Q1 2025 Paramount Group Inc Earnings Call
Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Paramount Group's first quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, May 1st, 2025.
Good day, ladies and gentlemen, thank you for standing by welcome to the Paramount Group's first quarter 2025 earnings conference call. At this time, all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
Please note that this conference call is being recorded today may 1st 2025.
Thomas Hennessy: I will now turn the call over to Tom Hennessy, Vice President of Business Development and Investor Relations. Please go ahead.
I'll now turn the call over to Tom who was named Vice President of business development and Investor Relations. Please go ahead.
Thomas Hennessy: Thank you, operator, and good morning everyone. Before we begin, I would like to point everyone to our first quarter 2025 earnings release and supplemental information which were released yesterday. Both can be found under the heading Financial Results in the Investors section of the Paramount Group website at www.pgre.com.
Speaker Change: Thank you operator, and good morning, everyone before we begin I would like to point, everyone to our first quarter 2025 earnings release, and supplemental information, which we released yesterday.
Speaker Change: It can be found under the heading financial results in the investors section of the Paramount Group website at Www Dot P. G. R E Dot com.
Thomas Hennessy: Some of our comments will be forward-looking statements within the meaning of the federal securities laws. Forward-looking statements, which are usually identified by the use of words such as will, expect, should, or other similar phrases, are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial conditions.
Speaker Change: Some of our comments will be forward looking statements within the meaning of the federal Securities laws forward looking statements, which are usually identified by the use of words, such as will expect should or other similar phrases are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect therefore you should.
Speaker Change: Exercise caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results financial condition.
Thomas Hennessy: During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating a company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our first quarter 2025 earnings release and our supplemental information.
Speaker Change: During the call we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.
Speaker Change: A reconciliation of these measures to the most directly comparable GAAP measure is available in our first quarter 2025 earnings release and our supplemental information.
Thomas Hennessy: Hosting the call today, we have Mr. Albert Behler, Chairman, Chief Executive Officer, and President of the company.
Albert Baylor: Hosting the call today, we have Mr. Albert Baylor, Chairman and Chief Executive Officer, and President of the company Wilbur pays Chief operating Officer, Chief Financial Officer, and Treasurer, and Peter Brindley Executive Vice President head of real estate.
Thomas Hennessy: Wilbur Paes, Chief Operating Officer, Chief Financial Officer, and Treasurer.
Albert Behler: And Peter Brindley, Executive Vice President, Head of Real Estate. Management will provide some opening remarks, and we will then open the call to questions. With that, I will turn the call over to Albert. Good morning, everyone. Thank you for joining our call today. Since we last spoke, we have experienced great momentum. and I'm excited to share our first quarter results. We are off to a strong start in 2025. Yesterday, we reported core FFO of $0.17 per share for the first quarter, exceeding consensus by one cent. From an operational standpoint, we also had an outstanding quarter in leasing.
Speaker Change: Management will provide some opening remarks, and we will then open the call to questions with that I will turn the call over to Albert.
Albert Baylor: Good morning, everyone.
Albert Baylor: Thank you for joining our call today.
Albert Baylor: Since we last spoke we have experienced great momentum.
Albert Baylor: And I'm excited to share our first quarter results.
Albert Baylor: We are off to a strong start in 2025, yes.
Albert Baylor: Yesterday, we reported core <unk> of 17 cents per share for the first quarter.
Albert Baylor: Seeding consensus by one cent.
Albert Baylor: From an operational standpoint, we also had an outstanding quarter in leasing.
Albert Behler: We executed leases totaling approximately 284,000 square feet. marking our strongest first quarter of leasing since 2019. This momentum is a testament to the tremendous effort of our leasing team. Strengths of the Portfolio and the Demand for High-Quality Space in Our Sub-Markets. Our pipeline remains in excellent shape and we are well positioned to continue this positive trajectory throughout the year. It is important to recognize the recent shifts in the broader economic environment as we discuss our performance. Despite these shifts, we have not experienced any disruption to our leasing activity over the past month. The resilience of our portfolio and the strategic locations of our properties continue to attract strong interest from high quality tenants.
Albert Baylor: We executed leases totaling approximately 284000 square feet.
Albert Baylor: Marking our strongest first quarter of leasing since 2019.
Albert Baylor: This momentum is a testament to the tremendous effort of our leasing team the strengths of the portfolio and the demand for high quality space in our sub markets.
Albert Baylor: Our pipeline remains in excellent shape, and we are well positioned to continue this positive trajectory throughout the year.
Albert Baylor: It is important to recognize the recent shifts in the broader economic environment as we discuss our performance.
Albert Baylor: Despite these shifts we have not experienced any disruption to our leasing activity over the past month.
Albert Baylor: The resilience of our portfolio and the strategic locations of our properties continue to attract strong interest from high quality tenants.
Albert Behler: In New York, the Manhattan office market showed significant improvement during the first quarter of 2025, as according to Cushman Wakefield, new leasing activity reached the highest quarterly total since fourth quarter 2021. This search was driven by the amount in Class A office space, which comprised approximately 82 percent of total activity. Within that citywide leasing, financial services tenants represented over half of new leases, 10,000 square feet and greater. We at Paramount are also seeing strong interest from a wide variety of tenants including the financial and legal sector. This demand reaffirms our conviction in the long-term appeal of our high-quality, strategically located space in New York's core sub-market.
Albert Baylor: In New York.
Albert Baylor: Manhattan Office market showed significant improvement during the first quarter of 2025.
Albert Baylor: According to Cushman Wakefield, new leasing activity reached the highest quarterly total since fourth quarter 2021.
Albert Baylor: This search was driven by the amount of class a office space, which comprised approximately 82% of total activity.
Albert Baylor: Within the citywide leasing financial services tenants represented over half of new leases 10000 square feet and greater.
Albert Baylor: We had Paramount are also seeing strong interest from a wide variety of tenants, including the financial and legal sectors.
Albert Baylor: This demand reaffirms our conviction in the long term appeal of our high quality strategically located space in New York score Submarkets.
Albert Behler: These market trends align well with our portfolio. We captured our fair share of leasing in New York, where we leased approximately 278,000 square feet. Additionally, we have a very robust leasing pipeline remaining. Peter will cover this in more detail shortly. During the quarter, we signed a significant new lease and subsequent expansion with Kirkland and Ellis at 903rd Avenue, totaling 179,000 square feet, improving the leased occupancy of the building over 20 percentage points from 68.9 to 90.2 percent. This lease represents a major expansion of Kirkland & Ellis, the largest law firm in the United States by gross revenue, and the new space will support their continued growth.
Albert Baylor: These market trends align well with our portfolio, we captured our fair share of leasing in New York, where we leased approximately 278000 square feet.
Albert Baylor: Additionally, we have a very robust leasing pipeline remaining.
Albert Baylor: Peter will cover this in more detail shortly.
Speaker Change: During the quarter, we signed a significant new lease and subsequent expansion with Kirkland and Ellis at 903rd Avenue totaling 179000 square feet.
Proving the leased occupancy of the building over 20 percentage points from $68 nine to 91, 2%.
Speaker Change: This lease represents a major expansion of Kirkland and Ellis the largest law firm in the United States by gross revenue and the new space will support our continued growth.
Albert Behler: This transaction also underscores the improved demand profile for high-quality office space in Midtown East and highlights the strategic value of our property. The lease strengthens our portfolio and demonstrates our ability to attract and retain top-tier tenants in competitive markets. We are already off to a good start in the second quarter with additional leasing momentum. As announced, we recently signed a significant new 121,000 square foot lease with the law firm Benesch at 13016 Avenue. This new lease, located on high floors, achieves strong rents and will bring 13016 Avenue to 90% lease. As we have emphasized in previous calls, the flight to quality remains a consistent theme in the market, with tenants increasingly focused on premier buildings in Midtown.
Speaker Change: This transaction also underscores the improved demand profile for high quality office space in Midtown East and highlights the strategic value of our properties.
Speaker Change: The lease strengthens our portfolio and demonstrates our ability to attract and retain top tier tenants in competitive markets.
Speaker Change: We're already off to a good start in the second quarter with additional leasing momentum.
Speaker Change: As announced we recently signed a significant new 121000 square foot lease.
Speaker Change: With a law firm Banish 13 016 Avenue.
Speaker Change: This new lease located on Hi, Flores achieved strong rents and they'll bring 30, you know one six avenue to 90% leased.
Speaker Change: As we have emphasized on previous calls the flight to quality remains a consistent theme in the market.
Speaker Change: Which tenants increasingly focused on premier buildings in Midtown.
Albert Behler: Our portfolio is benefiting from this trend bolstered by the Paramount Club, which continues to be a significant differentiator in the market. This amenity has proven transformative, not just in attracting new tenants, but in fostering a vibrant workplace community that enhances tenant satisfaction and retention. In San Francisco, while the market continues to trail New York, we remain optimistic about its recovery. The leasing activity in San Francisco already has started to show very positive momentum this quarter. The evolving political landscape in San Francisco is fostering a more favorable business environment, stimulating demand for office space. Our portfolio in San Francisco is well positioned to capitalize on the city's status as a hub for tech innovation and its leadership in AI-focused venture capital funding, which underscores its potential for recovery.
Speaker Change: Our portfolio is benefiting from this trend all set by the Paramount club, which continues to be a significant differentiator in the market.
Speaker Change: This amenity has proven transformative not just in attracting new tenants, but in fostering a vibrant workplace community that enhances tenant satisfaction and retention.
In San Francisco, while the market continues to trade in New York, we remain optimistic about its recovery.
Speaker Change: Leasing activity in San Francisco already has started to show very positive momentum this quarter.
Speaker Change: The evolving political landscape in San Francisco is fostering a more favorable business environment stimulating demand for office space.
Speaker Change: Our portfolio in San Francisco is well positioned to capitalize on the city's status as a hub for tech innovation and its leadership in AI focused venture capital funding, which underscores its potential for recovery.
Albert Behler: We anticipate that tenants will continue to prioritize high quality, well-located office space, further enhancing the appeal of our property. Our focus remains on maintaining strong tenant relationships and securing renewals, ensuring that our portfolio is ready to meet the needs of existing and prospective tenants as demand increases. Turning to our capital allocation activities, we continue to substantiate via the private market the underlying values in our portfolio. During the quarter, we closed the sale of a 45% interest in 903rd Avenue, raising approximately $95 million in net gross. This transaction valued the property at $210 million or $354 per square foot.
Speaker Change: We anticipate that tenants will continue to prioritize high quality well located office space further enhancing the appeal of our properties.
Speaker Change: Our focus remains on maintaining strong tenant relationships and securing renewals ensuring that our portfolio is ready to meet the needs of existing and prospective tenants as demand increases.
Speaker Change: Turning to our capital allocation activities, we continue to substantiate why the private market.
Speaker Change: Underlying values in our portfolio.
Speaker Change: During the quarter, we closed the sale of a 45% interest in 903rd Avenue, raising approximately 95 million in net proceeds this transaction values the property at $210 million or $354 per square foot.
Albert Behler: We retain the remaining 55% interest and we will continue to lease and manage the property.
Speaker Change: We retained the remaining 55% interest and we will continue to lease and manage the property.
Peter Brindley: With that, I will hand over to Peter. Thank you, Albert, and good morning. During the first quarter, we leased approximately 284,000 square feet, the majority of which occurred in New York. The weighted average term for leases signed during the first quarter was 12.9 years. At quarter end, our same-store portfolio-wide leased occupancy rate at share was 86.2 percent, up 140 basis points from last quarter. In both New York and San Francisco, tenants continue to prioritize premier, centrally located, amenity-rich buildings. We remain laser focused on further developing our tenant relationships, delivering market leading amenities and added conveniences to our tenants, securing renewals for upcoming lease expirations and filling our vacant space.
Peter: With that I will hand over to Peter.
Peter: Thank you Albert and good morning during.
During the first quarter, we leased approximately 284000 square feet, the majority of which occurred in New York.
Peter: Weighted average term for leases signed during the first quarter was $12 nine years.
Peter: Quarter end, our same store portfolio wide leased occupancy rate at share was 86, 2% up 140 basis points from last quarter.
Peter: In both New York and San Francisco tenants continue to prioritize premier centrally located amenity rich buildings we.
Peter: We remain laser focused on further developing our tenant relationships delivering market, leading amenities and added convenience to our tenants securing renewals for upcoming lease expirations and distilling our vacant spaces.
Peter Brindley: During the first quarter, approximately 60 percent of our leasing activity occurred on vacant space, 24 percent on space scheduled to expire in 2025, and the balance served to de-risk lease role in 2026 and 2027. Our pipeline of prospective tenants continues to expand, especially in New York, where improving market dynamics in Midtown's core submarkets combined with our market-leading amenity offering at the Paramount Club have helped generate significant momentum. Our pipeline in both New York and San Francisco currently contains more than 375,000 square feet of leases in negotiation, more than half of which are for vacant space and the balance for space scheduled to expire in 2025 and 2026.
Peter: During the first quarter, approximately 60% of our leasing activity occurred on vacant space, 24% on space scheduled to expire in 2025, and the balanced serve to Derisk lease roll in 2026 and 2027.
Peter: Our pipeline of prospective tenants continues to expand especially in New York, we're improving market dynamics in Midtown core Submarkets combined with our market, leading amenity offering at the Paramount club have helped generate significant momentum.
Peter: Our pipeline in both New York and San Francisco currently contains more than 375000 square feet of leases in negotiation more than half of which are for vacant space and the balance for space scheduled to expire in 2025 and 2026.
Peter Brindley: Additionally, we have advanced stage proposals being negotiated for more than 150,000 square feet. Beyond that, our pipeline continues to grow as evidenced by the increasing number of proposals we are exchanging. Turning to the New York market, Midtown remains the most active of Manhattan's three major markets. Midtown's leasing activity during the first quarter reached more than 4.8 million square feet, exceeding the five-year quarterly average for the sixth consecutive quarter. Increased demand, coupled with planned conversions of select office buildings, and little to no new development is leading to a scarcity of high-quality availability in Midtown's premier building.
Peter: Additionally, we have advanced stage proposals being negotiated for more than 150000 square feet.
Peter: Beyond that our pipeline continues to grow as evidenced by the increasing number of proposals we are exchanging.
Peter: Turning to the New York market Midtown remains the most active of Manhattan's three major markets Midtown leasing activity during the first quarter reached more than $4 8 million square feet exceeding the five year quarterly average for the sixth consecutive quarter.
Peter: Increased demand coupled with planned conversions of select office buildings and little to no new development is leading to a scarcity of high quality availability in Midtown as premier buildings.
Peter Brindley: We continue to gain momentum, as evidenced by our pipeline, and expect the ongoing absorption of space in our submarkets will support increased leasing and improved deal economics in the year ahead. The first quarter in New York was largely defined by the completion of a significant new lease with Kirkland & Ellis for 179,000 square feet at 903rd Avenue. The transaction is a testament to the quality of 903rd Avenue and serves as yet another example of the New York office market's ongoing resurgence.
Peter: We continue to gain momentum as evidenced by our pipeline and expect the ongoing absorption of space in our Submarkets will support increased leasing an improved deal economics in the year ahead.
Peter: The first quarter in New York was largely defined by the completion of a significant new lease with Kirkland and Ellis for 179000 square feet at 903rd Avenue the.
Peter: The transaction is a testament to the quality of 903rd Avenue and serves as yet. Another example of the New York Office markets ongoing resurgence.
Peter Brindley: in addition and subsequent to Quarter End. We signed a new 121,000-square-foot lease, 30,000 square feet of which is short-term, with the law firm Benesch at 1301 Avenue of the Americas, one of the most active buildings in our portfolio. This takes our leased occupancy rate to 90%, and given current activity on vacant floors at the building, we would expect additional occupancy gains in the coming quarter. At quarter end, our New York portfolio is currently 87.4% leased on a same-store basis at share, up 240 basis points from last quarter. Our lease expiration profile in New York is manageable with approximately 255,000 square feet or 4.7% at share expiring by year end.
Peter: In addition, and subsequent to quarter end.
Peter: We signed a new 121000 square foot lease 30000 square feet of which is short term with a law firm burnish at 13 O. One Avenue of the Americas, one of the most active buildings in our portfolio.
Peter: This takes our leased occupancy rates of 90% and given current activity on vacant floors at the building, we would expect additional occupancy gains in the coming quarters.
At quarter end, our New York portfolio is currently 87, 4% leased on a same store basis at share up 240 basis points from last quarter, our lease expiration profile in New York is manageable with approximately 255000 square feet or four 7% at share expire.
Peter: By year end.
Peter Brindley: Shifting to San Francisco, market-wide leasing activity continues to steadily improve as Q1 marked the strongest first quarter of leasing activity since 2019. San Francisco employees have been returning to the office at an increasing rate as more tech companies modify their workplace policy to be more office-centric. Remote job postings are declining, and as we have seen in New York, return to work on a larger scale in San Francisco will drive increased leasing activity in 2025 and beyond. During the first quarter, AI-based companies accounted for approximately 20 deals totaling more than 275,000 square feet and have become an increasingly large percentage of the tenants in the market profile as they continue to raise significant venture capital.
Peter: Shifting to San Francisco market wide leasing activity continues to steadily improve as Q1 marked the strongest first quarter of leasing activity since 2019.
Peter: San Francisco employees have been returning to the office at an increasing rate as more tech companies modify their workplace policy to be more office centric.
Peter: Remote job postings are declining and as we have seen in New York returned to work on a larger scale in San Francisco will drive increased leasing activity in 2025 and beyond.
Peter: During the first quarter AI based companies accounted for approximately 20 deals totaling more than 275000 square feet and have become an increasingly large percentage of the tenants in the market profile as they continue to raise significant venture capital funding in.
Peter Brindley: In fact, more than half of the AI-based tenants that transacted in the first quarter are new to the market, highlighting San Francisco's growing importance as an AI hub. While overall market conditions remain challenging given elevated supply, there continues to be a steady uptick in leasing inquiries and tour activity, which have increasingly led to proposals and transactions. Subsequent to Quarter End, we signed a new 32,000-square-foot lease with a leading law firm on Google floors at One Market Plaza and look forward to welcoming them to the building. We remain focused on our known move-outs, notably the ongoing backfill of Google space at One Market Plaza and the portion of J.P.
Peter: In fact more than half of the AI based tenants that transacted in the first quarter are new to the market highlighting San Francisco's growing importance as an AI hub.
Peter: While overall market conditions remain challenging given elevated supply there continues to be a steady uptick in leasing inquiries and tour activity, which have increasingly lead to proposals and transactions.
Peter: Subsequent to quarter end, we signed a new 32000 square foot lease with a leading law firm on Google floors at one market Plaza and look forward to welcoming them to the building.
Peter: We remain focused on our known move outs, notably the ongoing backfill of Google's space at one market Plaza and the portion of J P. Morgan space at one front street that expires this year.
Peter Brindley: Morgan space at One Front Street that expires. Plans are currently being developed to deliver exceptional amenities at both One Market Plaza and One Front Street, leveraging our experience from the Paramount Club. We are confident that our amenity plan will resonate with existing tenants and prospective tenants alike. At quarter end, our San Francisco portfolio was 82.3% leased on a same-store basis at share, down 150 basis points from last quarter. As we've discussed on prior calls, our lease expiration profile in our core portfolio in San Francisco is significant, with 490,000 square feet or 27.7% expiring at share in 2025, approximately 80% of which is comprised of Google and JP Morgan.
Peter: Plans are currently being developed to deliver exceptional amenities at both one market Plaza and one front street, leveraging our experience from the Paramount plus.
Peter: We are confident that our amended plan will resonate with existing tenants and prospective tenants alike.
Peter: At quarter end, our San Francisco portfolio was 82, 3% leased on a same store basis at share down 150 basis points from last quarter.
Peter: As we've discussed on prior calls our lease expiration profile in our core portfolio in San Francisco is significant with 490000 square feet or 27, 7% expiring at share in 2025, approximately 80% of which is comprised of Google and J P. Morgan.
Wilbur Paes: With that summary, I will turn the call over to Wilbur who will discuss the financial results. Thank you, Peter, and good morning, everyone. Yesterday, we reported core FFO of 17 cents per share for the first quarter, which was a penny above consensus estimate. Plus quarter same still growth was negative 4.1% on a cash basis and negative 5.4% on a gap basis. Our first quarter financial results are trending in line with our expectations and therefore we are reaffirming our earnings guidance that we put out back in February. During the first quarter, we executed 12 leases for a total of 283,874 square feet at weighted average starting rents of $76.52 per square foot and for a weighted average lease term of 12.9 years.
Peter: With that summary, I will turn the call over to Wilbur, who will discuss the financial results.
Wilbur: Thank you Peter and good morning, everyone.
Wilbur: Yesterday, we reported core <unk> of <unk> 17 per share for the first quarter, which was a penny above consensus estimates.
Wilbur: First quarter same store growth was negative four 1% on a cash basis and negative five 4% on a GAAP basis.
Wilbur: Our first quarter financial results are trending in line with our expectations and therefore, we are reaffirming earnings guidance that we put out back in February.
Wilbur: During the first quarter, we executed 12 leases for a total of 283874 square feet at weighted average starting rents of $76 52 per square foot and for a weighted average lease term of 12 nine years.
Wilbur Paes: Marked to markets on 81,707 square feet of second-generation space was negative 1.5 percent on a cash basis and positive 7.1 percent on a gap basis. At quarter-end, the least occupancy rate of our same-sale portfolio was 86.2%, up 140 basis points from the prior quarter, with New York at 87.4%, up 240 basis points, and San Francisco at 82.3%, down 150 basis points. Based on our year-to-date results and our outlook for the remainder of the year, we are increasing our leasing guidance to now be between 900,000 square feet and 1.1 million square feet, representing an 11% increase at the midpoint.
Wilbur: Mark to markets on 81707 square feet of second generation space was negative one 5% on a cash basis and positive seven 1% on a GAAP basis.
Wilbur: At quarter end the leased occupancy rate of our same store portfolio was 86, 2% up 140 basis points from the prior quarter with New York at 87, 4% up 240 basis points and San Francisco at 82, 3% down 100.
Wilbur: 50 basis points.
Wilbur: Just on a year to date results and our outlook for the remainder of the year, we are increasing our leasing guidance to now be between 900000 square feet and $1 1 million square feet, representing an 11% increase at the midpoint.
Wilbur Paes: In addition, we are increasing our same-store lease occupancy guidance to now be between 84.4% and 86.4%, representing a 50 basis point increase at the midpoint from our prior guidance. This, of course, is driven by our New York portfolio. As I said during our last call, the occupancy of our New York portfolio has bottomed out and with increasing velocity and a modest lease role, we will continue to drive occupancy. Also, as previously highlighted, lease occupancy in our San Francisco portfolio will deteriorate further in the near term before improving, driven by the sheer magnitude of lease expirations in the upcoming quarter.
Wilbur: In addition, we are increasing our same store leased occupancy guidance to now be between 84, 4% and 86, 4% representing a 50 basis point increase at the midpoint from our prior guidance.
Wilbur: This of course is driven by our New York portfolio as I said during our last call. The occupancy of our New York portfolio has bottomed out and with increasing velocity and a modest lease roll we will continue to drive occupancy.
Wilbur: Also as previously highlighted leased occupancy in our San Francisco portfolio will deteriorate further in the near term before improving driven by the sheer magnitude of lease explorations in the upcoming quarters.
Wilbur Paes: Turning to our balance sheet, in January, we sold a 45% interest in 900 Third Avenue. The sale resulted in net proceeds to the balance sheet of approximately $95 million, bringing our quarter-ended cash and restricted cash balance to $499.3 million. Our debt at quarter end, excluding debt on non-core assets, amounts to $3.25 billion at a weighted average rate of 4.26% and a weighted average term of 2.6 years. 73% of this debt is fixed with a weighted average interest rate of 3.51% and a weighted average term of 3.1 years. The remaining 27% is floating with a weighted average interest rate of 6.28% and a weighted average term of 1.4 years.
Wilbur: Turning to our balance sheet in January we sold a 45% interest in 903rd Avenue.
Wilbur: The sale resulted in net proceeds to the balance sheet of approximately $95 million, bringing our quarter end cash and restricted cash balance to $499 3 million.
Wilbur: Our debt at quarter end, excluding debt on non core assets amounts to 325 billion at a weighted average rate of 4.26% and a weighted average term of two six years.
Wilbur: 73% of this debt is fixed with a weighted average interest rate of 351% and a weighted average term of three one years.
Wilbur: <unk>, 27% is floating with a weighted average interest rate of 628% and a weighted average term of one four years.
Wilbur Paes: If you factor interest rate caps, uploading rate debt is reduced from 27% to less than 1%. Other than the debt on non-core assets, we do not have any debt maturing in 2025. We have $1.5 billion of debt maturing in 2026, the largest of which is the $860 million loan on 1301 6th Avenue. The building is performing exceptionally well and is now 90% leased and climbing. The debt markets for high-quality assets like 1301 is liquid, notwithstanding the recent turbulence in the macro environment. We will monitor the markets and opportunistically look to de-risk our 2026 maturity.
Wilbur: If you factor of interest rate caps are floating rate debt is reduced from 27% to less than 1%.
Wilbur: Other than the depth on non core assets, we do not have any debt maturing in 2025.
Wilbur: We have one 5 billion of debt maturing in 2026, the largest of which is the $860 million alone on 13 O. One sixth Avenue.
Wilbur: The building is performing exceptionally well and is now 90% leased and climbing.
The debt markets for high quality assets like 13 O. One is liquid notwithstanding the recent turbulence in the macro environment.
Wilbur: We will monitor the markets and Opportunistically look to de risk our 2026 maturities with that operator. Please open the line for questions.
Operator: With that, operator, please open the line for questions. Thank you.
Speaker Change: Thank you we will now be conducting a question and answer session. If you will.
Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: You asked a question. Please press star one on your telephone keypad a confirmation question indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.
Speaker Change: Perfect.
Speaker Change: Great.
Speaker Change: Sorry.
Speaker Change: Handset before pressing the starkey.
Manitobac: Your first question comes from Manitobac with Evercore. Please go ahead. Great. Good morning, everyone. Thanks for taking the question. The first one, I want to just touch on high level on capital uses and sources. With the stock obviously trading where it is, what do you, what should we expect kind of like going forward in 25? Maybe see more of transactions like 903rd Avenue or just maybe help us think through on like a more broader high level, what you kind of like are aiming for here?
Speaker Change: Your first question comes from Matt.
Speaker Change: That's it back with Evercore. Please go ahead.
Speaker Change: Great. Good morning, everyone. Thanks for taking the question.
Speaker Change: The first one I wanted to just touch on high level on capital uses and sources with the stock obviously trading where it is what do you what should we expect kind of like going forward in 'twenty five maybe see more of transactions like 903rd Avenue or just maybe help us think through on like a more broader high level. What's your kind of like are aiming for here.
Albert Behler: Hey, this is Albert Behler. As we had mentioned before, we we want to be considering all the options. and remain disciplined, for sure, and opportunistic. So if there are opportunities like the one we had at 900th search, we are definitely looking at that because it's helpful for us. We want to maintain flexibility and continue to develop our great relationships, especially abroad, and do the best for the shareholders with those relationships.
Speaker Change: Hey Man this is Albert Baylor as we had mentioned.
Speaker Change: Four we wanna be considering.
Considering all the options and remain disciplined.
Speaker Change: Disciplined for sure and opportunistic so if there are opportunities like the one we had at 903rd we are definitely looking at that.
Speaker Change: Because it is helpful for us we want to maintain flexibility and.
Speaker Change: And continue to.
Speaker Change: Develop our great relationships, especially abroad.
Speaker Change: And do.
Speaker Change: Do the best for the shareholders with with those relationships.
Manitobac: Vielen Dank. I think that makes sense. And then maybe one question was interesting to hear that you talked about the 32,000 square feet law firm that signed for the former Google floors at One Market Plaza. Could you maybe, to the extent you can share, talk about the rents, maybe the concessions, or the timing for that specific tenant to decide to go to One Marketplace? But congrats, it's a good win for the building.
Speaker Change: He has done I think that makes sense and then maybe one question what's interesting to hear that you talked about the 32000 square feet law firm that signed for the former Google floors at one market Plaza could you maybe to extent you can share I talk about the rents maybe the concessions are the timing for that specific tenant decided to go to one market place but.
Speaker Change: So it's a good win for the building.
Peter Brindley: Thanks, Matt.
Speaker Change: Yes.
Peter Brindley: This is Peter. We are seeing a lot of activity from law firms that are looking to upgrade the quality of their real estate, and we're trading paper with several at one market.
Speaker Change: Thanks, Matt. This is Peter we are we are seeing a lot of activity from law firms that are looking to upgrade the quality of their real estate and where we're trading paper with several at one market. This particular law firm are really very proud to welcome to the building you know the upper floors I would say generally command rents in excess of $120 a foot certainly.
Peter Brindley: This particular law firm, we're really very proud to welcome to the building. You know, the upper floors, I would say, generally command rents in excess of $120 a foot. Certainly, view space in a building of one market's quality is commanding real interest. And so, in any event, we were able to announce this subsequent to quarter end to give you the idea that we are starting to make progress. As I mentioned in my prepared remarks, we are starting to see and have more constructive conversations with the brokerage community in San Francisco. Tour activity is up. Proposals are starting to percolate.
Speaker Change: Use space in a building of one market quality.
Speaker Change: Is commanding real interest and so in any event, we were able to announce that subsequent to quarter end to give you. The idea that we are starting to make progress as I mentioned in my prepared remarks, we are starting to see and have more constructive conversations with the brokerage community in San Francisco Tour activity is up proposals are starting to percolate. So we're generally starting to feel.
Manitobac: And so, we're generally starting to feel better about the activity levels in San Francisco. But that was certainly a nice win for the building, and we look forward to sharing more in the quarters. Right. That is so many.
Speaker Change: Better about the activity levels in San Francisco, but that was certainly a nice win for the building and we look forward to sharing more in the quarters ahead.
Speaker Change: Right. So let me thank you.
Operator: Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you.
Blaine Heck: Next question, Blaine Heck with Wells Fargo. Please go ahead. Great.
Blaine Heck: Next question Blaine Heck with Wells Fargo. Please go ahead.
Blaine Heck: Great just following up on my last question I guess can you just talk a little bit more about San Francisco. It sounds like you guys continue to see good activity in that market in the first quarter I guess it has any of that momentum solved with the current uncertainty in the market. You know Peter you just talked about the activity at one market, but can you touch.
Blaine Heck: Just following up on that last question, I guess, can you just talk a little bit more about San Francisco? It sounds like you guys continue to see good activity in that market in the first quarter. I guess, has any of that momentum stalled with the current uncertainty in the market? Peter, you just talked about the activity at one market, but can you touch on any activity you guys have at one front? And then more broadly, I guess, how do you think about your commitment to that over the long term? I guess, is there any scenario in which you'd sell down your exposure there like you did in D.C.
Blaine Heck: On any activity you guys have at one front and then more broadly I guess, how do you think about your commitment to that market over the long term I guess is there any scenario in which you sell down your exposure. There like you did in D C and kind of just focus on New York.
Blaine Heck: and kind of just focus on New York?
Albert Behler: Blaine, let me start with this. We have, as you said now, transferred a lot of assets from lots of investments that we had in DC, I think in a prudent manner in time and early into San Francisco. San Francisco is clearly a different market than DC that has long-term structural issues. In San Francisco, I am still cautiously optimistic. The team spent nearly a week in San Francisco, including myself. We had meetings with the local authorities. You know that the mayor changed and the administration, and there's a totally different attitude towards business. I had a personal meeting with the mayor and his head of housing, Ned Siegel, and they're committed to clean up the city, make it safe.
Blaine Heck: Blayne, Let me let me start with this we we have as you as you sit now transferred a lot of our assets from from all lots of investments that they had in D. C. I think in a prudent manner.
Blaine Heck: In time it early into San Francisco, San Francisco is clearly a different market than than D. C that has long term structural.
Blaine Heck: Structural issues.
Blaine Heck: In San Francisco I am still.
Blaine Heck: Still cautiously optimistic the team spent.
Blaine Heck: Nearly a week in San Francisco, including myself, we had meetings with the local authorities.
Blaine Heck: You know that the mayor changed and then the administration and that's a totally different attitude towards it.
Blaine Heck: Towards business.
Blaine Heck: I had a personal meeting with the mayor and his head up housing.
Segal: Segal and they're committed to.
Segal: Clean up the city make it safe is our first goal and are working with the business community with the large employers.
Albert Behler: That is their first goal, and working with the business community, with the large employers, with whom they are well-connected, to come back into the city, similar to what had happened here in New York. And we have said on previous calls that San Francisco will be behind New York because it's a different kind of business environment. The technology firms reacted to the pandemic differently. Some of them thought they can work from home forever, but they're as well that the return to the office is beneficial for their business in general. So, we have already seen, and Peter can go into more details, you don't see that yet in the numbers, but we have seen much more leasing activity in the market with our various assets.
Segal:
Segal: With whom they are well connected to come back into the city are.
Segal: Similar to what has happened here in New York and we have said on previous calls that San.
Segal: San Francisco will be behind a new York, because it's a different a different kind of business environment the technology firms.
Segal: Reacted to the pandemic differently some of them thought they can work from home forever, but they are realizing as well that are the return to the office is beneficial pulled out for their business in general. So we have already seen that Peter can go into more details you don't see.
Segal: That yet in the numbers.
Segal: We have seen much more leasing activity in the market with our various assets. So it might take a little time as it took here in New York.
Albert Behler: So, it might take a little time as it took here in New York, but it looks like it's turning around to the positive.
Segal: But but it looks like it's turning around to the positive and you had asked a question about the the tariff discussions we don't see an impact on that at all for the time being in the market.
Blaine Heck: And you had asked a question about the tariff discussions. We don't see an impact on that at all for the time being in the market. Okay, great. That's really helpful and sounds great.
Speaker Change: Okay, Great that's really helpful and it sounds great.
Peter Brindley: And then, you know, I appreciate your commentary and transparency again on the 2025 move-outs and upcoming expirations, but wanted to ask if you could give an update on any activity you have at Showtime, Visa, any other large spaces that are facing expirations in 26. Sure. So, Blaine, this is Peter. We've discussed that 70% of our lease role in San Francisco is comprised of Google and JP Morgan. That's in 25. You asked about 26, and I think the big moving parts in 26 in San Francisco specifically are Morgan Lewis, Autodesk, Visa. We know that Morgan with a tenant for a portion of the Visa space currently.
Segal: And then you know.
Speaker Change: I appreciate your commentary and transparency again on the 2025 move outs and upcoming expirations, but wanted to ask if you could give an update on any activity you have at Showtime piece are any other large spaces that are facing explorations in 'twenty six.
Speaker Change: Sure. So so blayne this is Peter.
Speaker Change: We've discussed that.
Speaker Change: 70% of our lease roll in San Francisco is comprised of.
Speaker Change: Google and JP Morgan that's in 'twenty five you asked about 26, and I think the big moving parts in 'twenty six in San Francisco, specifically, our our Morgan Lewis.
Speaker Change: Autodesk visa.
Speaker Change: We know that Morgan Lewis and visa will move out.
Speaker Change: We are in advanced discussions with a tenant for a portion of the visa space. Currently so that backfill has started.
Peter Brindley: So, that backfill has started. And what I'm now referring to is a portion of the leases and negotiation pipeline that I didn't mention in my prepared remarks. And so, we are making progress there.
Speaker Change: And that what I'm now referring to as a portion of the leases in negotiation pipeline that dimension in my prepared remarks, and so where we are making progress there as it relates to Showtime. It in New York that is of course, our most significant known move out in 2026.
Peter Brindley: As it relates to Showtime in New York, that is, of course, our most significant known move out in 2026. We're trading paper with two or three tenants of size for that large block. When you look at what's happening in Midtown specifically, there are few blocks of this size, certainly of this quality. And the block, of course, is at 1633 Broadway that I'm referring to, the roughly 250,000 square foot Showtime block. And so, while that space does come back to us in January of 26, we are optimistic with regard to the activity level we have on the building, but it really is too soon at this point to share anything.
Speaker Change: We're trading paper with two or three tenants of size for that large block when you look at what's happening in Midtown specifically.
Speaker Change: There are few.
Speaker Change: <unk> of this size certainly of this quality.
Speaker Change: Mark of course is at 16, 33 Broadway that I'm, referring to the roughly 250000 square foot Showtime block and so while that space does come back to us in January of 'twenty six we are optimistic.
Speaker Change:
Speaker Change: With regard to the activity level, we have on the building, but it really is too soon at this point to share anything more than that.
Blaine Heck: Okay, thanks, Peter.
Speaker Change: Okay. Thanks, Peter last one for me maybe for Wilbur just touching on guidance your leasing volume at least three guidance were adjusted upward, but no change in same store NOI guidance is that just due to the delayed commencement of leases that you are expecting.
Blaine Heck: Last one for me, maybe for Wilbur, just touching on guidance, your leasing volume and lease rate guidance were adjusted upward, but no change in same store NOI guidance. Is that just due to kind of the delayed commencement of leases that you're expecting, you know, transferring into occupancy, or are there any other kind of moving pieces that we should be aware of? Blaine, it's primarily that. There are a couple of moving pieces, you know, we're trying to be very measured here with guidance as we always have. We gave out guidance two months ago, you know, we're sitting here in March.
Speaker Change: Transferring into occupancy or are there any other kind of moving pieces that we should be aware of.
Blaine Heck: Blaine, it's primarily that there are a couple of moving pieces you know, we're trying to be very measured here.
Speaker Change: With guidance as we as we always have we gave out guidance two months ago.
Blaine Heck: Sitting here in March I think.
Blaine Heck: I think you will see that refined and probably to the better as we move on with the activity we see right now and what's in the pipeline. Great. Thank you, guys.
Speaker Change: You will see that refined Ah.
Speaker Change: And probably to the batter as we as we move on with the activity, we see right now and what's in the pipeline.
Great. Thank you guys.
Dylan Burzinski: Next question, Dylan Burzinski with Green Street, please go ahead. Thanks for taking the question. Maybe just sort of continuing on the trend of the improvement in leasing volume or touring activity that you guys are seeing you know not only across New York now but San Francisco. Can you sort of talk about that specifically related to some of the larger tenants? Are we starting to finally see you know these tenants come back and look to take down space especially in San Francisco?
Speaker Change: Thank you.
Speaker Change: Dylan Brzezinski with Green Street. Please go ahead.
Speaker Change: Hey, guys. Thanks for taking the question.
Speaker Change: Maybe just sort of continuing on the trend of the improvement in leasing volume were touring activity that you guys are seeing you know not only across New York now with San Francisco.
Speaker Change: Sort of talk about that specifically related to some of the larger tenants are starting to finally see a you know these tenants come back at it and look to take down space, especially in San Francisco.
Peter Brindley: Yeah, Dylan, this is Peter. I'll start. You asked about New York. I'll tell you that the competition for space, certainly in premier buildings in the core submarkets of Midtown, is the most obvious theme that we're feeling. That is the force that is driving this market, and certainly there are large tenants that are really very active in Midtown specifically. As Albert said, and I touched on, San Francisco is certainly beginning to heal and recover. There's a lot of reasons to feel good and acknowledge that there are, in fact, some green shoots. It's still early, but in the most recent quarter, we did see some deals of size happen, and so we are starting to see more activity, and I think it's not just tech companies.
Speaker Change: Yes, John This is Peter I'll start Al you asked about New York I'll tell you that the competition for space certainly in Premier buildings in the core Submarkets of Midtown is the most obvious theme that we're feeling that as the force that is driving this market and certainly there are large tenants that are that are really very active.
Speaker Change: In Midtown specifically as Albert said and I touched on San Francisco is certainly beginning to heal and recover.
Speaker Change: Theres a lot of reasons to.
Speaker Change: To feel good and acknowledged that there are in fact, some green shoots it still.
Speaker Change: <unk> early but in the most.
Speaker Change: This quarter, we did see some some some deals of size happen and so we are starting to see we are starting to see more activity and I think it it's not just tech companies, we see in financial services and law firms of varying sizes and so you know this most recent quarter was the best quarter that San Francisco has realized since the first quarter of 2000.
Dylan Burzinski: We've seen financial services and law firms of varying sizes, and so this most recent quarter was the best quarter that San Francisco has realized since the first quarter of 2019, and while it's one quarter, we directionally, we feel that directionally, the market is moving in the right direction because of not only what we're experiencing by way of the results that have now been posted, but we're seeing out in the field day-to-day with the types of conversations we're having with the brokers. Appreciate those comments, Peter, and I guess just That demand you talked about in San Francisco, would you characterize that as like, net new demand in terms of new tenants and market or expansionary space?
Speaker Change: 19, and while it's one quarter.
Speaker Change: We directionally, we feel that Directionally the market is moving in the right <unk>.
Speaker Change: Our action because of you know not only what we're experiencing by way of the results that have now been posted but we're seeing out in the field day to day with the types of conversations we're having with the brokerage community.
Speaker Change: I appreciate those comments, Peter and I guess just.
Speaker Change: That demand you talked about it in San Francisco would you characterize that as like net new demand in terms of new tenants in market or expansionary space or is that more sort of musical chairs and more representative of tenants wanting to move out of quote unquote, maybe more commodity building into a higher quality building.
Peter Brindley: Or is that more sort of musical chairs and more representative of tenants? wanting to move out of quote unquote, maybe a more commodity building into a higher quality building, you know, that a Paramount might own. We're seeing a lot of law firms that are looking to upgrade the quality of their real estate. I think where we're seeing net new tenants enter the market would be the AI-based tenants. As I mentioned in my remarks, more than half of the deals that occurred in the first quarter, there were 20 deals, AI deals, if you will, more than half of them were new to the market.
Speaker Change: A lot of Paramount might own.
Speaker Change: We're seeing a lot of law firms that are that are looking to upgrade the quality of the real estate I think where we're seeing net.
Speaker Change: Net new tenants enter the market would be the AI based tenants as I mentioned in my remarks more than half of the deals that occurred in the first quarter. There were 20 deals AI deals. If you will more than half of them were new to the market and so we are we are seeing tenants that that quite honestly, we have to research when when when we identify who in fact they are in.
Dylan Burzinski: And so, we are seeing tenants that, quite honestly, we have to research when we identify who, in fact, they are. And so, there is a lot of new tenants finding their way into San Francisco, which are, like I said, predominantly AI-based tenants. They continue to be recipients of enormous amounts of venture capital funding. They certainly acknowledge the importance of the office. They subscribe to in-person work. And they are becoming increasingly active in a larger part of the tenant in the market profile in San Francisco. Appreciate the details. Thanks, guys. Thank you. Once again, if you would like to ask a question, please press star 1 on your telephone keypad.
Speaker Change: And so there is a lot of new tenants are finding their way into San Francisco.
Speaker Change: Which are like I said predominantly AI based.
Speaker Change: Tenants that continue to be recipients of enormous amounts of venture capital funding. They certainly acknowledge the importance of the office they subscribe to in person work and they are becoming increasingly active in a larger part of the tenant in the market profile in San Francisco.
Speaker Change: I appreciate the details thanks guys.
Dave: Thanks, Dave.
Speaker Change: Once again, if he would like to ask a question. Please press star one on your telephone keypad.
Tom Catherwood: Next question, Tom Catherwood with CTIG, please go ahead. Thank you and good morning everybody. Great to see the progress in Manhattan both in 1Q and thus far in 2Q.
Speaker Change: Next question, Tom Kathryn what it could be.
Dave: Scott.
Speaker Change: Thank you and good morning, everybody great to see the progress in Manhattan. It both in <unk> and thus far into Q are the Kirkland and finish leases on vacant space or are you taking back some space or moving tenants around to get those deals done.
Peter Brindley: Are the Kirkland and Benesch leases all on vacant space or are you taking back some space or moving tenants around to get those deals done? Hi, Tom. This is Peter. I want to say that Kirkland was in excess of 100,000 square feet on vacant space. So it not only solved for vacant space, but served to de-risk lease role. The Bennis transaction, which we announced this morning, was comprised of the following, about 30,000 square feet on vacant space, 60,000 square feet that's scheduled to expire in the fourth quarter of this year, and 30,000 square feet on space that's scheduled to expire in the latter half of 2020.
Speaker Change: Hi, John This is Peter.
Peter Blayne: I want to say that Kirkland was was a rough in excess of 100000 square feet on vacant space. So so.
Speaker Change: It not only solve for vacant space, but serve to derisk lease roll.
Speaker Change: The <unk> transaction, which we announced this morning was comprised of the following about 30000 square feet on on vacant space 60000 square feet that is scheduled to expire in the fourth quarter of this year and 30000 square feet on space Thats scheduled to expire in 2000, and the latter half of 2026.
Tom Catherwood: Got it. Appreciate that.
Speaker Change: Got it appreciate that and then Peter you mentioned the shrinking pool of quality available office space in Midtown are you starting to see tenants coming to you earlier and then a renewal process to try to lock in their space and they have in years past and does that allow you to start pushing rents here.
Peter Brindley: And then, Peter, you had mentioned the shrinking pool of quality available office space in Midtown. Are you starting to see tenants coming to you earlier and in a renewal process to try to lock in their space than they have in years past? And does that allow you to start pushing rents here? Yeah, I think with every tenant, it's a little different. I do think the fear of loss has kicked in. And I think that's largely what's causing tenants to engage. You know, we recognize that of the call at 40 million square feet in Midtown, 80% of it is on floors 24 and below.
Speaker Change: Yeah, I think with every tenant it's a little different I do think the fear of losses kicked in and I think that's largely what's causing tenants to engage we recognize it up the call. It 40 million square feet in Midtown 80% of it is on Florida, 24, and below and so if you if you happen to be leasing a HIFU.
Peter Brindley: And so, if you happen to be leasing a high quality building, as we do, of course, you certainly have pricing power on upper floors. There's just not a lot of availability on upper floors in our in Midtown. And so, yes, we do recognize that we have pricing power. We are pushing when and where we have availability on upper floors, and we're seeing the results now. Got it.
Speaker Change: We are building as we as we do of course, you certainly have pricing power on upper floors, just just not a lot of availability on upper floors in our market here in Midtown and so yeah.
Speaker Change: Yes, we do we do recognize that we have pricing power, we are pushing when and where we have availability on upper floors and we're seeing the results now.
Speaker Change: Got it and then last one for me following up on one blames San Francisco question yesterday, one of your peers have expressed concern that the first quarter leasing pick up was more of a one off with a number of large requirements landing at once but demand behind that primarily concentrated in small to mid sized.
Peter Brindley: And then last one for me, following up on on Blaine's San Francisco question. Yesterday, one of your peers expressed concern that the first quarter leasing pickup was more of a one-off with a number of large requirements landing at once, but demand behind that primarily concentrated in small to mid-sized tenants. Do you agree with that? And has your pipeline recently changed as large leases have signed elsewhere? There were certainly some several large transactions done in the first quarter, Google, JPMorgan, Databricks. And I would also say that a lot of these AI-based companies are smaller in nature, not all of them, but a lot of them, given where they are in the revolution.
Speaker Change: Tenants do you agree with that and has your pipeline recently changed as large pieces of signed elsewhere.
Speaker Change: There were certainly some several large transactions done in the first quarter, Google JP Morgan data bricks.
Speaker Change: And I would also say that a lot of these AI based companies are smaller in nature, not all of them, but a lot of them given given where they are in their evolution.
Tom Catherwood: I don't know that that rules out larger opportunities. Certainly, we are having conversations with tenants of size. And so I think in terms of, you know, demand. I would say that there still remains a nice range of requirements currently in the market. You know, we call the sort of tenant-to-market pipeline in San Francisco to be roughly $7 million. and it's made up of tenants of varying sizes. Got it. Appreciate all the answers. Thanks, everyone.
Speaker Change: I don't know that that that rules out larger opportunities certainly we are having conversations with tenants of size and so I think in terms of you know.
Speaker Change: A man I would say that there still remains a nice range of.
Speaker Change: Requirements currently in the market.
Speaker Change: We call that sort of 10 in the market.
Speaker Change: Pipeline in San Francisco to be roughly 7 million square feet.
Speaker Change: And it's made up of tenants of varying sizes.
Speaker Change: Got it I appreciate all the answers thanks, everyone.
Tom Catherwood: Thank you, Tom.
John: Thanks, John.
Albert Behler: I would like to turn the floor over to Albert Behler for closing remarks. Thank you. Thank you all for joining us today.
Speaker Change: I would like to turn the floor over to Albert Behler for closing remark.
Albert Behler: Thank you. Thank you all for joining us today.
Albert Behler: We look forward to Providing an update on our continued progress when we report our second quarter 2025 results.
Speaker Change: We look forward to a pro.
Speaker Change: <unk> an update on our continued progress when we report our second quarter 2025 results.
Operator: Goodbye.
Speaker Change: Goodbye.
Operator: This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time.
Thank you for your participation.
Speaker Change: [music].
Speaker Change: Yeah.
Yes.
Speaker Change: [music].