Vornado Realty Trust (VNO) 13 Feb 242023 Q4 Earnings call transcript

Good morning and welcome to the Vornado Realty Trust Fourth Quarter 2023 Earnings Call. My name is Andrea and I will be your operator for today's call. This call is being recorded for replay purposes. [Operator Instructions].

I will now turn the call over to Mr. and President Senior Borenstein, Corporate Counsel. Steve ahead. go Please

most the Earnings Welcome we afternoon, filed well annual XX-K as Quarter documents, financial Commission. non-GAAP and earnings available to our Realty directly Trust our on release, measures with Form on call, packages we today's Vornado documents and website, our www.vno.com, during Call. are these measures report and under issued as and GAAP Exchange Form These of the Yesterday discuss comparable release Investor financial certain Fourth included Relations to earnings Securities Reconciliations information our the are supplemental section. financial In quarter fourth these our measures. will in supplement. XX-K

forward-looking statements Securities XX-K actual from Commission, statements. report that may Please December statements differ annual materially aware and of may other to update undertake uncertainties filings due may with and the information time-sensitive and for a regarding this be does Please statements XX, deemed include made results company uncertainties. accurate these forward-looking that The duty variety on to our factors. during and Exchange of a refer risks, our be call only risks The information including more the any today's be as these Form not for call XXXX, ended date. to may year

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

questions. Our senior also available team is and present for

Roth. turn now to the will call Steven I over

right a everyone. and The good a Steve year note good the on with on quarter morning, you, the quarter. ended target. and Thank year were We fourth high

a year through interest will the It's continued important the negatively I well. our the to has affected expected, and reverse will in dramatic perform to as carry increase results recede. rates. in year moment. by that with quarter note business rates you will expect Although our Michael but interest were This next review as

leased New feet. In This won leasing Gold our XXX,XXX square City York office team the we Medal. year, quarter, fourth the

For million over office market rents gold and the year, of leased as $XX a we year $XXX foot tightening X.X stuff, foot, rents. square we X.X more In square for markets million square but quarter feet at still is tightening were even leasing remain -- are at the and the and the the Average record-breaking $XXX starting The challenged year, we respectively. the recovery capital medal foothills and leased per full feet. on even square for speak. slightly

so of are Foreclosures in front is and givebacks and, us still therefore, the opportunity.

Michael and has I and York retail As City last New bottomed the have on rapidly. in recovering calls, is few said

in prime other own announced major the deals million. bought million $XXX peak Prada And as Avenue While activity luxury global use retailers, Kering X recovery. strength stores. deal December, and $XXX for about a their Upper reach and rents of very X way big to news. level have pricing feel the we more there's good to was ago, retail the was blockbuster One Fifth of retail properties years and go In

$XXX numbers, half block Upper call million Avenue. about on So in round front it for Fifth a

most on is only most we New London, own This investing in York, country. important important aggressively Paris. their in the our cities, world the retailers in estate So the in world street for important have now retail use happening real the most

of Upper can share sure similar I'm mark here. of venture, our a available we quality. this very half personally Fifth XX% market XX% X AAA do joint own so in take blocks -- we X the in blocks you Avenue our Now half all share, in -- because retail blocks math

that in blocks. full best venture, X own the same joint also We

business sign in Times blocks the largest that be half So X and have in would town. Square we

at complete been public have X X, created long taken Street the sure and of promenade All we an and surrounding our The double a across the about just PENN the now Directly quite will XXrd space, setback construction be our block-wide XX XX% changer. of say about combined I completed the this, with the the a Street are Seventh and front ground, which open game for PENN creating is plazas XXrd renovation X PENN in we It's together enormous PENN Avenue, Penn with is ride Hotel announced majestic. of site. to might plazas. huge down

must If you immediate Vornado, is in are a this an of interested are see. or go Vornado shareholder

colleagues that. their come workers now in CBD The now Office alone a by than cutoff office total the in threat creates of to funny The the apocalypse home offices survived handily world from [indiscernible] home balance ways and passing, opportunity. end, the And e-commerce the gather grow the will end, major and their with office work cities table. the leading equation the we total involving capital in of New with on a supply-demand have is hometown at bring turns having market in will But York, landlords' retail continue and kitchen America markets. rather the new blacklisting apocalypse will at into and be supply. thrive, In attack. our of a

New challenges obsolete, XXX York, anything investors, say, There is and the remain of, but in capital now. forward-looking or This feet time over yet. square space. the not can't unrentable is build million cycle irrelevance of evaporation in You for markets these frozen old,

My colleagues Vornado and optimistic I excited. and at are

Now over to Michael.

office year, XXXX to be Thank you, resilient. morning, was Steve proved challenging Though good core and businesses a and retail our everyone.

previously up we that communicated. as York the same-store to from up was due compared to expense, year New interest the in year, which fourth healthy the FFO with for was XXXX, per $X.XX quarter was increased business X.X% in and X% a largely year. down cash NOI for last Comparable overall is $X.XX Our share the adjusted line expectations

driven for quarter, sold a per fourth Fourth increased to per quarter as decrease quarter comparable was share Overall, G&A $X.XX. year's flat and and by of was decrease in adjusted core FFO business properties. lower from was $X.XX FFO $X.XX the last entire the share the compared

We supplement. our and financial have in a quarter-over-quarter earnings release provided in bridge our

We we to should $XX included venture noncash of during not to noted fourth that exit in related accordance be intend FFO. It NAREIT's that impairment charge assets charges next joint years. impairment primarily the million with this quarter, recorded in the is in FFO definition, few

XXXX. to turning Now

rates variable current be a XXXX, we remains roughly FFO $X.XX which project already forecasting the We to down be our in XXXX be higher interest expense the from continue While market. net to rates impact hedges interest economic expect to on higher challenging impacted debt. and from by to in higher our extending seems due comparable environment, at

as Additionally, these Avenue. and up will over temporary earnings the This to we is XXX leases this XXX be at a have chunk XXXX there but Americas, already turn spaces. XXXX. certain ding the won't in leased begin Park as GAAP good Avenue earnings Broadway a in we Primarily of space of

lease increase We expect rates and and XXXX down earnings other vacancies online. will from from to represent come income and the as trend trough of meaningly PENN up the in for as there our earnings

markets. leasing turning to the Now

Competitive healthy, recovery more as space York in by days fueled X for providing office year is ensued conditions is strong X The to XXXX continued on for is are enter favorable the growth. the city are is than to clearly market. experience pandemic the leasing since employment nationally space office, tightening, we note. continues leasing sublease A decline the XXXX, ended support a New least back week. the charge per development Class market in economy and most March in in leading And market any Manhattan thinning in as the strong the new pipeline. a XXXX, employers at higher-end

companies into is which that needs, clarity their on Now space tenant greater more translating leasing have is growing, demand transactions.

highest evaporating, strong rents A supply Activity tenants redeveloped attract Class on and Grand they buildings focused as increasingly retain been new the at are best rising. and seek has the vacancy Penn less in talent. than and Station XX% to near Central buildings with Station, With quality

has portfolio major Our that bear this, outperform as a the of marketplace, stats beneficiary the this we Steve consistently earlier. best-in-class been trend, out mentioned

rents X.X triple-digit foot starting with feet at million starting leased $XX we feet industry-leading rents. per million X.X square square XXXX, and average In of

we upcoming King & XX tenant Avenue. significant our following in with leases and at with XXXX customers. roll assets in at Selendy the Wakefield Americas important GIC and most Tenth strides Avenue, at XXX Cushman and vacancy Gay Importantly, the PJT Citadel addressing Avenue XXX our Partners at made & Spalding, Park Shopify Avenue, some important of of Park at

and XXX,XXX at new PENN square strong leases X, of with momentum we feet by highlighted deals, Samsung another Additionally, Genuity. Canaccord with maintained

District, increase PENN what reminder, a feet per rents efforts at our of of over as we million leased starting started on buildings the since square X.X office foot, square we have in a previously. significant achieved average redevelopment $XX these Just

at fourth the million market's comprising is with leases Even in currently pipeline robust. leasing XXXX XXX,XXX different almost we very of We activity stages negotiation, as close into feet new with balanced completed Our XX to upturn XXXX, renewal mix of rents another quarter our square and negotiation of a heading feet leases leasing foot. led $XXX at our volume our of per starting overall strong pipeline including in X deals. have feet XXX,XXX

capital the markets to Turning now.

with for stability problem remain are in the some as we Fixed challenging quarters. office office past markets While investors income the deal loans, again office for the significantly spreads XXXX. are starting potentially very unsecured have on high-quality with and couple over see to of bond tightened banks Fed continue cutting rates to financing constructive

now away we And supply. they financing for being financing More loans be mortgage office. the has will lenders bottomed. types current levels. or healthy refinanceable across property office their appetite wide That the no at keep restructured for have as market on to extended is now new financing which sector Conversely, retail have construction a a most that open, said, from lid should broadly, aren't still most in are market

our we on in liquidity. focused shape with very financing sheet maintaining strong strength. balance Even good As sheet continue remains remain always, challenging to this in environment, balance

We and on progress working pushing are good out with the which maturities our actively lenders loans, this mature making year. our

revolving billion, cash undrawn restricted of is $X.X liquidity including under facilities. $X.X current cash and a $X.X billion billion and Our strong a $X.X credit billion

the to over With it for that, operator turn Q&A. I'll

[Operator Instructions]. Steve question first from comes Sakwa Evercore ISI. of And our

guess, the for maybe I guess you us talked is a X of of feet you kind that the discussion, how 'XX? first that, in year just you Are tell maybe And expirations share square the could of kind there that or about, us? much million the as Michael on bit portfolio, can you much for that Glen, existing question of I upcoming pipeline, large might know you that for just about move-outs in that X? such development any that could this how PENN talk about known with is little

Steve, it's Glen.

is and of that that's in there, in spread the PENN we X. pipeline So PENN remarks, mentioned a opening there including good X the

activity is thinks this strengthen has X tour So both continues The charts. volume to the is Everyone they've wow, properties. reception better off ever excellent, than at seen. at PENN been thing nothing a

include the X. at X both PENN does So pipeline activity PENN and

'XX. away put to continue in 'XX of As move it we Park, that it, and feet very we market 'XX in attacked course, we've great over here, expiring XX% Equitable. of re-leased Broadway, we and in as -- more now media that leased [indiscernible] more far. bulge XXX tech, thus On At with and perform the the and to facing, PJT, I along expect of XXX,XXX a expirations big XX the XXXX, location building, be which that space the well to is expiring feet were XXX building the XXX,XXX given was expiring relates was we've but great building in think, bones. already At between that its of than 'XX we we big

Just a XXX, saying Are have that...? quick Meta does a follow-up. you expiration that

Meta It of of does. expiration year. It a XXX,XXX is this feet June in

Meta. the rest is Of what's left,

Yes.

have another XXX,XXX long the Meta, we'll building. in after expiration, the term Steve, feet So,

guess you that makes on sense of Okay. the by which But second noticed the guys, unchanged. certainly challenging then just kept you the PENN just And stabilization I a also you yield year, kept question, out the given Great. market pushed today. -- the I X

just I continue perspective, leasing you to drag somewhat an does help soon, that? from lack occur So a of to 'XX year And from doesn't just to through create potential us begin capitalize can that kind accounting of on if the this earnings in project? that costs think guess, ability

take-up a delivery out it's It's reaction But has taken there. gotten been longer little respect going referenced, did The the as outstanding. to is, Steve, here Michael. to get answer to stabilization it's we on push just with as to 'XX. it Glen

we that pushed said, as be is the include odd we're based yield does cost, that well so being out. $XXX So to on to pick trying ] up. million The not But we realistic it expect and [ carry.

NOI base the over original cost. that's So

drag have So that's and guess, we I baked We in feel a about beyond not the you. simple 'XX, feel done, if it'll what we math for good pipeline potentially it's now. right but

from question of comes Citi. next Griffin Michael The

or of in know the developments? about I new seeing you be? allocation kind in advantage it priorities, kind those, maybe opening at when could stock relative opportunities Steve, starting buying your make you look talked sense the opportunities back capital would maybe to of market. there And remarks, you're you out what your Can take stressed those quantify to of

stock of one is allocation. first back There the capital our are opportunities, usage X or buying

is offensively third acquiring second little assets. debt paying and And off is deleveraging a The new the bit.

we the do. any expiries. go I only the I've -- in I distressed front don't and assets. not debt givebacks the the in then we pace, is new foreclosures are us. so what interested on really accelerated our we opportunities stock, at prices. that think priority that, as are have the of been stock the to the after The think We at have assets #X But time. we acquiring comments over an I to as -- will might And accelerating still said, opportunistically have And -- price react debt to need

rent of should I future a extrapolate but of we if wondering from Great. rent is and in own comment kind know this you things I XX% this And perspective? a a could building you recent about there rent tenant terms leasing from a that and news come at worry the on XXX reduction to roll Madison. was of sign maybe then of only a

this they The got interesting get always some But case, right. it thing is, dead it of industry the wrong. papers, they

facts the that think number. I the number net are a was $XX

$XXX is so if So about I the it's than telling low a up, $XXX you little but guess. foot foot. a a -- it's gross it's $XXs, it less in Glen me,

Camille comes Bonnel of The next from of Bank question America.

on this will more you in to lack track of horizon, overall do Can you XXXX? it talk your did with the bit of the in And new levels retention a portfolio versus How 'XX? supply the up the expectations? think pick

It's Glen.

was rate strong. retention Our

definitely of gotten I over we blocks forward, us on mentioned, that lease makers the We're decision the done, than than pipeline and we've now And to few quality As who the are leasing had less there's went because them. less past in thought expiring of available that have the better renewals, expirations. referenced, been originally CEOs, thing that activity earlier very these we coming 'XX. that finding at the years of to are space they have we good our beginning forward tenants

is forward program We're I during very the especially with many seeing in 'XX leasing and than of 'XX what going good in talks we're now it's the our in say it definitively, our would numbers, showing with we activity renewal volume tenants had I stronger and been. already. think So had

a good point. make You

I think said with of the you lack supply.

the healthy, going anything in soon market. they market, So very you the pretty or to this are capital dynamics get cause office can't build which very,

have think feet. said retrofitted, new which that to I in around of The is of coming somewhere are of which stock trend the older high-quality the supply next the being are want no are supply obsolete or be will buildings, number and space and which square there over that the to years, those new eaten last were tenants buildings I irrelevant that million -- And completely built So buildings, seem is up. on evaporate. cycle is XXX all and stream. the and XXX so either been million brand buildings just Those will last

square different foot XXX the not is is totally which XXX a high something we're dealing supply-demand foot, with we're equation. is million in square dealing somewhere with what million So which marketplace, a

bit bright there. looking the the that can pipeline in to a seems you of about leasing given your And how for spot is a business? Appreciate talk also be your of retail color portfolio, side

you is that appreciate bright I Sure. recognizing a spot. retail

wrote own everything I the and investors off think still York happened City, like that the retail remarks. most marketplace, feels with in it the in it New alluded opening we quality highest Steve as that's forgotten and his to in

property assets. So these scarce are

couple rollover there's across talked tenant the really in value on We got quarters We've the or recognized. last those vacancy tenants and think continues And the Where I cases, some are multiple have it about board, spaces. occurring, activity is in being rebounding. leasing spaces. the activity, all rents clearly for our of we pipeline.

I right coming based of what's sort we're So would on just We're now. stay tuned. in terms down optimistic the say, what pipe of on working

There quality is block financial the retail, half noticed, then a half And for of have the marketplace is highest which I blocks new the you price. in wants. best of metric is I got definitely a finite a which retail what we place. hope supply space, lot And called

that 'XX the higher less levels? And did I forward? those that on current are And since pool. PENN development the appreciate year quite a Just but is Is pick X going to of managed this any last it some pandemic for your additional expense. well to the there interest control that. due just from stock will side, now G&A instance, keep for at capitalized reoccurring out G&A the up event you've key considerations costs finally, your or program

talent But event. compensation you're generally will felt difficult No, our the think which I roll is that G&A, to referencing plans capitalized place environment. a important will onetime we put some a in was of be given in that comparable. retain interest off what

in those, we heavily tied will quite to entirely years. June, the X do tied well. do if well, X the quite then implemented -- next stock performance to And employees over the And so X, shareholders

So that expense to, will I think, get this was start elevated in as normalize 'XX. into And year. we that

many expense are writing how the plan? off we years comp the Tom, for

accelerated. [indiscernible] years X it's So

say again... it So,

[indiscernible] accelerated.

So the period. equity expense comp a writing we over we're June in off issued X-year that the is plan

And the mountain mountain. enormously said that to go as rolls So you the will benefit the I G&A climb off. in think the remarks, of and you then side shortly my other I

earnings, reduce had actually guess And going the -- begins So the but well, the rise the big will. rates, they which somewhere are that's in to That then is similarly, X our government interest substantially. the penalized pretty to as -- rates big that's reverse I thing. those

Now similarly, was think, that. Michael from and up, on income come to fill will -- going said independent of or turnover our that lease his again, hit I spaces be expiry those word, were dinged, [indiscernible] the board. will by earnings expiry Once

So these reverse. in our are temporary which absolutely earnings will reductions

The next from John question BMO. of comes Kim

retail street you telling on Or update going commentary think Are into and your market just our rents -- us how to this looking to pricing this recovered, Or going is to are it's strength? has you do all Given been improve? really strong. be very the sell estimates? the to and

John. from our from part may really a target year-to-year, bottom. of we evaporated its that that now cetera. from the every of has the the from already e-commerce, believe advantage by all bounce assets And selling increased retail. the not here has and first had is were We on asset sold a assets core. prices that in take And thing back threatened chunk Hi, a we of retail mean, vogue. has once while. dramatically we're by back the thought enjoying assets retail those the become Well, of that I et the we prices We've own

well are to we're So to we've that absolutely ago? and the Probably but convinced rise. they're more certainly rise from X rise they sell that Will some were rents may going peak not to here. pricing they going years some, sold we

peak In you you'll established you originally words, you think reached same that Do have level pricing joint other the and venture? Okay. got its when assets pricing from...? get

not be. delighted going our We're able to what we achieve were the joint to that venture. speculate pricing pricing on will We're with last the in

-- it's that's speculation. John,

levels the and Steve stretch and we're And talked I not say then could to our think -- portfolio be that over back Prada that the look worth, pricing Now time. paid if it's at blocks. and who half back analyze a about will those or you those at knows Kering you get levels, what to right?

But seeing who thing you're retailers important think of saying I most have I We be there forever. Avenue want is, critically world is think Fifth most is, to the what X the us. important you the important to in are

price be there. are history animal And pay of I is, meaningful to going. prepared the think We the get these to a spirits things

make position. are Fifth have behind secure You don't we need sure to saying, them that on a think maybe retailers other we our place and

think these don't I a So that occur the transactions stretch X to on Fifth. last aren't it's that think

that joint you there it Michael, impairment Are to that And mentioned assets so, you've ones Is venture you're looking they? venture taken you're are this discussing? other an quarter assets? this which if joint retail And related to exit.

the is not Retail, said. we've Yes, as past the retail. us, worst

much exit convention, a a next it what handful were accounting again, ventures of the you than the office the joint Now methodology accounting different intend of impairment. to should And the generally, results be -- they're assets Street to It's X all for know thus proceeds accounting and But realized, wholly treatment, now, The over approach to in events, impairment handful TBD. is well accounting is a we the guys different of the as X smaller years smaller these from retail they're really an that by given will treatment, ultimate assets. this joint that a assets, owned handful venture. assets. relates in just and

this doubt no have values fallen. that is there cycle, But in

to rates an value. that enormous X.X% has interest from when on go effect X% So

as as that And impairments small they the actually. pleased so were therefore, I'm were very

just include XXX or confirm, to does not Cal? this And XXXX

No.

correct. That's

from comes Dylan next question of The Green Burzinski Street.

Okay.

office and Just X retail quick the side both ones things. for occupancy on of

as fair a -- that sort sounds into the and should it XXXX. Is like you of beyond? started a that characterization? leased And New occupancy look up have see already bottom should of throughout guys recovery -- out XXXX pretty it move-outs office, some for swift we as York So that

Glen. It's

I think that's fair.

I back see the on dip up. quarters about on what over And the pipeline, you'll come talked we'll based think earlier. based it coming we right

think I characterize what fair it's you it. Yes.

overall. 'XX flattish Probably though for

there about just hang Just a hang word on, -- word occupancy. on, on a

the market teens. in the So occupancy is high

So our south is, XX% of occupancy give around XX%. or take, [indiscernible]

back between over look our it occupancy XX%, large our you XX% they you over difference hair XXX% XX%. XX is If over history, foot on vacancy, and never The normal a a get call is XX%, kind million XXX% of portfolio. square like structural to

So our pretty -- we that's let's -- occupancy the think difference good a performance we do really which is market. and between is XX% say XX%, really we better, but is can the X%, better think vacancy in will between we our do soft difference

our is that earnings. as thing increase to that's the in very we a next significant XX% normal, ramped the when XX%, to Now space, up the revert from markets

for that we us front in of have So sure.

into I my question, that things. on sort And side the Great. think is leads kind next of of of retail

we at think you there portfolio given guys the the that today, your just, in about regarding of pipeline? how the high think say, out leasing you were XXs, you is I disclosure, do the some guys we occupancy laid I As look recovery mid-XXs. guess comments pre-COVID

the ago. that's -- occupancy. And really includes that next And is points what's occupancy Well, of a XX of anomaly. It what's years an Mall, made second JCPenney one, [indiscernible], the the who right? the Manhattan of retail couple Tom? Is vacated sort

We have retail Farley, the there.

we the probably Avenue Farley, [indiscernible] so have somewhere mid-XXs. we're those between And Ninth then side, the in on X,

The comes next of Malhotra question Vikram from Mizuho.

to 'XX. go FFO in I about comment Just, back just want your troughing to

XXX, said was you've expiring, that? that then move could is foot term, to was square clarifications move-outs X just they're so long XXX,XXX it FFO what is the And rest clear Facebook out to roughly the there is -- this you we the or mentioned, So impact year the #X. just #X, lease, first quantify it what the but going

term. is remaining correct. the question, first That's the feet XXX,XXX long On Meta

Right.

the Yes, So don't one as the right? is things number the we well. and just remainder, can guidance, yes, mentioned that There's And are -- on quantify just going X year. so outs. but component there's XXX,XXX specific feet -- a ins this Vikram the but other of give situations we you

it So I the X, expect this to How isolate impact to be the have to see don't full want give say, Net-net, is whole big? because the across picture. We what and doesn't portfolio. these negative. transpires on that we

And so to I just a guess clarify. is second question

You're basically outs, will with will impact, occupancy move interest ins the saying FFO the rate the outs, go dip. think with et -- you and cetera,

what other eventually rate Is to You're 'XX the will help least you're fair? any come will And that assuming the to. assuming is Is all recover wise. there back, I'm leasing big of moving referring that then equation? impact FFO piece that

that natural Steve No, general is and power I other I But well. think going not comment just that's turnover, accurate. mentioned that think fair. Obviously, look, some as as that's of the which we is vacancy -- leased your up to Penn, it's which

I agree it's accurate.

down. and will Interest go They're but gone have painful. go So go going have the to they to down all been to up rates summarize. They X will down. way not

so increase here. earnings to from going our that's And

climb say, Our going to from, XX% occupancy to is whatever.

earnings. next then the going increase And is, And so will will rent, big X income that's come that to thing over from our the years, PENN the X online.

over $XXX million. probably that's Now

XXX% overall, But you're substantial So correct. these so are -- fairly numbers.

Great. just then, last And Steve, Okay. one.

the and executives look point, you external gauging going the paying as X different we you important. to that X what But of You could -- to X -- maybe look metrics is obviously so next years LTIP awards. at in maybe years FFO are terms be some Board award growth delevering. versus -- yourself, LTIPs look growth mentioned if the assuming forward, the I'm or X of opportunities top last those

and how years. sophisticated very quarter answer to know going to don't talk question, next it's difficult don't We Vikram. what's happen to next couple that guidance over X the for -- very to predict I around that. a give But of

have and don't a imagine I a depth open of will that knowledge up we experience, company. are New have. the where York-centric that we same We new kind franchise of don't we beachhead

we're my will York I'm up, comes basically, but is that a is, unless we York company, So company. a contemplating New guess stay something New not

beachhead And Northeastern Now a we think spun into also terrific years company, some we up a off. in Washington opened I a a shopping center company, then had which ago, large that separate which spun off opportunity. we is

geographies. we York-centric. guess company main So But that the continue is to will with different be have experience my New

make office aggressive of conventional I've to is, we likelihood company. at I said full large think office will The But continue this acquisitions pricing. will a we not be before,

We at buyer what's at will distress, want be don't for buildings. it only prices office distressed will we the -- the And word, Okay, a Michael? call right buy buildings. office only I to finest

We important like maybe have markets. what District then you frozen the the capital go arguably of we that. little more will and in forward. PENN today important as bit of do because the is residential. District development we build an most the a anything in PENN part our And extraordinarily develop country to some in I'd company of But can't

And we developer. land residential developing a You math to cannot piece of it. marketplace. building doesn't The begins consider sell even But -- will in might thaw, through we work. a residential that do that and as residential

be can't going will New happen. But ahead we X years, we predict So what's in York-centric. to

District X We years majority PENN office from important an will be the now. and really company be will

of Goldfarb The Sandler. next comes question Piper from Alexander

your Park in the and at around last the guys just we all stock understandably think plan, year-end. were stocks you the Obviously, understood back middle comp about that. of year, their on in you the depressed the XXX that revised was guys and place given talking just how comp plan Steve, I put

and to plan especially dividend their At definitely year that year, the comp the -- stub though, for the the the surprised to till stub shareholders figure end this XXXX, of out end wait the XXX have [indiscernible] of aside.

So just wait another and for can year how about talking down deliver earnings development a to we dividend. that about you should doesn't year comp through walk decade think the going you're still another shareholders project while this that for for plan having

last and the generation did update want that to especially the of that, light in Just you senior executives understand for midyear upper guys summer.

go me first. backwards let -- Alex, Sure. the

comment about dividend. the Your

enormous industry the efficient we And a saying rightsize is incomings this et and but had was to with capital. way, cetera, to what continue we will have most shareholders, dividend, cetera of by and continue of peers, in dividend just pay, overpay We dividend the to an number not et capital to the markets did correct. analysts, pay the from use

So tell you you that -- think the did was can correct me. what seem to of I on other we your most and are that thing. side that. friends of Pardon peers be the

about Now development let's comp the talk fee plan.

long that time. something is this been a thinking about So we've

important its So increase is is, to and retention, Retention, reward, the thing and incent reward, our employees. to first most incent. motivation objective motivation

the So from plan is comp anything venture first projects. is joint comes development that that paying thing on out that

do memory, -- first don't we probably in Now my we the of one. a XXX, lot is XXX We Park XXX%. did those. did

is So lot we the a District don't do and PENN -- we own XXX%.

doesn't come there a until this development that fee. into being So joint partner a pays is venture

with this shoulder third-party bring with most outside to that peers industry kind capital, capital. think are investing. We motivation. become using and shoulder the has of And incentives funds, about it's talked it's, do in to that think we outside our in we also that -- shareholders the our our shareholders shoulder shoulder we of I Now which

haven't past. that in We the done

we in want future. the to that So do

that's expect our peers. any way, that our and we beginning as So We substantial it By compensation very management it. as senior plan. it find in compensation line, be of to almost the and don't lower than way. look at a even the the our it's we And we of review down is all small

We told didn't this be we sort shareholders were going probably stock it. control very mistake. because way -- stock-based We comp this was of not we small price. can't a frankly, But of amount, this It's that it a with of joint third-party do would socializing it highly it's thought can plan what small. thought We I do. appropriate. good we our mistake. the should base have a a comp to comp shareholder And And development performance out control fees, the way. other because development fees is made only Vornado get We plan. comp, paying. amount is than by of job did we payable made to development we small And We June a the have So our performance-based in a ventures. would think

million myself, negative to there I'm I think We but people at that. deserves our think New building the extremely unhappy work. square have of -- myself way it level. is it's on, backbreaking it's the It's get think a backbreaking doing we And certainly by -- highest don't nights, way, any hang about weekends, underpaid, are that comping And good I highest at it. in foot comments right. We I think it's team people. -- York X is. work. a We our and the the And City it's level

it you, it's but amount, committee, your or a would rewarding. to just job, as that's comp like a hey, small part of the guys, bonus something annual seem we're of XXXX, part for great Steve your XXXX point, if like, that did

that it just management doesn't that of And stand-alone. it like would would two, value of regular why drive part a and clear ordinary So be It's be course their shareholders to is much expected incentive. if course seem number, it's like a small for it not an to seems compensation. incremental do

goes all -- you plan like don't I agree I of me agree take through But you me, want -- agree anyway, and you. like compensation paid the comp agree they like with the unless you. it agree into than this but circumstances Board committee But with the Obviously, I is rather you. me to is to account. to with to with I'd would no with would

have there So you it.

Okay.

original I to X, switched one. believe PENN from on you brokers your Glen, a switch. one me guys Let new

pretty good. guys progress seemed Just X on that curious, the you had PENN

the It You switch the X? done caused that us X. to learned you of sort last guys seemed was that to asset, and it impress it something process you you Or switch repositioning certainly tenants? happened of seemed what you through X What with else found that PENN toured that to the brokers of project, PENN a different well. with there have is PENN year was necessary brokers like going on leasing

team So we & team. brokers. not The switch is to Cushman did my additive Wakefield

do you brought The we over add for in market, normal switch. know X Manhattan change, it X, of additive, in often, that nationally. PENN so a decided do not switch, team & not the it's but reasoning had regionally, to course Cushman the the all remains no West, no team. Wakefield entire done doing both the business. but as leasing and Vornado cover do was team a We PENN we locally here great just Something to and

do But Alex, medal confident in-house the the I'm of business. to the in team that unturned stone the and we're Glen team rest gold has and ability, no franchise strength the job. of the his the

And into have of thought extra was piece Cushman a so to we insurance that marketplace good working and look that adding the it's out.

from comes Caitlin question Burrows Goldman Sachs. next of The

fourth the And Blouin we Julien really for the you again the XXXX Steve, dividend assume helpful required your could quarter if will that taxable sort adding and minimum provided should at XXXX. a taxable same the level? wondering is was This on quarter, of provide income you be Caitlin. Alex's question, income. to of for last breakdown regarding expected dividend I

is we XXXX as of with will that is a comfortable idea you income have expect. not the number that disclosing broad we enough taxable a are it what to answer would publicly. be, But The that

one. the that's So first

second point is, view, the capital decision. out allocation that's Board right pay because this minimum financial dividend a to it's at our The a time, point the policy of from of

investors, sales have the dividend, will numerous decision. gains of our as I have all the low that's We very us peers asset tell part most had, assets of interesting be likely shareholders, on The the because analysts, dividend, right before, said basis. however,

'XX, than or the determine that an would choose what X be. more X or dividend we if anything, So to will asset sell or X, in

switching That's gears. ground And maybe renewal. really X, the To lease PENN then helpful.

I than still think the update And year, lower in the you process? at market expectation? Is on evolving million mentioned sort last the based just thought that what estimate you $XX could that final is conditions. that guess number original come of latest I of beginning on the your

there's but that. side the with Well, on that other my absolutely that's somebody expectation disagrees

the number process we're middle of the what be. the can't And we So determine to on. in that's will arbitration process something the -- speculate

Yulico from Nick next The of Scotiabank. question comes

that, But a eventually last in I X, first, let -- assumed I just captured benefit of million Just based how how and stabilized guess, in of us to know there's on sup, the, just this incremental on any yield $XX it like it's any for impact if year? was already more on question of future they're quarter pool. yet the you a the about looks PENN like that I gave assume know now cash Can NOI, that's of any been think of basis. the there you

can't as this so to is I Michael. back that hand. the is of vacancy give it's answer Obviously, in it program Nick, exact there. but you numbers well. continue next year off and there's rolling in some is The a will come 'XX

As will that as that well. up, online leased come gets

not over it's confident published, last answer we is is the in tell it. in of we're we years I hopefully and as the development This circle and X year one it roll But specifics. our had done. in exceeding but can that's up more you terms So -- there. that's project X But the to in of But of can some or that some 'XX of is sort get hitting well. the anymore. yields will and next

like to I'd comments. couple make a of

on focus is that yield initial first asset. of on The all the us what is an

a I X, very what in think asset can to interesting revenue that out. say it's X, terms years X exercise produce of

Manhattan a and and So I of neighborhood, we highly in side we the believe PENN you Hudson west that a District Yards, We sought when mean Manhattan. District, hell whatever. with that's of believe believe, for West the example, PENN after combine in

own from over So grow them and we next of return return that the we time. at believe there get-go will these assets to period very will the satisfactory a continue as

So there's that.

Central about or there's We Well, more the is Park that important, the -- I which Penn some also obviously, Grand at question Avenue. foot of is mean Central? answer Grand believe is

the So the in the that's everybody I principal And Avenue even to in world. boulevard considers country, Park very important. maybe business think be

fastest note Avenue New Park on suburb growing into multiple assets comes it's Transit of Station. We interesting And Jersey But York. is Jersey representation Penn New too. a have New only of that the to

very, are happy our very with we So position.

Okay.

question PENN and is X second PENN Just on X.

or And a in rate the South. guys, us wondering for a You, leased for can just way there's only assets any like feel of about numbers talk if even I'm give achieved leasing that the these you projects. to those occupancy give your much you've getting yields for on about you the ultimate think is of cash what how stabilized plan so far

much how X -- do to PENN [indiscernible] going you're much So

talked Similarly, about tenants tenants a we and year-to-year. pipeline. as property, mean, XX% of this is I And XXX as We've feet X X, which there considerable the very rolling north project, X on we're action X out Michael date next, it's now. rents call been space a cycle set When over in in X, expire the we We've year, these the at amount over lot PENN [indiscernible] said, leased it, to the we years. have leased program. pipeline through over of in continue a it and successful. PENN were X, the multiyear we of PENN to

could PENN we activity And second you tuned at roll the we 'XX. as on that first, speak. X quarter as into stay We coming deals of have to fore

understand where no NOI Yes. point at the honestly and to in you hard NOI. in out those rolling I getting there's benefit you're the of re-leasing. the re-leasing Okay. a terms of commentary the appreciate on projects? anymore at provided rolling And because what guys like all bit the It's of are just And little bridge the about

to very the going be what couple the years. company quantify honestly is the to it's benefit difficult over So of next to

net can too, million late assets, capitalized up that a time X, taken it, square that footage go you, Between right? market, X to okay? That's -- rolling market that guess let's comes X crisp whether PENN we've to an of. ] years, rough asset, be there's $XXX to those to million lease NOI in going in PENN and to another I the X. So terms little that There's Nick, probably I'm right? about retail. terms But it timing, -- in magnitude go care give going $X.X let's right? remaining that short the million got interest, X to through a assets, another of to to we've on and less probably bit maybe of up, half $XXX [ a say, a those to it it's X, PENN So right? that's period X, incremental or bit bulk comes use from that's in let's call from would of Farley the I'm PENN I right? is of happen. going of from as as little a probably the early million, the -- date,

I Michael. extra commentary, appreciate Great. that

of next The JPMorgan. from question comes Paolone Anthony

have markets retail. just one. I now pretty got open you mentioned Michael, think if I for right are right debt your comment earlier, I

[ creates your you to at interest prep And for get any in all. that all back the ] near paid on in the so term if wondering I was JV opportunities

a we're or on the of or we've XXXX. XXX old And it. markets the starting we're -- about opening. is, you as But Fifth couple are a Tony, to pleased right? at got -- some at to think those that the do assets If answer well, look space leasing the

emerging I continue bit is, are as we improve, the think absolutely as the X markets that table little possibility, the a answer as we or stabilized there's the to possibility. as So on something a on of of focused as opposed was X leasing sort to assets. had it. one But And But accomplished, emerging. got a limitation of There's And how not when data time to you that -- of much our But of and gathering terms goal size leasing. we're a is is the in the system. that looking sort also it. do we can to where over it's things when those capital at put repatriate through of opportunity it's

really which high. capital that the you are at to unless it. give lenders you borrowing prepared I X%. it open absolutely because too that open, it not is is to -- look aggressively this just be me need markets will money And cost not That's differently. of at The to are means the time

would of these the it very see surprising aggressively at preferred anything company rates. look we interest is, point answer view refinance to it but else the So an academic be or at from our

Now just a minute about our liquidity.

no a that but that time remember have had has the of $X.X Penn We and source some amount in point it's at at X% we a liquidity. preferred to, Not cash. And if We source But that's of Plaza is on it. big lower. next debt consider is, liquidity the in billion. a

and X site we've got Farley debt-free, PENN debt-free. PENN So X Penn debt-free debt-free, Hotel

an interesting. of which have liquidity source we pretty we think enormous is So

Morgan next Kamdem Ronald The comes question from Stanley. of

Great.

at some about in you Just I expect was the the to the for of you the details well. really footnote as me XX-K, release looking put one where just office portfolio. some on maturities helpful

like looks retail or thought to sort XX%, of the trying I some helpful. was connect of spreads. flat it I at which the in But over dots re-leasing between think those

that don't we the know on NOI into broad should number? I we flat? Is occupancy be pieces? it same-store How those should Is together and a same-store earlier talked part we it the down? first there before guidance think picking about thinking about that all potentially us strokes I call you up, you put think some can year dipping back in the -- about NOI? for give slightly but is of

depends the aggregate. and what on again, bit bit little happens. little when a a probably in down But It's it basis

in as leases that. his to deal than -- and on with I pull think more doing Glen forward team office overall number is guidance So a those. basis, But of that probably a you history roll average accurate. characterization hard are of give But flat and any we'll has to the going your an

So to it's that you sort give number. of hard

a is Evercore Steve of question next ISI. The Sakwa follow-up from

Michael, the actually follow-ups. just G&A in that comes be you think -- I X color. are to or flattish down wanted you versus so that some and with provided 'XX, I 'XX in on you it But Steve saying think Just quick 'XX G&A, 'XX? had will

to The that's we're item, done to this that's down. item, reoccur, was going come down. to it's that right? last developments going be are mean year there, Well, so not not going I going a

think down. be will we yes, is answer the So it

basically one-timer the that really that off the sort come just stripping of kind would out, But Okay. that's 'XX of only number?

a I There's don't that that to between development we're the comes more terms probably fee for reoccur Yes. off, so of in vesting based $XX somewhere -- historical accelerated in million net-net, in or on certain people. just neighborhood is, neighborhood, that answer that little things Tom, -- But course, were of aren't that going know, 'XX. talking is the so,

follow-up, I And then -- think just on second working big you've XXX on Park just refinancing Great. Okay. your you're got Avenue. a with partner at that

might gone mechanics Just that any have would provide part that, could of into of refinanced. color servicing. on just I any color, or that refinancing be the that getting maybe loan of kind was you great. commentary But I assume think, special that

our part partner are servicing, still of not and in good middle to I'm we loan, too on working process the Sure. a with progress but into and terms get CMBS attractive. we're making a the are say to expect the given that out. of resolution is successful to going it we much process think we going special that And is that of

you loans X the way So But complicated, right been hard last I they think we've at and the more shortly have that. work months. painful, come X, there. given for recognize the up. they're The sponsorship are to CMBS set But

closer we're to So getting finish the line.

like remarks. to question-and-answer for back over to turn conference session. Steven today's Roth I would the concludes any That closing

-- every everybody. you This was interesting you When next We call. the And is your appreciate you, call. from call. We see learn next an Thank -- we and in the our we'll snowing company. call? interest it's at

May X.

Have day. X. a good May On

today's now and Ladies you Thank concludes for this and gentlemen, participating may disconnect. call. conference you