of any Amazon both morning. Amazon reports out the David Steve, terms there Thanks, And

potato. hot That's a

property. would Amazon to and tact. of - say, opinion that Governor the First that chose as expanding like a of relocating, my Facebook company paying and York New York stupidest city it of it's was personal high York of political and huge with et trouble cetera. growing enormous different thing New deal, with take on what the York would for damn that on an New deal the ever on deal Mayor of the a I New basically this Google us. the and be fine. jobs And the and And that's deal terrific no and for all, blows it's real conventional the right seen. way with have if important terrific climate in dealing folks in of I If locating a I've I made Amazon mean personal my a number opinion think. that's through

have, before, City is Crystal and involved we as of Chairman said company, Now obviously, we the the the I'm welcoming. company, are which I heavily

I the the welcoming So deal. of of think maybe this point view more some take a savvy folks much in auction to on

wondering for buyout of around Okay. at leasing for expectations sort project? your as foot. are a Farley Farley, relates the to of it sort could if talk be sort what just that My $X,XXX and expectations us your a square of I remind of kind return second I'm question, in you at think overall cost about timing your that deal on might

be totally New horizontal the think It we in Farley is of Steve, good morning. in unique a will that Building terms Listen, space delivering. the as York. we campus

of year, the was over over across square at rents. million or feet square leased at for feet at told last year rents in city, some when We the by the activity $XXX rents mentioned we past, that earlier, some have million numbers the this you are XX building city in you million and think way, XX square X.X generally, think the I triple-digit as about feet

as We with of the is called a differentiated new So number a new these all of clearly rents have our become space. discussion and triple-digit in well in significant redeveloped remain relates for this We way to construction again from building it the think tenants norm. vertical substantially product.

the said, by of to for about delivered the be asset. own begin I now space we sometime excited the fact very year, As of XX% build middle will out tenants this next

Yes.

lowest in Our the here of financial so XXXX, to our cash. - of basically Cash the be. community this this have - we and the and enthusiastic And plan said, going here tenant Steve, is And David very out possible deal that capital lowest reactions is brokerage that as one. coming we from cost that build the the with are I we love it's said to community. enthusiastic also

then guess, it, And uplift XPENN. uplift, you the about at question maybe and guess around the just Okay. XPENN I talked I last my

you per a figure. think I quoted square foot $XX

us Manhattan framing some your of rent how kind XPENN? in through or between Just that of at out, Yards finished ultimately West you about that of and there and maybe Hudson expect the and sort think sort help to the differential thinking would of be XPENN project uplift you're product the new that

I in-place it's Well, a are worth 'XXs, think The higher the average in rents think that, bit buildings I finished high in average be pretty current those 'XXs, being numbers. will the on product the with but leasing are simple. marketplace. than We low the mean, little

Let's say, foot. a pick a number, $XX

$XX a uplift. that's So

get of little Now may be become has up bit. increase the the to uplift go out taxes a in any a the marginal to, doesn't that cleaning doesn't expenses, have or higher operating

see for what and remember experience have And different both and future the in building, And location years. pure we terms will number, Penn excited a of many at spaces pretty got future new what in the we we New believe, York based are forward, us, tenant the a other in these and have top fact forward we occasions. what market going what of builds transforming best that and all yields pricing. be, history we We we're at the is about We transformation upon on trended the around determine and going So it. theMART this Station. demand we have we of believe buildings now that's basically, market couple to fairly new determine what -

So we're pretty and certain that's we're our right. best judgment

guys. That's Thanks Okay. me. from it

Steve. Thanks,

the The from Thank queue you. next Korchman question Manny with in comes Citi.

Your sir. is open line Please proceed.

Hey, everyone. are life it second. good now we build and that. will, a out tenant. the In you traditional, can more for tech Farley morning, just discussed focused one you if Maybe science sector if a that support there to I correctly? squarely sounds past, component reading And you've Am potential on more like

tenant important I opportunity in, at to welcome pricing the everybody an a strong proper landlords, heart. where maybe, happy an with know, tenant, very we're You open when equal comes mean,

we have interest science we from firms. tenants, financial some significant have from some fairly we So from creative have class interest even more interest tenants,

this not market. the service So building. building a designed special to It's once again, a entire is purpose

related in for rates XX gives vacancy to activity can has points, terms little cap And maybe been basis about NAV that bit the more What cap legislation with that, haven't moved potential you a street analysis. retail pack? the in applied to talk transaction your that. than a lighter. the up And then Thanks of new confidence Steve you rates

of cap put this marketplace NAV what we best The year's rate the our is estimate in is.

we've very So assets it the okay. it's scarce but great on a that marketplace, trend right unique believe - hit we thin pricing these button,

The legislation, Manny? second about question was what

proposed, I vacancy retail tax, time? getting guess umpteenth it's the for On the

not especially Well, for anybody. are I think on the it's is key that landlords. New It's streets there of Everybody the thing there umpteenth fact vacancies not is for time. good lots about concerned good the York, the the of

Okay.

why talked it's landlords the want the understand don't space the the filled I and don't politicians - fill up. don't these fact politicians more to want recognize space this that to I time. why understand all up the folks they we than So

professional that landlords are price will the clearing go obviously, for so to space. the the And

piece, both back get the deal what And as make think to it in going it's that I By just way, execution. a I'm said, a that I'm then as saying, I I'm will just confident in the word, by. fairly predictions, don't pass what's concept extremely completed. fairly So will Steve that - but it's will bad the confident bad it's go, I'm Amazon confident it we're idea just as

you. Thank Okay.

Feldman the of Bank next Jamie Lynch. The from comes Merrill you. question with in America queue Thank

is Please line proceed. Your open.

morning. - look could earnings like, get more could to It those ready Great. rest emptying on Thank what move-outs good getting you like same-store as and you're as the a us able a for like? of of redevelopment bit lot building? sounds and Just give for look even in big portfolio portfolio ready out for the you kind kind the Are color of year of you'll NOI have and the the guide some, as move-ins of changes? XPENN we that a you what

extraordinary you And are don't give about Yes, for things. what do guidance. think know, we we guidance. We you're talking as guide

of it For was and say because the example, $XX we to to we the and in that all guide dislocation to the that everybody did that to when thought Washington, million the missed moved we of guide predict very better it BRAC patent difficult minimum I'm we side. ago, we cash retail positive happy was when it, be did out would on. focused by the office had what what for XX Last NOI year, part was years that something was

So so I think valid and paying folks question we of slug colleagues for a one that a years and it's about we we $XX part operator When that's your space asset $XX our one we a that's foot, because out and this. very think important understand XX later, I us huge business an empty as well. that, of thing. that will later months said building having will transform for as about don't foot tell how a a two space let you question. that's or to our the think a

think business. that's kick as what So guiding whereas shareholder you wish fact saying are not hear really out I'm $XX huge we normal that folks saying about in the that and I in going the run but everything, look it, - we move value. $XX upon a is our uptick and tenants about what to way We tenants would we'll you're

quarter. the each right a that so what's and to Maybe pick thought it's it's Okay. earnings terms you look talk thing out on more tenants like? rates and think I about think setting just kick volumes. I the market up said I are quarterly you That's fair And You of don't it's more anyone your cap generally probably the just point. redevelop think will I expect then into transaction to do moving market? on has rates. on thoughts about XXXX do heading the office to Manny what of you in a had touched sense I Can on, know as just cap will market mean, and the what we disagrees buildings, - mean, expectations

Michael Investment him Chief going to Officer. our Franco let I'm is here, answer that who is question.

good morning. Jamie, So

number of coming things a that think pause I after market. the the are in hitting there's year, a

we the lot in got bigger the on like under coming coming also new condo, some think year. that or million the Hudson product call SL you've Some of is last to XX, out other, some some a other District. Garment the were to out, out $XXX sweet-spot maybe but that be whether lesser it's have Green deals putting going continue Lex, where size, interested of of to Yards, deals But couple million a it, quality $XXX Midtown buildings, things is assets the I

looks is of will it probably XX $X like recently hit hit the in days. near-term, billion to or So $X product there's next billion office that

or are I starting is, is think the north. you're a a out the and $X,XXX pretty new the a we're for value of it's is sort of standpoint, assets hearing, builds for it in year probably $X,XXX how some or that now, less, of see per interest, square at to investors than what foot and out, the higher well, That's on foot where I think which what seeing foot are from active price bulk just going at trading saw as a basis. investor Midtown most attractive we'll think quality perceive but last least of seeing, we plays as see we're I

and So quality in the reflect see think up we'll terms of picking investor feels market interest like that. I it's

put my what agree $X.XX and would I I Michael with said.

used $X,XXX fair and that be a I foot as have pinch thing to more The marketplace do. number a buildings is or to pricing less I that investing considers it value years now. in first that now think at the neighborhood been a pinch for gotten has

no and shock first-class buildings office there of what sticker So the people trade to are for. Manhattan getting used is pricing

I investors deep invest is who want York. So there a to think in very that market of New

it's whole know the Tokyo on kettle basically we London, strongest is world. think going know a the Europe. in I of different great, what's going mean, what's on We that's market doing in I in fish.

pricing fair - saying I'm we what year. gets investment think are New than and pricing a used strong share. We is market anticipating its sales to investors York So the next way think more we're

thank as you. had equities you or maybe stocks, you've Okay, decent then non-core more in move sales. capital a guys REIT the Steve, And asset source some of Are buildings seen of holding? operating thinking of mentioned you finally, the are you some

transparent the not cetera. to sale pretty predict, do which I'm to terms intend assets. going billion what in on I'm over we to list. realize mean, what in our CapEx $X It's obvious timing we not pretty is to sales. we're that for of sales timing going were with needs, doing I predict But and of those specific et All of

So over all roll-out that time. will

you. thank Okay,

Thank you, sir.

queue Thank Stanley. Adam comes you. the The next question with in Morgan Gabalski from

open. Your proceed. line Please is

Hey, guys. Thanks for taking the question.

also, market? thoughts any of advantage do retail what the whether see and inflect you're is Just happen positively? retail, where taking given distress you rents have any XXXX, guys in seeing could to on on And we considering street rents in you start with street saw or bottom not Vornado

Adam. stress, wait can't love the distress. We We some for

going little importantly that. now inkling We're a beginning cycle. to the there's prices, capital have the and or even fewer to space. a assets first growing see tenants so biggest prices that seeing so on to expertise marketplace in that's respect lenders appetite class back that bit base, the of rents at We're are beginning for interested are problem looking and With in rents, most the there of the trolling this the fair of that. asset fair the be We maybe to lot not below

don't yet price we know So the bottom what is.

market and take level start other year, market most of these to will markets, a this again. a the up while, follow maybe be some you If bottom cleaned then it for grow and two will years maybe as fishers to vacancies by

for really mean, not of having a but there, a position we under with of we our portfolio, enviable we're fine. and tenants good the the I vacancy so have it's have have we long-term - here, terms of mass in So lease vacancy

bit. be a Can on expirations All in got Westbury talk those retail And impact little NOI you. on just know what latest right. street pushed then street about one to and I the the Thank out XXXX? leases update Massimo helpful. the That's then will you and Dutti very retail, just more

out. again, Massimo the Once think question. lease pushed was I that's guidance don't a Dutti

neighboring - that XX think goes MAC and XXs, the don't I think. lease So has into the I

Dutti cruising We Massimo space. have people the

report nothing yet. have We to

it. Appreciate right. All Thanks.

O'Neill. Thank you. question Goldfarb The Sandler from Alexander queue the next in with comes

Your is line open. Please proceed.

morning. on Good your comments I Steve, guidance. appreciate

got Yorker over year has this So to try, you - ask let me right, try. try it I every to well, If we New look to way. Steve, guess, this got

had If to created still the that's year next year. recoup guys of you'll you offline, going think, look part over taxes you that, and earnings headwind. come net a is PENNX but went - values, theMART I up, obviously this next,

will So obviously near that's some that NOI that and it But produce at and will then will filled the eventually. come term, you off grow NOI. get guys in the Cube have XXX boost you rents

talked earnings you - do So the mean, past all I to pieces years. the including just I year few with parts? been Directionally, different with retail the stay some flat to you this are different growing, of and before. the moving street Jamie's going, just that flat see have or street NOI that next retail net over reduce vacancy coming question, that about all think will that be

think level, but we So creating because stays part all I just NAV that an flat? to at trying and for a thinking people property value get agree just the from are sense it how, FFO, directionally, about you're

but don't would that a flat, you you to if hold good be directionally, to this, want thought. I me would I just say, think

is there it okay. rents refer go ebb noise. some of business out, to go down, flow whatever, rents in, move I tenants - and the business. up, our to So move people Okay? the I is, refer it as as mean, normal Tenants

York jurisdictions, as it hold our retail it. New business, three it take but guide all different Chicago best Francisco, and you in arguably together together, known think financial asset overall, to in San and if office the and me business not So our business best building a all flat, don't I the arguably that's will the in

Okay.

as drum obviously has on second just said, is spec view picture, Downtown, this Far the I yesterday of marketing Do go in the or And which that are business pressured have to we West delivery, rents suddenly morning of guess, the or supply sort trying question another where concerned he spec just talked Side. Silverstein working Okay. years few Brookfield New has then may bigger like you through going we're wave, this supply bluster, could York? about you previous up

don't They may bit, major, Hey, a little these don't major bluster, okay. bullshit are they They people. bluster. but

third-party So firms of that capital, are firms that these you remember deal got okay. promoted with to both

So what their the talked why them - my guess can build and if is to I the about appetite, the this, get they'll they an okay. building, - haven't of investor either not, who has

appetite So whatever. I that's example. There possible Avenue for spots, like of development think and large is brilliantly totally for invested Park and a capital for located buildings for even -

Rick and guys. if going has what he fund it do So wants I can and no raise to. money can to both that what build if he third-party over, got Larry happens. and capital will seasoned we'll has they're discretion so Larry see are idea have he he Rick

sort about not another of pressure you're sound concerned though, doesn't like? in rents But it glut supply

change early last next a one time XXX place, in the developers, create. City happened a was They feet not was the foot That happen building in to years the the these a buildings, entrepreneurial will The there they have change on million and - there A York square and happening rush this a take not square will influence million million five, is to They a slug. building like office won't created beat not here, now. was there, or are teeth. seven in building the dramatic XXs, now pulling New then business. XX the was XX zoning and zoning where in that

Steve. you, Thank

new build aside, we By at we're buildings. pretty the an okay, good way, as love to I it. mean,

of under is foot build that in $XXX built our that the somebody a we function if to properties have our And is $XX-$XX, it. we building business the in XXX, we to We umbrella built $XXX that the absolutely now. It's of But new get skill-set. $XX-$XX, price creates and building, range. a core going we rents we - so wonderful it, for know the main part do how own Bloomberg

Okay? all fine. So that's

Thank you.

Alex. Thanks,

in Thank Markets. you. comes The question the Capital queue with Kim next from John BMO

Your line Please is proceed. open.

Thanks. you. Thank

Alex's want follow-up question. on last Just to

Plaza, that Given does Manhattan potentially change of competes redevelopment the directly with timeline of the West PENNX? Penn

Absolutely think neighborhood product on included. we going quickly Absolutely we and are it's as people neighborhood, our think fast fine. tenants, that more are We with going first-class us The entire can. in as PENNX. that's better the we the We're the first-class can in it not. deliver for as all is unique property to PENNX, not. product as we

look good them we as a So look and neighbor. we them upon as colleague a a don't as upon competitor,

are on NAV you your just buyback? ask announced With a discount? $X trade know if Okay. you XX% at Simon a during can just share a now Given saw And I I billion updated what the views this morning, at program $XX, don't your but buyback call?

see didn't No, that. I

Our on so. buyback communicated as same over the last views have the or the we are year

it, look lower the you is list? but it's on priority at Which

to The answer that if was were is would that do change our somebody a successful. views buyback

and money so So and happened yet in keep we'll our jeans we'll and our hasn't watch see. learn, that

last now, over year answer as it's much thinking is of right pretty buybacks our or right as the same - the So the been is, so. about it's

a XXX final this South. for at Park question, might be But then And Okay. Joe. Central

and in units condo lower sheet than for your January. already $XX that's sale on balance million what had ready You you've at closed

good a forward? if you to indicator on next I'm plan of quarter So the wondering, this what going is over close

five January, I remainder anticipate first through will think commented $XXX of they substantial in the another XXXX weeks million. We into that the accounting that's quarter-by-quarter more XXXX. it of additional he remarks, the all the Steve's in more category, question. was floor in closings of rigors But full been reclassified that closings. for Remember, sold substantially apartments yes, for have remainder be expect we your and

for an TCO, on sheet gets My as a into accounting a of occupancy, balance apartment convention is the gets of - it Joe. understanding temporary this Check the me that available apartments when sale. reclassified certificate on

That's correct.

many with nothing got number at to it So gotten has what do do that sales, apartments nothing to on. have with entirely to with you're how financial order we do is future - looking because the activity, that in

And end into year, a the It this as not the number XXXX. in of XXXX. is grow will of number

as apartment right through TCOs I And on so that get before hope we our them. the is we we go plan helps. sell that serially

Is million it $XXX good should be to does. per a million it there Yes, quarter? Is that modeling? we rate $XXX run

No.

that quarter. we've We as of not it out it haven't by the given intend quarter But is we that $X by we total. albeit information earnings, shown think noise billion to to. don't And no, non-comparable take because, and over again, have I one-time, given in

roll the okay. whether and one it's year, It's matter, going million, one over pretty $XXX out out the it's sold doesn't rolled next million another less to I all quarter to $XXX next mean, year. be quarter, over more or simply, going or

you. thank Great,

Thank you.

Okay. Scotiabank. The next question comes with Nick from Yulico

Please Your proceed. line is open.

from of million the Okay, Park XXX thanks. South. think capitalized should $XX we you how about interest - on, Central first Couple questions, of about talked

I would think that you time. the is the from losing over lower plan interest sales expense, debt interest to condos, which of also your paydown then benefit but the are capitalized

over impact we you should can the a think to give next expense So for just year? interest feel how your about us that

year-end billion, We've the we of and and the increase taxes the billion. that's sales publicly million. Well. wrote million It's in was billion, number $XXX construction its that We've quarter. from a Hi, proceeds which the not was $XXX shown it's that's amount Joe. Good going At little morning. to mortgage, of said we're that's the over $XXX for that the NAV really originally - reports, $X.X paydown that in comes earlier, million. cost of PENNX, the Farley, entire $X job going of over somebody is fund to as from the in the is $XXX was development. the one balance be used, pipeline the an of needs a said million. $X PENNX, - little in proceeds have you prior what same Today $X the And to billion are the of Steve $X year of of billion,

we are. So I where think that's

Okay. away benefit interest for spending capitalized highest as interest, which at trying is for versus does about Central new your forward to just expense Last of year is think level and goes I'm kind that a your on XXX Company. its change Park redevelopments? going you how

our financial is put, plan Centrally this.

quickly a paydown XXX million, sales fours zero. $XXX go of go loan and to in to first of which The is that the come out now will secured

part the eliminates which is in the is couple the by way, So Then of industry. loan. of out dollars, purposes. to CapEx And of that the all the that that of that cost okay, going capital interest expense will go after for better billion capital that, a the into comes be loan or lowest other

when are buildings I substantial. we P&L accretion think going interest be our about mean, higher, to be cost will buildings So will profit no these you therefore the it, building in the and with very be to those

Retail then Levi's, Forever from know, going And Sephora, just segment, the this commencements. thanks. XX Okay, - you you to lease benefit have can I the year back

item As I year, temporary the expiration renewal Dutti this and was there Westbury. offsets out, at the think also the some Massimo you some move of occupancy do have then

mean, lease So offset temporary do are to in - benefits is feel and the move-outs, lease from a and you escalations mind expirations of much just that issue? getting portfolio? commencements the the your occupancy the the giving us how I for you

NOI of go - guidance $XXX million. be that $XXX to that we no $XXX mid-year we Facebook, favor some not Retail would $XXX of back in that last year million gave million at million, way mean, back space year, of $XXX in In the our so a Kmart in some number, is that's a we said NOI, guidance retail we We million, number other cash it minimum year, less That bought was Retail again. last below for the okay. we was year cash $XXX this that okay. came I okay. than minimum because bought to the from million, last that of would said million the went the detailed adjusted beginning Basically, number around, question, $XXX

again, a sensitive something business It's for be that. this about year. the happy me flattish my will once the we're So that too off cash you number we are of head. guesstimating retail to top give But

Okay, thanks. it. Appreciate

Yes, sir.

The from next queue America comes Lynch. Feldman Jamie Okay. Bank with question Merrill of

open. is line Your Please proceed.

Jamie, welcome back.

there's want get just I market where the way to And flat? spreads leasing thoughts generally I to into thoughts have XX-K is on back. prolong kind where But foot depending be rents the kind Good year on growth? just Thank XX, you. on, at don't that Is but if footnote - follow-up, looking rents like of I your tie are Page I any office, you about this quick or spread, want a to it your you on being to be going get market rent are like talking want of leasing about in to you're kind this call. for of it positive - and it in the renewals think had at looks in on your looking helpful? that looks on a where can an get XX% positive. leased you're you just on, range, look done a flat a should would you at rents seeing XXXX. retail,

congratulations all, Jamie, of for out. information ferreting that first my

that's genius. what Joe, you think guys are saying? I

$XX, David I is Jamie going midpoint what of expiries Jamie XXXX it's and we so mark-to-market. was math did what XX% is referring that the of guidance close. just took said rent the average that an let was the That's that over at to with and office our will $XX.XX in for embedded have he and

it the this the there So published. square actually only next XXX,XXX the think Effectively is relevant expiring XXX,XXX feet, important that's is to to I Jamie, - year. that's with respect point number

coming at in of across the reflective the out where looking over the next portfolio, that's up reflective mark-to-markets service. it's not and Plaza, think which we're it's in specifically of portfolio, course the going comes fact Penn year space So at of of that not go we in the coming is rents across fact up space that's to some are of X

just... then And Okay.

at numbers year's valid observation. the that next as $XX that $XX mid benefit to observation higher opposed a than or will in from is low a number your expiries Jamie, XXs

a So low have we to double-digit mark-to-market XXXX. expect do in

you. thank of sense just rent Okay, And general market... in then growth the

ahead, …little Jamie. higher. Go

flat? say Just general sense or they're rents you rising would you would say still of rent growth. I mean, generally are

emphasized I'll while number X%, whatever the spot that to Manhattan sub last if single what I districts the number think in at come and went up back I X%, over at said the where and seen bit earlier, a little again say looking is, the look in the rents a Jamie, you key is this generally year calls the of rent growth. we've is number and city, highest is we've our any X%,

assets, in Chelsea in rents the have XXs obviously to redeveloped Hudson numbers relates dramatically no product. to asking same rents it years. as true thing a is Midtown started new obviously South rents we're The telling said and tenants Yards mentioned includes West, West in sticker which in today seeing is the are years today mid increased couple product over last several I in Midtown and where Manhattan back longer shock most our out of as those what South, triple-digits. thing triple-digit So are and The I earlier is the

that are the trending in flat not redeveloped, are we down marketplace from bit add is view. newbuildings, point older concession this to of the maybe So generally, in basically where leveled we all buildings, thing the at effective rents buildings and a off even from And view, have concessions other I'd where that of between seeing increasing. are point rents are then a time. rent a net we redeveloped seeing would a I say and product point bifurcation encouraging to this see All

pointed disclosure, that client thank just have am to you to than a I me, is you. that be out for even but thank And Okay. full driver All your right, I smarter on help.

credit. to I'm interesting. That's Thanks. you all give happy very the

you. Thank right. All

The with next question in the queue comes from Green Advisor. Daniel Ismail Street

line is open. Your

Thanks. guys. Good morning,

me. from one quick a Just

And provide the market is by for Can weakness rate On you any looks in the you like speaking residential York? page, XX NAV the to cap New color more bps. rising on about that? raised just in that

we small that sure substantially or X of fight And I it's doesn't the of comfortable take was the or that part point or we our that X.X a or say better was not X me shareholder value would thought the of number. is number doesn't of the really any It residential to is, part it but a notch. view, make and the X.X or Company. number are aggressive It's difference, or gang smart a portfolio. in it with know whatever X.X from in am conservatism X. NAV it X.X We up are this we affect our the whether whether it's terms thought better of other, just our the exactly very and to valor and

Fair Thank enough. you.

To market over limited we number. we're have some. I to mean, our support we that that, die But knowledge. going But sword on have not

Okay. The Citi. comes Manny next with in question the Korchman queue from

is proceed. Please Your open. line

Hey. Michael Steve. It's here Bilerman with Good Manny. morning, July, late last July... Steve,

I you was where Hi, Michael. hanging? wondering, were

hanging. I'm

number about on it. frustrated we the of of I'm July, and discount getting have You've the being lease talking and quoting so activities. that has other you a NAV as between comment you said, and went a You you right? up office The And last can over started made additional quote been creating NAV on year, the value you it, fluctuate when NOI the being test. course executing

sort at should share just point narrowing anything? in haven't it the what want gap, that And should and if not ways at about expect But expect so, something I'm when successful been your mind. of wondering, you've you'd that this else market talked I occur, others may the because future of being we entertained something any know buyback that

of and speculate really to something, on hard going to that's non-core we we've to selling industry assets, done hint stock business, think and continue undervalued. again, before, still We I decide is it. and When not to we do think once we off are this, announce to what the spinning not focusing might as our tell do. work we're et going again, terms as restructuring anymore we significantly said it. off when you business, in will we that, And more Once we can't the spinning our in Anybody we cetera. entire even

all the just value. advantage in I like value getting Company feel want value that done of may and know do on of creating It's been that like a that the that's to is you going time that increase to you'd narrow over and what's short to gap changing? things is a number new Do be time highlight marketplace getting not to to don't frustrated make with? you I the the to whether shorter, has go something the route decision totally you last given want that in feel something agree about marketplace with take the what to years this arguably you've that

take by mean What may changing? by do mean you be what advantage you and do

Well, get some event a know, global want be and external think out of have in in or event the that a to other don't environment NAV that in I occurs. uncertainty you there's softer to I there's where don't you the economic marketplace can't a that lot situation, we

the said. just of be would what opposite that think I Well, you

If you're be think know. this market stock to recession it's I'm price, buying hinting not... go would we have want lower, would that down, I you the time don't going at and may stock avoid I that mean, the a to may that we go

I'm other additional I'm is strategic your see thinking assets, liquefying don't be broadly buyback, that, to $XX you and of Well, spin to transactions saying be type that's view that what the not narrow believe stock on may offs, some between additional be split think or sales $XXs? I not doing gap in the stock terms in doing stock may the - of that I can route the go, may more

yes. believe friends that I've do do, just to and your mean, what we every and hint something answer to minute advice, there some we focus shut every we cautioned that My that's it to been me, of by that day. out speculate, do. up we're And going is not appreciate my on of even that's to what might not I

forward Okay. Thank And what appreciate look I seeing out. it. you. I to comes

Michael. Thanks,

question the last in Okay. Steve with Evercore. queue And comes the Sakwa from

proceed. Please open. is line Your

Thanks.

number curious, you York. I'm David, number or they're go commissions, steady? sort over touched of leasing TI or see XX% if being you on a this, of leasing Just of year kind trending next just running mean, flat CapEx and rents see New a just in XX% in can the do terms I had TI that like little you how see over that kind are down commissions you so? holding the that of up, so follow-up.

percentage rent. a of are the realistically a commissions of Leasing function

realistically So to to rent. track going leasing commissions it relates are directly as

missing I'm be I unless it's want significant high generally leasing something, commissions my can be So going reflect as rent to a as growth. because to they

I TI So said, plateaued. think and think variable as to the allowance have those only I relates numbers I

Okay, thanks.

to Mr. the queue questions any at back now turn time, for call remarks. no will have the further Roth so I We over Steven this in closing

and very plan take I emphasize only of just billions South, excited and assets. which our about future will about one said and our putting developments, enormously not Penn on into of remarks, capital Park zero is, XXX accretive. to everybody. cost and Penn which thing, a that financial significant conversation We're Two which all other my has in the be and Central and out want Thanks, I our prospects our One focused it Farley very is has to XXX of all the coming growth

again quarter. talking forward So with next anyway, we're to very enthusiastic. you We look

you participating. This and Thank gentlemen. you, for Thank teleconference. concludes ladies today's

now may You disconnect.