Q4 2024 SL Green Realty Corp Earnings Call

We recorded.

At this time the company would like to remind listeners that during the call management may make forward looking statements.

You should not rely on forward looking statements as predictions of future events.

Actual results and events may differ from any forward looking statements that management may make today all forward looking statements made by management on this call are based on their substance and beliefs as of today.

Additional information regarding the risks and uncertainties and other factors that could cause such differences to appear are set forth in the risk factors and MD&A sections of the company latest Form 10-K, and other subsequent reports filed by the company with the security and Exchange Commission.

Also during today's conference call the company May discuss non-GAAP financial measures.

Defined by regulations G under the Securities Act.

The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at <unk>.

Current report on form 8-K relating to our fourth quarter 2020 for earnings.

Speaker Change: Before turning the call over to Marc Holliday, Chairman and Chief Executive Officer of SL Green Realty Corp, I ask that those of you participating in the Q&A portion of the call to please limit your questions to two per person.

Speaker Change: I'll now turn the call over to Marc Holliday. Please go ahead Marc Okay. Thank you and thank you for all dialing in today, it's great to speak to everyone. As we kick off another exciting year in 2025, we are ready to dive into it.

In years past my opening remarks in January are typically brief coming on the heels of what is a very comprehensive presentation. We do for our institutional investors at the December Investor Conference, which was just seven weeks ago. It was very exciting moment for the company in December.

Speaker Change: And for our team because it really capped a pinnacle year, where we achieved so much having come through some fairly tough years. It was nice to see your strategy pay big dividends for our shareholders.

Speaker Change: And we posted market leading returns and it was a great. It was great affirmation. If you will of a strategy that we stuck to and hung in there and you know now I think we're entering a period of time.

Speaker Change: Which I mentioned in December I think this is gonna be possibly some of the best years, we've had at the company, possibly ever given the dynamics of what we see in this market.

Speaker Change: We finished the year strong with 188 individual leasing deals totaling $3 6 million square feet, that's our third highest leasing year ever we.

Speaker Change: We closed on our opportunistic debt fund in December.

Speaker Change: That really came.

Speaker Change: Just within a short period of time of when we launched it earlier in the year I think it was February or March and we have additional closings occurring that we expect will round the fund out to over $1 billion in the first half of the year there are opportunities that are.

Speaker Change: Far far beyond what that $1 billion will provide for us. So the good news is we expect to have.

Speaker Change: Have opportunities to deploy and to continue our historically successful debt preferred equity platform in this fully discretionary.

Speaker Change: <unk> format, and I think it's a real feather in the cap of this team and this platform to have.

Speaker Change: <unk> been able to close.

Speaker Change: This fund that quickly and what.

Speaker Change: What will be robustly in terms of amount for a first time closed end fund issuer and we look forward to rolling out many additional strategies in the future.

Speaker Change: At its core the most important stat is that we ended the year at 92, 5% occupancy and we're projecting over 93% leased occupancy in the coming year. Our business is fundamentally about filling office buildings with tenants and when we get close to that 95% range and we are closing in.

Speaker Change: On it that's when we can really begin to push rents rein in concessions and see building values increase at above average rates in December we had 900000 square feet of pipeline that was the stat that we announced at our Investor Conference. We've already leased just in those seven weeks 250000 square feet. Since then.

Speaker Change: And we still have about 900000 square feet of pipeline. So we're getting stuff done, but we're also immediately refilling that pipeline, which is what it's all about refilling and growing that pipeline and it's only January which is usually a slow time in the market, but not here and not this year in.

Speaker Change: In fact, there was a lot of good news in the earnings release yesterday, we had very strong profits that you saw we continued on our path of.

Speaker Change: Making the market in New York City with a lot of transactional activity and we certainly got a lot of leasing done.

Speaker Change: As well I think close to $1 8 million square feet in.

Speaker Change: In the fourth quarter.

Speaker Change: Since that time.

Speaker Change: So as not to let too much grass grow under the feet, we've announced two big expansions already with leading companies this year.

Speaker Change: Yesterday, we announced the signing of IBM to a 90090 3000 square foot expansion at one Madison, that's about a 33% expansion over the square footage that they had originally committed to just within the past 18 to 24 months. So.

Speaker Change: You know rapid growth.

Speaker Change: Good for IBM I'm sure part of that is due to.

Speaker Change: Their successes, there having particularly.

Speaker Change: A rapidly growing footprint in the industry and also.

Speaker Change: They are one of the many many firms out there that are getting people back to work five days and are benefiting from collaboration.

Speaker Change: <unk>.

Speaker Change: Buildings that are designed to accommodate tenants like them Ares added another 38000 square feet that was about a 10% growth in footprint a little more actually of $2 45 Park and that's a building that is undergoing a significant repositioning and is also now a massive success. So.

Speaker Change: We.

Speaker Change: Leveraged off that success.

The success that we're having leasing in our premier Premier buildings in our Premier Park Avenue portfolio by closing on 500 Park Avenue and closed a couple of days ago. It's a great postwar landmark building designed by S. Ohm, It's a building where we can bring our brand of hospitality high end amenities.

Speaker Change: Service capital improvements to move rents meaningfully higher and make it another key holding of ours on Park Avenue and we're very proud.

To make that addition, and we got brand new debt.

From Wells Fargo on that.

Speaker Change: On that property.

Speaker Change: On terms that I think we're very competitive and reflective of the building its location and the opportunity and sponsorship.

Speaker Change: <unk>.

Speaker Change: The market on park, I'll, just sort of keep harping on that.

Speaker Change: It's about as tight as I've ever seen it.

Speaker Change: <unk>.

Speaker Change: Leased occupancy is about 7% of vacancy I should say, 7% or less.

Speaker Change: And dropping.

Speaker Change: And you can extrapolate that to trophy buildings throughout New York is about 38 buildings defined as trophy buildings. They account for 46 million square feet. That's about it's over 10% of the market is trophy the availability rate in those 46 million square feet is six seven.

Speaker Change: <unk>, notably that's down almost 200 basis points from where it was just in the third quarter of 2025, that's what I mean, when I talk about you know the rapidity with which things can tighten up.

Speaker Change: When you get a confluence of diminishing supply and escalating demand when I look out at the year ahead. My optimism is driven by all of this activity that I'm talking about but also just by the fundamental economic success of New York City on so many levels and job creation.

Speaker Change: The city's OMB is forecasting about 38000, new office using jobs in 2025, those jobs will be coming out of the finance business services and information technology sectors that translates into millions and millions of square feet of new absorption.

Speaker Change: For each one of those bodies and those are not work from home bodies for the most part.

Speaker Change: Combine that with the fact that onsite attendance is rising every month as companies are calling people back to the office four and five days a week, we expect to see very strong demand for office space throughout 2025, and we'll just continue to monitor and keep you all updated on these.

Quarterly calls throughout the year.

Speaker Change: The revenue line item moving away just from office.

Speaker Change: Specific metrics looking at the city overall.

Speaker Change: Personal income tax receipts are way up driven largely by the sort of extraordinary profits being realized in the finance sector.

Speaker Change: We are tracking.

Speaker Change: Bring to your attention from time to time the Wall Street member firm profits. They were 36 billion through September they are expected to be $48 billion of profits through the end of 'twenty four when they finally report on that that would make it the third highest year ever in that category and that drives.

Speaker Change: Corporate tax collections that drives personal income tax collections on increased compensation combine that also with the fact that the city has been spending over the past couple of years $3 billion to $4 billion annually on dealing with the.

Speaker Change: Severe migrant crisis.

Speaker Change: New York City was experiencing more acutely than many other cities throughout the country, but now we've seen a trend towards shelter closures, which should accelerate I believe under this new administration and should be a big pickup for the city and saved costs as that crisis begins to become more manageable for this.

Speaker Change: City, both in terms of space and support services for those community people.

Speaker Change: All of this occurs at a time when there's real scarcity of well located amenity space in Manhattan I said in the December Investor Conference. There are zero, new ground up office projects currently underway in core Midtown and with four to seven year timelines for major projects. The reality is that inventory is only going to do.

Speaker Change: Scarcer in the coming years.

Speaker Change: Due to that imbalance between timeline for demand and.

Speaker Change: The realities of when the space can be delivered in a best case.

Speaker Change: Space is going to be even more constrained you've heard us talk about the office to residential conversion trend, which is moving ahead and it's moving ahead rapidly we're tracking about 15 million square feet of residential space, that's being built out of office buildings being converted some of those deals or move.

Speaker Change: Going ahead, some are announced summer being capitalized.

Speaker Change: But that's subset is the subset we track and I think this may.

Speaker Change: It marries up with the city's numbers, that's extraordinary if you look back over decades and decades.

Speaker Change: The city office inventory does not shrink it stays static it goes up modestly it rarely shrinks and if so by tiny amounts, but to take to be talking about 15 million square feet, possibly coming off the rolls as we sit here today and I think that number could be in <unk>.

Speaker Change: <unk> of 25 million square feet.

Speaker Change: When you look back in time five years to seven years from now.

Speaker Change: That is kind of like a.

Speaker Change: It's like a double compound or to have accelerating demand, while you've got diminishing supply and no obvious path for immediate delivery of new.

Speaker Change: Of new product because of.

Speaker Change: The long lead times.

Speaker Change: And that is a recipe that I think is makes us very optimistic for achieving our goals in 'twenty five and beyond.

Speaker Change: He said that this conversion opportunity is kind of a triple win it takes obsolete space off the market. It addresses the housing crisis in a big way and revitalize as new York's Prime and primary central business District, Midtown that needs 2047 activity not activity just during business hours.

Speaker Change: So.

Speaker Change: We will keep tracking that we're participating in that as well.

Speaker Change: And you heard us announce that we are kicking off this year, we have kicked off to be more accurate the conversion of 753rd Avenue.

Speaker Change:

Speaker Change: The plans, which we unveiled in December I think our.

Spectacular we're gonna add oversees approximately 650 units of new housing on third Avenue take that space off the market and create real lifestyle amenity in that location, which will only.

Speaker Change: Act as an incentive to other buildings on third and second to do the same and that's on top of.

Speaker Change: The Pfizer former headquarters that's a lot of square feet.

Speaker Change: It's probably over 1 million square feet.

Speaker Change: <unk> is well over 1 million square feet that is coming off the market and has been converted.

Speaker Change: Bye.

Mitchell: Metro loft, Yes, my Mitchell.

Mitchell: So anyway, I, just going to build and build on itself and you know.

Mitchell: I would keep your eye.

Mitchell: Leah tuned on onto that.

Mitchell: So when we said in December we.

Mitchell: We are out there on the hunt for another Big development site in Manhattan, something we could do on a scale of one Vanderbilt one Madison.

Mitchell: These are the reasons, we think now is the time, but.

Mitchell: But.

Mitchell: Taking into account the lead time that.

Mitchell: It it takes to get those buildings control approved and built.

Mitchell:

Mitchell: Finally, it's been exciting couple of months on the hospitality and entertainment side of our business we are quickly becoming.

Mitchell: Our hospitality branded hospitality.

Mitchell: Great restaurant tours within the city.

Mitchell: Not only did Mike Williams summarize a record breaking year for summit, one Vanderbilt with over two and a quarter million visitors upstairs. We've now done 6 million over 6 million visitors since we opened at some at one Vanderbilt and its contributing significant profits at the building level into our company, but we.

Mitchell: Also it was announced the new location for the Paris expansion of summit will be at the incredibly designs.

Mitchell: Angled tower in the 15th Arrondissements Paris. It has the most amazing views of the Eiffel tower in the entire city, we're working again with our partner and incredible artist Kenzo digital on a new bespoke concept for Paris, and it's it's going to be a lot of shared DNA with what we've got.

Mitchell: Some at one Vanderbilt but.

Mitchell: Bringing everything up a level beyond anything we could have comprehended. When we designed this first four years ago four in New York.

Mitchell: And we.

Mitchell: <unk> opened in partnership with Daniel Boulud Daniels first steakhouse lets at door at one Madison for my liking its the best Steakhouse in the city and I think maybe one of the best restaurants in New York period, and combined with our Michelin starred restaurants, <unk> and La <unk> I think we've proven our chops and the high end culinary world.

Speaker Change: With the incredible <unk> team and Daniel Boulud, and you could say where.

Speaker Change: Only an Italian restaurant away from having most of the major food groups covered so thank you for your support and 24.

Speaker Change: Hope to.

Speaker Change: And look forward to being on this journey with you in 'twenty five and let's open it up for questions.

Thank you at this time, we will conduct a question and answer session to ask a question you will need to press star one on your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: <unk> limit yourself to two questions. Please.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: And our first question comes from the line of Nick <unk> of Scotiabank. Your line is now open.

Nick: Great. Thanks, I guess first question is maybe.

Nick: That you can just walk through a bit how you know Q4 and the year played out because I think there was a little bit of confusion about the <unk> number given the gains and whatnot, but it does seem like you actually beat on the year even versus the December forecast.

Nick: That you just gave even if you exclude all the gains. So can you just maybe walk through some of the the items there and if there was a beat what drove that thanks yeah.

Julie.

Nick: One topic Mark didn't cover and all the good news he laid out there was that fourth quarter was also well ahead of our expectations from an earnings perspective, even going back to December.

Nick: Where we indicated that's on a reported basis and on a normalized basis, we indicated back in December that without all the DPA gains, which are real gains, but I'll exclude those are mark to market on derivatives.

Nick: What I'll call our normalized <unk>.

Nick: Midpoint of <unk> would be 486.

Nick: Looking at the posted results and taking out those same components mark to market on derivatives and any depot gains we ended up at $4 95, So nine cents ahead on.

Nick: On a quarter and therefore, the year as driven by better performance at the property so higher NOI.

Nick: Other income so fee income, we continue to generate incremental fee income.

Nick: Summit performed better than expectations in the fourth quarter and incremental debt and preferred equity investing. So we said we would be out searching for new investments.

Nick: <unk> on the debt side the equity raise we did in November to help fund that we did some of that investing in recognized incremental income.

Nick: In late December off of off of those investments all told <unk> better excluding all the gains and mark to market on derivatives just in the fourth quarter.

Mark: Alright, Thanks, and then Mark you talked about the leasing pipeline you know.

Mark: Essentially being up because you removed some leased activity versus December.

Mark: Can you just talk a little bit about kind of what's the incremental pipeline, where it's focused any any other sort of commentary either he or Steve can provide on that thanks.

Mark:

Mark: I guess in terms of color you want.

Mark: We could talk a little bit about Steve.

Mark: You know, where it's coming from but I'd just start off its broad based I made the statement earlier about.

Mark: How tight Park Avenue isn't it is from our occupancy standpoint, as well as trophy buildings as defined throughout the city.

Mark: But some of the biggest deals we did last year.

Mark: We're in great buildings, maybe they are considered trophy, but I don't I don't know how those definitions.

Mark: Exactly.

No.

Mark: Hand, it around but 919 third.

Mark: We did a lot of you know, we did massive leasing and expansion with Bloomberg.

Speaker Change: Hundred Park Alvarez, and marsal, so one's information and media the other financial business services consulting.

Speaker Change: Those were Alvarez and Marsal was like 220000 square feet at 100 Park and Bloomberg was 900000 feet expansion and renewal we did travelers insurance company at 485 Park.

Speaker Change: I'm, sorry, 45, flexing our partner by month 45, Lexington, right across from $2 45 Park and you'll have to building we've owned since I think 2003 or something.

Speaker Change: It's a great building and travelers has been there for a decent amount of time and they renewed.

Speaker Change: There and so there's there's lots more anecdotally you can go through C. But in terms of the 900 or 875000 feet of pipeline that we have today, how would you characterize sort of anymore.

Speaker Change: One of the key features which shows that it is broad based not dominated by any one, particularly large transactions as a matter of fact, it's composed of 59 separate.

Speaker Change: Tenant transactions in the 900000 is roughly 600000 square feet of leases that are out another 300000 square feet of advanced term sheets. Coincidentally. It's the same number of about 600000 square feet of of new tenant leases as opposed to renewals.

Speaker Change: And it's spread everything from eight seventh Avenue to the grab our building to a little bit of leasing on Park Avenue, which we don't have a lot of space left on Park Avenue.

Speaker Change: Yeah.

I guess you know in terms of color you want you know, we could talk a little bit about Steve you know.

Speaker Change: So it's a wide variety of.

Speaker Change: Different kinds of businesses different size geographic locations.

Where it's coming from but I just start off its broad based I made the statement earlier about.

Speaker Change: Financial services law firms entertainment some media.

How tight park Avenue as it is from our occupancy standpoint, as well as trophy buildings as defined throughout the city.

Speaker Change: Type in general business uses so.

Speaker Change: Takes a lot of comfort from that because we've had this conversation a year or two ago. It would have been heavily dominated by the top end of the market and only financial services and now we're seeing a much broader.

But some of the biggest deals we did last year.

We're in great buildings, maybe they are considered trophy, but I don't I don't know how those definitions.

Exactly.

I'll hand.

I hand, it around but 919 third.

Speaker Change: Type of tenant demand and broader geographic and different price points.

We did a lot of we did massive leasing and <unk>.

Speaker Change: Alright, thanks, guys.

<unk> with Bloomberg.

Speaker Change: Right.

<unk> hundred Park Alvarez, and marsal, so one's information and media the other financial business services consulting.

Speaker Change: Thank you Amit for next question.

Speaker Change: And our next question comes from the line of Alexander Goldfarb of Piper Sandler. Your line is now open.

Those were Alvarez and Marsal was like 220000 square feet at 100 Park and Bloomberg was 900000 feet expansion and renewal we did travelers insurance company at 485 Park.

Alexander Goldfarb: Hey, good afternoon, two questions, Steve maybe I'll just continue on that the leasing discussion.

Speaker Change: I'm, sorry, 45, flexing our park in my 45, Lexington, right across from $2 45 Park and you're actually building, we've owned since I think 2003 or something.

Speaker Change: From the Investor day till now it seems like Theres been an uptick in activity and as Mark noted in his commentary.

Alexander Goldfarb: Holiday Times January <unk>.

Speaker Change: It's a great building and travelers has been there for a decent amount of time and they renewed.

Speaker Change: Not exactly a hot leasing activity market you had two big expansion. So could you just give a little bit more color as to what was going on where these just sort of deals in the pipeline that we're stalled because of the election or what was driving this sort of holiday.

Speaker Change: There and so there is there is lots more anecdotally you can go through C. But in terms of the 900 or 875000 feet of pipeline that we have today.

Speaker Change: Or would you characterize I think mark hit one of the key features which is that it's it's broad based not dominated by any one, particularly large transactions as a matter of fact, it's composed of 59 separate.

Alexander Goldfarb: January surge if you will.

Speaker Change: Well I think I recall that.

Alexander Goldfarb: When we talk about our pipeline.

Speaker Change: Deals that are pending.

Speaker Change: Tenant transactions in the 900000 is roughly 600000 square feet of leases that are out another 300000 square feet of advanced term sheets. Coincidentally. It's the same number of about 600000 square feet of new tenant leases as opposed to renewals.

Alexander Goldfarb: For that component of the pipeline.

Speaker Change: That's where.

Speaker Change: Transaction terms sheets of just advanced to a stage, where we have a high degree of.

Speaker Change: Probability that it will convert over to a lease so some of that.

Speaker Change: Now.

Speaker Change: Those conversations maturing so that they may have started two or three months prior to <unk>.

Speaker Change: And it's spread everything from 810 seventh Avenue to the Graybar building to a little bit of leasing on Park Avenue, which we don't have a lot of space left on Park Avenue.

Speaker Change: To us now, adding it to the pipeline and some are just new requirements that have come out of the woods.

Speaker Change: But whats most notable of that is that it's.

Speaker Change: Sure.

Speaker Change: So it's a.

Speaker Change: It's two thirds of it is.

Speaker Change: A wide variety of.

Different kinds of businesses different size geographic locations.

Speaker Change: Our new tenants as opposed to just renewal transactions.

Speaker Change: I mean listen we did a quarter million square feet of leasing since our Investor Conference.

Speaker Change: Financial services law firms entertainment some media.

Speaker Change: <unk> kept the pipeline basically at the same level.

Speaker Change: Type in general business uses so.

Speaker Change: And it is a combination of factors I don't think there was an unnatural pause.

Speaker Change: It takes a lot of comfort from that because we've had this conversation a year or two ago. It would've been heavily dominated by the top end of the market and only financial services and now we're seeing a much broader.

Speaker Change: Of deals other than the fact that people took a powder for two and a half weeks over over vacation.

Speaker Change: And the other sort of restarting the engine. So I think it will be most notable as what we see over the next two or three months now.

Speaker Change: Type of tenant demand and broader geographic and different price points.

Speaker Change: It is back into the office and there's a lot of enthusiasm in the in the tenant market for where the economy is headed and particularly for your extra the commitments.

Speaker Change: Alright, thanks, guys.

Thank you Amit for next question.

Speaker Change: Okay second question is on the debt paydowns or payoffs.

Alexander Goldfarb: And our next question comes from the line of Alexander Goldfarb Piper Sandler Your line is now open.

Speaker Change: If my math is right you now have four deals that you've paid off mortgages, either below par paint or repaid mezz below par. The 690 Madison I think I think that's a fully leased asset can you just give a little bit more color on.

Alexander Goldfarb: Hey, good afternoon, two questions, Steve maybe I'll just continue on that the leasing discussion.

From the Investor day till now it seems like Theres been an uptick in activity and as Mark noted in his commentary.

Speaker Change: Sort of the secret sauce, or how you are able to especially at this point in the market where things seem to be improving youre still able to get lender.

Alexander Goldfarb: The holiday Times January.

Speaker Change: <unk> to accept cents on the dollar and.

Alexander Goldfarb: Not exactly a hot leasing activity market you had two big expansion. So could you just give a little bit more color as to what was going on where these just sort of deals in the pipeline that we're stalled because of the election or what was driving this sort of holiday.

Speaker Change: Are we still there is still a lot more deals like this possible or we are we at the tail end of this.

Speaker Change: Yes. These payoffs.

Harry: Yes sure this is Harry.

Harry: We have great relationships with all of our lenders.

Alexander Goldfarb: January surge if you will.

Harry: We work closely with them we don't.

Alexander Goldfarb: Well I think I recall that.

Harry: Get into their motivations everyone. In every cycle has their motivations as to why they want to either keep paper moved paper and.

Alexander Goldfarb: When we talk about our pipeline.

Alexander Goldfarb: Deals that are pending.

Alexander Goldfarb: For that component of the pipeline.

Harry: And our job is to work closely with them to find the best outcome for everybody.

Alexander Goldfarb: That's.

Alexander Goldfarb: Where transaction term sheets of just advanced to a stage, where we have a high degree of.

Alexander Goldfarb: And as to the last part of your question, Alex we layered into our guidance another $20 million of gains in 25, I think we stretch that goal to.

Alexander Goldfarb: Probability that it will convert over to a lease so some of that is now.

Harry: 50, like we did last year.

Alexander Goldfarb: Do we have opportunities potentially.

Alexander Goldfarb: Those conversations maturing so that they may have started two or three months prior to.

Harry: But we'll have to work them.

Alexander Goldfarb: Thank you.

Alexander Goldfarb: To us now, adding it to the pipeline and some are just new requirements that have come out of the woods.

Harry: Thank you for our next question.

Alexander Goldfarb: But whats most notable of that is that it's.

Speaker Change: And our next question comes from the line of John Kim of BMO Capital markets. Your line is now open.

Alexander Goldfarb: That is two thirds of it is.

Alexander Goldfarb: Our new tenants as opposed to just renewal transactions.

Alexander Goldfarb: I mean listen we did a quarter million square feet of leasing since Investor Conference.

John Kim: Thank you. So this quarter at least occupancy went up but your financial occupancy went down sequentially and this is not just one or two assets across several assets.

Alexander Goldfarb: <unk> kept the pipeline basically at the same level.

Alexander Goldfarb: And it is a combination of factors I don't think there was an unnatural pause.

John Kim: I was wondering why that happened this quarter and also if you can give us maybe some guidance or an idea of how financial occupancy trends this year.

Alexander Goldfarb:

Alexander Goldfarb: Deals other than the fact that people took a powder for two and a half weeks over over vacation.

Alexander Goldfarb: Theres sort of restarting the engine. So I think it would it be most notable as what we see over the next two or three months now that everybody is back in the office and there's a lot of enthusiasm in the in the tenant market for where the economy's headed particularly for you or exceed the commitments.

John Kim: Olivia.

John Kim: Yes, John its Matt so the I telegraphed a bunch of this in in December there were move outs in the fourth quarter late third early fourth that's a factor in the same store NOI guidance. We gave in December because occupancy leased occupancy is.

Alexander Goldfarb: Okay second question is on the debt paydowns or payoffs.

Alexander Goldfarb: You guys. If my math is right you now have four deals that you've paid off mortgages, either below par paint or repaid mezz below par.

John Kim: On a.

John Kim: Distinct track the trajectory upward.

John Kim: It was in 'twenty, four and got to our goal we're expecting it again in 'twenty five but you have to roll through the move outs build the space for the new leases and then bring them on so that kind of mutes. The same store cash NOI growth, we see in 'twenty, five but that and you do your capital spend and twenty-five which then leads to the NOI growth.

Alexander Goldfarb: 390, Madison I think I think that's a fully leased asset can you just give a little bit more color on.

Alexander Goldfarb: Sort of the secret sauce, or how youre able to especially at this point in the market, where things seem to be improving youre still able to get.

Alexander Goldfarb: Lenders to accept cents on the dollar and.

Are we still there is still a lot more deals like this possible or we are we at the tail end of this.

John Kim: And economic returns and 26 and beyond.

John Kim: I think it is definitional that financial is always going to trail leased because you're only leasing.

Alexander Goldfarb: Yes. These payoffs.

Harry: Yes sure this is Harry.

Harry: We have great relationships with all of our lenders.

John Kim: The leasing to renew or leasing to replace vacant so lease can't really be ahead of financial I don't think I got to think that through but I think you'll always see it it'll trail so as leased occupancy rises financial occupancy.

Harry: We work closely with them we don't.

Harry: Get into their motivations everyone. In every cycle has their motivations as to why they want to either keep paper move paper and.

John Kim: Should follow suit.

John Kim: After the downturn.

Harry: And our job is to work closely with them to find the best outcome for everybody.

John Kim: Yeah.

John Kim: Okay and my second question is on the New York City congestion tax, which certainly seems like.

Harry: And as to the last part of your question, Alex we layered into our guidance another $20 million of gains in 25, I think we stretch that goal to.

John Kim: It's had an impact on traffic patterns, but I'm wondering if you could comment on any impact you've seen on the office side, whether its tenant preferences for certain neighborhoods or office utilization or anything that maybe would have impacted demand in a negative way.

Harry: <unk> like we did last year.

Harry: Do we have opportunities potentially.

Harry: But we'll have to work them.

Harry: Thank you.

Harry: Thank you for our next question.

John Kim: I think it's too it's too early to I mean, it's only been a couple of weeks so.

Speaker Change: And our next question comes from the line of John Kim of BMO Capital markets. Your line is now open.

John Kim: All of it.

John Kim: We will have I guess some data on that.

John Kim: After a quarter or two it's very tough it's because at this time everyone's commutation patterns change a bit after the holidays and in January so.

Speaker Change: Thank you. So this quarter at least occupancy went up but your financial occupancy went down sequentially and this is not just one or two assets across several assets.

John Kim: I think.

John Kim: The stats MTA is putting out there is that the traffic is lighter than usual.

Speaker Change: I was wondering why that happened this quarter and also if you can give us maybe some guidance or an idea of how financial occupancy trends this year.

Speaker Change: In the congestion congestion zone, how much of that is on account of.

Speaker Change: The new tax how much of it as a result of what january's or like sometimes in New York City, when it's very cold.

Speaker Change: Okay.

Speaker Change: Absolutely.

Speaker Change: Yes, John its Matt so the I telegraphed a bunch of this in in December there were move outs in the fourth quarter late third early fourth that's a factor in the same store NOI guidance. We gave in December because occupancy leased occupancy is.

Speaker Change: I think we need more.

Speaker Change: Time too.

Get the data assess it and speak to our tenants, which we really haven't had a chance to do to see.

Speaker Change: If theyre, making any changes in their preferences and choices based on that.

Speaker Change: <unk> seen that I don't know if you have comment we haven't heard any commentary too, but common sense would tell you that if more people are going to take.

On a.

Speaker Change: Distinct track the trajectory upward.

Speaker Change: Was in 'twenty, four and got to our goal we're expecting it again in 'twenty five but you have to roll through the move outs build the space for the new leases and then bring them on so that kind of mutes. The same store cash NOI growth, we see in 'twenty, five but that and you do your capital spend and twenty-five which then leads to the NOI growth.

Speaker Change: Public transit.

Speaker Change: The proximity to Grand Central terminal and major transportation hubs will be a driver and of course.

Speaker Change: Our portfolio is most most.

Speaker Change: Centrally located.

Speaker Change: Thank you.

Speaker Change: Thank you Omar for next question.

Speaker Change: And economic returns and 26 and beyond.

Speaker Change: Our next question comes from the line of Steve <unk> of Evercore ISI. Your line is now open.

Speaker Change: I think it is definitional that financial is always going to trail leased because you're only leasing.

Steve: Yes. Thanks, good afternoon, Marc you've noted the tightness in the market and I'm just wondering.

Speaker Change: You are the leasing to renew or leasing to replace vacant. So lease can't really be ahead of financial I don't think I got to think that through but I think you'll always see it it'll trail so as leased occupancy rises financial occupancy.

Speaker Change: How is that translating into the brokerage community and are you getting a sense from the brokers and maybe tenants that theres, a little bit more angst on their side to start thinking about even 'twenty six 'twenty seven explorations and are they coming to you earlier to talk about renewals.

Speaker Change: Should follow suit.

Speaker Change: After the downturn.

Speaker Change: Yes.

Speaker Change: Okay and my second question is on the New York City congestion tax, which certainly seems like its had an impact on traffic patterns, but I'm wondering if you could comment on any impact you've seen on the office side, whether its tenant preferences for certain neighborhoods or office utilization.

Steve: I mean I don't know.

Steve: Don't know about angst.

Steve: The tenants.

Speaker Change: Are increasingly aware that they are they a window of opportunity is closing.

Speaker Change: The thing that maybe has impacted demand in a negative way.

Speaker Change: The market is not yet tight I mean were tight.

Speaker Change: I think it's too it's too early to I mean.

Speaker Change: We're just out there and we're getting stuff done and other prime buildings are tight and park Avenue site, but.

Speaker Change: It's only been a couple of weeks so holiday.

Speaker Change: Well, we will have I guess some data on that.

Speaker Change: Theres still vacancy in the secondary and tertiary buildings and some of the outlying markets and I think tenants kind of got lulled into thinking they had time they could differ on decisions that could stay loosen flexible and with.

Speaker Change: After a quarter or two it's very tough it's because at this time everyone's commutation patterns change a bit after the holidays and in January so.

Speaker Change: I think.

Speaker Change: The stats MTA is putting out there is that the traffic is lighter than usual.

Speaker Change: The <unk>.

Speaker Change: Dynamics, I mentioned earlier about escalating demand and decreasing.

Speaker Change: In the congestion congestion zone, how much of that is on account of.

Speaker Change: Inventory, specifically in that secondary and tertiary.

Speaker Change: Inventory world that window is going to close quickly.

Speaker Change: The new tax how much of it as a result of what january's or like sometimes in New York City, when it's very cold.

Speaker Change: And.

Speaker Change: I can't yet.

Speaker Change: Or do we see it now or we will see it in the next few quarters tenants are going to come to the realisation very soon if.

Speaker Change: I think we need more.

Speaker Change: Time to.

Speaker Change: Get the data assess it and speak to our tenants, which we really haven't had a chance to do to see.

Speaker Change: If everything stays on its current trajectory.

If theyre, making any changes in their preferences and choices based on that I have not seen that I don't know if you have comment we haven't heard any commentary too, but common sense would tell you that if more people are going to take.

Speaker Change: And that the debt at that moment is is going to be passed and theyre going to be competition for space and thats when.

Speaker Change: We'll have an opportunity to revisit rent concession. So we're seeing it some buildings assume I hope, we'll see it across the board and I mentioned in the earlier remarks I look at this as kind of one of the real moments in time for US. We're looking at over the next two three years I know everyone is focused you know quarter to quarter, but we've.

Speaker Change: Public transit.

Speaker Change: The proximity to Grand Central terminal and major transportation hubs will be a driver and of course, that's where our portfolio is most most.

Centrally located.

Speaker Change: Got a 235 year horizon, and we like the landscape, we see and we want to accumulate more product into that developed more into that and.

Speaker Change: Thank you.

Speaker Change: Thank you Omar for next question.

Speaker Change: Okay.

Steve <unk>: Our next question comes from the line of Steve <unk> of Evercore ISI. Your line is now open.

Speaker Change: Ploy as much capital as we can.

Speaker Change: Out of our new discretionary funds to take advantage of that.

Steve <unk>: Yes. Thanks, good afternoon, Marc you've noted the tightness in the market and I'm just wondering.

Speaker Change: The present day opportunities because not everyone is.

Speaker Change: Is realizing that same level of success.

Steve <unk>: How is that translating into the brokerage community and are you getting a sense from brokers and maybe tenants that theres, a little bit more angst on their side to start thinking about even 'twenty six 'twenty seven explorations and are they coming to you earlier to talk about renewals.

Speaker Change: There is.

Speaker Change: There are deals out there that are upside down and.

Speaker Change: Some sponsors are getting through and some aren't.

Speaker Change: Okay, I guess that leads to my second question you had talked at the Investor day about trying to find another Midtown development site. You just mentioned here you'd like to do more development. Just can you kind of update us on that process and to the extent that you are underwriting new development like what sort of hurdle would you want to see on a new deal today.

Steve <unk>: Yes.

Speaker Change: And I don't know about angst I think the tenants.

Speaker Change: Are increasingly aware that they are window of opportunity is closing.

Speaker Change: To the extent that you could put one under contract and.

Speaker Change: The market is not yet tight I mean were tight.

Speaker Change: Bring it to market in say three to four years, well you're going to see if we can have to reserve that one for the next quarter because.

Speaker Change: We're just out there and we're getting stuff done and other prime buildings are tight and park Avenue site, but.

Speaker Change: A group of us are saddling up and heading out too.

Do about a 12 day roadshow in Asia.

Speaker Change: Theres still vacancy in the secondary and tertiary buildings and some of the outlying markets and I think tenants kind of got lulled into thinking they had time they could differ on decisions that could stay loosen flexible.

Speaker Change: We've got a lot of partners.

Speaker Change: And capital capital and equity partners out there.

Speaker Change: We try and.

Speaker Change: And with the dynamics I mentioned earlier about escalating demand and decreasing.

Speaker Change: B out there several times a year because they.

Speaker Change: Having a significant appetite for the best of the best product in the best of the best markets and we've got really great relationships that now are broad and diverse throughout several different.

Speaker Change: Inventory, specifically in that secondary and tertiary.

Speaker Change: Inventory world that window is going to close quickly and.

I can't yet where do we see it now or we will see it in the next few quarters tenants are going to come to the realisation very soon.

Speaker Change: Markets in Asia and.

Speaker Change: We'll have it really dialed in on.

Those yield expectations for Prime development I don't think its changed much over time, I think secondary product risk product.

Speaker Change: If everything stays on its current trajectory.

Speaker Change: That the debt debt that moment is is going to be passed.

Speaker Change: And theyre going to be competition for space and Thats when we.

Speaker Change: Those spreads gap out a contract I think good core class AAA properties Trophy properties in Midtown Manhattan.

Speaker Change: We will have an opportunity to revisit rent concession. So we're seeing it some buildings assume I hope, we'll see it across the board and I mentioned in the earlier remarks I look at this as kind of one of the real moments in time for US. We're looking at over the next two three years I know everyone is focused you know quarter to quarter, but we've got.

Speaker Change: See those prices change a whole lot and we've demonstrated that over the years.

Speaker Change: On deals that we've done where people take a very long term view you know not not three to five years seven to 10, I'm talking 15 years and beyond for.

Speaker Change: 235 year horizon, and we like the landscape, we see and we want to accumulate more product into that developed more into that and.

Speaker Change: For good core product, that's kind of irreplaceable and top of the market.

Speaker Change: Those returns on a levered basis, it could be in the low teens.

Speaker Change: Deploy as much capital as we can.

Speaker Change: I don't think it would be much more than that but I think thats consistent with where it's been.

Speaker Change: Out of our new discretionary funds to take advantage of the present day opportunities because not everyone.

Speaker Change: Great. Thank you.

Speaker Change: Is realizing that same level of success.

Speaker Change: Thank you our next question.

Speaker Change: There is.

Speaker Change: There are deals out there that are upside down and <unk>.

Speaker Change: Yes.

Speaker Change: Our next question comes from the line of Jeffrey Spector of Bank of America Securities. Your line is now open.

Speaker Change: Some sponsors are getting through and some art.

Speaker Change: Okay, I guess that leads to my second question you had talked at the Investor day about trying to find another Midtown development site. You just mentioned here you'd like to do more development. Just can you kind of update us on that process and to the extent that you are underwriting in new development and what sort of hurdle would you want to see on a new deal today.

Speaker Change: Great. Thank you Mark one follow up to that conversation around international.

Speaker Change: Interest or foreign capital interest or working with here in New York City has anything I guess could you share any comments anything any views or anything youre hearing since the.

Speaker Change: To the extent that you could put one under contract and.

Speaker Change: The election over the last couple of weeks.

Speaker Change: Bring it to market in say three to four years, well you're going to see if we can have to reserve that one for the next quarter because.

Speaker Change: Given all of the in the at least it seems like interest in the U S.

Speaker Change: I have not but to be honest I haven't we haven't really been in that mode. In the past four or five weeks. So I think that's what we're embarking on.

Speaker Change: A group of us are saddling up and heading out too.

Speaker Change: Do about a 12 day roadshow in Asia.

Speaker Change: We've got a lot of partners.

Speaker Change: And capital capital and equity partners out there.

Speaker Change: Got new agenda, new deals we wanted to get done this year, all sorts of debt and equity deals.

Speaker Change: Try and.

Speaker Change: When we go we go with a full menu of opportunities and I think we will we will get a good read on that but I can't say I'm looking around the rest of the room or anyone's had that input, but I haven't heard anything directly on those lines. Yes, I think it's worth noting a few of the transactions, we've completed where post election, whether it be one vanderbilt the financing at five <unk>.

Speaker Change: B out there several times a year because they.

Speaker Change: Having a significant appetite for the best of the best product the best of the best markets and we've got really great relationships that now are broad and diverse throughout several different.

Speaker Change: Markets in Asia and.

Speaker Change: We will have it really dialed in on.

Park.

Speaker Change: So we haven't seen anything getting in the way and if anything we're seeing continued momentum.

Those yield expectations for Prime development I don't think it's changed much over time I think secondary.

Speaker Change: Coming off the election.

Speaker Change: Okay. Thanks, the interesting.

Speaker Change: To hear after your trip some of the feedback yep.

Speaker Change: Product risk product.

Speaker Change: Those spreads gap out a contract I think good core class AAA properties Trophy properties in Midtown Manhattan.

Speaker Change: Sure I guess, maybe keep it high level market you touched on.

Speaker Change: One of the policy initiatives immigration potential changes coming in New York City any other high level thoughts you can share with us on some of the.

Speaker Change: See those prices change a whole lot and we've demonstrated that over the years.

Speaker Change: Executive orders are again policy shifts that you think SL green.

Speaker Change: On deals that we've done where people take a very long term view you know not not three to five years seven to 10, I'm talking 15 years and beyond for.

Speaker Change: We will benefit SL green or your.

Speaker Change: Youre thinking about.

For good core product, that's kind of irreplaceable and top of the market.

Speaker Change: I Love the five day, a week maintained I mean, let's get let's get back to work I mean, it's.

Speaker Change: Those returns on a levered basis could be in the low teens.

Speaker Change: Corporate America is largely back I think now.

Speaker Change: I don't think it would be much more than that but I think that's consistent with where it's been.

Speaker Change: Federal government people think of it as Virginia and D. C. We've got a lot of federal buildings in the city leased and owned.

Speaker Change: Great. Thank you.

It's a big deal to get ever.

Speaker Change: Thank you our next question.

Speaker Change: Everybody back in I think it's it just further cements for us the business activity the profitability. The energy is all there we just want to see the bodies.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Jeffrey Spector of Bank of America Securities. Your line is now open.

Great. Thank you Mark one follow up to that conversation around international intra.

Speaker Change: Back and I think that being one of the you know one of the early executive order signed with.

Speaker Change: Interest or foreign capital interest or working with you in New York City has anything I guess could you share any comments anything any views or anything youre hearing since.

Speaker Change: It was just a just directionally a very positive statement.

Speaker Change: Ron.

Speaker Change: Productivity and.

Speaker Change: The election over the last couple of weeks.

Speaker Change:

Speaker Change: Just getting people.

Speaker Change: Back together I think it's a big deal certainly for our market directly and indirectly.

Speaker Change: Given all of the in the at least it seems like interest in the U S.

Speaker Change: I have not but to be honest I haven't we haven't really.

Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: <unk> been in that mode in the past four or five weeks. So I think that's what we're embarking on.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Anthony Pallone of Jpmorgan. Your line is now open.

Speaker Change: We've got new agenda, new deals we wanted to get done this year, all sorts of debt and equity deals.

Speaker Change: Alright, great. Thank you.

Speaker Change: When we go we go with a full menu of opportunities and I think we will we will get a good read on that but I can't say I'm looking around the rest of the room or anyone's had that input, but I haven't heard anything directly on those lines. Yes, I think it's worth noting a few of the transactions, we've completed where post election, whether it be one vanderbilt the financing at 500.

Speaker Change: Our first question is on just the capital markets and building sales side, so maybe putting aside something like one Vanderbilt that's that's pretty unique but you know in the past few months. It seems like buildings are starting to transact again and yet in the last month, you've had this big move in treasury yields.

Speaker Change: There a point, where there is a pause again or do you think that's a.

Speaker Change: Mark.

Speaker Change: So we haven't seen anything getting in the way and if anything we're seeing continued momentum.

Speaker Change: Limiting factor there.

Speaker Change: Is enough momentum to keep this going.

Speaker Change: Coming off the election.

Speaker Change: Okay. Thanks, the interesting.

Speaker Change: Not after today's mandate from President Trump interest rates down immediately.

Speaker Change: To hear after your trip some of the feedback yep.

Speaker Change: Sure I guess, maybe keep it high level market you touched on.

Speaker Change: Do you get the memo.

Speaker Change: But against.

Speaker Change: One of the policy initiatives immigration potential changes coming in New York City any other high level thoughts you can share with us on some of the executive orders are again policy shifts that you think SL green.

Speaker Change: Pause.

Speaker Change: Not not whatsoever, I mean, we're seeing.

Speaker Change: Very strong momentum from investors right now they're focused on the fundamentals all the things that Youre hearing Steve talk about all the results we're posting.

Speaker Change: We'll benefit SL green or your.

Speaker Change: It takes up almost the entirety of our discussions with investors today.

Speaker Change: Youre thinking about.

Speaker Change: I Love the five day, a week maintained I mean, let's get let's get back to work I mean, it's.

Speaker Change: And so I continue to see more momentum of investors wanting to participate and recaps outright sales.

Speaker Change: Corporate America is largely back I think now.

Speaker Change: And as Mark said, we're going to be out in Asia very shortly.

Speaker Change: Federal government people think of it as Virginia and D. C. We've got a lot of federal buildings in the city leased and owned.

Mark: We will be digging in on those conversations as part of execution of our 25 business plan.

Speaker Change: It's a big deal to get.

Speaker Change: Okay. Thanks, and then just second one just sort of a little bit more.

Speaker Change: Everybody back in I think it's it just further cements for us the business activity the profitability. The energy is all there.

Details you've given out numbers now in special servicing in terms of like what's active and where <unk> been designated just curious are you all.

Speaker Change: Just wanted to see the bodies.

Speaker Change: Designated more as events become highly probable and thus there is a high likelihood of this the $8 2 billion for instance, converting to active or just trying to think about that like is that a pipeline or.

Speaker Change: Back and I think that being one of the you know one of the early executive order signed with.

Speaker Change: With just a just directionally a very positive statement.

Speaker Change: <unk>.

Speaker Change: Productivity and.

Speaker Change: Just how to think about it I guess.

Speaker Change: Yes look those events are.

Just getting people.

Speaker Change: Particularly they are out of our control so I wouldn't feel comfortable commenting on the outcomes of those of those assets and those assignments.

Speaker Change: Back together I think it's a big deal certainly for our market directly and indirectly.

Thank you.

Speaker Change: Some may go into servicing some may not.

Yeah.

Speaker Change: Thank you one moment for our next question.

Speaker Change: For us the priority is working with controlling class bondholders.

Speaker Change: Okay.

Speaker Change: And the capital stacks to be properly aligned with them. So youre not I don't think theres any way to to wait how many of those go into special servicing or not.

Speaker Change: Our next question comes from the line of Anthony Pallone of Jpmorgan. Your line is now open.

Speaker Change: Alright, great. Thank you.

Anthony Pallone: First question is on just the capital markets and building sales side, so maybe putting aside something like one Vanderbilt that's that's pretty unique but you know in the past few months. It seems like buildings are starting to transact again and yet in the last months you've had this big move in Treasury yields like is there a point, where there's a pause.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Michael <unk> of Citi. Your line is now open.

Speaker Change: Great. Thanks, maybe just going back to the leasing pipeline and the tenant interest youre seeing out there dwells I know you mentioned a number of different industries, but I didn't hear a tech as being a bigger part of that I know that teck doesn't make up a big part of your portfolio, but just curious if youre seeing more demand from those.

Speaker Change: Cause again or do you think that's a limiting factor.

Anthony Pallone: There is enough momentum to keep this going.

Speaker Change: Not after today's a mandate from president Trump interest rates down immediately.

Anthony Pallone: Do you get the memo.

Anthony Pallone: Alright, I bet against.

Speaker Change: Companies given what we've seen in the press about more stringent return to office requirements.

Anthony Pallone: Yeah.

Anthony Pallone: Pause.

Anthony Pallone: Now whatsoever.

Speaker Change: Overall in the market right now there is generally.

Seeing.

Anthony Pallone: Very strong momentum from investors right now they're focused on the fundamentals all of the things that Youre hearing Steve talk about all the results we're posting.

Speaker Change: Roughly 300 active tenant searches covering over 25 million square feet of that Theres seven over 7 million square feet of known Tech.

Anthony Pallone: That it takes up almost the entirety of our discussions with investors today.

Speaker Change: Tenant searches ongoing compare that too.

Anthony Pallone: So I continue to see more momentum of investors wanting to participate and recaps outright sales.

Speaker Change: $3 7 million square feet in January of 24, so you've seen a doubling in demand.

Anthony Pallone: And as Mark said, we're going to be out in Asia very shortly.

Speaker Change: Over the past year.

Anthony Pallone: We'll be digging in on those conversations as part of execution of our 25 business plan.

Speaker Change: Not a big part of our portfolio other than we are in you know I'd say diligence discussions with a couple of tech tenants who.

Anthony Pallone: Okay. Thanks, and then just a second one just sort of a little bit more details you've given out numbers now in special servicing in terms of like what's active and where <unk> been designated just curious are you all like designated more as events become highly probable and thus there is a highlight.

Speaker Change: Seem to be focused on one Madison Avenue.

Speaker Change: Yeah.

Speaker Change: Great that's helpful.

Speaker Change: Then maybe just a little more color on the financing the new mortgage at 500 Park should we take this of lenders are more willing to dip their toes into the office financing market I mean, I imagine there is an aspect that's driven with relationships that you have with lenders, but curious if that market is opening up more and then just on the.

Anthony Pallone: Head of this $8 2 billion for instance, converting to active or just trying to think about that like is that a pipeline or.

Anthony Pallone: Just how to think about it I guess, yes.

Anthony Pallone: Yes look those events are.

Anthony Pallone: Particularly they are out of our control.

Speaker Change: Term as their 10 year debt out there for mortgages, yet on office buildings or its five really kind of pushing it for what's out there.

Anthony Pallone: Wouldn't feel comfortable commenting on the outcomes of those of those assets and those assignments.

Anthony Pallone: Some may go into servicing some may not.

Speaker Change: Lenders are back we've already we're mid January we've already seen.

Anthony Pallone: For us the priority is working with controlling class bondholders.

Anthony Pallone: And the capital stacks to be properly aligned with them. So youre not I don't think theres any way to to wait how many of those go into special servicing or not.

Speaker Change: Some very large transactions get done I talked about the spiral.

Speaker Change: At the end of last year's Investor Conference.

Speaker Change: Just saw that get done $2 $85 billion I think it's even worth noting that the AAA spreads on that got done just over 1% I mean, I think it's now been trading inside of that when I looked at the screen before the call.

Okay. Thank you.

Anthony Pallone: Thank you one moment for our next question.

Anthony Pallone: Okay.

Speaker Change: Our next question comes from the line of Michael <unk> of Citi. Your line is now open.

Speaker Change: So we're seeing big momentum from lenders right now closing into both balance sheet and <unk> 2025.

Speaker Change: Great. Thanks, maybe just going back to the leasing pipeline and the tenant interest youre seeing out there dwells I know you mentioned a number of different industries, but I didn't hear tech as being a bigger part of that I know the tech doesn't make up a big part of your portfolio, but just curious if youre seeing more demand from those.

Speaker Change: It's going to be a very active year for the credit markets.

Speaker Change: Some of the deals that you should look out for will be $2 99 Park 200 Park, three Bryant and five Manhattan West all of which are out for pricing and should close in Q1 and Q2 of this year.

Speaker Change: Companies given what we've seen in the press about more stringent return to office requirements.

Speaker Change: Great. That's it for me thanks for the time.

Speaker Change: Thanks.

Speaker Change: Overall in the market right now there's generally.

Speaker Change: Thank you next question.

Roughly 300 active tenant searches covering over 25 million square feet of that Theres seven over 7 million square feet of known Tech.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Ronald Camden of Morgan Stanley. Your line is now open.

Speaker Change: Hey, just two quick ones for me.

Speaker Change: Tenant searches ongoing compare that too.

Speaker Change: So going back to the leasing I think the commentary on Park Avenue was pretty clear, but wondering if there is moving to sort of the west side assets in that part of the portfolio any sort of color on the interest tenants.

Speaker Change: $3 7 million square feet in January of 24, so you've seen a doubling in demand.

Speaker Change: Over the past year.

Speaker Change: Not a big part of our portfolio other than we are in you know I'd say diligence discussions with a couple of tech tenants who.

On that piece of it yes.

Speaker Change: Yes, we've got it got it.

Speaker Change: Did a substantial amount of leasing of 11, 85, 6% and a 10, 7% last year.

Speaker Change: <unk> seem to be focused on one Madison Avenue.

Speaker Change: Minimum was carried into this year, where we have a number of leases out of both of those buildings.

Speaker Change: Yeah.

Speaker Change: Great that's helpful.

Speaker Change: Then maybe just a little more color on the financing the new mortgage at 500 Park should we take this of lenders are more willing to dip their toes into the office financing market I mean, I imagine there is an aspect that's driven with relationships that you have with lenders, but curious if that market is opening up more and then just on the.

Speaker Change: For our west side part of our portfolio are they're probably the.

Speaker Change: Two big.

Speaker Change: Two of the three or four biggest.

Speaker Change: Assets that we have in that part of town.

Speaker Change: Yeah.

Speaker Change: Great. That's helpful. And then my second one is just on the Fad funds available for distribution and I know this year the guidance as in <unk>.

Speaker Change: Term is their 10 year debt out there for mortgages, yet on office buildings or its five really kind of pushing it for what's out there.

Capex in facultative Capex, just any comments or is your sort of leasing up this portfolio really quickly how we should think about that at recurring capex side and may be getting better and in 'twenty six 'twenty seven just just high level thoughts would be helpful.

Speaker Change: Lenders are back.

Speaker Change: Already we're mid January we've already seen.

Speaker Change: Some very large transactions get done I talked about the spiral.

Speaker Change: At the end of last year's Investor Conference.

Speaker Change: I touched on this a bit back in December as well when we gave gave guidance we leased it at $3 6 million square feet third highest year ever and took our occupancy.

Speaker Change: Just saw that get done $2 $85 billion I.

Speaker Change: I think it's even worth noting that the AAA spreads on that got done just over 1% I mean, I think it has now been trading inside of that when I looked at the screen before the call.

Speaker Change: 300 plus basis points.

Speaker Change: The dollars that we spend on that new leasing our investment dollars.

Speaker Change: So we're seeing big momentum from lenders right now closing into both balance sheet and <unk> 2025.

Speaker Change: It happens around through fab, that's just the categorization.

Speaker Change: The industry likes but its investment capital.

Speaker Change: It's going to be a very active year for the credit markets.

Speaker Change: As we get closer to stabilized occupancy of 93 this year 995 thereafter.

Speaker Change: Some of the deals that you should look out for will be $2 99 Park 200 Park, three Bryant and five Manhattan West all of which are out for pricing and should close in Q1 and Q2 of this year.

Speaker Change: Leasing Capex, obviously comes down.

Speaker Change: As occupancy goes up.

Speaker Change: The other side of that you talked about maintenance capex or just other forms of capital we're spending on the leasing capital investment capital, but the base building kind of non revenue generating capex is very very nominal or off of our operations and construction team does a phenomenal job as a mostly redeveloped portfolio they spend a little bit every year to maintain.

Speaker Change: Great. That's it for me thanks for the time.

Speaker Change: Thanks.

Thank you Bob for next question.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Ronald Camden of Morgan Stanley. Your line is now open.

Speaker Change: The high standards, but.

Speaker Change: In total dollars on a <unk>.

Hey, just two quick ones for me.

Speaker Change: <unk> 30, plus million square foot portfolio, we spend call. It 20 somewhere between 20 and $30 million a year on non revenue enhancing capex, which is very nominal overall. So it's investment dollars that we feel are are very valuable and.

Ronald Camden: So going back to the leasing I think the commentary on Park Avenue was pretty clear, but I'm wondering if there is moving to sort of the west side assets in that part of the portfolio any sort of color on the interest tenants.

Speaker Change: Look forward to spending them because it means occupancy and NOI is going up.

Speaker Change: On that piece of it yes.

Speaker Change: Yes, we've got it we've got we did a substantial amount of leasing at 11 80 567 last year.

Speaker Change: Thanks, so much.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Minimum was carried into this year, where we have a number of leases out of both of those buildings.

Speaker Change: Our next question comes from the line of Michael Lewis of Securities. Your line is now open.

Speaker Change: There.

Michael Lewis: Thank you so that Capex question with my first question too and so obviously when you have a lot of leasing activity and success like you've had you'll also have capex right. So you guided to $88 million back this year at $99 million committed and then you've got base building and the other stuff, which are smaller like you said I was wondering if.

Speaker Change: For our west side part of our portfolio are they're probably the.

Speaker Change: Two big.

Speaker Change: Two of the three or four biggest.

Speaker Change: Assets that we have in that part of town.

Yeah.

Speaker Change: Great. That's helpful. And then my second one is just on the Fad funds available for distribution and I know this year the guidance has some <unk>.

Michael Lewis: There is a committed capital that you think bills into 'twenty six.

Speaker Change: Opex in fact go to Capex, just any comments or is your sort of leasing up this portfolio really quickly how we should think about that at recurring capex side, and maybe getting better and in 'twenty six 'twenty seven just just high level thoughts would be helpful.

Michael Lewis: And do you expect the Capex to remain high until you get close to that 95% occupancy or does it kind of normalized birth.

Michael Lewis: So maybe put a point on it.

Michael Lewis: The purchase on guidance I mean, do you think the dividend is covered in 2006 or is the capex still.

Speaker Change: Yes.

Speaker Change: On this a bit back in December as well when we gave gave guidance we leased it's amongst the $3 6 million square feet third highest year ever and took our occupancy.

Michael Lewis: Really heavy for another year.

Michael Lewis: Let me let me.

Michael Lewis: I'll weigh in from.

Speaker Change: 300 plus basis points.

Michael Lewis: From a ti side of that question for capital.

Speaker Change: The dollars that we spend on that new leasing our investment dollars. It happens around through Fad, that's just the categorization.

Michael Lewis: <unk>.

Michael Lewis: I'll make a couple of points one is that where we saw the higher end of our Ti in the fourth quarter those were transactions generally associated.

Speaker Change: The industry likes but its investment capital.

Michael Lewis: Associated with long term, meaning longer than 15 year leases or the higher end.

As we get closer to stabilized occupancy of 93 this year 995 thereafter.

Speaker Change: Seeing capex, obviously comes down.

Michael Lewis: Price point deals.

Michael Lewis: Where where I sort of see those conversations going right now and improving throughout the rest of this year I think the high end of the market youre going to start to come down because there's a shortage of supply and just that's going to give the landlord more leverage to push that number down I also think you're going to see.

Speaker Change: As occupancy goes up the other.

Speaker Change: Decided that you talked about maintenance capex or just other forms of capital I mean, we're spending on the leasing capital investment capital, but the base building kind of non revenue generating capex is very very nominal or off of our operations and construction team does a phenomenal job as a mostly redeveloped portfolio they spend a little bit every year to maintain the ice.

Michael Lewis: Litany of Ti on the renewal side of transactions.

Michael Lewis: Because tenants have fewer spaces too to select from its going to drive them to.

Speaker Change: Anders but.

Speaker Change: Total dollars on a.

30, plus million square foot portfolio, we spend call. It 20 somewhere between 20 and $30 million a year on non revenue enhancing capex, which is very nominal overall. So it's investment dollars that we feel are are very valuable and.

Michael Lewis: Higher probability of renewal and there's just less ti that one has to spend in order to retain an existing tenants. So I think those are both really positive factors to see the capital side of the equation come down over the next two at year end and.

Speaker Change: I look forward to spending them because it means occupancy and NOI is going up.

Going forward.

Speaker Change: Thanks, so much.

Michael Lewis: Okay.

Speaker Change: Thank you one moment for our next question.

Michael Lewis: Is there any capital that.

Michael Lewis: $100 million committed this year that needs to be spent is there anything committed beyond.

Speaker Change: Our next question comes from the line of Michael Lewis of True Securities. Your line is now open.

Michael Lewis: 2025.

Michael Lewis: Sizable like that.

Michael Lewis: So.

Michael Lewis: When we commit capital tenants, we have two unless we're doing the work we have to rely on our best guess as to when the capital will be requested in spent so in any given year stuff spills over there may be some spillover and 25% to 26, we accelerated some capital from $25 back into 'twenty four.

Michael Lewis: Thank you so that Capex question with my first question too and so obviously when you have a lot of leasing activity and success like you've had you'll sort of capex that you guided to $88 million back this year at $99 million committed and then you've got base building and the other stuff, which are smaller like you said I was wondering if.

Michael Lewis: There is they're committed capital that you think bills into 'twenty six.

Michael Lewis: So yeah on the margins it does move around.

Michael Lewis: Little bit year to year, because we're not in control of every nickel of that capital.

Michael Lewis: And do you expect the Capex to remain high until you get close to that 95% occupancy or does it kind of normalized birth.

Michael Lewis: Okay.

Michael Lewis: Earlier or not appropriate to comment on whether the dividend will be covered.

The dividend is covered this year and.

Michael Lewis: So maybe put a point on it.

Michael Lewis: The purchase on guidance I mean, do you think the dividend is covered 26 or is the capex still.

Michael Lewis: We look at the dividend ever here from a perspective of not just taxable income, which is a governance, but coverage and fad is not the metric I'll say it for the hundredth time fat is not the right metric to look at coverage of dividend because that is not cash flow.

Michael Lewis: Really heavy for another year.

Michael Lewis: So let me let me.

Michael Lewis: I'll weigh in from.

From a ti side of that question for capital.

Michael Lewis:

Michael Lewis: I'll make a couple of points one is that where we saw the higher end of our Ti in the fourth quarter those were transactions generally.

Michael Lewis: Okay I understood.

Michael Lewis: My second question, our last question I guess.

Michael Lewis: You mentioned.

Michael Lewis: Continuing to close commitments for that fund and just the kind of leading edge is starting to deploy some capital.

Michael Lewis: Associated with long term, meaning longer than 15 year leases or the higher end.

Michael Lewis: Over the next several months.

Speaker Change: Price point deals.

Michael Lewis: What should we expect.

Speaker Change: Where where I sort of see those conversations going right now and improving throughout the rest of this year I think the high end of the market youre going to start to see <unk> come down because there is a shortage of supply and just that's going to give the landlord more leverage to push that number down I also think you're going to see.

Michael Lewis: The pace of kind of deploying what your expectations are and then also.

Michael Lewis: How do we kind of follow along I know in your supplemental package you got some good disclosure on the DP book.

Michael Lewis: I don't know if we'll see something similar if that's necessary.

Michael Lewis: At least until you launch more funds and it gets complicated, but what can we expect to kind of see out of that over the next few months.

Speaker Change: Tightening of Ti on the renewal side of transactions.

Michael Lewis: There's a big opportunity in front of US right now we have term sheets and documents in negotiation on pipeline deals that are what we want to see ourselves investing in what are.

Speaker Change: Because tenants are pure.

Speaker Change: Spaces too to select from its going to drive them to.

Speaker Change: A higher probability of renewal and there's just less Gi that one has to spend in order to retain an existing tenants. So I think those are both really positive factors to see that.

Michael Lewis: Our investors in the fund you wont see us invested in and we expect to deploy the capital over the coming months and through the end of the year.

Speaker Change: Capital side of the equation come down over the next two at year end.

Michael Lewis: As to how you can track that I got to push that to Matt if theres anything to cover.

Speaker Change: Going forward.

Michael Lewis: No.

Speaker Change: Okay.

Michael Lewis: Alright, Thank you guys.

Speaker Change: Is there any capital that $100 million committed this year that needs to be spent is there anything committed beyond.

Michael Lewis: Thank you very much.

Michael Lewis: Good question.

Michael Lewis: Yeah.

Speaker Change: 2025.

Speaker Change: Sizable like that.

Speaker Change: And our next question comes from the line of Blaine Heck of Wells Fargo. Your line is now open.

Speaker Change: So.

Speaker Change: When we commit capital tenants, we have two unless we're doing the work we have to rely on our best guess as to when the capital will be requested in spent so in any given year stuff spills over there may be some spillover in 'twenty five 'twenty six we accelerated some capital from $25 back into 'twenty four.

Blaine Heck: Great. Thanks, just following up on the investment side it sounds like your focus might be on debt transactions at the moment, but we're hearing that there are higher quality properties that have come to the market and more potentially coming to the market. So if you were to make more direct property acquisitions are they most likely to be done in a JV structure or what.

Speaker Change: So yeah on the margins it does move around.

Speaker Change: Little bit year to year, because we're not in control of every nickel of that capital.

Blaine Heck: Would you consider full ownership and <unk>.

Speaker Change: Okay.

Blaine Heck: It required a big check what are your thoughts around issuing equity at these levels for the right transaction.

Speaker Change: Earlier are not appropriate to comment on whether the dividend will be covered.

Speaker Change: The dividend is covered this year and.

Speaker Change: Question about new.

Blaine Heck: New property acquisitions.

Blaine Heck: Generally we've taken an asset light approach for the past several years now since we.

Speaker Change: We look at the dividend ever here from a perspective of not just taxable income which is our governance.

Blaine Heck: Shifted direction, but there is still many assets.

Coverage and Fad is not the metric I will say it for the <unk> time Fad is not the right metric to look at coverage of dividend because that is not cash flow.

Blaine Heck: We will own at a point in time ourselves 500 Park is a great case in point, we own it we're going to execute a program going to lease it up and then down the road, maybe we'll bring in a JV partner to recapitalize it but thats.

Speaker Change: Okay understood.

Speaker Change: My second.

Speaker Change: Question, our last question I guess.

Blaine Heck: That's down the road thing and Thats after the value creation, but thats for a deal that we can comfortably fit on balance sheet, there might be very significantly large deals like the new development deal we spoke about.

Speaker Change: You mentioned.

Continuing to close commitments for that fund and just at the kind of leading edge is starting to deploy some capital.

Speaker Change: Over the next several months.

Speaker Change: What should we expect.

Blaine Heck: In concept.

Blaine Heck: That we really would only want to undertake something like that in venture with others.

Speaker Change: The pace of kind of deploying what your expectations are and then also.

Speaker Change: How do we kind of follow along I know in your supplemental package you got some good disclosure on the DP book.

Blaine Heck: Because the equity commitments could be you know a $1 billion plus.

Blaine Heck: And that's.

Speaker Change: I don't know if we'll see something similar if that's necessary.

Blaine Heck: That doesn't that's inconsistent with our asset light program. So it's situational.

Speaker Change: At least until you want from our funds and it gets complicated but what.

Blaine Heck: I don't.

Speaker Change: What can we expect to kind of see out of that over the next few months.

Blaine Heck: We don't run the book here looking at.

Blaine Heck: Investments JV, non JV et cetera.

Speaker Change: There's a big opportunity in front of US right now we have term sheets and documents in negotiation on pipeline deals that are what we want to see ourselves investing in what.

Blaine Heck: Our goal is first and foremost to identify and execute upon good opportunities and then figure out.

Speaker Change: Our investors in the fund who want to see us investing in and.

Blaine Heck: The optimum capitalization approach.

Speaker Change: And we expect to deploy the capital over the coming months and through the end of the year.

Speaker Change: After Chris Fortunately, we're in a envious position of having ample liquidity that gives us the flexibility to at first and then optimize as opposed to a lot of our competitors that have to have.

Speaker Change: As to how you can track that I got to push that to Matt if theres anything to cover.

Speaker Change: No.

Speaker Change: Alright, Thank you guys.

Speaker Change: Thank you.

Speaker Change: <unk>.

Speaker Change: All of the various capital sources tied up even to be able to be competitive.

Speaker Change: Yeah.

Speaker Change: That's why you invest with us or hopefully invest with us.

Blaine Heck: And our next question comes from the line of Blaine Heck of Wells Fargo. Your line is now open.

Speaker Change: As in part because of the flexibility you have with our $1 billion plus of corporate liquidity that enables us really to be very tactical fleet flexible when it comes to those kinds of decisions but.

Blaine Heck: Great. Thanks, just following up on the investment side it sounds like your focus might be on debt transactions at the moment, but we're hearing that there are higher quality properties that have come to the market and more potentially coming to the market. So if you were to make more direct property acquisitions are they most likely to be done in a JV structure or would you.

Speaker Change: That's a secondary considerations never the primary consideration primarily as always finding the best deal and deal we want to do and then second is how do we optimize capital structure.

Blaine Heck: Consider full ownership.

Speaker Change: It required.

Speaker Change: It required a big check what are your thoughts around issuing equity at these levels for the right transaction.

Speaker Change: Okay, great and any thoughts on issuing equity for the right transaction.

Speaker Change: Question about.

Speaker Change: New property acquisitions, I mean generally we.

Speaker Change: I mean.

Speaker Change: <unk> taken an asset light approach for the past several years now since we.

Speaker Change: We did an equity issuance as you know a month and a half ago or thereabouts.

Speaker Change: Shifted direction, but there is still many assets.

Speaker Change: We will own at a point in time, Marcellus 500 partners Great case in point, we own it we're going to execute a program going to lease it up and then down the road, maybe we'll bring in a JV partner to recapitalize it but thats.

Speaker Change: I wouldn't say that was for new opportunities I mean that was it was a more general raise there were various purposes to that raise I think prior to that we hadn't released equity.

Speaker Change: A long time, I forget that 10 years Matt.

Speaker Change: That's down the road thing and Thats after the value creation, but thats for a deal that we can comfortably fit on balance sheet, there might be very significantly large deals like the new development deal we spoke about.

Speaker Change: So.

Speaker Change: It's a tool in the quiver arrow in the quiver tool in the shed sorry.

Speaker Change: And.

Speaker Change: You know were pretty stingy with our equity as you know in fact.

Speaker Change: In concept.

Speaker Change: That we really would only want to undertake something like that in venture with others.

Speaker Change: Over the past six seven years.

Speaker Change: Because the equity commitments could be you know a $1 billion plus.

Speaker Change: We've reduced share count substantially from about 105 million shares to now I think 75 million shares so.

Speaker Change: And that's.

Speaker Change: That doesn't that's inconsistent with our asset light program. So it's situational.

Speaker Change: It's always an option.

Speaker Change: It's usually never the primary option, but.

I don't.

Speaker Change: We don't run the book here looking at.

Speaker Change: Never rule it out either if we think that.

Speaker Change: Investments JV, non JV et cetera.

Speaker Change: There is a moment in time, where we have uses those users might be new investment might be debt reduction might be any number of sort of items. If we think.

Speaker Change: Our goal is first and foremost to identify and execute upon good opportunities and then figure out.

Speaker Change: There is there is a moment in time.

Speaker Change: The optimum capitalization approach.

We certainly won't shy from that but if you look at our 10 year track record, it's not a primary source of our of our raising capital.

Speaker Change: After because fortunately we are in a envious position of having ample liquidity that gives us the flexibility to at first and then optimize as opposed to a lot of our competitors that have to have.

Speaker Change: Great.

Speaker Change: And then second question you invested in a relatively small amount of CB <unk>. This quarter, but can you talk about the profile of those investments whether they are collateralized by office properties in New York or whether there is any exposure to other sectors and potentially other markets and I guess, what sort of attributes from a return in profile.

Speaker Change: All of the various capital sources tied up even to be able to be competitive.

Speaker Change: That's why you invest with us or hopefully invest with us.

Speaker Change: Is in part because of the flexibility you have with our $1 billion plus of corporate liquidity that enables us really to be very tactical.

Speaker Change: Perspective, Youre looking for in an additional <unk> MBS investments.

Speaker Change: Yes, the only color at this point it would be New York City commercial properties.

Speaker Change: Tactical fleet flexible when it comes to those kinds of decisions but.

Speaker Change: Yes.

Speaker Change: Alright fair enough. Thanks.

Speaker Change: That's a secondary consideration is never the primary consideration primary is always finding the best deal and deal we want to do and then second is how do we optimize capital structure.

Speaker Change: Thank you for our next question yes.

Speaker Change: Yes, we're going to end.

I apologize, we do have a hard stop.

Speaker Change: We had it for three o'clock.

Speaker Change: The commitments, we have out of the office immediately after this call I.

Speaker Change: Okay, great and any thoughts on issuing equity for the right transaction.

Speaker Change: I think we have time for maybe one or two when we got to run I apologize its more than we are on to 16, 17 et cetera, and thats just more than usual, which we hadn't anticipated.

Speaker Change: I mean, we.

Speaker Change: We did an equity issuance as you know a month and a half ago or thereabouts.

Speaker Change: Hopefully we can limit it to just one or two more.

Speaker Change: I wouldn't say that was for new opportunities I mean that was it was more general raised there were various purposes to that raise I think prior to that we hadn't released equity.

Speaker Change: Thank you our next question.

<unk>.

Speaker Change: Our next question comes from the line of Kevin <unk> of Goldman Sachs. Your line is now open.

Matt: Been a long time, I forget that 10 years Matt.

Speaker Change: Hi, Thanks for taking the question maybe I'll just go on the other income side I know this was a volatile line item in 2024. So I'm wondering if you can go through what drove it can be so high in <unk> and then beyond the full year guidance, you've given maybe your expectation for 2025 main drivers and cadence, yes. So 2025 I'd just refer you back.

Speaker Change: So.

It's a tool in the quiver.

Speaker Change: Arrow in the quiver tool in the shed sorry.

Speaker Change: And.

Speaker Change: You know were pretty stingy with our equity as you know in fact, I guess over the past six seven years.

Speaker Change: To the Investor Conference deck, where we gave guidance and broke out all of the categories Q4 was nominally ahead of what we expected maybe a million or $2. Just there incremental fee income that we generate and a bunch of different ways.

Speaker Change: We've reduced share count substantially from about 105 million shares to now I think 75 million shares so.

Speaker Change: It's always an option.

Speaker Change: It's usually never the primary option, but.

Speaker Change: The large number in Q4 was all expected we generated fee income off of our JV interest sale in one Vanderbilt that was included in guidance going all the way back to December of 2023 and was again included in the numbers that I presented for 24 back in early December so nothing really unusual or unexpected in the <unk>.

Speaker Change: You never rule without either if we think that you know.

Speaker Change: There is a moment in time, where we have uses those users might be new investment might be debt reduction might be any number of sort of items. If we think.

Speaker Change: There is there is a moment in time.

Speaker Change: Well, we certainly wont shy from that but if you look at our 10 year track record, it's not a primary source of our of our raising capital.

Speaker Change: Q4 numbers, maybe a million or two more than we expected 25, you can look at the investor deck.

Speaker Change: Great.

Speaker Change: Got it Okay, and then just back to a question earlier on the leased versus economic occupancy and I was wondering if you could talk about your expectation for economic occupancy. This year and do you think it goes down before up to or like how quickly will it rise.

Speaker Change: And then second question you invested in a relatively small amount of CB <unk>. This quarter, but can you talk about the profile of those investments whether they are collateralized by office properties in New York or whether there is any exposure to other sectors and potentially other markets and I guess, what sort of attributes from a return profile perspective.

Speaker Change: It's going to trail is et cetera, there's going to trail the least.

Speaker Change: Occupancy by a little bit because we have to get the space built and the tenant leases commence and then into <unk>.

Speaker Change: <unk> you are looking for an additional fee MBS investments.

Speaker Change: Financial or physical occupancy, but that will trend upward throughout the course of 25 and beyond and ultimately catch up to the leased occupancy, but it does generally lag.

Speaker Change: Yes, the only color at this point would be New York City commercial properties.

Speaker Change: Yes.

Speaker Change: Alright fair enough.

Speaker Change: Thank you for our next question yes.

Speaker Change: Thanks.

Speaker Change: Yes, we're going to and I apologize, we do have a hard stop.

Speaker Change: Thank you I'm showing no further questions at this time I would now like to turn it back to Marc Holliday for closing remarks.

Speaker Change: We had it for three o'clock.

Because of commitments, we have out of the office immediately after this call.

Marc Holliday: Thank you everyone.

Speaker Change: I think we have time for maybe one or two when we got to run I apologize. Its more then we're on to 16, 17 et cetera, and Thats, just more than usual, which we hadn't anticipated but <unk>.

Marc Holliday: Listen again I appreciate it.

Marc Holliday: Your participation on the call and look forward to getting back together in a few months time.

Speaker Change: Hopefully we can limit it to just one or two more.

Marc Holliday: Thank you for your participation in today's conference. This concludes the program you may now disconnect.

Speaker Change: Thank you we'll move for our next question.

Marc Holliday: Yeah.

Speaker Change: Sure.

Speaker Change: Our next question comes from the line of Kevin <unk> of Goldman Sachs. Your line is now open.

Kevin: Hi, Thanks for taking the question maybe I'll just go on the other income side I know this was a volatile line item in 2024. So wondering if you can go through what drove it to be so high in <unk> and then beyond the full year guidance, you've given maybe your expectation for 2025 main drivers and cadence yes.

Speaker Change: So 2025 I'd just refer you back.

Speaker Change: To the Investor Conference deck, where we gave guidance and broke out all the categories.

Speaker Change: Q4 was nominally ahead of what we expected maybe a million or $2. Just your incremental fee income that we generate and a bunch of different ways.

Speaker Change: The large number in Q4 was all expected we generated no fee income off of our JV interest sale in one Vanderbilt that was included in guidance going all the way back to December of 2023 and was again included in the numbers that I presented for 24 back in early December so nothing really unusual or unexpected in the.

Speaker Change: Q4 numbers, maybe a million or two more than we expected 25, you can look at the investor deck got.

Speaker Change: Got it Okay, and then just back to a question earlier on the leased versus economic occupancy I was wondering if you could talk about your expectation for economic occupancy. This year and do you think it goes down before at the or like how quickly will it right now.

Speaker Change: Trailers et cetera, there's going to trail the least.

Speaker Change: Occupancy by a little bit because we have to get the space built and the tenant leases commence and then into <unk>.

Speaker Change: Financial or physical occupancy, but that will trend upward throughout the course of 25 and beyond.

Ultimately catch up to the leased occupancy, but it does generally lag.

Speaker Change: Thanks.

Speaker Change: Thank you I'm showing no further questions at this time.

Marc Holliday: Turn it back to Marc Holliday for closing remarks, okay. Thank you everyone.

Speaker Change: Still listen again I appreciate it.

Speaker Change: Your participation on the call and look forward to getting back together in a few months time.

Speaker Change: Thank you for your participation in today's conference. This concludes the program you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: Okay.

[music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.