Q2 2025 Alexander's Inc Earnings Call

August 5, 2025

Operator: Good morning, welcome to the Vornado Realty Trust Q2 2025 earnings call. My name is Michael, I will be your operator for today's call. This call is being recorded for replay purposes. All lines are in a listen-only mode. Our speakers will address your questions at the end of the presentation during the question and answer session. At that time, please press star 1 on your touch tone phone. I will now turn the call over to Mr. Steven Borenstein, Executive Vice President and Corporation Counsel. Please go ahead.

Michael Borenstein: Good morning and welcome to the Vornado Realty Trust second quarter 2025 earnings call. My name is Michael and I will be your operator for today's call. This call is being recorded for replay purposes. All lines are in a listen-only mode. Our speakers will address your questions at the end of the presentation during the question and answer session. At that time, please press star, then one on your touch-tone phone. I will now turn the call over to Mr. Steve Borenstein, Executive Vice President and Corporation Counsel. Please go ahead.

Good morning and welcome to the Vornado. Realy trust second quarter, 2025 earnings call. My name is Michael and I will be your operator for today's call. This call is being recorded for replay purposes. All lines are in a listen-only mode. Our speakers will address your questions at the end of the presentation during the question and answer session at that time. Please press star then 1 on your touchtone phone.

Steven Borenstein: Welcome to Vornado Realty Trust Q2 earnings call. Yesterday afternoon, we issued our Q2 earnings release and filed our quarterly report on Form 10-Q with the Securities and Exchange Commission. These documents, as well as our supplemental financial information package, are available on our website www.vno.com, under the investor relations section. In these documents and during today's call, we will discuss certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in our earnings release, Form 10-Q, and financial supplement. Please be aware that statements made during this call may be deemed forward-looking statements, and actual results may differ materially from these statements due to a variety of risks, uncertainties, and other factors.

Steve Borenstein: Welcome to Vornado Realty Trust second quarter earnings call. Yesterday afternoon, we issued our second quarter earnings release and filed our quarterly report on the 10-Q with the Securities and Exchange Commission. These documents, as well as our supplemental financial information package, are available on our website, www.vno.com, under the Investor Relations section. In these documents, and during today's call, we will discuss certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in our earnings release, Form 10-Q, and financial supplement. Please be aware that statements made during this call may be deemed forward-looking statements, and actual results may differ materially from these statements due to a variety of risks, uncertainties, and other factors.

I will now turn the call over to Mr. Steve borenstein, Executive Vice President and Corporation Council. Please go ahead.

Welcome to tornado. Realy trust, second quarter earnings call yesterday afternoon. We issued our second quarter earnings release and filed our quarterly report on. Thank you with the Securities and Exchange Commission. These documents, as well as our supplemental. Financial information package are available on our website www.bn.com under the investor relations section.

Steve Borenstein: Please refer to our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2024, for more information regarding these risks and uncertainties. The call may include time-sensitive information that may be accurate only as of today's date. The company does not undertake a duty to update any forward-looking statements. On the call today for management, for our opening comments are Steven Roth, Chairman and Chief Executive Officer, and Michael Franco, President and Chief Financial Officer. Our senior team is also present and available for questions. I will now turn the call over to Steven Roth.

Steven Borenstein: Please refer to our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2024, for more information regarding these risks and uncertainties. The call may include time-sensitive information that may be accurate only as of today's date. The company does not undertake any duty to update any forward-looking statements. On the call today from management for our opening comments are Steven Roth, Chairman and Chief Executive Officer, and Michael Franco, President and Chief Financial Officer. Our senior team is also present and available for questions. I will now turn the call over to Steven Roth.

We will discuss certain non-gaap Financial measures reconciliations of these measures to the most directly comparable. Gaap measures are included in our earnings release form 10 q and financial supplements. Please be aware that statements made. During this call may be deemed forward-looking statements and actual results. May differ materially from these statements due to a variety of risks, uncertainties and other factors.

Please refer to our filings with the Securities and Exchange Commission, including our annual report on form, 10K for the year. Ended December 31st 2024, for more information regarding these risks and uncertainties, the call may include time-sensitive information. That may be accurate only, as of today's date. The company does not undertake a duty to update any forward-looking statements.

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

Steven Roth: Thank you, Steve Sakwa, and good morning, everyone. Let me start by expressing our sorrow about the tragic and senseless shootings at 345 Park Avenue last week. Our deep condolences go out to the victims' families and friends. We have many friends in that building, in ownership and occupiers, and we stand with them as they deal with this terrible tragedy. To continue. Here at Vornado, our business continues to be strong, is getting stronger, and I remain incredibly enthusiastic about our future prospects. Our stock performance leads the office sector, have increased 42% over the trailing 12 months, almost double the S&P 500. I was quite surprised that, broadly speaking, every other office REIT, whether East Coast or West Coast, including all the other New York office specialists, were negative during that period. We had an excellent quarter, and Michael Franco will cover the results shortly.

Steven Roth: Thank you, Steve, and good morning, everyone. Let me start by expressing our sorrow about the tragic and senseless shootings at 345 Park Avenue last week. Our deep condolences go out to the victims' families and friends. We have many friends in that building, in ownership and occupiers, and we stand with them as they deal with this terrible tragedy. To continue, here in Vornado, our business continues to be strong, is getting stronger, and I remain incredibly enthusiastic about our future prospects. Our stock performance leaves the office sector has increased 42 percent over the trailing 12 months, almost double the S&P 500. I was quite surprised that, broadly speaking, every other office read, whether East Coast or West Coast, including all the other New York office specialists, were negative during that period. We had an excellent quarter, and Michael will cover the results shortly.

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

Thank you, Steve and good morning everyone.

Let me start by expressing our sorrow about the tragic and senseless shootings at 3:45 Park Avenue last week.

A deep Consolidated. Go out to the victims, families and friends. We have many friends in that building and ownership and occupiers. And we stand with them as they deal with this terrible tragedy.

To continue here. With grenado, our business continues to be strong is getting stronger and I remain incredibly enthusiastic about our future prospects.

Our stock performance leads the office sector have increased 42% over the trailing 12 months, almost double, the S&P 500. I was quite surprised that broadly speaking every other office week where the East Coast or West Coast, including all the other New York office Specialists were negative during that period.

Steven Roth: By excellent, I mean leasing, balance sheet, and Penn, all excellent. Let me once again discuss what we see on the ground and our business strategies. We are a 90% New York-centric company. Actually, we are a 90% prime pitch Manhattan-centric company. We do own a single large building in Chicago, the Mart, and a single complex at 555 California Street, the number one building in San Francisco. These two assets may be on the for sale list for the right deal at the right time. Manhattan is universally claimed to be the strongest real estate market in the country, and I mean the strongest by far. While Manhattan may have nearly 420 million square feet of office space, we actually compete in a much smaller, 180 million square foot, class A better building market. Our clients are expanding, demand is strong, broad base, and here's the punchline.

Steven Roth: By excellent, I mean leasing, balance sheet, and pen, all excellent. Let me once again discuss what we see on the ground and our business strategies. We are a 90 percent New York-centric company. Actually, we are a 90 percent prime-pitch Manhattan-centric company. We don't own a single large building in Chicago, the Mark, and a single complex at 555 California Street, the number one building in San Francisco. These two assets may be on the for-sale list for the right deal at the right time. Manhattan is universally claimed to be the strongest real estate market in the country, and I mean the strongest by far. While Manhattan may have nearly 420 million square feet of office space, we actually compete in a much smaller 180 million square foot Class A better building market. Our clients are expanding, demand is strong and broad-based, and here's the punchline.

We had an excellent quarter, and Michael will cover the results shortly. By "excellent," I mean leasing, balance sheet, and performance—all excellent.

Let me once again, discuss what we see on the ground and our business strategies.

We are 90% New York Centric company. Actually, we are a 90% Prime pitch, Manhattan Centric company.

We don't own a single large building in Chicago, the mark, and a single complex is 5555, California Street. The number 1 building in San Francisco.

These 2 assets may be on the for sale list for the right deal, at the right time.

Manhattan is universally claimed to be the strongest real estate market in the country. And I mean, the strongest by far

Well, Manhattan may have nearly 420 million square feet of office space. We actually competed in a much smaller 180 million square foot Class A Better building Market.

Steven Roth: Available space continues to evaporate quickly. Replacement costs for a Class A tower in Manhattan has risen to, call it, $2,500 per square foot. With interest rates at 6% or 6% plus, rents in the 200s are now commonplace. Think about it, $100 rents were rare only a few years ago. I believe this math is telling us there will only be a trickle of new supply for the foreseeable future, at least through the end of the decade. Remember, it takes 5 years from start to deliver a new build tower in New York. That trickle of supply, however unlikely, will undoubtedly be spoken for and not create speculative space available to the market. Taken together, all this is the very definition of a landlord's market.

Steven Roth: Available space continues to evaporate quickly. Replacement costs for a Class A tower in Manhattan is rising to call it $2,500 per square foot. With interest rates at 6 or 6 plus percent, rents in the 200s are now commonplace. Think about it, $100 rents were rare only a few years ago. I believe this math is telling us there will only be a trickle of new supply for the foreseeable future, at least through the end of the decade. Remember, it takes five years from start to deliver a new build tower in New York. And that trickle of supply, however unlikely, will undoubtedly be spoken for and not create speculative space available to the market. Taken together, all this is the very definition of a landlord's market.

Our clients are expanding demand is strong broad base and here's the punch line available. Space space continues to evaporate quickly.

Replacement costs for a class a tower in Manhattan. Has risen to call it 2500 per square foot.

With interest rates at 6 or 6 Plus percent rent in the 200s are now Common Place.

Think about it. 100 dollar rents were rare only a few years ago.

I believe this math is telling us there will only be a trickle of new supply for the foreseeable future, at least through the end of the decade. Remember, it takes five years from start to deliver a new build tower in New York.

And that trickle of Supply. However, unlikely will undoubtedly be spoken for and not create speculative space available to the market.

Steven Roth: With tight availability and Class A better buildings in Manhattan and West Side Cardiff, and no new supply coming for the rest of the decade, I believe the next few years have the potential to be one of the strongest periods of rental growth we've seen in decades. And it's already started. That said, logically, and for certain, values will increase as well. Here is our industry-leading leasing scorecard. During the first half of 2025, we leased 2.7 million square feet overall, of which 2.2 million square feet was Manhattan office. That includes the 1.1 million square foot master lease with ending play at 770 Broadway, the largest New York office lease since 2019, which, by the way, absorbed 500,000 square feet of vacancy at that property.

Steven Roth: With tight availability in Class A better buildings in the Manhattan and West Side corridor, and no new supply coming for the rest of the decade, I believe the next few years have the potential to be one of the strongest periods of rental growth we've seen in decades, and it's already started. That said, logically and for certain, values will increase as well. Here is our industry leading leasing scorecard. During H1 2025, we leased 2.7 million sq ft overall, of which 2.2 million sq ft was Manhattan office. That includes the 1.1 million sq ft master lease with NYU at 770 Broadway, the largest New York office lease since 2019. Which, by the way, absorbed 500,000 sq ft of vacancy at that property.

Taken together. All this is the very definition of a landlord's Market with tight availability and Class A Better buildings in the Manhattan and Westside carbon and no new Supply coming for the rest of the decade. I believe in the next few years have the potential to be 1 of the strongest careers of rental growth we've seen in decades and it's already started. That said, logically and for certain values will increase as well.

Here is our industry-leading lease uh, leasing scorecard during the first half of 2025. We lease 2.7 million square feet overall, at which point, to which 2.2 million square feet was Manhattan office.

That includes the 1 Point 1 million square foot Master Lease, with any play with 770 Broadway, the largest New York office lease in 2019.

Steven Roth: The remaining 1.1 million square feet of leasing during the first half was at $97 per square foot average starting rents, with mark-to-market of plus 10.7 percent GAAP and plus 7.7 percent cash. During the second quarter in Manhattan, we executed 27 deals, totaling 1.5 million square feet, including NYU. Excluding NYU, the remaining 400,000 square feet of Manhattan office leasing for the quarter was at $101 per square foot starting rent, with mark-to-market of plus 11.8 percent GAAP and plus 8.7 percent cash. We continue to achieve the highest average rents in the city. This quarter leasing was 190,000 square feet in Penn and 210,000 square feet in our other Manhattan assets. Importantly, our leasing this quarter included 12 transactions for 183,000 square feet at Penn One and an average starting rent of $101 per square foot, bringing occupancy here to 91 percent. Here's an interesting factoid.

Steven Roth: The remaining 1.1 million square feet of leasing during H1 was at $97 per square foot average starting rents, with mark-to-markets of +10.7% GAAP and +7.7% cash. During Q2 in Manhattan, we executed 27 deals totaling 1.5 million square feet, including NYU. Excluding NYU, the remaining 400,000 square feet of Manhattan office leasing for the quarter was at $101 per square foot starting rents, with mark-to-markets of +11.8% GAAP and +8.7% cash. We continue to achieve the highest average rents in the city. This quarter leasing was 190,000 square feet in Penn and 210,000 square feet in our other Manhattan assets. Importantly, our leasing this quarter included 12 transactions for 183,000 square feet at Penn 1, at an average starting rent of $101 per square foot, bringing occupancy here to 91%. Here's an interesting factoid.

Which, by the way, absorbed 500,000 square feet of vacancy, at that property.

The reigning 1.1 million square feet of leasing. During the first half, was at 97 per square foot. Average, starting rents with Mark, Tom markets of plus, 10.7% Gap and plus 7.7% cash.

During the second quarter in Manhattan, we executed 27 deals, totaling 1.5 million square feet, including NYU.

Office leasing for the quarter, was at 101 dollars per square foot starting rent with Mark to markets of plus 11.8% Gap, and 8.7, and plus, 8.7% cash.

He continued to achieve the highest average rent in the city.

This quarter quarter leasing was 190,000 square, feet in 10 and 210,000 square feet in our other Manhattan assets.

Importantly uh importantly our leasing this quarter included 12 transactions for 1803 thousand square feet at 10.

At an average spotting rent of 101 dollars per square foot. Bringing occupancy here to 91%.

Steven Roth: Since the start of physical development, we have leased 1.6 million square feet at Penn One at average rents of $94. At Penn, we are handily exceeding both our initial underwriting and our increased underwriting. Here's another way to look at it. Looking towards the future, everyone is modeling large increases in Vornado's earnings as leases at Penn One and Penn Two come online, as they should. This is all based on rents of, say, $100 per square foot. But our neighbors to the west are achieving $150 per square foot, and over time, so will we. Think about it. Penn One, Penn Two, and Farley together comprise 5 million square feet. So the math says every $10 a foot uptick in rent yields $50 million to the bottom line.

Steven Roth: Since the start of physical development, we have leased 1.6 million sq ft at Penn 1 at average rents of $94. At Penn, we are handily exceeding both our initial underwriting and our increased underwriting. Here's another way to look at it, looking towards the future. Everyone is modeling large increases in Vornado's earnings as leases at Penn 1 and Penn 2 come online, as they should. This is all based on rents of, say, $100 per square foot. Our neighbors to the west are achieving $150 per square foot, and over time, so will we. Think about it. Penn 1, Penn 2, and Farley together comprise 5 million sq ft. The math says every $10 a foot uptick in rent yields $50 million to the bottom line.

Here's an interesting factoid since the start of physical development, we have least 1.6 million square feet at 101 at average rents of 94 dollars at Penn. We are handling both our initial underwriting at our increased underwriting.

Here's another way to look at it.

Looking towards the future. Everyone is modeling large increases in grenades earnings as leases at 101 and 102 come online as they should. This is all based on rents of say, 100 hours per square foot, but our neighbors to the West are achieving $150 per square foot and over time. So, will we think about it? 101, 102, and Farley together, comprise 5 million, square feet.

Steven Roth: And what's more, when the uptick, i.e., market rents get to $150 per square foot on 5 million square feet, that's an increment of $250 million per year. Same store asset appreciation over time is the ticket to success in the property business. Tenants are expanding in the Penn District. As an example, in the last quarter, Samsung doubled its space at Penn One, and since its first 220,000 square foot lease signed in 2020, our major tech tenant at Penn 11 has expanded three more times, now occupying 460,000 square feet in that building. Last week, after the quarter ended and not included in the leasing statistics, we announced the 203,000 square foot headquarters lease at Penn Two with Verizon Communications, one of the world's leading telecommunications companies. Verizon now joins other top tenants, Madison Square Garden, Major League Soccer, and Universal Music Group at Penn Two.

Steven Roth: What's more, when the uptick, i.e., market rents, get to $150 a sq ft on 5 million sq ft, that's an increment of $250 million per year. Same store asset appreciation over time is the ticket to success in the property business. Tenants are expanding in the Penn District. As an example, in the last quarter, Samsung doubled its space at Penn 1, and since its first 220,000 sq ft lease signed in 2020, our major tech tenant at Penn 11 has expanded three more times, now occupying 460,000 sq ft in that building. Last week, after the quarter ended, and not included in the leasing statistics, we announced a 203,000 sq ft headquarters lease at Penn 2 with Verizon Communications, one of the world's leading telecommunications companies. Verizon now joins other top tier tenants, Madison Square Garden, Major League Soccer, and Universal Music Group at Penn 2.

so the math says every $10, a foot uptick in red seals million dollars to the bottom line

And what's more?

Uh, when the uptick IE Market rents get to $150 per square foot on 5 million square feet, that's an increment of 250 million per year.

Same store asset appreciation. Over time is the ticket to success in the property business.

Tenants are expanding in the pain District as an example on the last quarter Samsung doubled its base at 101 and since its first 220,000 square foot lease, signed in 2020, a major Tech tenant at Penn 11 has expanded 3 more times. Now occupying 460,000 square feet in that building

Last week after the quarter ended and not included in the leasing statistics, we announced the 2003 3,000 square foot headquarters. Lease has been to with Verizon communications 1 of the world's leading telecommunications companies.

Steven Roth: We are, of course, delighted to welcome Verizon. Verizon's choice of Penn and their enthusiasm for their new home can best be described by lifting a quote from their press release by one of their senior executives. Quote, "New York City isn't just where we work, it's who we are. Our employees deserve a workplace that is just as vibrant as our culture. Penn Two is more than an office. It's a space designed to bring us together, to collaborate, to celebrate, to think boldly, to build the future side by side." Close quotes. The Verizon folks get it. This is a very important deal and continues to validate the product. This is a very important deal. Occupancy at Penn Two is now 62 percent, and we have multiple deals in the on-deck circle, which will keep our occupancy marching upwards.

Steven Roth: We are, of course, delighted to welcome Verizon. Verizon's choice of Penn and their enthusiasm for their new home can best be described by lifting a quote from their press release by one of their senior executives. Quote, New York City isn't just where we work, it's who we are. Our employees deserve a workplace that is just as vibrant as our culture. Penn Two is more than an office. It's a space designed to bring us together, to collaborate, to celebrate, to think boldly, to build the future side by side. Close quote. The Verizon folks get it. This is a very important deal and continues to validate the product. This is a very important deal. Occupancy at Penn Two is now 62%, and we have multiple deals in the on deck circle, which will keep our occupancy marching upwards.

Verizon now joins other top, tier tenants, Madison Square Garden, Major League, Soccer, and Universal, Music Group, at Penn 2. We are of course, the lighter to welcome Verizon.

Rises choice of pain and their enthusiasm for their new home investing described by lifting a quote from their press release.

By 1 of their senior Executives. Quote, New York City isn't just where we work, it's who we are our employees deserve, a workplace, that is just as vibrant as our culture pensou is more than an office at the space designed to bring us together to collaborate to celebrate to think boldly to build the future side by side close quote.

The Verizon folks get it.

This is a very important deal and continues to validate the product. This is a very important deal.

with now, 62% and we have multiple deals in the on Deck Circle, which will keep our occupancy, marching upwards,

Steven Roth: The Penn District, our three-block-long city within a city, continues to amaze and impress tenants and stakeholders. We sit atop the nexus of Pennsylvania Station and the New York City subway system, adjacent to our good neighbors to the west, Manhattan West and Hudson Yards. The three of us combined represent the new booming west side of Manhattan. At Penn, we are creating a campus of multiple interconnected buildings under one ownership. We're delivering exactly as we said we would, and there is much more to come. As a starter, we are well along in the development process for a 475-unit rental residential project on our 34th street site, catty-cornered to the Moynihan Train Hall. Next, we are going to transform as much as 700 front feet of tired old retail on both sides of 7th Avenue, along 34th Street, into attractive, modern, and exciting retail offerings.

Steven Roth: The Penn District, our 3 block long city within a city, continues to amaze and impress tenants and stakeholders. We sit atop the nexus of Pennsylvania Station and the New York City subway system, adjacent to our good neighbors to the west and Hudson Yards. The three of us combined represent the new booming west side of Manhattan. At Penn, we are creating a campus of multiple interconnected buildings under one ownership. We're delivering exactly as we said we would, and there is much more to come. As a starter, we are well along in the development process for a 475-unit rental residential project on our 34th Street site, catty corner to the Moynihan Train Hall. Next, we are going to transform as much as 700 front feet of tired, old retail on both sides of Seventh Avenue along 34th Street into attractive, modern, and exciting retail offerings.

The pain District, our 3 block long City within the city continues, to amaze and impress, tenants and stakeholders.

We set a top, the Nexus of Pennsylvania station and the New York City subway system, adjacent to our good neighbors, to the West that have the west, and hunts and yards.

The 3 of us combined represent the new booming west side of Manhattan.

At 10, we are creating a campus of multiple interconnected buildings under 1 owner, exactly. As we said, we would, and there is much more to come

Steven Roth: The gateway to Penn is 7th Avenue at 34th Street. This stretch across the street from Macy's used to be an op-three location, and returning to top three is our goal. As I said before, the Penn District will be a growth engine for companies for years to come, with rising rents and future development projects, including the Penn 15 site and potential residential opportunities. We also continue to add to our already impressive food offerings in the district with our newest restaurant, the Dynamo Room, which opened last month to great reviews. Avril will open at Farley in the fall. And our rooftop park at Penn Two, called The Perch, named The Perch, is the best spot in the city for view, food, gathering, or just chilling. Come see Penn for yourself.

Steven Roth: The gateway to Penn is Seventh Avenue at 34th Street. This stretch across the street from Macy's used to be a top 3 location, and returning to top 3 is our goal. As I said before, the Penn District will be a growth engine for company for years to come with rising rents and future development projects, including the Penn 15 site and potential residential opportunities. We also continue to add to our already impressive food offerings in the district with our newest restaurant, The Dynamo Room, which opened last month to great reviews. Avra will open at Farley in the fall. Our rooftop park at PENN 2, named The Perch, is the best spot in the city for view, food, gathering, or just chilling. Come see Penn for yourself.

As a starter we are well along in the development process for a 475 unit. Rental residential project on our 34 Street site, caddy corner to the moan train Hall. Next we are going to transform as much as 700 front feet of tired old retail, on both sides of Senate Avenue, along 34th Street, into attractive modern and exciting. Retail offerings.

The Gateway depended 7th Avenue at 34th Street. This stretch across the street from Macy's. Used to be a top 3 location.

And returning to flat top, 3 is our goal.

As I said before, the pain district will be a growth engine for a company for years to come with Rising rents and future development projects, including pain 15, the pain 15 site, and potential residential opportunities.

we also continue to add to our already impressive food offerings in the district, with our newest restaurant restaurant, that Dynamo room which opens last month, the great reviews

Open it Farley in the pool.

And our rooftop park at 10 to called the purse name, the perch is the best spot in the city for view food Gathering or just chilling.

Steven Roth: I invite you to come to Penn District anytime, but especially at happy hour, where you will see every seat in every restaurant and amenity, whether it's indoors or outdoors, filled with happy employees of our tenants. Our unmatched amenity package of 180,000 square feet is surely doing its job in spades to attract and delight our tenants. Our New York office leasing pipeline is robust with a total of 560,000 square feet of leases signed or in negotiation, setting up the Q3, plus more than 1 million square feet in various stages of proposal. As we announced on our last call, after 2 years of intense deliberations, the arbitration panel issued its ruling on the Penn One ground lease rent reset. The Penn One ground lease, as fully extended, goes to 2098.

Steven Roth: I invite you to come to Penn District anytime, but especially at happy hour, where you will see every seat at every restaurant and amenity, whether it's indoors or outdoors, filled with happy employees of our tenants. Our unmatched amenity package of 180,000 square feet is surely doing its job in spades to attract and delight our tenants. Our New York office leasing pipeline is robust, with a total of 560,000 square feet of leases signed or in negotiations, setting up the third quarter, plus more than 1 million square feet in various stages of proposal. As we announced on our last call, after two years of intense deliberation, the arbitration panel issued its ruling on the Penn One ground lease rent reset. The Penn One ground lease, as fully extended, goes to 2098.

Come see, Pantry yourself. I invite you to come to Penn District anytime but especially at happy hour where you will see every scene at every restaurant at amenity, whether it's indoors or Outdoors, filled with happy employees of our planet.

Our unmatched appen amenity package of 180,000 square feet is surely doing its job in space to attract and Delight our tenants.

Our New York office, leasing a popular pipeline, is robust with a total of 560,000 square feet of leases signed or in negotiations.

Setting up the third quarter plus more than 1 million square feet in various stages of proposal.

As we are announced on our last call, if the 2 years of intense deliberations, the arbitration panel issued its ruling on the 101 ground lease, rent reset.

Steven Roth: Days ago, ground lessor filed an 11th hour Hail Mary motion in New York County Supreme Court to vacate the rent reset panel ground rent determination. We believe the motion is entirely without merit and intend to vigorously oppose it. We also completed the following financing transactions as we continue to bolster our liquidity and handle our debt maturities. In April, we completed a $450 million financing of 1535 Broadway, using $407 million of net proceeds to partially redeem our retail JV equity on the asset. The preferred equity outstanding balance is now $1.079 billion, down from $1.828 billion. In June, we completed a 5 year, $675 million refinancing of Independence Plaza, a joint venture in which we own a 50.1% ownership interest.

Steven Roth: Days ago, a ground lessor filed an 11th-hour hail Mary motion in New York County Supreme Court to vacate the rent reset panel ground rent determination. We believe the motion is entirely without merit and intends to vigorously oppose it. We also completed the following financing transactions as we continue to bolster our liquidity and handle our debt maturities. In April, we completed a $450 million financing of 1535 Broadway, using $407 million of net proceeds to partially redeem our retail JV equity on the asset. The preferred equity outstanding balance is now $1.079 billion, down from $1.828 billion. In June, we completed a five-year $675 million refinancing of Independence Plaza, a joint venture in which we own a 50.1 percent ownership interest. In July, we completed a five-year $450 million refinancing of Penn 11, paying down this previous loan by $50 million.

The pain 1 ground lease has fully extended goes to 2098.

Days ago groundless or filed at 11th, our Hail Mary Motion in New York County, Supreme Court to vacate. The rent resets panel, ground rents determination. We believe the motion is entirely without Merit and intensive. V vigorously, opposed it

We also completed the following financing transactions, uh, as we continue to bolster our liquidity and handle our debt maturities. In April, we completed a 450 million financing of 1535 Broadway using 407 million of net proceeds to partially redeem, our retail JV equity on the asset.

The preferred outstanding, the preferred Equity outstanding balance is now 1.079 billion down from 1.828 billion.

Steven Roth: In July, we completed a 5-year, $450 million refinancing of Penn 11, paying down this previous loan by $50 million. We have meaningfully delevered our balance sheet over the past couple of quarters. Since the beginning of the year, we have generated $1.5 billion of net proceeds from sale, financings, and the NYU deal, paid down $965 million of debt, and increased our cash by $540 million. Our cash balances are now $1.36 billion, and together with our undrawn credit lines of $1.56 billion, we have immediate liquidity of $2.9 billion. Our net debt to EBITDA metric has improved by 1.4 turns to 7.2x from 8.6x, and our fixed charge coverage ratio, as expected, is steadily rising. Please see page 23 of our financial supplement for details.

In June, we completed a 5-year 675 million refinancing of Independence Plaza. A joint venture in which we own a 50.1% ownership interest,

in July, we completed a 5-year, 450 million refinancing of at 11 paying down this previous loan by 50 million.

Steven Roth: We have meaningfully delevered our balance sheet over the past couple of quarters. Since the beginning of the year, we have generated $1.5 billion of net proceeds from sale, financings, and the NYU deal, paid down $965 million of debt, and increased our cash by $504 million. Our cash balances are now $1.36 billion, and together with our undrawn credit lines of $1.56 million, we have immediate liquidity of $2.9 billion. Our net debt to EBITDA metric has improved by 1.4 turns to 7.2 times from 8.6 times. And our fixed charge coverage ratio, as expected, is steadily rising. Please see page 23 of our financial supplement in details. Finally, we remain very excited about the redevelopment of 350 Park Avenue with Citadel as our anchor tenant and Ken Griffin as our 60 percent partner.

We have meaningfully delivered. Our balance sheet over the past couple of quarters. Since the beginning of the year, we have generated 1.5 billion of net proceeds from sale financing and the NYU deal.

Paid down 965 billion of debt and increased our cash by 540 million.

Our cash balances are now 1.36 billion and together with our undrawn, credit lines of 1.56 billion. We have immediate liquidity of 2.9 billion, our net debt to Ethan metric, has approved by 1.4 turns to 7.2 times from 8.6 times.

Steven Roth: Finally, we remain very excited about the redevelopment of 350 Park Avenue with Citadel as our anchor tenant and Ken Griffin as our sister developer partner. The process to create this grand Foster + Partners designed 1.8 million square foot tower on the best side of Park Avenue has begun, and this new building will stand out as being truly best in class. DDs are complete, i.e., the building is basically designed, and CDs are progressing. Last month, the City Planning Commission voted to approve the project, and we expect the final ULURP approval from the city council this fall. Citadel is currently building out their interim swing space, which will allow us to commence demolition of the existing 350 Park Avenue building in spring. Thank you all for listening. Now over to Michael to cover our financials.

And our fixed time fixed charge coverage. Ratio as expected is steadily Rising. Please see page 23 of our financial supplement for details.

Steven Roth: The process to create this grand, foster, and partners-designed 1.8 million square foot tower on the west side of Park Avenue has begun, and this new building will stand out as being truly best in class. DDs are complete, i.e., the building is basically designed, and CVs are progressing. Last month, the City Planning Commission voted to approve the project, and we expect the final yield of approval from the City Council this fall. Citadel is currently building out their interim swing space, which will allow us to commence demolition of the existing 350 Park Avenue building in spring. Thank you all for listening, and now over to Michael to cover our financing.

Finally, we remain very excited about the Redevelopment of 350. 350 Park Avenue as Citadel with Citadel as our anchor tenant and Ken Griffin as our 60%,

The process that creates this Grand Foster and partners designed 1.8 million square foot for tower. On the best side of the Park Avenue has begun. And is that and this new building will stand out as being being truly rest in class.

DVDs are complete i.e. and CDs are progressing.

Last month, the City Planning Commission voted to approve the project. And we expect the final ulip approval from the city council this fall.

Senator is currently building out their income swing space, which will allow us to commence the evolution of the existing 350 Park Avenue building.

In Spring.

Michael Franco: Thank you, Steve, and good morning to everyone. Second quarter comparable FFO was 56 cents per share, which beat analyst consensus of 53 cents per share and essentially flat compared to last year's second quarter. We had lower net interest income from retail preferred repayments and lower NOI from asset sales, offset by lower real estate taxes at the Mart net of tax tenant reimbursements. We have provided a quarter-over-quarter bridge on page two of our earnings release and on page six of our financial supplement. In addition, our cash NOI is lower this quarter, primarily due to the previously discussed one-time Penn One ground rent true-up payment made in April and free rent associated with recently commenced leases from backfilling the previously known move-outs. On our last earnings call, we said that we expected 2025 comparable FFO to be essentially flat compared to 2024 comparable FFO, $2.26 per share.

Michael Franco: Thank you, Steve Sakwa, good morning, everyone. Q2 comparable FFO was $0.56 per share, which beat analyst consensus of $0.53 per share and essentially flat compared to last year's Q2. We had lower net interest income from retail preferred repayments and lower NOI from asset sales, offset by lower real estate taxes at The Mart net of tax tenant reimbursements. We have provided a quarter-over-quarter bridge on page 2 of our earnings release and on page 6 of our financial supplement. In addition, our cash NOI is lower this quarter, primarily due to the previously discussed one-time PENN 1 ground rent true-up payment made in April and free rent associated with recently commenced leases from backfilling the previously unknown move-outs. On our last earnings call, we said that we expected 2025 comparable FFO to be essentially flat compared to 2024 comparable FFO of $2.26 per share.

Thank you all for listening and now over to Michael to cover off your answers.

Thank you, Steve and good morning everyone.

Second quarter comparable, ffo with 56 cents per share which beat analysts consensus of 53 cents per share and essentially flat compared to last year's. Second quarter.

We have lower net interest income from retail preferred repayments and lower. Noi from asset sales offset by lower real. Estate taxes at the Mart net of tax pain and reimbursements. We have provided a quarter over quarter bridge on page 2 of our earnings release on Page 6 of our financial supplement.

In addition our cach noi is lower this quarter primarily due to the previously, discussed, 1-time pain, 1 ground rent, true-up payment made in April, and free rent associated with recently. Commenced leases from backfilling, the previously announced known move outs

Michael Franco: This is still a good assumption as we sit here today. As previously discussed, we still expect the full positive impact of the lease-up of Penn One and Penn Two in 2027, resulting in significant earnings growth by 2027. New York office occupancy increased this quarter to 86.7 percent from 84.4 percent last quarter, primarily due to the full building master lease at 770 Broadway. As we continue to execute on our leasing pipeline, we anticipate that our occupancy will increase into the low 90s over the next year or so. Lastly, the financing markets are liquid, and we have been active in refinancing our 2025 maturities. On top of the recent Independence Plaza and Penn 11 refinancings, we have several others in the works. The investment sales market is also picking up as the financing markets recover and as confidence in New York City's recovery grows.

Michael Franco: This is still a good assumption as we sit here today. As previously discussed, we still expect the full positive impact of the lease up of Penn 1 and Penn 2 in 2027, resulting in significant earnings growth by 2027. New York office occupancy increased this quarter to 86.7% from 84.4% last quarter, primarily due to the full building master lease at 770 Broadway. As we continue to execute on our leasing pipeline, we anticipate that our occupancy will increase into the low 90s over the next year or so. Lastly, the financing markets are liquid, and we have been active in refinancing our 2025 maturities. On top of the recent Independence Plaza and Penn 11 refinancings, we have several others in the works. The investment sales market is also picking up as the financing markets recover and as confidence in New York City's recovery grows.

Compared to 2024 comparable. SFO $2.26 per share.

This is still a good assumption. As we sit here today,

as previously discussed, we still expect the full positive impact of the lease up for pin, 1 and pin 2 and 2027 resulting in significant earnings growth by 2027.

New York, office occupancy, increases quarter to 86.7% from 84.4% last quarter, primarily due to the full building Master Lease at 770 Broadway.

as we continue to execute on our leasing pipeline, we anticipate that our occupancy will increase into the low 90s over the next year or so,

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

lastly, the financing markets are liquid and we have been active in refinancing our 2025 maturities on top of the recent Independence Plaza and pain 11 ref financing. We have several others in the works. The investment sales Market is also picking up as the financing markets recovered and has confidence in New York City's recovery growth.

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

Operator: Thank you. We will now begin the question and answer session. If you have a question, please press star then one on your touch tone phone. If you wish to be removed from the queue, please press star then two. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then one on your touch tone phone. Each caller will be allowed to ask a question and a follow-up question before we move on to the next caller. Steve Sakwa from Evercore ISI is on the line with a question. Please go ahead.

Michael Borenstein: Thank you. We will now begin the question and answer session. If you have a question, please press star, then one on your touchstone phone. If you wish to be removed from the queue, please press star, then two. If you are using a speaker phone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star, then one on your touchstone phone. Each caller will be allowed to ask a question and a follow-up question before we move on to the next caller. Steve Sokla from Evercore ISI is on the line with a question. Please go ahead.

Thank you. We will now begin the question and answer session. If you have a question, please press star, then 1 on your touchtone phone, if you wish to be removed from the queue, please press star. Then 2, if you are using a speaker-phone, you may need to pick up the handset. First, before pressing the numbers, once again, if you have a question, please press star then 1 on your touchtone phone.

Each caller will be allowed to ask a question and a follow-up question before we move on to the next caller.

Steve Sakwa: Yes, thanks. Good morning. Steve, I guess I wanted to tie two comments together. You said Penn Two was 62% occupied with multiple deals in the on-deck circle, and then you talked about the LOIs of 560,000 SF plus 1 million of proposals. Can you just maybe help us understand how much of that sort of pending activity is geared towards Penn Two and how much is for the rest of the New York City portfolio?

Alexander Goldfarb: Yes, thanks. Good morning. Steve, I guess I wanted to tie two comments together. You said, you know, Penn Two was 62 percent occupied with, you know, multiple deals in the on-deck circle. And then you talked about the LOIs of like 560,000 feet plus a million of proposals. So can you just maybe help us understand how much of that sort of pending activity is geared towards Penn Two and how much is for the rest of the New York City portfolio?

Steve sakoa from evercore. Isi is on the line with a question. Please go ahead.

Uh, yes, thanks. Good morning. Uh, Steve. I guess I wanted to tie 2 comments together. You said, you know, Penn, uh, Penn 2 was 62% occupied with, you know, multiple deals, uh, in the index Circle.

Then you talked about the Louis, uh, like 560,000 fee plus a million of proposals. So,

Can you just maybe help us understand how much of that sort of pending activity is geared towards PEN 2 and how much is for the rest of the New York City portfolio?

Steven Roth: Glenn, you want to take that?

Glenn: Sure. Good morning, Steve. It's Glenn. Of the 560,000 feet, those are leases out in negotiation. The Verizon lease is included in the 560. In our pipeline, we have about 1.4 million feet in the pipeline in various lease proposal stages, and about 50% of that is at PENN 2. That's the breakdown.

Glenn Weiss: Sure. Good morning, Steve. It's Glenn. So of the 560,000 feet, those are leases out in negotiation. The Verizon lease is included in the 560. In our pipeline, we have about 1.4 million feet in the pipeline in various lease proposal stages, and about 50 percent of that is at Penn Two. That's the breakdown.

Glen, you want to take that?

Sure, good morning, Steve, it's Glenn.

So of the 560 ft, those are leases out.

In negotiation, the Verizon leases included in the $560.

in our pipeline, we have about 1.4 million ft in the pipeline and various lease

Uh proposal stages and about 50% of that is at Penn 2, that's the breakdown.

Steve Sakwa: Great. For my follow-up, Steven Roth, you made some comments early on about The Mart and 555 California Street sort of being for sale at the right price. I feel like that's maybe a little bit of a shift or change in your thinking. Maybe could you just expound upon that? Is your goal to really sort of get back to being just kind of a pure New York City company in the shorter versus longer term?

Alexander Goldfarb: Great. And then for my follow-up, you know, Steve, you made some comments early on about the Mart and 555 California sort of being for sale at the right price. And you know, I feel like that's maybe a little bit of a shift or change in your thinking. So maybe could you just expound upon that? And you know, is your goal to really sort of get back to being just kind of a pure New York City company, you know, in the shorter versus longer term?

Right. And then for my follow-up, you know, Steve you made some some comments early on about uh the Mart and 555 California sort of being for sale at the right price. And you know, I feel like that's maybe a little bit of a shift or change in your thinking. Um, so maybe could you just expound upon that? And you know, is, is your goal to really, sort of get, get back to being just kind of a pure, New York City company, uh, you know, in the shorter versus longer term.

Steven Roth: Steve, hi, how are you? We've worked very hard to focus the company, stick to our knitting, and focus on the financials and our stock price. Our mission is to increase our stock price. That's our sole mission. We think that those two assets are valuable. We think one of them is free and clear, the other one has some financing on it. We think that 555 California is the single best asset in San Francisco. San Francisco is in a recovery phase now, which we think is going to be very dramatic. As I said, those two assets, we will sell for the right price at the right timing. They're not sacred. By the way, nothing is sacred. We look upon them as a financial asset, and we will do what we think is the best financial outcome for the company.

Steven Roth: Steve, hi. How are you? We've worked very hard to focus the company, think forward-looking, and focus on the financials and our stock price. So our mission is to increase our stock price. That's our sole mission. We think that those two assets are valuable. We think one of them is free and clear. The other one has some financing on it. We think that 555 California is the single best asset in San Francisco. San Francisco is in a recovery phase now, which we think is going to be very dramatic. So as I said, those two assets we will sell for the right price at the right timing. They're not sacred. By the way, nothing is sacred. So we look upon them as a financial asset, and we will do what we think is the best financial outcome for the company.

Uh, let's see if Hi, how are you? Uh, we've worked very hard to focus the company stick to our meeting, uh, and, uh, focus on, uh, the financials and our stock price.

so, our mission is is to uh,

Uh, increase our stock price, that's our sole mission.

Um, we think that those 2 assets are

Valuable, we think 1 of them is free and clear. The other 1 has some financing on it. We think that 5555 California is the single best asset in San Francisco. San Francisco has, uh, is, is it a recovery phase now? Which we think is going to be very dramatic.

so, as I said, um, those 2 assets, we will

Sell for the right price at the right timing. Uh, there's they're not Sacred By the way. Nothing is sacred. Uh, so, uh, we look upon them as, as a financial asset. And, uh, we will do what we think, is the, the best financial, uh, uh, outcome for the company.

Steve Sakwa: Great. Thank you.

Alexander Goldfarb: Great. Thank you.

Right. Thank you.

Operator: Your next question comes from Floris van Dijkum with Ladenburg Thalmann. Please go ahead.

Michael Borenstein: And your next question comes from Floris van Dijkum with Ladenberg Balman. Please go ahead.

And your next question comes from Flores van day-um with L ladenburg Thalman please go ahead.

Floris van Dijkum: Hey, thanks, guys. Maybe if you can talk a little bit about your signed not open pipeline. You talked about your occupancy, your lease occupancy being around, I think, 85.2% in New York. What's the physical occupancy? I.e., how much rent is coming online over the next, presumably 12 months by the time that becomes activated?

Glenn Weiss: Hey, thanks, guys. Maybe if you can talk a little bit about your signed not open pipeline. You talked about your occupancy, your least occupancy being around, I think, 85.2 percent in New York. What's the physical occupancy? And i.e., how much rent is coming online over the next presumably 12 months by the time that becomes activated?

Hey, thanks guys. Um

How much rent is coming online over the next?

Presumably 12, 12 months by the time that, uh, uh, that that becomes activated.

Michael Franco: Floris, good morning. It's Michael. Welcome back, and congrats on your new position. In terms of the signed but not commenced, we're going to have to come back to you on that number. I don't want to give you a guesstimate and swag. We'll have to come back on that. Obviously, with Verizon signed, the occupancy number will continue to migrate up close to 88%. Obviously, there's ins and outs. We continue to believe it will be north of 90 as we get in the next year. That income generally, I think we've been consistent on this point, will from an FFO standpoint, kick in heavily in 2027. Right? 2026 continues to be a year where we have the leases signed, but they don't kick in.

Michael Franco: Floris, good morning. It's Michael. Welcome back and congrats on your new position. You know, in terms of the signed but not commenced, we're going to have to come back to you on that number. I don't want to give you a guesstimate and swag. We'll have to come back on that. But obviously, you know, with Verizon signed the occupancy number, we'll continue to migrate up close to 88 percent. Obviously, there's ins and outs. We continue to believe that we'll, you know, be north of 90 as we get in the next year. And that income generally, and I think we've been consistent on this point, will, from an FFO standpoint, kick in heavily in 2027, right? So 26 continues to be a year where, you know, we have the least that's signed, but they don't kick in. 27, I think you're going to see a significant increase.

Uh, of course, uh, good morning. It's Michael. Uh welcome back um and and congrats on your new position. Um,

You know, in terms of the sign. Uh, but not comin. We're gonna have to come back to you on that number. I, I don't want to, I don't want to give you a, a, a guesstimate and swag. And we'll have to come back on that. But um, obviously

Michael Franco: 2027, I think you're going to see a significant increase. That I think is consistent with the last couple of quarters. In terms of specific dollars, I have to come back to you on that.

Michael Franco: And that, you know, I think it's consistently said the last couple of quarters. But in terms of specific dollars, I have to come back to you on that.

You know, with Verizon sign the occupancy number. We'll continue to migrate up um, uh, course 88% obviously, there's ins and outs. Uh, we continue to believe that we'll, uh, you know, be north of 90 as we get in the next year. Uh, and that income generally, and I think we've been consistent on this point will from an ffo standpoint kick in heavily in 2027, right? So 26 continues to be a year where um you know we have at least a sign but they don't kick in 27. I think you're going to see a significant increase um and that you know, I think it's consistently said the last couple quarters, but in terms of specific dollars, have to come back to you on that.

Glenn Weiss: Thanks, Michael. And maybe if I can ask one follow-up, I was sort of, Steve, you peaked my interest about the upside potential in your Penn District. I think in the past, you've talked about, you know, sort of stabilized NOI at around 325. How do you see that changing, or how much has that changed over the past six months based on market rents going higher and obviously your lease activity at Penn Two in particular?

Floris van Dijkum: Thanks, Michael. Maybe if I can ask one follow-up. Steve, you piqued my interest about the upside potential in your Penn District. I think in the past, you've talked about sort of stabilized NOI at around $325. How do you see that changing? How much has that changed over the past 6 months based on market rents going higher and obviously your lease activity at PENN 2 in particular?

Thanks, Michael. And maybe if I can ask, uh, 1 follow up. Uh, I was sort of, uh, see if you piqued my interest about the, the, the upside potential in your pain District. I think, in the past you've talked about, you know, sort of stabilized noi, um, at around 3:25, uh, how do you see that changing? Uh, uh, or how much has that changed over the past 6 months? Uh, based on Market rents going higher and obviously, you're you're at least, uh, uh, activity at at Penn 2 in particular.

Steven Roth: Floris, hi. I couldn't be more enthusiastic about what we're doing at Penn and what Penn's value accretion to the company will be over time. Right now, we are leasing Penn 1 and Penn 2, and we predicted that we would achieve $100 of rent. We're achieving that, and we're achieving more. We're doing better than our underwriting. The interesting thing is that our neighbors are getting $150 a foot and more. We believe that over time, we will also in Penn 1, Penn 2, and whatever other buildings we build, we'll be able to achieve rents that will be approximately maybe just a pinch below those buildings.

Steven Roth: Floris, hi. I couldn't be more enthusiastic about what we're doing at Penn and what Penn's value appreciation to the company will be over time. So right now, we are leasing Penn One and Penn Two, and we predicted that the market rents would be that we would achieve $100 of rent. We're achieving that, and we're achieving more. So we're doing better than our underwriting. But the interesting thing is that our neighbors are getting $150 a foot and more. So we believe that over time, we will also, in Penn One, Penn Two, and whatever other buildings we build, will be able to achieve rents that will be approximately maybe just a pinch below those buildings.

Uh forth. Uh, hi. Um, I couldn't be more enthusiastic about what we're doing at Penn and what pens value appreciation to the company will be over time.

So right now, we are releasing 101 and 102. Um, and the, we predicted that the market rents would be, uh,

That we would achieve a hundred dollars of of rent. We would we're a cheapie that and we're achieving more. So we we're we're doing better than our underwriting.

Steven Roth: So if you think about it, if you look at real estate as not as a quarter-to-quarter business, but as a five-year planning cycle or something like that, if the market rents in Penn go up on the 5 million square feet that we already have by $10 a foot, that increment is $50 million to the bottom line. That's 20 cents a share. That's a fairly big number. If they should go up by $50 a foot, from 100 to 150, over time, the company will realize a $250 million increase in its income. Now, there's going to be some expenses, the minor expenses about that. Real estate taxes will go up marginally, but the numbers are very big. So what I'm saying is the best part of the real estate business is great assets over time.

Steven Roth: If you think about it, if you look at real estate as a, not as a quarter-to-quarter business, but as a 5-year planning cycle or something like that, if the market rents in Penn go up on the 5 million square feet that we already have by $10 a foot, that increment is $50 million to the bottom line. That is $0.20 a share. That is a fairly big number. If they should go up by $50 a foot from $100 to $150, over time, the company will realize a $250 million increase in its income. There is going to be some expenses, some minor expenses about that. Real estate taxes will go up marginally, but the numbers are very big.

But the interesting thing is is that our neighbors are getting fifty dollars, a foot and more. So we believe that over time we will also intend 1 Penn 2 and whatever, whatever other uh uh buildings. We build will be able to achieve rents that will be approximately maybe just a pinch below those build those buildings.

So if you think about it, if you look at real estate as a, not as a quarter of an order business, but as a uh, out of 5 year planning cycle or something like that.

Steven Roth: What I'm saying is the best part of the real estate business is great assets over time, and we believe that the buildings that we now have are under market, so that as the market appreciates it, as the market comes to our buildings, these buildings will get more and more valuable each year.

Steven Roth: And we believe that the buildings that we now have are undermarket so that as the market appreciates and as the market comes to our buildings, these buildings will get more and more valuable each year.

If the market rents in pain go up on the 5 million square feet that we already have by ten dollars. A foot that increment is 50 million dollars to the bottom line, that's 20 cents a share. That's a fairly big number. If they should go up by $50 a foot from a 100 to 150 over time, the company will realize that 250 million dollar increase in its income. Now there's going to be some expenses, some minor expenses about that real estate taxes will go up marginally, but the numbers are very big. So what I'm saying is the best part of the real estate, business is great assets over time. And we believe that the buildings that we now have are

Under market. So that as the market appreciates it, as the market comes to our building the, these buildings will get more and more valuable each year.

Floris van Dijkum: Steve, as you think about that, is there a possibility that THE PENN DISTRICT could generate maybe up to $400 million of NOI in five years' time?

Glenn Weiss: So, Steve, as you think about that, is there a possibility that the Penn District could generate maybe up to 400 million of NOI in five years' time?

Steven Roth: Easily. By the way, that's with no new construction, no new buildings. The existing inventory that we have now, what you're saying is, can it go up by $100 million over three or four years? Sure.

Steven Roth: Easily. Easily. By the way, and that would be, that's with no new construction, no new buildings. The existing inventory that we have now, what you're saying is going to go up by $100 million over three or four years? Sure.

So Steve as as you think about that, is there a possibility that the pain District could generate maybe up to 400 million of noi in 5 years time?

Easily.

By the way. And that's, that would be, that's what no new construction, no new buildings. The existing inventory that we have now we're just saying is going to go up by 100 million dollars over over 3 or 4 years.

Uh, sure.

Floris van Dijkum: Thanks.

Glenn Weiss: Thanks.

Thanks.

Operator: Your next question comes from John Kim with BMO Capital Markets. Please go ahead.

Michael Borenstein: And your next question comes from John Kim with BMO Capital Markets. Please go ahead.

And your next question comes from John Kim. With BMO Capital markets, please go ahead.

John Kim: Good morning. I know there's a few different occupancy numbers out there, but just focusing on your occupancy stats on page 32, New York occupancy went up to 85.2%, which is a sequential improvement, which is great. It is lower than the 86.2% that you noted post the NYU lease last quarter. I was wondering what the headwinds were this quarter that brought that down 100 basis points or so.

John Kim: Good morning. I know there's a few different occupancy numbers out there, but just focusing on your occupancy stats on page 32, New York occupancy went up to 85.2 percent, which is a sequential improvement, which is great. But it is lower than the 86.2 percent that you noted post the NYU lease last quarter. So I was wondering what the headwinds were this quarter that brought that down 100 basis points or so.

Michael Franco: Yeah, I think, John, good morning. Yeah, I think a couple of things. One is I think that's an area of New York number office and retail. I think the office numbers are generally consistent with what we said. It's a little bit of timing, and Verizon got signed a few days after the quarter. So obviously, if that had happened before, we'd have been above even what we said last time. So a little bit of timing. I think the biggest impact there was retail. You know, we had two Forever 21 leases at 1540 and 4357 where they were paying low rent. The company obviously went bankrupt again, and they vacated those stores. And that knocked off, I think, about seven percentage points off the retail occupancy, which in total, you know, took us to the area number you see there.

Do you see 1 of 85 85.2%? Which is a sequential Improvement which is great, um, but it is lower than the 86.2% that you noted post the NYU lease last quarter. So, I was wondering what the, the headwinds were, uh, this quarter that brought that down 100 basis points or so,

Michael Franco: John, good morning. I think a couple things. One is, I think that's an area New York number office and retail. I think the office numbers are generally consistent with what we said. There's a little bit timing, and Verizon got signed a few days after the quarter. Obviously, if that happened before, we'd have been above even what we said last time. A little bit of timing. I think the biggest impact there was retail. We had two Forever 21 leases at 1540 and 435 Seventh, where they were paying low rent. The company obviously went bankrupt again, and they vacated those stores. That knocked off, I think, about 7 percentage points off the retail occupancy, which in total took us to the area number you see there. Wasn't a lot of rent coming out of either one of those stores.

You know, I think John. Good morning. Um,

You know, I think a couple things. One is, um, I think that's an arrogant New York number. Office in retail, I think the office numbers are generally consistent with what we've said. It's a little bit timing, and Uprising got signed a few days after the quarter. Um, so obviously, if that had happened before, we'd have been above even what we said last time. So, a little bit of time. And I think the biggest impact there was retail. You know, we had 2 Forever 21 leases of 1540 and 4357.

Uh, where they were paying low rent coming, obviously, when bankrupt again and they vacated those stores, uh, and then knocked off, I think about 7 percentage points off the retail occupancy, which in total.

Michael Franco: So it wasn't a lot of rent coming out of either one of those stores. They were frankly placeholders, particularly at Penn, until we had a, we really sort of redeveloped that whole stretch as Steve alluded to in his remarks. But from an occupancy standpoint, I think that was the biggest driver.

Michael Franco: They were frankly placeholders, particularly at Penn, until we had a really sort of redevelop that whole stretch, as Steven Roth alluded to in his remarks. From a occupancy standpoint, I think that was the biggest driver.

took us to the area number, you see there. So wasn't a lot of rent coming out of either 1 of those, um, stores or frankly, placeholders, particularly a pen until we had a, uh, uh, really sort of redeveloped that that whole stretch of Steve alluded to and his remarks. But from a uh, occupancy standpoint, I think that was the biggest driver.

John Kim: On 555 California Street, the mark-to-market, Steve, you talked about potentially selling this. I wanted to see if you had any more commentary on timing, if this is something that could be listed in the next 12 months. How should we think about use of proceeds between developments, acquisitions, and reduction of debt? We did notice that you provided new disclosure on net debt to EBITDA. I'm wondering if that's a KPI going forward as far as maintaining or lowering net debt to EBITDA.

John Kim: And then on 555 Cal on the Mart, Steve, you talked about potentially selling this. I wanted to see if you had any more commentary on timing, if this is something that could be listed in the next 12 months. And how should we think about use of proceeds between developments, acquisitions, and reduction of debt? We did notice that you provided new disclosure on Net Debt Dependa. So I'm wondering if that's a KPI going forward as far as maintaining or lowering Net Debt Dependa.

Okay. Um, and then on 555, count on the mark. Steve, you talked about potentially selling this. I wanted to see if you had any more commentary on timing, if this is something that could be listed in the next 12 months.

And how should we think about use of proceeds between developments Acquisitions and reduction of debt? Uh, we did notice that uh you provided new disclosure on net debe de. So I'm wondering if that's uh, a kpi going forward as far as uh,

Maintaining or lowering net debt Deepa.

Steven Roth: On the first question, we are not listing those buildings in the next year or whatever. If we sell those buildings, it will probably be an opportunistic incoming where somebody wants them. What I'm saying is, we're not actively marketing the buildings, and we have no prediction on timing. They are available if the deal is correct and the timing is correct. The other half of your question was what, sir?

Steven Roth: On the first question, we are not listing those buildings in the next year or whatever. If we sell those buildings, it'll probably be an opportunistic incoming where somebody wants them. But what I'm saying is that we're not actively marketing the buildings, and we have no prediction on timing. But they are available if the deal is correct and the timing is correct. The other half of your question was what, sir?

Uh, on the first question, uh, we are not listing those buildings in the next year or whatever. If we sell those buildings, it will probably, it will probably be an opportunistic incoming where somebody wants them.

Uh,

Michael Franco: Use of proceeds.

But uh what I'm saying is is we're not actively marketing the buildings that we have no prediction on timing but they are um available if uh the deal is corrected, right? And the timing is correct uh the other half of your question. Was what sir?

John Kim: Is the leverage metric.

Steven Roth: Use of leverage cycle.

Michael Franco: John.

John Kim: Yeah.

Michael Franco: Again, to Steve's point, nothing is imminent. For the right price, we'll transact. At the time, we'll assess the best way to utilize that capital, whether it's to pay down debt, whether it's to deploy those into development, et cetera. Appreciate you recognizing the good work we've done on the leverage front. We're proud of that. We've worked hard to get our leverage debt down. We think we're now quickly moving to the head of the class there, we want to continue that. When something is more right, we'll assess exactly how we'll utilize those proceeds.

Michael Franco: Yeah. So again, to Steve's point, you know, nothing is imminent. But for the right price, you know, we'll transact. And at the time, you know, we'll assess the, you know, the best way to utilize that capital, whether it's to pay down debt, whether it's to, you know, deploy those into development, you know, etc. I appreciate you recognizing the good work we've done on the leverage front. We're proud of that. We've worked hard to get our leverage debt down. I think we're now quickly moving to the head of the class there, and so we want to continue that. So, but you know, when something is more right, then we'll assess exactly how we'll utilize those proceeds.

Yeah, so again, just these point, you know, nothing is imminent, um, but uh, for the right price, you know, we'll we'll transact. And at the time, you know, we'll assess the, you know, the best way to utilize that Capital whether it's the pay down debt, whether it's to, uh, get them deployed those into, uh, development, you know, Etc.

Steven Roth: I want to tack on to what Michael said. One of the very important things that happened over the last short period of time is the improvement in our balance sheet. Taking our leverage ratio down by 1.4 turns is a really big thing. Rebuilding our cash balances, having lots of availability, and having a very strong balance sheet is one of the important things that we do, and I'm very proud of what the team has accomplished over the last period of time. I think it's a really big step.

Steven Roth: I want to tack on to what Michael said. One of the very important things that happened over the last short period of time is the improvement in our balance sheet. Taking our leverage ratio down by 1.4 turns is a really big thing. Rebuilding our cash balances, having lots of availability, and having a very strong balance sheet is one of the important things that we do. And I'm very proud of what the team has accomplished over the last period of time. I think it's a really big step.

Um, appreciate you recognizing the good work. We've done in the leverage front. Uh, we're proud of that. We've worked hard to get our leverage that down. Uh, we think we're now, uh, quickly moving to the Head of the Class there and, uh, and so, we want to continue that. So, um, but you know, when, when, when something is more right, then we'll assess exactly how we'll utilize this proceeds.

I want to, I want to tack on to what Michael said: one of the very important things that happened over the last...

Short period of time is the improvement in our balance sheet, uh, taking our uh uh, leverage ratio down by 1.4. Turns is a really big thing rebuilding, our cash balances having lots of availability and having a very strong balance sheet is 1 of the important things that we do and I'm very proud of what has what the team has accomplished over the last period of time.

I think it's a really big thing.

John Kim: Thank you.

Operator: Your next question comes from Dylan Burzinski with Green Street. Please go ahead.

Michael Franco: Thank you.

Michael Borenstein: And your next question comes from Dylan Berzinski with Green Street. Please go ahead.

In the next question. Comes from Dillon, berzinski with Green Street, please go ahead.

Dylan Burzinski: Hi guys. Thanks for taking the question. I know you guys talked about how strong the leasing pipeline is. Obviously, you mentioned occupancy will continue to increase into the low 90s sometime next year. Can you guys talk about just the ability to push net effective rents in that environment and strong backdrop?

John Kim: Hi, guys. Thanks for taking the question. Just can you sort of talk about just the, I know you guys talked about how strong the leasing pipeline is. Obviously, you mentioned occupancy will continue to increase into the low 90s sometime next year. But can you guys talk about just the ability to push net effective rent in that environment and strong backdrop?

Hi guys, thanks for, thanks for taking the question. Just can you sort of talk about just that I know you guys talked about how strong the leasing pipeline is? Obviously you mentioned occupancy, will continue to increase in the low 90s sometime next year. Uh but can you guys talk about just the ability to to push that effective rents and and that environment and strong backdrop?

Michael Franco: Yeah. Why don't I start? Glenn, jump in here. You know, if you look at the current environment in the marketplace, whether it's Park Avenue, 6th Avenue, etc., you know, the vacancy rates are generally under 10 percent for Class A buildings, probably Park Avenue under 5. In general, you know, citywide, in Midtown, the West Side, very tight. And I think in terms of large blocks of space, I think there's less than a handful of a couple hundred thousand feet or larger, Penn Two being one of those, and I think widely viewed as the best of those. So, you know, Steve talked about, you know, we're a landlord's market, and we certainly feel that. I think tenants feel that. There's strong demand in the marketplace.

Michael Franco: Yeah. Why don't I start, Glenn, jump in here. If you look at the current environment in the marketplace, whether it's Park Avenue, Sixth Avenue, et cetera, vacancy rates are generally under 10% for class A buildings, probably Park Avenue under 5. In general, citywide in Midtown and the West Side very tight. I think in terms of large blocks of space, there's less than a handful of a couple hundred thousand feet or larger, PENN 2 being one of those and I think widely viewed as the best of those. Steve talked about we're in a landlord's market, and we certainly feel that. I think tenants feel that.

Uh, yeah, when I started Glenn, Glenn jump in here. Um,

10% for class A buildings, play Park Avenue, under 5 um uh in in general, you know, city-wide in Midtown in the west side uh very tight and and I think in terms of large blocks of space.

Michael Franco: The strong demand in the marketplace, a number of tenants that are focused on expiries 2, 3 years out, they're worried about whether they're going to be able to either consolidate in a single location, have enough expansion space, et cetera. The dynamics have shifted and we are, I would say, on a weekly basis, evaluating our space and trying to determine how much we can push rents. We're going to continue to push rents, I think, across the board. We've done it aggressively on Park, we're doing it in our other buildings in Midtown, and we're doing it in Penn. I think what you're hearing and what you're seeing in terms of the stats is a continued movement to push up rents there, where I think we started at Penn 1 in the mid-$80s, maybe $90, and now we're achieving rents north of $100.

Michael Franco: You know, a number of tenants that are focused on expiry years out, they're worried about whether they're going to be able to, you know, either consolidate in a single location, have enough expansion space, etc. So, you know, the dynamics have shifted. And, you know, we are, I would say, on a weekly basis, evaluating our space and trying to determine how much we can push rents. And we're going to continue to push rents, I think, across the board. We've done it aggressively on Park. We're doing it in other buildings in Midtown, and we're doing it in Penn. I think what you're hearing and what you're seeing in terms of the stats is a continued movement to push up rents there, where I think we started at Penn One in the mid-80s, maybe $90, and now we're achieving rents north of 100.

I think there's less than a handful of a couple hundred thousand feet are larger, uh pain, tubing, 1 of those. Uh and I think widely viewed as as the best of those. So um, you know, Steve talked about, you know, when a landlord's market and we certainly feel that I think tenants feel that, uh, the strong demand in the marketplace, uh, you know, a number of tenants that are focused on expertise in the 3 years out. They're worried about, uh, whether they're going to be able to, uh, you know,

Michael Franco: We're going to continue to push those same on Penn Two. So, you know, we're pretty optimistic in terms of what's going to happen to rental rate growth, just given the lack of quality space available and the demand side we're seeing. So, you know, I think we have the potential to see, you know, growth rates we haven't seen in quite some time. And, you know, we're going to push. We're going to find the resistance level as we move out here.

Michael Franco: We're going to push those same on PENN 2. We're pretty optimistic in terms of what's going to happen to rental rate growth, just given the lack of quality space available and the demand side we're seeing. I think we have the potential to see growth rates we haven't seen in quite some time. We're going to push, we're going to find the resistance level as we move out here.

Either consolidate the single location, have enough expansion space, Etc. So you know, the the Dynamics have shifted and, you know, we are, I would say on a weekly basis, evaluating our space and and trying to determine uh, how much we can push rents. And, and we're going to continue to push rents. I think across the board, uh, we've done an aggressively on Park and we're doing in our other buildings in Midtown and we're doing it in pet. I think that they what you're hearing and what you're seeing in terms of the stats as they continue to movement to push up rents there where I think we started at Penn 1 in the mid 80s, maybe 90 dollars. And now we're achieving Rents, North of a 100. We're going to continue to push those same on Penn 2. Uh, so I, you know, we're we're pretty optimistic in terms of what's going to

Rental rate growth just giving the lack of quality space available and the demand side we're seeing, uh, so you know, I think I think we have the potential to see, you know, growth rates we haven't seen in in quite some time. Uh, and you know, we're going to push, we're going to find the resistance level. Uh, as we as we move out here,

Dylan Burzinski: That's helpful. I guess one last one from me. Are you guys able to talk about the A-note and B-note investments you guys have did?

John Kim: That's helpful. And then I guess one last one from me. Are you guys able to talk about the A note and B note investments that you guys did?

That's helpful. And then I guess 1 1, last 1 for me, are you guys able to talk about the, the, the a known B note Investments? Do you guys have did?

Michael Franco: It's on a site in Midtown. It's a note that we've legged into in two phases. It's a high-quality site. It can go either way. On one hand, we might just collect the coupon and earn a reasonable return, relatively good earning cash. Alternatively, it could be an opportunity to own the asset and capitalize on the opportunity there. It could go either way. We just view it as it's a high-quality asset. We're happy if we earn the return and may leverage into a broader opportunity. That's as much as we can say right now.

Michael Franco: You know, it's on a site in Midtown. It's a note that, you know, we've liked into in two phases. It's a high-quality site, and it can go either way. You know, on one hand, we might just collect the coupon and earn a, you know, reasonable return, relative to what we could earn in cash. And alternatively, you know, it could be an opportunity to own the asset and, you know, capitalize on the opportunity there. So it could go either way, but we just viewed it as it's a high-quality asset. We're happy if we earn the return and may leverage into a broader opportunity. And that's as much as we can say right now.

Um, you know, it's on a, it's on a site in Midtown. Uh, it's a, it's a note that, uh, you know, we've liked into in 2 phases, uh,

It's a high quality site and it can go either way. You know, we're we're on 1 hand, we might just collect the coupon uh and learn a, you know, reasonable return relative to what we could earn in cash and alternatively uh you know it could be an opportunity to own the asset and and uh you know and capitalize on the opportunity there so it could go either way uh but we just viewed it as if the high quality asset. Uh we're we're happy if we earn the return and may leverage into a into a broader opportunity that's and that's as much as as we can say right now.

Dylan Burzinski: Appreciate it.

John Kim: Appreciate it.

Michael Franco: Okay.

Appreciate it. Okay.

Michael Borenstein: And your next question comes from Seth Berge with City. Please go ahead.

Operator: Your next question comes from Seth Berger with Citi. Please go ahead.

And your next question comes from. Seth Bergie with City. Please go ahead.

Seth Berger: Hi. Thanks for taking my question. I think on the last call you spoke to kind of hitting the 80% target for PENN 2 by year-end. I guess, just given the recent leasing activity, and it sounds like half the $1.4 billion development pipeline is kind of on leases out on PENN 2. Do you think you could kind of exceed that target?

John Kim: Hi, thanks for taking my question. You know, I think on the last call, you spoke to kind of hitting, you know, the 80% target for Penn Two by year-end. I guess just given the recent leasing activity, and it sounds like half the, you know, 1.4 billion development pipeline is kind of on leases out on Penn Two. Do you think you could kind of exceed that target?

Hi. Thanks for taking my question. Um, you know, I think on the last call, you spoke to kind of hitting, you know, the 80% Target for 10 to buy year end, I guess just given the recent leasing activity and it sounds like after, um, you know, 1.4 billion development pipeline is kind of, on leases, out on to do you think you could kind of exceed that Target?

Michael Franco: I doubt it.

Steven Roth: I doubt it.

Glenn: Hi, it's Glenn.

Glenn Weiss: Hi, it's Glenn.

I doubt it. Hi, it's going.

Michael Franco: Glenn, I said I doubt it. The question is, can we exceed 80%, and I'm saying I doubt it. Go ahead, Glenn.

Steven Roth: No, Glenn, I said I doubt it. The question is, can we exceed 80%? And I'm saying I doubt it. Go ahead, Glenn.

Glenn Weiss: I mean, look, we're feeling very good about where we are at Penn Two. We'll feel we'll get there. I will say we're being patient. We're being smart. I might even say we're being a little choosy in terms of our credit profile, our tenant mix, and we do keep looking at our price and increasing it. So we're not rushing just to lease space. That's not what we do. So while we think we'll get there, we're being careful and smart about our strategy. We're in it for the long term, not for the short-term statistics.

Glenn: Look, we're feeling very good about where we are at PENN 2. We feel we'll get there. I will say we're being patient, we're being smart. I might even say we're being a little choosy in terms of our credit profile, our tenant mix. We do keep looking at our pricing and increasing it. We're not rushing just to lease space. That's not what we do. While we think we'll get there, we're being careful and smart about our strategy. We're in it for the long term, not for the short-term statistics.

I know. I Glenn, I said, I doubt it. The question is, can we exceed 80%? And I'm saying, I doubt it. Go ahead.

What I mean? Look, we're feeling very good about where we are pain to.

Um, we'll we'll feel we'll get there. I will say we're being patient, we're being smart.

I might even say we're being a little choosy in terms of our credit profile or tenant mix and we do keep uh, looking at our pricing, increasing it. So we're not rushing just to leave space, that's not what we do. So while we think we'll get there. Um, we're being careful and smart about our strategy. We're in it for the long term, not for the short term statistics.

Michael Franco: Well said, Glenn.

Steven Roth: Well said, Glenn.

Well, well said.

Michael Borenstein: And your next question comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

Operator: Your next question comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb: Hey, good morning, and congrats to you guys on the Verizon deal. That was nice to see. Glenn, you partially answered my question on the leasing ex-NYU. It sounds like you guys are choosier on the types of deals that you're doing, especially in this market. What stood out in the quarter is ex-NYU, the average lease term was just 6.8 years, which given CBD leasing would expect that longer. Can you just give us a little bit more color? Clearly you're on for big whale of deals, but on the smaller deals, can you just give a context of the types of tenants and space and tenure? Because again, would expect deals to be longer than averaging 6.8 years.

Alexander Goldfarb: Hey, good morning, and congrats to you guys on the Verizon deal. So that was nice to see. Glenn, you partially answered my question on the leasing ex-NYU. It sounds like you guys are choosier on the types of deals that you're doing, especially in this market. But what stood out in the quarter is ex-NYU, the average lease term was just 6.8 years, which given, you know, CBD leasing would expect that longer. So can you just give us a little bit more color? Clearly, you're on for a big whale of deals. But on the smaller deals, can you just give a context of the types of tenants and space and tenure? Because, again, would expect deals to be longer than averaging 6.8 years.

In your next question comes from. Alexander Goldfarb with Piper Sandler. Please go ahead.

Glenn: Yeah, of course. Hi, Alexander Goldfarb. I look at it for the full year, the H1 thus far, our average is 12 years on 1.1 million feet of leasing outside of New York University, of course. For the quarter, it's an outlier this quarter. It was a mix of large renewals that were less than 10 years, with a lot of pre-build deals at PENN 1 and other buildings that are multi-tenant, like the Fuller Building and others. It was an odd mix of leasing this quarter. I certainly would not say there will be a trend of this type of average lease term, particularly you know us and you know our averages are normally at least 10 years. It's an outlier and I'm not concerned at all.

Glenn Weiss: Yeah, of course. Hi, Alex. So I look at it, you know, for the full year, the half year thus far, our average is 12 years on 1.1 million feet of leasing outside of NYU, of course. For the quarter, it's an outlier this quarter. It was a mix of large renewals that were less than 10 years with a lot of pre-build deals at Penn One and other buildings that are multi-tenant, like the Fuller Building and others. So it was an odd mix of leasing this quarter. I certainly would not say there will be a trend of this type of average lease term, particularly you know us and you know our averages are normally at least 10 years. It's an outlier, and I'm not concerned at all.

Given you know, CBD leasing would expect that longer. So can you just give us a little bit more color? Clearly you're on for big whale of deals but on the smaller deals. Can you just give a context of the types of tenants and space and tenure because again would expect deals to be longer than averaging 6.8 years.

Yeah, of course. Hi Alex.

Um, so

I look at it, you know, for the full year, the half year, those far are averages 12 years on 1.1 million ft of leasing outside of NYU. Of course,

for the quarter, it's an outlier this quarter. It was a mix of large renewals

That were less than 10 years.

Michael Franco: Okay. The second question is, Steve, I appreciate your comments on the cash balance for Vornado, but when we look at Alexander's, it seems to be the inverse in the sense of the dividend overpayment, the cash needs for the Bloomberg in 2029 replacing Home Depot. So can you just help us understand the dividend overpayment relative to the cash balance relative to how we should think about Alexander's on a go-forward basis?

Alexander Goldfarb: Okay. The second question is Steve, I appreciate your comments on the cash balance for Vornado, but when we look at Alexander's, it seems to be the inverse in the sense of the dividend overpayment, the cash needs for the Bloomberg in 2029 replacing Home Depot. Can you just help us understand the dividend overpayment relative to the cash balance, relative to how we should think about Alexander's on a go-forward basis?

Uh, with a lot of pre-built deals at 10 1 and other buildings that are multi-tenant like the Fuller building and others. So it was, it was an odd mix of leasing this quarter. I certainly would not uh, say there will be a trend of this type of average lease term, um, particularly, you know, us and, you know, our averages are normally at least 10 years. Um, it's an outlier and I'm not concerned at all.

Michael Franco: This is a Vornado call. I think it's inappropriate to get into Alexander's. We had this conversation last quarter, as I remember. There are things going on at Alexander's that you don't know about, and as a result of that I quibble with your analysis. Alexander's is going to be just fine.

Okay, the second question is Steve, uh, I appreciate your comments on the cash balance for Vornado, but when we look at Alexander's, it seems to be uh, the inverse in the sense of the dividend overpayment the cash needs for the Bloomberg in 2029. Replacing Home Depot. So, can you just help us understand the dividend overpayment relative to the cash balance relative to how? We should think about Alexander's on a go forward basis?

Steven Roth: This is a Vornado call. I think it's inappropriate to get into Alexander's. We had this conversation last quarter, as I remember. There are things going on at Alexander's that you don't know about. And as a result of that, you know, I quibble with your analysis. Alexander's is going to be just fine.

This is a Varnado call. I think it's inappropriate to get in Alexander. We had this conversation at last quarter. As I remember, there are things going on at Alexander's that you don't know about. And as a result of that, um, you know, I quibble with your analysis,

Alexander is going to be just fine.

Alexander Goldfarb: Okay. I appreciate that, Steve. Thank Thank you.

Michael Franco: Okay. I appreciate that, Steve. Thank you.

Steven Roth: By the way, just to clarify just a little bit more, there are some assets that are going to be sold at Alexander's, which will, how do I say it? Probably surprise you greatly. It's not the big ones.

Steven Roth: No worries. But I'm just to clarify just a little bit more. I mean, there are assets that are going to be sold at Alexander's, which will, how do I say it, probably surprise you greatly. And it's not the big.

Okay, I appreciate that. Steve, thank you.

Bye. But this just to clarify just a little bit more. I mean there are some assets that are going to be sold at Alexander's which will uh how do I say it? Uh, probably surprise you greatly?

And that and and it's not the big.

Michael Franco: I like surprises, so I appreciate your time, Steve. Thank you.

Alexander Goldfarb: I like surprises, so I appreciate your time, Steve. Thank you.

Steven Roth: Thank you.

I like surprises. So I appreciate that. I appreciate your time, Steve. Thank you.

Thank you.

Michael Borenstein: And your next question comes from Gina Galon with Bank of America. Please go ahead.

Operator: Your next question comes from Jana Galan with Bank of America. Please go ahead.

Jana Galan: Thank you. Good morning. Maybe just following up on the retail leasing environment, can you talk a little bit more about the timing around the vision for the 34th Street corridor, and then the potential timing of backfilling the Forever 21 space?

Gina Galon: Thank you. Good morning. Maybe just following up on the retail leasing environment, can you talk a little bit more about the timing around the vision for the 34th Street corridor and then the potential timing of backfilling the Forever 21 space?

Your next question comes from Jana Galan with Bank of America, please go ahead.

Thank you. Good morning. Um, maybe just following up on the retail leasing environment. Can you talk a little bit more?

Around the vision.

To 44, 34th Street Corridor, and then the potential timing of backfilling the Forever 21 Space.

Steven Roth: Hi. Thanks. This is a long-term activity. We have held that space off the market. Well, first of all, let's talk about the quality of the real estate. 34th Street, over the years, has been one of the top two or three shopping streets in Manhattan. The subway stations are the second busiest and the third busiest in the entire system. The footfall is amazing. The traffic is accelerating now with all of the office buildings that have been built in the district. When you look at the transportation system, the transportation system really is at 7th Avenue and 33rd Street and 6th Avenue and 33rd Street. All of the buildings to the west, the people, in order to get into the transportation system, basically come east into our neighborhood. We're very enthusiastic about the quality of the retail. The street has gotten, dare I say, shabby.

Steven Roth: Hi, thanks. You know, this is a long-term activity. We have held that space off the bar. Well, first of all, let's talk about the quality of the real estate. 34th Street over the years has been one of the top two or three shopping streets in Manhattan. The subway stations are the second busiest and the third busiest in the entire system. The footfall is amazing. The traffic is accelerating now with all of the office buildings that have been built in the district. And when you look at the transportation system, the transportation system really is at 7th Avenue and 33rd Street and 6th Avenue and 33rd Street. So all of the buildings to the west, the people, in order to get into the transportation system, basically come east into our neighborhood. So we're very enthusiastic about the quality of the retail.

Uh, hi. Thank you.

We have held that space Off the Mark. Well, first of all, let's talk about the quality of the of the real estate.

Uh 34th Street over the years has been 1 of the top 2 or 3 shopping streets in Manhattan.

but,

30 at 33 Street and 6th Avenue and 33rd Street. So all of the buildings to the West, the people in order to get into the transportation system, basically come east into our neighborhood

Steven Roth: The street has gotten, dare I say, shabby. We have held lots of space, maybe even all the space off the market, waiting for the right timing. The timing is now. So what I said was that we're going to take, it looks like it's 700 front feet. 700 front feet is basically three and a half blocks. Nobody has that kind of concentration under one ownership. So we're very excited about the opportunity. With respect to when the Forever 21 space gets released, it may be reconfigured, and I really can't predict what the timing is going to be. It will undoubtedly be a different building, and it will take some time, and be patient with us. But what's going to happen is going to be a great result.

Steven Roth: We had held lots of space, maybe even all the space, off the market, waiting for the right timing. The timing is now. What I said was that we're going to take, it looks like it's 700 front feet. 700 front feet is basically three and a half blocks. Nobody has that kind of concentration under one ownership, we're very excited about the opportunity. With respect to when the Forever 21 space gets released, it may be reconfigured, and I really can't predict what the timing is going to be. It will undoubtedly be a different building, and it will take some time, and be patient with us. What's going to happen is going to be a great result.

So we're very enthusiastic about the quality of the retail. The street has gotten you needed. Dare I say shatty. We have held lots of space, maybe even all the space off the market. Waiting for the right timing, the timing is now. So, but I said was, uh, that we're going to take it. Looks like it's 700. Uh, front seat. 700 front feet is basically 3 and a half bucks.

Uh, nobody has that kind of concentration under 1 ships. So we're we're very excited about the opportunity.

Jana Galan: Great. Thank you, Steve. Question for Michael Franco. Thank you for the comments on the comparable FFO for this year versus last. Can you help us think about kind of the revenue ramp at the end of the year? Just trying to help us kind of think about the full impact of Penn 1 and Penn 2 being in 2027, kind of how will that trend quarter to quarter.

Gina Galon: Great. Thank you, Steve. And question for Michael. Thank you for the comments on the comparable FFO for this year versus last.But

With respect to when the Forever 21 uh space gets released. It may be reconfigured and I really can't predict what it's uh uh what the timing is going to be uh it will undoubtedly be a different building and it will take some time and be patient with us. But what's going to happen is going to be a great result.

Speaker 1: can you help us think about kind of the revenue ramp at the end of the year, just trying to help us kind of think about the full impact of pen one and pen two being in 2027, but kind of how will that trend quarter to quarter?

Great. Thank you, Steve. And, um, question for Michael, uh, thank you for the comments on the comparable ffo for this year versus last. But can you help us? Think about, kind of the, the revenue ramp but the end of the year um just trying to help us kind of think about the full impact of pain 1 and Pen 2 being in 2027 but

And how will that Trend quarter to quarter?

Michael Franco: Sounds like you're asking for guidance, Gina, which we don't give. I think it will build over those quarters. It's going to be, as we think about both Penn 1 and Penn 2, it's going to be more back-ended there. It'll start building a little more towards Q4 this year and then into next year. I think most of it's going to happen in 2027, from a run rate standpoint. I don't want to give you a 2026 prediction here today. We haven't done our budgets yet. Obviously, the market's moving positively. We'll see where we end up. I think most of that'll hit, it's going to be pretty steep growth from 2026 to 2027.

Steven Roth: Sounds like you're asking for guidance, which we don't give. I think it will build over those quarters, but it's going to be, you know, as we think about both pen one and pen two, it's going to be more back-ended there. But I don't think, and I'll just start going a little more towards fourth quarter this year and then into next year. But I think most of it's going to happen in 2027 from a run rate standpoint. So I don't want to give you a 26 prediction here today. You know, we haven't done our budgets yet. Obviously, the market's moving positively. We'll see where we end up. But I think most of that will hit, you know, it's going to be pretty steep growth from 26 to 27.

Um, sounds like you're asking for guidance J.

Um,

we don't give, uh,

Jana Galan: Great. Thank you.

Speaker 1: Great. Thank you.

I think, I think it will build over those quarters. Um, but um, uh, it's going to be, you know, as we think about both panel and Penta is going to be more back end of their. Um, but I don't, I don't think uh, and I'll just start building a little more towards fourth quarter this year and then in the next year. But I think most of us going to have to happen in 2027, from a run rate standpoint. So, um, I don't want to give you a 26 prediction here today. You know, we haven't done our budget yet. Uh, I was the Market's moving positively, we'll see where we end up, but, uh, I think most that will hit, you know, it's going to be a pretty steep uh, growth from 26 to 27.

Great. Thank you.

Operator: Your next question comes from Vikram Malhotra with Mizuho. Please go ahead.

Speaker 3: And your next question comes from Vikram Alhotra with Mizuho. Please go ahead.

Vikram Malhotra: Thanks so much for taking the question. Michael, I guess I wanted to just get some more color on that last few comments. You obviously talked about the 2027 growth. We're not looking for a number for 2026, just are there any big moving pieces we should be aware of as we model this out? Anything that'll really, I guess, depress 2026, or is it just a step function change as we go into from 2026 to 2027?

Michael Borenstein: Thanks so much for doing the question. Michael, I guess I want to just get some more color on that last few comments. So you obviously talk about the 27 growth. We're not looking for a number for 26, but just are there any big moving pieces we should be aware of as we model this out? Like anything that'll really, I guess, depress 26, or is it just a step function change as we go into it from 26 to 27?

And your next question comes from vicram alho with mujo. Please go ahead.

Uh, thanks so much for doing the question Michael. I guess I want to just um, get some more color on that last few comments. Um so you obviously talk about the 27 growth, we're not looking for a number for 26 but just

Are there any big moving pieces? We should be aware of as we model this out like anything. That'll really, I guess depress 26. Or is it just a, a step function change as we go into from 26 to 27?

Michael Franco: I think it's largely just step function. I don't think it's anything unusual. I mean, look, we have space releasing up really across the board, both New York, some space in California, and Chicago. We've got activity on the retail area. That'll kick in as well. I think generally across the board. Nothing unusual, but largely, as I said, just given timing of when we sign those leases, stepping heavily into 2027.

Steven Roth: I think it's largely just step function. You know, I don't think it's anything unusual to me. Like we have space releasing up really across the board, both New York, some space in California, Chicago. You know, we got activity on the retail area that'll kick in as well. So I think generally across the board, nothing unusual, but largely, as I said, you know, just given timing of when we sign those leases, stepping heavily into.

I think it's largely just step function, um, you know, I don't think it's anything, uh, unusual. I mean, like, we have space releasing up really across the board, both New York, uh,

space in California Chicago um you know we got activity on the retail area that'll kick in as well so I think generally across the board um,

Vikram Malhotra: Okay. No big move-outs or interest expense, I guess, any swaps or anything expiring that'll pressure 2026 relative to 2025 before we get a step-up in 2027?

Michael Borenstein: Okay. So no big move-outs or like interest expense, I guess, any swaps or anything expiring that'll like pressure 26 relative to 25 before we get a step up in 27?

Uh no no nothing unusual. But but uh but but but largely, as I said, uh uh, you know, just giving timing is when we sign those leases stepping heavily into, okay, okay.

So no, so no big move outs or like interest expense. I guess any swaps or anything expiring that like pressure 26 relative to 25 before we get a step up in 27.

Michael Franco: No. Look, in terms of move-outs, we're in the leasing business, right? There's going to be a certain amount of tenants that move out, a certain amount you keep, a certain amount that grow, a certain contract. I think we're more in the grow than contract right now. Apparently, there's always some level of move-out. In the New York office, we'll just have to see what sort of comes about over the course of the next year. I will say on the interest expense side, I think we talked about this on the last quarter, I think we're generally on the downhill trajectory on that.

Steven Roth: No. I mean, look, it's, you know, in terms of move-outs, I mean, you know, we're in the leasing business, right? And there's going to be a certain amount of tenants that move out, a certain amount you keep, a certain amount that grow, certainly contract. I think we're more in the grow than contract right now. But, you know, apparently, there's always some level of move-out. So, you know, in the New York office, you know, you're going to have, we'll just have to see what sort of, you know, comes about over the course of the next year. I will say on the interest expense side, and I think we talked about this on the last quarter, you know, I think we're generally on the downhill trajectory on that. You know, we had been fairly well hedged. You know, we're now A, between delevering the balance sheet.

No, I mean, look, it's, uh, you know, in terms of move-up. I mean, you know, we're at the leasing business, right? And there's going to be a certain amount of, uh, tenants that move out, certain amounts you keep, certain amounts of the growth, certain contracts. I think we're more.

Michael Franco: We had been fairly well hedged. We're now, A, between de-levering the balance sheet. I think we're generally rolling over assets, I would say flat in terms of interest, maybe a little bit down, maybe a little bit up, but generally flat. With less debt, the interest expense is coming down. If short-term rates come down, that'll help a little bit more. I think we're on the backside on the interest front.

Steven Roth: I think we're generally rolling over assets. You know, I would say flat in terms of, you know, interest, you know, maybe a little bit down or a little bit up, but generally flat, but with less debt, you know, the interest expense is coming down. So, you know, and if short-term rates come down, that'll help a little bit more. So I think we're, I think we're on the backside on the interest front.

With Broadband contract right now but, um, uh, you know, apparently there's always some level of move out. So, uh, you know, in in New York office, um, you know, you're going to have, we'll just have to see what sort of, you know, comes about over the course of the next year. I will say on the interest expense side, and I think we talked about this on the last quarter, you know, I think we're generally on the downhill trajectory on that, uh, you know, we, we had, uh, we had been fairly well hedged, um, you know, we're now a between de-levering, the balance sheet. Uh, I think we're generally rolling over assets, uh, you know,

Steven Roth: Think about it.

Michael Borenstein: Think about it.

I think we're on the back side, on the interest front.

Vikram Malhotra: Okay,

Steven Roth: Hang on for a minute. Think about it from the big picture point of view. We operate our business, 90% of our business, in the single best market in the country by far. We are in the best building category, which is a smaller market than the entirety. It's 180 million sq ft market. The vacancies in that market, our customers are expanding, our customers are doing well. The demand for space is robust, aggressive in the market that we serve. Vacancies are evaporating. The markets are getting tighter. That all augurs to a better business and shareholder value creation. That's where we are.

Steven Roth: Can I just, you know, hang on for a minute. Think about it from the big picture point of view. We operate our business, 90% of our business in the single best market in the country by far. We are in the best building category, which is a smaller market than the entirety. It's a 180 million square foot market. The vacancies in that market, our customers are expanding. Our customers are doing well. The demand for space is robust, aggressive in the market that we serve. Vacancies are evaporating. The markets are getting tighter. So that all augurs to a better business and shareholder value creation. So that's where we are.

Think about think about it.

They hang out for a minute. Uh, think about it from the big picture.

Point of view.

We operate.

Our business, 90% of our business in the single best Market in the country by far.

we are in the best building category, which is

a Walmart Market that is entirely 180 million square feet.

The vacancies in that market are customers are expanding. Our customers are um are doing well. The demand for space is robust, aggressive in the in the market that we serve

uh,

they can see our uh, evaporating. The markets are getting tighter so that all aurors to a

A a, a, a, a, a, a better better business, and shareholder value creation. Uh, so that's where we are.

Vikram Malhotra: Okay. I just wanted to clarify. I guess, Steve, you mentioned San Francisco likely to come back very, I guess, I don't know if it was the word ferocious, and then obviously New York doing very well. I'm just wondering, does this create an opportunity for Vornado to use some capital to buy assets, invest in debt? I know you're paying down debt, but just what are the investment opportunities today for Vornado?

Michael Borenstein: Okay. I just wanted to clarify. So I guess, Steve, you mentioned, you know, San Francisco likely to come back very, very, I guess, I don't know if it was the word ferocious, and then obviously New York doing very well. I'm just wondering, like, does this create an opportunity for Bernado to use some capital, you know, to buy assets, invest in debt? I know you're paying down debt, but just like what are the investment opportunities today for Bernado?

Okay, I just wanted to clarify. So I guess you mentioned, you know, San Francisco like to come back very, very, I guess, I don't know if it was the word furrow shift, and then obviously in New York doing very well. Um, I'm just wondering, like, does this create an opportunity for Bernado to use some capital, you know, to buy assets? Invest in debt? I know you're paying down debt, but just like, what are the investment opportunities today for Bernado?

Steven Roth: The answer is capital allocation is probably the single most important thing that we have to do. We are going to be very vigorous and very disciplined in what we do. We look at everything that comes up, and we invest cautiously, and we invest aggressively when we think there's something that creates real shareholder value. I don't have anything in the way of predictions for you other than the fact that we are very responsible in our capital allocation.

Steven Roth: The answer is capital allocation is probably the single most important thing that we have to do. And we are going to be very vigorous and very disciplined in what we do. We look at everything that comes up, and we invest cautiously, and we invest aggressively when we think there's something that creates real shareholder value. So I don't have anything in the way of predictions for you other than the fact that we are very responsible in our capital allocation.

Um, the answer is capital. Allocation is probably the single most important thing that we have to do, uh and we are going to be very vigorous and very disciplined in what we do. Uh, we look at everything that comes up and we invest, uh, cautiously and we invest aggressively when we think there's something that uh, uh, creates real shareholder value. Uh, so I don't have any anything in the way of predictions for you, other than the fact that we are very responsible that our Capital allocation

Operator: Your next question comes from Caitlin Burrows with Goldman Sachs. Please go ahead.

Speaker 3: And your next question comes from Caitlin Burrows with Goldman Sachs. Please go ahead.

Caitlin Burrows: Hi. Good morning. Earlier, somebody asked about net effective rents, and you talked about pushing rents across New York City. I guess on the tenant improvement and leasing commission side, you show it as a percent of initial rent, and it's up in New York City for Q2 and H1 to 12% to 13% of initial rent. I was wondering, would you say that 2025 outcome is a result of something in particular, or is that just the reality of leasing today, and what will it take for that to change?

Steve Borenstein: Hi, good morning. Earlier, somebody asked about net effective rents, and you talked about pushing rents across New York City. I guess on the tenant improvement and leasing commission side, you show it as a percent of initial rent, and it's up in New York City for the second, sorry, for 2Q and the first half to like 12 to 13 percent of initial rent. So I was wondering, would you say that 2025 outcome is a result of something in particular, or is that just the reality of leasing today, and what will it take for that to change?

In the next question comes from Caitlyn Burroughs with Goldman Sachs. Please go ahead.

Hi, good morning. Uh, earlier somebody asked about net effective rents and you talked about pushing rents across New York City, I guess on the tenant Improvement and leasing commission side, you show it as a percent of initial rent and it's up in New York City for the second. Uh, sorry for TQ and the first half to like 12 to 13% of initial rent. So I was wondering, um, would you say that 2025 outcome is a result of something in particular? Or is that just the reality of leasing today and what will it take for that to change?

Steven Roth: I don't know. Go ahead, Glenn.

Steven Roth: You know, I don't know that the.

Michael Borenstein: Go ahead, Glenn.

You know, I don't know.

Glenn: I was just going to say that, look, the TIs have stabilized, haven't come down yet, but we are seeing free rent come down, which is not in that percentage. We expect, as things tighten, that the TIs will eventually come down. Free rent certainly is starting to come down in our deal-making with rents rising. I think that's a great start to the net effective story strengthening for owners like us, for sure.

Steven Roth: I was just going to say that, look, the TIs have stabilized. Haven't come down yet, but we are seeing free rent come down, which is not in that percentage. But we expect, you know, as things tighten, that the TIs will eventually come down. But free rent certainly is starting to come down in our dealmaking with rents rising. So I think that's a great start to the net effective story strengthening for owners like us, for sure.

Yeah, go ahead, Glenn.

I was just going to say that. Look the ti.

Um, have stabilized haven't come down yet? But we are seeing free, rent, come down, which is not in that percentage.

Caitlin Burrows: Got it. Okay. I was wondering if you could just give any update on your dividend thoughts as it relates either to 2025 or just broadly in having a quarterly dividend reinstated.

Steve Borenstein: Got it. Okay. And then I was wondering if you could just give any update on your dividend thoughts as it relates either to 2025 or just broadly in having a quarterly dividend reinstated.

Um, but we expect, you know, as things tighten, um, that the TI's will eventually come down. But free rent certainly is starting to come down in our deal-making, uh, with rents rising. So, I think that's a great start to the net effective story strengthening, um, for owners like us, for sure.

Okay, and then I was wondering if you could just give any update on your um, dividends thoughts. I as it relates either to 2025 or just broadly and having a quarterly dividend reinstated.

Michael Franco: Good morning, Caitlin. On the dividend front, obviously, that's a board decision, and we'll meet with the board, discuss it with the board as we get at year-end. I would say a couple of things, though. Given the positive trends in the business, and where taxable income is expected to be, and there's still things that could move it around in a number of different ways, including you've seen us sell a couple of small assets, et cetera. I would say as we get towards year-end, our expectation, given the trends are, at a minimum, we think we'll pay as much as we paid last year, which was $0.74 a share. That's for 2025. Again, we'll get with the board at year-end.

Steven Roth: Good morning, Caitlin. So on the dividend front, obviously, you know, that's a board decision, and we'll meet with the board, discuss it with the board as we get at year-end. I would say a couple of things, though. You know, given the positive trends in the business, you know, and where taxable income is expected to be, and you know, there's still things that could move it around, you know, in a number of different ways, including, you know, some, you know, you've seen us sell a couple of small assets, etc. But I would say as we get towards year-end, you know, our expectation, given the trends, are, you know, at a minimum, we think we'll pay as much as we paid last year, which was 74 cents a share. So that's for 2025. And again, you know, we'll get with the board at year-end.

Uh, good morning Kaylin.

Um, so on the dividend front, um, obviously you know, that's a, that's a board decision. And uh, we'll meet with the board discuss it with the board as we get, uh, at at year end. Uh, I would say a couple things though. Um, you know, given the positive Trends in the business. Um, uh

You know, and and where taxable income is expected to be, and, you know, there's still things that could move it around, uh, you know, in in a number of different ways including, you know, some some, you know, you've seen Us sell a couple, small assets, Etc. But I, I would say as we get towards your end, you know, our expectation given the trends are, you know, at a minimum we think we'll pay as much as we paid last year, which was 74 cents. A share

Steven Roth: You know, I think as we look out, and I think Steve made this comment maybe a couple of quarters ago, you know, as the environment heals, we'll look towards more of a regular dividend. You know, I think that's something we'll also look hard at at year-end and, you know, get back to our more normalized, you know, quarterly dividend, whether that results in any different outcome. And there's a total, you know, I can't comment on that. But I think certainly as we enter this year, you know, no less than last year to the expectation. And, you know, again, given the positive trends, you know, we think that the dividend, you know, will start growing over time, particularly as we get into that, you know, 2027, you know, significant increase in earnings.

Michael Franco: I think as we look out, I think Steve made this comment maybe a couple of quarters ago, as the environment heals, we'll look towards more of a regular dividend. I think that's something we'll also look hard at at year-end, get back to our more normalized quarterly dividend. Whether that results in any different outcome in terms of total, I can't comment on that. I think certainly as we enter this year, no less than last year, the expectation, again, given the positive trends, we think that the dividend will start growing over time, particularly as we get into that 2027 significant increase in earnings.

As we as we enter this year, uh, you know, no less than last year. The expectation and, you know, again given the positive Trends. Uh, you know, we think that the dividend, uh, you know, will start growing over time particularly as we get into that you know 2027 you know significant increase

In earnings.

Caitlin Burrows: Thanks.

Steve Borenstein: Thanks.

Thanks.

Operator: Your next question comes from Ronald Kamdem with Morgan Stanley. Please go ahead.

Speaker 3: And your next question comes from Ronald Camden with Morgan Stanley. Please go ahead.

Ronald Kamdem: Hey, I just got two quick ones. Just on the going back to the same-store NOI and some of the callouts, just wondering if any high-level thoughts as you sort of anniversary this period in 2026 or 2027, just any sort of color on where that same-store could look like or how we should think about it without asking for guidance?

Michael Franco: Hey, I just got two quick ones. Just on the going back to the same store in Hawaii and some of the callouts, just wondering if any high-level thoughts as you sort of anniversary this period in 26 or 27, just any sort of color on where that same store, you know, could look like or how we should think about it without asking for guidance.

And your next question comes from. Ronald Camden with Morgan Stanley, please go ahead.

Hey, I just got 2 quick ones just on the going back to the same store in Ohio and some of the call outs just wondering if any high-level thoughts as you sort of anniversary, this period in 26 or 27.

Just any sort of color on where that same store.

Um you know could look like or how we should think about it without asking for guidance.

Michael Franco: I think that, boy, in NOI, you got a lot going on because obviously 770 comes out in there now, we obviously paid off the debt too. Look, I think as we get to particularly next year, we'll start seeing positive same-store NOI, and beyond. I can't give you the percentages yet. Again, just given the leasing pipeline, we expect that that'll be the case.

Steven Roth: You know, I think that, boy, in NY, we got a lot going on because obviously 717 comes out in there now. We obviously paid off the debt too. But look, I think as we get to particularly next year, you know, we'll start seeing positive same story on Hawaii and beyond. I can't give you the percentages yet. But, you know, again, just given the leasing pipeline, we expect that that'll be the case.

Ronald Kamdem: Makes sense. Then my second question, just some updated thoughts. I think the Hotel Penn land site, some of the activity on sort of Fifth Avenue and retail monetization. Just curious if you can give us a pulse on those assets and how you're thinking through about potential monetization there or what you're hearing. Thanks.

Michael Franco: Makes sense. And then my second question, just some updated thoughts. I mean, I think the hotel pen land site, some of the activity on sort of 5th Avenue and retail monetization. Just curious if you can give us a pulse on those assets and how you're thinking through about potential monetization there or what you're hearing. Thanks.

Um, you know, I think that, uh, by the way, in, no way to get a lot going on because obviously 777, he comes out there. Now we obviously paid off the debt too, but, um, like I think as we get to particularly next year, you know, we'll start seeing positive, same story on a lie, uh, and and Beyond, I can't give you the percentages yet. Um, but you know, again just giving the leasing pipeline uh, we expect that that that that'll be the case.

Makes sense. And then my second question, just some updated thoughts. I mean, I think the Hotel Penn line site, uh, some of the activity on sort of 5th Avenue and retail monetization. Just curious if you can give us a pulse on those assets and how you're thinking through potential monetization there or what you're hearing. Thanks.

Steven Roth: The Penn 15 site is, I believe, the single best site in the West New York market. Obviously, it will require a new build. A new build now is, as I've said in my prepared remarks, the escalation in cost of the new builds is fairly dramatic. We're trolling for tenants. We see every large requirement that comes along. When the right tenant comes along, we will make a deal and develop the land. The timing on that is uncertain, but it certainly will not be imminent or quick.

Steven Roth: The pen 15 site is, I believe, the single best site in the West New York market. Obviously, it will require a new build. A new build now is, as I've said in my prepared remarks, the escalation in cost of the new build is fairly dramatic. So we will, we're trolling for tenants. We talk, we see every large requirement that comes along. And when the right tenant comes along, we will make a deal and develop the land. The timing on that is uncertain, but it certainly will not be imminent or quick.

Uh, the 10 the purchasing site is uh, I believe the single best site in the west. Uh, West New York Market. Um,

Uh, obviously, uh, it will require a new build. A new build now is, as I've said, in my prepared remarks, uh, the escalation in, in cost of the new bills is fairly dramatic. So, uh, we will

uh, we're trolling for tenants, we talked we we we see every large requirement that comes along, and when the right tenant comes along, we will make a deal and develop the

The develop the land.

Uh, the timing on that is uncertain, but it certainly will not be imminent or quick.

Operator: Your next question comes from Brendan Lynch with Barclays. Please go ahead.

Speaker 3: And your next question comes from Brendan Lynch with Barclays. Please go ahead.

Brendan Lynch: Great. Thanks for taking my question. As you guys mentioned, San Francisco is showing broad signs of improvement in demand. Can you give us an update on progress for renewing or re-leasing some of the upcoming expirations at 555 California?

Alexander Goldfarb: Great. Thanks for taking my question. As you guys mentioned, San Francisco is showing broad sense of improvement in demand. Can you give us an update on progress for renewing or releasing some of the upcoming expirations at 555, California?

In your next question, comes from Brendan Lynch with Barclays. Please go ahead. Great, thanks for taking my question. As you guys mentioned in San Francisco showing broad sense of improvement and demand. Can you give us an update on progress for renewing or releasing some of the upcoming expirations at 555? California.

Michael Franco: Glenn, you want to take that?

Steven Roth: Glenn, you want to take that?

Glenn: Sure. I was just in San Francisco a few days ago. Things are markedly improved. The streets feel good, safer, cleaner. Buildings are busier. The good news is, leasing is starting to tick up and improve. It feels a lot like New York, I'd say probably 18 months ago or so, where things are starting to happen in a positive way. The beat is better. The brokers are smiling a little bit all of a sudden. It all feels good. We've just completed a huge run of leasing there, about 600,000 feet. We have some vacancy to contend with right now, 100,000 feet in bits and parts. We have a couple of tenants moving on next year. We have action on everything. Our tour volume is great, almost daily in the building.

Michael Borenstein: Sure.

And you want to take that?

Steven Roth: I'm sorry. Just in San Francisco a few days ago, things are markedly improved. The streets feel good, safer, cleaner. Buildings are busier. And the good news is leasing is starting to tick up and improve. It feels a lot like New York, I'd say, probably 18 months ago or so, where things are starting to happen in a positive way. The beat is better. The brokers are smiling a little bit all of a sudden. So it all feels good. You know, we've just completed a huge run of leasing. They're about 600,000 feet. We have some vacancy to contend with right now, 100,000 feet in bits and parts. And then we have a couple tenants moving on next year. We have action on everything. Our tour volume is great, almost daily in the building. Everyone is coming through.

mark,

I'm sorry, just since San Francisco a few days ago, things are marketing. Improved, the streets, feel good, safer, cleaner, buildings are busier. And the good news is leasing is starting to tick up and improve. Um, it feels a lot like New York. I'd say, probably 18 months ago or so where things are starting to happen in a positive way. Um, the bead is better, the Brokers are smiling a little bit, all of the sudden so it all feels good.

You know, we've just completed a, a huge run of leasing. There are about 600,000 feet.

Glenn: Everyone is coming through, the building continues to outperform everybody by a long shot. The best tenants with the highest rents are all coming to 555. We feel great about our prospects, overall, the market seems to be coming on now. The mayor's done an excellent job improving the environment, working well with landlords like us and with our tenant base. We feel like things are signaling to improvement and strength.

Steven Roth: And the building continues to outperform everybody by a long shot. The best tenants with the highest rents are all coming to 555. We feel great about our prospects. But overall, the market seems to be coming on now. The mayor's done an excellent job improving the environment, working well with landlords like us and with our tenant base. So we feel like things are signaling to improvement and strength.

Um, we have some vacancy to contend with right now, 100,000 sq. ft. and bits and parts. We have a couple of tenants moving on next year. We have action on everything. Our tour volume is great—almost daily. In the building, everyone is coming through, and the building continues to outperform everybody by a long shot. The best tenants with the highest rents are all coming to 555.

Uh, we feel great about our prospects, but overall the market seems to be coming on. Now, the mayor is on an excellent job, improving the environment.

Working well with landlords like us and with our tenant base, we feel like things are signaling an improvement in strength.

Brendan Lynch: Great. Thanks. That is helpful. Maybe more broadly on the demand picture, our checks with brokers have suggested that a lot of the demand that they have seen in recent quarters has reflected real-time needs and urgency among tenants versus some more traditional longer-term capacity planning needs that would have been more of a characteristic of the past cycles. Have you seen any shifts in recent quarters in how the tenant base is approaching their need for space in terms of real-time needs versus longer-term planning?

Alexander Goldfarb: Great. Thanks. That's helpful. And maybe more broadly on the demand picture, architects with brokers have suggested that a lot of the demand that they've seen in recent quarters has reflected real-time needs and urgency among tenants versus the more traditional longer-term capacity planning needs that would have been more of a characteristic of the past cycles. Have you seen any shift in recent quarters in how the tenant base is approaching their need for space in terms of real-time needs versus longer-term planning?

Great. Thanks, that's helpful and maybe more broadly on the demand picture. Um, but our checks with Brokers have suggested that a lot of the demand that they've seen in, uh, recent quarters has reflected real time needs and urgency among tenants.

Istic of the, the past Cycles. Have you seen any shift in uh, recent quarters in? How the tenant base is approaching their need for space? Um, in terms of real-time needs versus uh, longer-term planning.

Michael Franco: Glenn, that's you.

Steven Roth: Glenn, that's what it's going.

Glenn: Sure. It's Glenn. Verizon's a perfect example. It's a deal that started percolating to us in mid-June and closed at the end of July. That's fast. We love that. A tenant decided to move their headquarters, acted quickly, concisely, perfectly, and smoothly. That's something we see. We have other activity at PENN 2, PENN 1, and elsewhere in the portfolio similar, where tenants are now coming quickly. It's not as much of our lease expires in 2 years or 3 years or 4 years. It's the action that we like, a landlord's market type of action. A lot of it is both relocation and expansion. There's a lot of expansion, particularly in New York right now, where we're seeing signs of growth and people are acting very quickly. Even in some cases, we have tenants now battling for space throughout the portfolio.

Michael Borenstein: So Verizon's a perfect example. You know, it's a deal that started percolating to us in mid-June and closed at the end of July. That's fast. We love that. Tenant decided to move their headquarters, acted quickly, concisely, perfectly, and smoothly. So that's something we see. We have other activity at pen two, pen one, and elsewhere in the portfolio similar where tenants are now coming quickly. It's not as much of our lease expires in two years or three years or four years. It's the action that we like, a landlord's market type of action. And a lot of it is both relocation and expansion. There's a lot of expansion, particularly in New York right now, where we're seeing signs of growth and people are acting very quickly. And even in some cases, we have tenants now battling for space throughout the portfolio.

Sure.

So Verizon's a perfect example.

Um, you know, it's a deal that started percolating to us in mid, June and closed at the end of July. That's fast. I love that, uh, tenant decided to move their headquarters. Acted quickly can slightly perfectly and smoothly.

Um, so that that's something we see we have other activity at 10 to 10 and 1 and elsewhere in the portfolio similar.

Michael Borenstein: So I think your comment is on cue in terms of what we're seeing.

Glenn: I think your comment is on cue in terms of what we're seeing.

Where tenants are now coming quickly. Um, it's not as much of our lease expires in 2 years or 3 years or 4 years. It's, it's the action that we like, um, a landlord's Market type of action. Um, and a lot of it is both relocation and expansion. There's a lot of expansion particularly, um, in New York right now. Um, where we're seeing signs of growth, and people are acting very quickly, and even in some cases, we have tenants now battling for space throughout the portfolio.

So I think your comment is uh is on Q in terms of what we're seeing.

Brendan Lynch: Great. Thanks, Glenn.

Alexander Goldfarb: Great. Thanks, Glenn.

Great. Thanks, bud.

Operator: Your next question is a follow-up from Alexander Goldfarb with Piper Sandler. Please go ahead.

Speaker 3: And your next question is a follow-up from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb: Thank you. Glenn and Steve, I just want to go back. Steve, you mentioned $100 in place, I think it was in place in Penn that could go to $150 if you guys get the same rents as your neighbors to the west. I thought the new deals that you were signing were in sort of the $120, $130 range.

Glenn Weiss: Hey, and thank you. Glenn and Steve, I just want to go back. Steve, you mentioned $100 in place. I think it was in place in pen that could go to $150 if you guys get the same rents as your neighbors to the west. But I thought the new deals that you were signing were in sort of the $120, $130 range. I thought that's where the new deals are commanding. So maybe I'm wrong, but maybe you can just provide a little perspective versus what are in-place rents at the pen one, pen two versus where you guys are signing rent. As I said, I thought your signed rents had been moving up steadily.

In the next question, we have a follow-up from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb: I thought that's where the new deals are commanding. Maybe I'm wrong, but maybe you can just provide a little perspective versus what are in-place rents at the Penn 1, PENN 2, versus where you guys are signing rents. I said, I thought your signed rents had been moving up steadily.

Steven Roth: Glenn, do you want to handle that for a minute?

Hey, and and thank you. Um, Glenn and Steve, I just want to go back. Steve, you mentioned a hundred dollars in place. I think it was in place in Penn that could go to 150 if you guys get the same rent as as your neighbors to the west. But I thought the new deals that you were signing were in sort of the 1 120 130 range. I thought that's where the new deals are commanding, so maybe I'm wrong but maybe you can just provide a little perspective versus what are in place. Rents at the pain. Uh pain 1 pen, 2 versus where you guys are starting signing rents. As I said, I thought your your signed rents had been moving up steadily

Michael Borenstein: Glenn, you want to handle that for a minute?

Glenn: Certainly, we're moving steadily up. As Michael said, we were in the 80s, then the 90s, now in the 100s. That's on average. We of course have seen deals well into the 100s, the 110s, the 120s, the 130s. We are certainly seeing month-to-month improvement, rising rates. We expect that to continue. Our average rents have risen quarter to quarter, and we're seeing deals well into the 100s now. You're correct, Alex.

Steven Roth: Certainly, we're moving steadily up. As Michael said, we were in the 80s and the 90s, now in the 100s. That's on average. We, of course, have seen deals well into the 100s, the 110s, the 120s, the 130s. So we are certainly seeing month-to-month improvement, rising rates. We expect that to continue. So our average rents have risen quarter to quarter, and we're seeing deals well into the 100s now. You're correct, Alex.

Uh Glen, do you want to handle that for a minute?

Certainly we're moving steadily up.

Alexander Goldfarb: Okay, cool. Thank you.

Glenn Weiss: Okay, cool. Thank you. Thank you.

Um, as Michael said, we were in the 80s and the 90s. Now, in the hundreds, that's on average. We, of course, have seen deals well into the hundreds: the 110s, the 120s, the 130s. Um, so we are certainly seeing month-to-month improvement. Rising rates, we expect that to continue. Um, so our average rents have risen quarter to quarter, and we're seeing deals well into the hundreds now. You're correct, Alex.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Mr. Steven Roth for any closing remarks.

Okay, cool. Thank you. Thank you.

Speaker 3: This concludes our question and answer session. I would like to turn the conference back over to Mr. Steve Roth for any closing remarks.

Steven Roth: Thank you for joining us today, everybody. We continue to be very excited about a lot of things. We're very excited about Penn, obviously. We're very proud of what we've done with our balance sheet over the last couple of quarters. Business is actually pretty terrific. We'll see you next quarter. Thank you.

This concludes our question and answer session. I would like to turn the conference back over to Mr. Steve Roth for any closing remarks

Steven Roth: Thank you for joining us today, everybody. And we'll, we continue to be very excited about a lot of things. We're very excited about pen, obviously. We're very, very proud of what we've done with our balance sheet over the last couple of quarters. And business is actually, actually pretty terrific. We'll see you next quarter. Thank you.

Thank you for joining us today everybody. Um, and we'll we can continue to be very excited about a lot of things. We're very excited about pain. Obviously we're very, very proud of what we've done with our balance sheet over the last couple of quarters.

And a business is actually uh actually pretty terrific. Um we'll see you next quarter. Thank you.

Operator: Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.

Speaker 3: Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.

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