Vornado Realty Trust (VNO) 1 Nov 222022 Q3 Earnings call transcript

Welcome to the Vornado Realty Trust Earnings and Webcast for the Third Quarter of 2022. My name is Vanessa, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] I will now turn the call over to Steve Borenstein, Senior Vice President and Corporate Counsel Steve, you may begin.

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

for Chairman and Officer; comments today On opening are our call Officer. Financial Chief Michael Roth, Steven and from the Executive Chief Franco, management and President

available Steven is now over call Our senior the turn present to will I for also questions. Roth. team and

Thank you, everyone. morning, Steve, good and

last from As headwinds year’s still Michael in we XX% moment, another third year. quarter year to interest this will expect fair with economy of from FFO quarter. a a good Despite and slowing amount from comparable we a had rising cover last rates, up be

slowing on a our below XXX,XXX a feet result this year, timing. and square the – Overall, This square York of next effect interest the of numbers bit feel New growth well XXX,XXX will the rates a effect in feet, We leased the little of is full market, full given we of lot quarter impact. trend. year higher

slowing, deadly is in clearly explain, will York The As capital is their square million Michael markets New feet. economy volatile. pursuing fight The is Fed and inflation. are a robust against serious pipeline X.X our

Further, our extended year, very $XXX so now following modest taken due near-term have actions. million the we Earlier coming coming assets billion, top no due for outstanding and significant our a years. we providing with X a the liquidity X million X priority, we lines XXXX, extended to through and have of debt we totaling debt on next As in XXXX unsecured this maturity, XXXX $X.X only XXXX. credit $XXX in revolving

the In addition, weighted in average supplement, be or providing X caps Page rate now of additional protection financial LIBOR $X on $XXX debt for floating aggregate by of a years, billion debt and we our case Further, months. X.X% protected the above activity fixed, this swaps floating and our rate of which line an by line. interest see as XX $X have billion swapping average rate all may term weighted average Mark-to-market we X.X%. exposure on weighted the of in a describes XX caps million. the basis a Please for of money SOFR

rate environment. So Be higher our in is really loans exposure $XXX only debt. which remaining nothing largely JV protect is mature into as can rate debt aware floating million, that effect, a

Island The very come look now lobby of to of the far ground-up completed to you conducive current at is, not to X reactions that quarter all we Broker are us truly and be are through. second and with down demolition the District. development. of X of and the and XXXX. in give is environment must have happy headwinds scheduled Hotel you area Railroad a Long The be the bustle along our and PENN The will tell PENN complete. to is I all fourth the coming down been say a outstanding. call focus tenant in as course, are now invite or amenities Concourse. skin PENN We PENN take

comment Lastly, our I want on to dividend.

to taxable our in equal income policy to be Our taxable is lower expect XXXX. to our now We dividends income. payout

XXX We rate have asset South. not curve. we will from We assume yield Central income are Park to budgeting no sales the interest and

As the projection XXXX dividend of will Trustees plans size retain with taxable more of us income. our right taxable protection in Board of our allow to such, our – This cash. commensurate

you, to over Now, Michael.

Thank and you, good Steve, everyone. morning,

As we had Steve mentioned, another quarter. good

core experienced we While from business rates, interest headwinds rising some well. our performed

partially just will higher result we share comparable XXXX, greater The this in We’ve an XX.X%. a the accruals year’s as quarter-over-quarter rising that driven and next real was a Page debt. year-over-year. anticipate bridge interest our and have to comparable expense did prior on new interest the amount additional on office The about still we per in rates and of period year’s a $X.XX increased adjusted impact mitigated rent do growth last over be due for rates by quarter. prior NOI Company-wide quarter, debt primarily continued theMART, rate in store our leases, share, for supplement commencement impact for release comparable recovery for full rate earnings for businesses, $X.XX partially in hedging retail financial our our rates of increase of variable X. quarter, increase FFO and the will of per variable up impact third third quarter Steve FFO from an and rising cash expense year, as rates increased from expect to was estate adjustment compared covered. X quarter expense as Third rate this year, Page Notwithstanding lower on XX.X% tax We our third $X.XX or FFO on a the early and provided net at same additional offset higher the debt by interest per variable variable costs year. significant we the share will

theMART Excluding the taxes, solid real to would increase been still accrual X.X%. the estate have adjustments rate

several important rent leases. Our of up very a commencement due retail same-store cash NOI primarily to X.X%, was strong the

benefited quarter adjustment. by was the compared overall office XX% to Our business year’s theMART up prior third also

was higher post-redevelopment. office York due largely lower business to X not New down tenants tenants X.X% rent PENN renewing at paying to bring our in order While in

this backdrop the feet, resilient, XXX,XXX the in market. of for is levels million leasing the reinforcing by New Deal XX A are job volumes are million. the in pre-pandemic the York Class York signed year, led feet, headquarters stands activity Amidst rebound averages. this above last by to volume where its market were third pre-pandemic Manhattan New office quarter now time leasing uncertainty, long-term market above tenants X.X stimulated labor turning XX we $X.X commitments. million use, Year-to-date, was of with including Now committed tight Leasing through at quarter the employment square remains continued city’s office in market-wide economic activity leases large quarter. feet square the at during square and excess of XX% signing surpassing

There’s world word As is the in we acting enter day. tenants though, increasing the uncertainty the the of accordingly. caution are and fourth quarter,

As also the remains critical. space to come spaces, and experience to being office to amenities for commodity for Most of and new businesses requirements, attracting incentivizing is both highest and Tenant companies work developed quality strong back best-in-class product talent. on employees transportation redeveloped high growing. key continue or the buildings believe newly top is reassess to their collaboration in preference between modern is the bifurcation quality with

us to Our demand. tenant well continue to portfolio capture consists largely assets, of of positioning these types

portfolio. office square comprising breadth across In starting our York, team the third and York, foot, San transactions New very quality feet our rents the leasing New $XX our per Chicago high quarter, completed of average square were XXX,XXX During Francisco. XX strong reflecting

negotiation in York pipeline leasing and advanced approximately overall Our feet New square strong remains X.X proposal and million stages. of leases with

Chicago. feet transactions Now, mix showroom theMART in to turning in XX,XXX really XX/XX At square a this activity. and office of XX quarter

Chicago a proposal pickup have quarter. seen the we While remains in during in challenged, the market

with we’re including our with through XXX,XXX Morgan full back large pre-pandemic Partners. expected, XXXX feet, during has except In nicely rebounded three quarters renewal for As the where California foot year. a expansion in last million renewal still leased San feet XX,XXX business street, NOI Stanley Francisco versus XXX Centerview yet, up XXX,XXX tradeshow for levels with at to a not quarter, we the and its square square queue, square $XX.X

strong strong be quarter the GAAP with for California rents. tenants asset very the these locations. reported to where XXX More particularly cash daily were financial leases. once and generating transaction of with new with in leasing very Railroad for again, workers mark-to-market. XX% to Island Francisco, for cash search activity incurred skewing rents mark-to-market. Retail continuing premier the one San Long by broadly in evidenced The tourism the estate positive more significantly modest activity were good see retailers store you’re and in rebound seeing bulk Concourse, starting as real continues the fairly Our leasing renewal a were results redevelop

new However, about the will the and retailer more to be concerns about inflation our stabilizes. leases now. results economy, the change in cautious This them economic environment committing

the minute spend Global and we a was GRESB. retail survey, where let our of group, Americas and the Finally, Vornado listed on regional to a X Sustainability in responded in for office in be Estate selected out sector and a real once REITs as me GRESB leader and Benchmark global that companies again leader. or USA Real one number continue ranking sustainability, number diversify estate all the publicly to XXX

score. our well portfolio time Five market. Star we the reporting rating, XXth as stakeholders In the for GRESB’s again for in and the differentiator A a in increasingly other our addition, public received our to This as area ESG important tenants is for Green and Star for in once distinction scored and and our

market other now. lenders XXXX pause. than this anticipated We the more XXXX and to the are is to now our lenders effectively impacting CMBS the to becoming interest with debt and the right properties hesitant balance Turning markets dealt heightened sponsors. generally the year, rates financial and and had rise markets capital and Overall, and market and focus is shut aggressive most causing lend early volatility challenging best investors maturities. capital sheet significantly The and in markets to

attractive and with maturities this refinancing all risk. have $X Importantly, near-term in spreads, refinancing dealt are protected mid-XXXX largely significant the at of our we as from we given completed billion summer through

transact On there negotiating Without active be the small while now. investors million place right retail difficult challenges, without our assets. front the sales a to sell interest in of financing Notwithstanding to to Fulton from of office XX large with continues York handful contract $XXX and and asset it market, assets. a executed that New of is market a assets stable in sale they

cash, operator to current strong for With in under revolving Q&A. $X.X U.S. of investments billion $X.X $X.X and that, liquidity credit facilities. billion, cash and including it over I’ll bills, undrawn a the $X.X billion turn our our Finally, billion is restricted Treasury

Thank you.

Steve We question-and-answer We our question Instructions] [Operator ISI. first will have now Evercore our session. begin with from Sakwa

a maybe provide how I’m maybe morning. or the of how more requirements for Michael in little maybe Glenn, of Good can just much the and Thanks. to or kind XXXX. early much just feet that relates and that is you pipeline? million are color Steve, into renewals looking XXXX curious on you new X.X of

we Good more we going forward really to morning, the in But, service it’s the tenants versus feet, lot some locking in tend expanding would Steve. [ph] It’s million new spaces we financial we X.X at the more it’s Filling a know BD expanding tenants a new the good coming Glen. new in look empties portfolio. to have will in coming renewals. and terms tenants today have tenants activity. to activity, as pipeline portfolio. or sided from [ph] do; of some we say, It’s I Yeah, then of the cited towards activity, and be mix

just maybe firms, investment private Glen, big banks, any kind these of assume, is And of in equity tenants, asset of managers? terms types tech color on law just hold, but I

less at very, portfolio, Yeah, in Seventh, service still some on our buildings, et also you’re hedge equity is very financial Private as fund active. saying. XXX financial certainly very strong, XXX heavy, Fifth, activity tech, There’s is cetera. our

busier and So like definitely firms the certainly Sixth in financial is busy, portfolio, are XXXX Avenue. law buildings getting particularly

just on and do Steve, curious casino if in that next you sort your how desire something pursue that’s process to past, XX the commented one still downstate. then you’re the interested in to I’m of that licenses think the unfolds of over secondly, XX you’ve And Great. months.

interested. It’s very We to interested, be process. government a continue

December, [ph], they going there, goes. put think, see we’ll it in that ROIC have already how from early think, out first announced And I January. late they’re then, their I to

it competitive expect a to We very process. be

you. Great. Thank me. That’s for it

you. Thank

our have Michael we – from is question next Our question Griffin from next Citi. with

additional of going dividend Maybe Thanks. And be commentary sort can if expecting just back on the heading helpful. frame comments dividend, of size the to Great. how maybe the that right much XXXX. you on any into you’re wondering would

what be I to moving year. around. might it’s would guess And numbers totally for We really still dividend mean, are as It can’t, to board prerogative. inappropriate a next us the be that

interest cost was it. Got million then, leave the then the off And on to in of $XXX in floating? to maybe burn swaps. for those XXXX. to What loan, be those expected about And swap Would term that forward are $XXX executing as or like swaps just million rate back swaps? going plan the it the that embedded still looks

Good morning, Michael.

typical, terms depends a In the think, say, X But you. And would that loan in all-in I of these supplement, that’s all the say sometimes corporate that out that that but a cost But, X Page – less. on on term to – trade. XX there, cite, level bit you in for working as the laid that’s well, little of gave swap a again, assumption, the that’s embedded so embedded what we that basis swaps. rates if numbers is you would credit swaps, of bad. use all, not I not the there’s gives we it’s particular are charge the I you largely on points you

ability different where did, to and the shift example, different year. move asset, have wanted around, we as for around we an we it Long a We this which moved loans, to up, pull sold asset, we those that to Island So it on earlier sold City, asset. we we if

corporate. are by large, There swaps, but asset and flexibility. level the us gives it So certain

went we fixing balance. the we – then at forward If term move ahead potentially not, so, answer loan, next is some the that getting ability swap year, have we’re of and and to that we’ll the XXX look And around.

right. for All me. the it That’s Thanks time. for Great.

Yeah, thank you.

Bonnel Bank We from of have America. with questions our next Camille

front. Hi, on financing the good morning. quarter Busy

lower swaps. on thinking you to versus following Just in you XX% help how interest floating rate behind the the up Can period? your a understand on exposure more us line your with debt reducing decided rate amount

I Well, of on the We’ve to in use. the think number place not XX% right the caps got rest. bulk

So beyond – of or is our the you are look partners at coming net have do there. – any of what’s loans there was And of JV expose, it’s to X%. rates that no year floating about where that when basically hedging to due we exposure – sort collectively sort end desire the

want cash is exposure, rates, in I on got think So, again, we’ve Treasury net bills, remind that’s earning also learning our from banking everybody, a sheet that our of significant we’ve I some about balance higher rates got X%. to just with deployed relationships. higher that’s some been

terms exposure, what even think accurate X%. is. it’s than a more less exposure bit on So net I But, little it’s in of I think, the

going you drop very quarter. speak is And for specifically in saw retail? this to pricing helpful. York to Okay. just That’s spreads we leasing shifting quite New Can a retail, you how about broadly City where think

retail has communicated, couple is view. the think we our think bottomed city, we’ve and that I in last calls, over of the

done, key of I drop bit be up some vacancy forerunner and right is many retailers the are want the actually getting which And, a in to begin sub-markets. when obviously best Rents – our on falling leases But, don’t reflected corrected, footfall But, cases, be are and from situated bottomed, anymore to were our get a highest they have now. have think is to leases rents pricing to start starting seeing to some the – half be depends many right there. the assets sub-markets, the could beginning see think already, they’re be most of I time on rebuilding, best take rents going in not the exposure sub-market vacancy are sub-markets, focused you’re They to done to markets now, one-third move the areas slow peak. locations. we You’re but decline where overall, have in that and could on that the to in that’ll recover. portfolio fact little is big in of the

I time. best locations, economy. just retailers much net-net, as for of leases a little given top right being of city the what’s on looking I roll But, spaces. is they’re New and a the bit still they and depends going market now, the expand trendline standpoint, caution want York of where be very on think cruising on the is But to and ranking where So, it they the focused around want it. the said, where more when the They’re from to

Thank you for taking my question.

respect still market. in recovering retail, a With to retail we are

where back So to volumes yet are they were not pre-pandemic.

the basically and of wholesome. into although, subways at look streets two-thirds it [ph] on city, debrief is in numbers the the what in traffic transportation anecdotally coming you looks was pandemic, If at the pretty buses railroads, the and, the

in is, do market And So much couple a to will need not market. is years. healthy what a year-to-year is to think a the This a quarter-to-quarter say it’s thing. you I we’re more prediction recovery is our of in thing; be very that

Thank you.

Goldfarb Piper Our next from question with is Alexander Sandler.

Hey, billion just of a did retail, the Maybe ago. retail that preferred the JV have good Steve morning, following years Michael. on up you you in number the $X.X that guys and

view rate out refinance balance the Steve, about the value to And I addressed think sort cash still that number coupon Just think, worth a this of is flow more the ability your exposure. does position? get you’ve How $X.X sheet focus, thoughts cash coverage, par? of on that the you The and that, do your as floating of that, you billion X.XX%. of guys,

Michael. It’s morning, Alex. Good

So, questions. let all your to me get try

a understood, par] [I I [ph], think worth equity terms fine, referred and gave and you We know be. worth believe JV build don’t – you’re that our the clearly the There’s value we we left partners value. remains it’s think, than par. so. values still wrote you to think that of sentence still In less it

whatnot again, cash remind not, today strong payment think, And strong. the secure very you, is X.XX%. be the on downs that and to goes though the very assets, some that to rise remain the So, of And XXXX you dividends, time ups to is to flow we standpoint, of a assume preferred on it From will to preferred. over the retail preferred strong. just coverage whether that cash which April continues have coverage and X.XX% I all they and rollover that even from of or preferred In today. is front. our And flow coverage coverage is the expect

Now, your product if last I go what is to category. I question, don’t think opening any right, and my the right refinance markets are you any out, this ability secret. The financing to good now, remarks, not said back in

want So, banks for it and a investors really big down the to and don’t the unless whatnot. shutting year, and are CMBS deploy rest of basically capital. great market client you’re property bond

So financing the don’t. remain the if tough rates market But, you challenging to, fortunately near-term. to retail that have in refinance

to or on rates on pay exorbitant not that have would be today avail prudent. And next and, and the opens so. five But, we’ll And, is capital by it this so, remember, in market the get to X, and if up, need not do when we to X do, we the the cash don’t to year or assets want we at There’s preferred time. piece piece, done this then refinance right? in budget go can do X want our that ourselves or be this

hopefully, had but asked, I that’s the current everything So state.

two it. it at the do collateral. look this Alex, and is second is the the yield elements way. One There’s

the take that of or dividend clearly carry think think, is said I coverage just The very fine. what the we preferred units. the double the on collateral give is Michael

clearly pocket this collateral So a Dividend preferred is price we capital fine. chaotic market the in is very what below and then be. would think volatile, is

instrument. but might so still sound will X So that than think the on were we change and if is trader, a that a a say sub-market short-term less sold that’ll basis, and it, because you you dividend, you of you get

then, Steve, question, dividend. as Okay. And mentioned, you second

in a will comments of make as VNO appreciate determination similar similar, next boat. that year; Should a board read Alexander You we is the through the a on the resizing that the dividend dividend for Alexander’s for well? similar

No.

Okay. Thank you.

Thank you.

Our with Kim next Capital from Markets. question BMO John is

morning. Good you. Thank

environment, lot wondering how in an on You an forward? project particular, the a talked going would you in could with more you was if project, piece much the cautious move have consideration need New posts update the PENN pre-leasing optimistic about office the week there’s and less the development? York any to was there provide the this change forward And to XX. office, of on if use of I to

very John, question. prepared the my the I’m to question. round-up current remarks for I in meant the A couple did it. thanks things, makes development environment I duck going of and that say difficult,

terms number we’re – two of that’s uses to into what So changing and one. that’s something now. get have Number in you going not is

Okay.

wouldn’t rates Central Regarding taxable the South Park on XXX year? I that so of Are protection, a taxable XXX know, talked in pressures South you’ve I the in there it tax year, you other direction Central rising thought see income income Park thoughts is next other next any about businesses other an issue, any but on be fully XXXX? sold. really your being that

is because primary reasons that mean, to our interest rates, The show that higher go going think I said we’re down. that are we XXX% taxable protected. we budgets income not

a income we XXX, no and economy. have from self We have

those you if budgeting any So, we’re gains we’re budgeting asset and – from together, three that all things not take sales.

number that current are I on a we a reluctant mean, will at in that first we think So, probably quarter. But to decision put make time. the I the

And at taxable is year? income dividend XXX% your this of

number, the Tom? is exact What

haven’t a and X.XX, we dividend taxable finalized income. For

What’s our projection?

It’s around that.

Yeah.

for we the is of of our XXXX… So, the that year income dividend think within there XXX% current taxable

...which includes, X.XX.

you. Thank Great.

you. Thank

Daniel with Street. Green Our from is next question Ismail

you. Thank Great.

and you times of these recognize tough curious, answer a question financing transactions. do a lack difficult I I’m the to given office rates But You environment. days? values mentioned cap City the And where is few this New think are just York

activity. there a is, answer, The of lot transaction Daniel

think, first to a I precise New I investor is that interest say remains – in York give all, answer, would difficult of I high. right? the City very there it’s think

see While some and a when opportunity, see they want as you at the terms others clouds, going around look where New on they the global evaluate what’s fundamental have in and York, world, right, base, don’t seem London? their given global so. it as very the to to Doesn’t Is I the come capital, financial is York attractive, issues it I have. think Hong is, looks Kong And capital. black they invest investor And then others to belief U.S., good. New in think, of question anymore? back

in cash a somebody rate, if If financing. to from Sure, have sort basis New at a York, period be of you think, then financing interest a money larger going than a right, lot going then all lot two with you the impact. no. a of scouring less of But now, cap So of wider it’s in right frankly don’t in the But, that’s York, because quarters, sell value. smart on it of up a forced sell I points, see don’t, XX%. Is on market for rate something rate stem New little compressed. is cap a to impact there’s know in it looking if a absence it’ll And if there one market, you’re maybe XX needs market, buyer, I quarter, to cap precision this knows. you’re that, the time. give it’s that’s you’re they they picking who think I this? I activity

impacted are values So XX%.

But don’t assumption, think precision. that anybody can a probably. I reasonable is say think I with

on markets seen debt illiquid. And in before comments A times, you if access They couple entering recession. either are economy are and they the the that. are rioting. expensive highly this of markets. must many unbelievably markets or The recession the We’ve debt capital is

that’s a asset So to sales. big very deterrent

that that The sell to thing is markets, have only of is, transact. second in kinds these people

because buyers distressed And transacting, so, sellers really only weak are buyers. the market only the that trolling the are are

are the really a market, to you of end go have that this market happens a year. to capital kind X And or make you a live year judgment. about the this This the transactional aberrant just of a in where and than is you X So can or think. we into But not we’re out it’ll sooner one return. year is either through

it. Got

more significantly One companies they of my judgment, to the mark-to-market distress where below office have point, The even stocks comment. gone that corrected the in number. have portfolio significantly of the below the

Got it. I appreciate the thoughts.

I’m where Are curious abating you and these for the one last are are new think trending seeing concessions concessions leases you stabilization days. any Glen, guys Just or on negotiating? you

I concessions I’m saying, they’ve haven’t [T have too stabilized. stabilized. unquote quote are They [ph] still think but high, abated, eyes]

seeing getting of buildings, stabilized. terms that of helping in terms than tenants the the eyes certainly You’re but in T I more build has historically, into think of more space them out number

fallen the We’re a up the market. not Rents and strange T eyes well. seeing inducements if have gone really better had sort as of going on buildings, anything, they’re up. But the

of in pound opposed the inducements the their rent flesh taking reductions. is market as the in So

a Thanks it. Got lot.

you. Thank

from Deutsche with is question Bank. next Our Johnston Derek

So, perhaps, greater will employers power office Thank a drive in there business slowdown view? guess, the In likely Good can leaders, for is tipping morning, with everyone. a be I of sustainable and, greater employees? the the versus view office you. and that balance recession favoring your utilization, your discussions utilization point

the will have employee is and Recently debunked to I opposed office. a And workspace, table. power piece that. office out scamper the wrote I view the that therefore that came no that employee, recently, on he back the into he that the as changes the from the the do unemployment, however, believe, kitchen basically from I gets to where idea, employer gets recession, just being going aspect in overpower to the believe people collegial and think the friends, change cetera, to will at the productive. be table. But, The the that pain back a of temptation to over of recession, I will that the office, time, that’s will the the kitchen will change, want colleagues it’s more with be where office et don’t work, culture sit higher marketplace. and

Got and you. it it. Appreciate thank

said, have been and hope But, have you’ve unfair. to Just Like this this REITs it is sidelined hybrid the picture recession. to this concern movie but Or really going you’ve before. by one, seen do, you What guys work big you. on sentiment take? don’t is I we secular more this before, likely flip Steve, Office longer-term? now investors you another investor think help positive ultimately, seen I can what Thank as

believed of sell the that game high. buy the were and rules low always to I’ve

to what distress They’re are And few there we the have that the buy market, now market. is at distressed is very assets it’s are prices, on in hard illiquid. certainly So but very stock that the assets.

mean, like but my know, buy. family to to that’s in don’t recessions investing, and buy I personal and time from I so, And the we’d

going start for take it that the stocks turns, to And of that – realizing what’s guess happen. as So gallops these end cheap. before you don’t stock stupid, but market way and stupid, ahead, just I is, know, the guys recessions. my always are is to will

I well. think as do tell what the catalyst you will I is. that the office can’t business

Thank you, sir.

from Anthony We with have Paolone next JPMorgan. our question

help move in or ups, roll thank bit in quarter. downs? like Yeah, and Can as you. office to expiring peel retail looking at you first there’s And whether give have disproportionate lease not that and just us your you any outs sense the or known it big expirations, roll a maybe XXXX a seems amount back

It’s Glen.

mix of and As to only a the XXX in office that’s the the XXX, in it year, not Park, quarter. XXXX, our of properties, Broadway, throughout really and first it’s relates XXXX XXX X

unique buildings, when very very, market, and those some our attacking those a at look we others course, like will have space. quality you the good of the lease XXX were highest to trying action of you, and XXX. like tell I on assets characteristic and most in amongst We’re, buildings of expirations, all

out coming the expirations where in that’s XXXX. are So

Okay. there? about the to anything in quarter And how first call retail out

I key The we’ve definitely, and – X I some may will discussions, There’s it’s the given down just Tony, remain do most said, just X to tenants happen still we’re where given, I think, even do keep discussions fluid renewed pretty precision, net-net, fluid. more one getting renew, likely right now, be income where doing renew if is, but it, or tell not what’s got answer the you Michael. I could rolling, and discussion going can’t all there.

one tradeshows some to think the back, Okay, where then the has on And that in you annual gotten asset? us the run I item. back about, and got it. seems just follow-up the EBITDA are think maybe years, tax on like March, Can you know have just rate help it

is today to – also be before mid-XXs. the leaving, mid-XXs, know in in we’re But, probably so, is that low- casual back. comes probably we the think bottoms business I the going it to and

that back. of that that run the decent year, of numbers a to terms mid-XXs before probably a we So at probably end is rate, run rate rebuild low- in the

What’s Okay. at potential Difficulty] end? top building, Thank [Technical if it’s you. the the

in back Ultimately, million, upside tradeshow. north the We of additional $XXX it. there’s think building do our I think get is the should right? some job re-lease to So

number hopefully north in So it gets that back to it’s of the next, within XX $XXX months million. called,

year, will would but the – upon volatile so to not happen story. turns about in before the potential goes XX, we XXs, next will little assets. down back to for like, it as based we So expect than but the and it much The future, it which right the bit now that’s as more XXX, up happen it’s into go

Okay. I that. appreciate

Yes, sir.

Thank you.

Our next with Nick Scotiabank. Yulico question is from

that Broadway? no wanted Thanks. to want to just at the just Meta, from recent with there’s news for your seeing space Farley them or I impact confirm you’re see given XXX

XXX the happen very is at their this to time utilization we is properties. big There’s no to buildings credit, love And company recent to but point one no looking announcements. Farley, of financial met from a view. the on relates strong. It’s almost of a tenant. embarrassing bit say, spectacular impact a of are they The both impact They little because on

– So a million cash have greater free a a of spending discretionary. year number or they the similar amount $XX amount flow you what’s after which it, about when R&D, think on is

So cash have almost They is above their $XX million flow a debt. no year. well

cash think did debt issue in the first balances or They that I their of XXs like recently. dollars. billions tiny of they have millions something dollars,

over A little billion. $XX

That Okay. works.

they view, company. of of And great have these and Instagram so, financial a Facebook, They platforms huge are a point from WhatsApp.

Yeah, because what done that have guy a now in to off look the on so And they’re mission. he’s back past.

this. is will it the believe certainly impair not be to it’s successful. answer new extraordinarily I they Even the are it a for sanctity successful, unbelievable not trying if that, of develop universe. will So

we’re and vendors friends, we’re happy to we’re be So so. them, and honored to

Thanks. Appreciate that, Steve.

on is retail question JV. the other one Just

I NOI property. bit? and in might the the a back NOI world. up then supplement actually was the it this actually the higher at the today, I’m But, in like, very in cap deal cap a also look I know, I it at is presumably, are mean, impair that based original the struck investment you to feels looking So, think want when everything I going rates the was I be you But similar X.X at in see, when XXXX. to just deal XXXX, struck, it that. on on did rate, And confirm

trying should to is of from annual to impairment the dynamic think of have on just that you possibility test there the if do any the when we with understand the value that? So JV,

Nick. Hey,

just one I My struck numbers as of terms Because bankrupt, on when And, of on in is since from they’re the from downplayed is recollection the still portfolio went little we the forever outs original and had have and the was So, versus you don’t in we recall, exact of, deal income the deal, struck. XXXX down Fifth me. a front knowing now when that ins vacancy but space, bit. so then. the number may the in

struck very out, net-net been frankly So, point I played the is durable. you think booming deal, higher correctly now, and signage than like income but the But, the we touch. is down right has when

the there’ll Some leases of be roll, impact. but some

at what to think we and work. did south I the struck performed having don’t that impaired. original And look I’m give – assumption we Nick, correct, I Again, that. behalf that’s frankly I take terms don’t we an in – of value at the billion. every what party from quarter, they which of venture, appraisal going sort provide the independent XXXX, want the that, deal on fine. fair impairment, and it is of the But is third memory, have X, that So it impaired X, there’s we without independent we $X drives the think we answer do was their we you’re number of it, in you

at their work So, end of the the year, evaluate. they’ll and do we’ll

will can’t it predict I whether won’t So or be.

certainly market, how is yet. – your there’ll impairments given be imperative our I say any and it’s upcoming is think the priced the significantly, certainly comments in stock market further whether on but can’t I

Michael. Thanks, Okay.

Yeah.

We have question our Morgan with Kamdem from Stanley. next Ronald

Hey, me. ones of quick for couple a

I hoping maybe economy slowing hybrid? so leasing Just side, just you also about, you the is by be activity, And the could a this little of, the tenant forth, of it and to would provide color helpful? going back sort was more sub-sectors, talked bit it sort Is from economy?

more for certainly hesitant economy, CEOs are due I the sure. think, to

of couple this our there leases tell We’re of not I’ll generally, more specifically. big much so market economy, the is by discussions. that tech But, more due tech signed hesitancy quarter the hybrid to by certainly in is caution, some in couple a slowed. a or those. small you, sector, think, seeing the the more tell by I activity, to medium And I’ll you, size

second board understand – dividend. just minus was thinking it place it back be the And to that the they’re trying of discussing basis? sort the my of is question I for I’m get cash we sense are talked sort for right just dividend into solve to for going looking what plus that, it’s CapEx, know, should to at operating about, get sustainable million decision, to you to the pieces about then And how that then Great. or of is – going to what land of flow? you’re the $XXX to still banks? just a thinking trying a about just

already I’ve say the dividend more have I on don’t to anything other said. than what

first that board meeting. the to quarter at get will We

not math everybody rate. but little can run X% stock XX% and their own guesstimate, you and I between business. I’m I do that trades the think is tell do and one guesstimating can the dividend factoid

So something’s already that I’ll stand But that with indicates I’ve what think wrong. said. I

you. all Great. questions. Thank That’s my

Yes, sir. Thank you.

Thank you.

Malhotra Our Vikram from next is with question Mizuho.

and to I what want get things macro improving, few inflecting a last wise, bigger taking years you’ve dividend. seem are rates so Thanks just now debt wise, for micro – But then contemplating for your lot a maybe just at is to question. I’m much fundamentals. to picture thoughts level of It have more the to cutting been swapped return feels Steve. for of you rate your leasing a at I guess, sort improving. just X work like contemplating on was the according calls, with –

sounds this a balance you can your you of dividend bridge? like like trying to to I than more issue said, What all a in X-to X-year I’m us this effectuate action, issue. it’s issue. it the just X-year a But are macro and X-year micro you like wise guess, so in And X-year near-term, swap? wise forecasting help it’s

economy the obviously, see, to that the it’s tune probably been let’s So has hyped destructive. very

deadly reasons, it. politics, And, reasons, earnest have said, the job whatever get Fed So different stopping different why as to for is and runaway but think whatever into is we and want for inflation. I don’t this – about I doing their

rates, I effect manner, et stock of market, whole illustrated cetera. an rates the tool, very have rapid In course, by one number had their enormous as already. mean, the interest is So interest a market, the

just to interest it reasons, multiple it’s win is one different protect environment. a most end, this how So, going to aggressively takes. the went In to against the battle. for floating long runaway of was of We our rate the important matter which protect Fed rate a exposure

quickly. would this of number. So is firm read so our efficient anything and to then into economy not fail steep we they and swaps – recession, The have charts if for look They aggressively at the discussions out. the past I I put tell the X-year they fairly a that generally do that had we think, based on pretty expect look it There at years, and did most covered. curve, and you view the then activity. execution down was at past basically we graphs future, of go up into sort come They the you upon X and that.

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appropriate. about dividend sheet, is we to balance our think we So overpay protected our we think

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you. Thank

as in assuming. the the X- fundamentals macro comment X-year So to out to that just more, down, opposed you office laid your I’m on is that

numbers I on know up following Just the are moving that, around…

X The prediction. to X is macro a years

square Okay. where fundamentals do in fundamentals you that And how be will timeframe? office

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of are New think success. an we’re We another York that what PENN extraordinary District. be to in is going doing convicted and absolutely PENN We the strongly about center

very, So very about that. we’re very, excited

going Okay. But before that. you that, know relate I moving are to ask out. and once numbers I to the just was

but a historical may be, assume historical So ratio, we full assume to as going is look to line are I’m the payout in at should think not is asking model whatever the like year? a we you where levels, be, AFFO if as we fair numbers to dividend a it next cut payout with

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to another quarter full we’ve it So got go.

it, the the and in over in we’re when make quarter. know budgeting decision process, we that first so, we we And will

you. Thank

question Steve We with Sakwa from have a follow up ISI. Evercore

low private big persist. of foot, just financing discounts But, – today, square guess, per you there’s Thanks. close and sure, numbers, gaps very big, where mentioned about cap markets Steve, that doesn’t price valuation, traded you Historically, are given come sectors where high rate. the seem that a implied the seen equity very lot and we’ve in I on in I’m likely.

time that is you wait and just the for gap? are steps are financing that kind steps to of you’re to and to can there Or try take? contemplating patient where you’ve Or this improve? So there be a got close markets

too. want to question duck that I almost

now. is see parse that may if which can its something right may can’t all is buyout of debt, this there, company value. has and predict How into leveraged I The not it. I or extraordinary and me Let in environment. work out our model, equity value plays it The

Well, you’ve guess separation District I talked I the in about a which past know of maybe assets spin into was the out, PENN on the hold.

you need You to to able said which stock, buybacks meaningful But assets be you a in would sell way. probably to only seems buy do back difficult.

So you like just close could do help tied. gap. seems missing that to here your we anything the hands are are just wondering, I’m

one on is number priority. the the our sheet of And still balance protection is spinout The the table.

That’s Got Thanks. it. it.

Steve. Thanks,

Thank you, sir.

We further have no in queue. questions

appreciate thank next when? is you joining much. all We and call Well, you – us the very

Valentine’s Day, XX. Tuesday, February

next the Michael Day. says is lovable The call, Valentine’s

my guess, thank much. to So, doing. the in who by our and Valentine’s of Thanks you you of to show down take up extraordinary see we’re on those Thanks through red PENN. or very haven’t all joining. Please sincere and like year invitations there for toured much. advantage [ph]. get of yet. great and you We’d invitation, to seen we’ll it’s it the take what all I way, you Day. you And a come Have you It’s rest down very

Ladies today’s this conference. participation. and for Thank your gentlemen, concludes you

may You disconnect. now