Alexander's Q4 2025 Alexander's Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Alexander's Inc Earnings Call
Speaker #1: operator for today's My name is Nick and I will be your call. This call is being recorded for replay purposes. All lines are in a listen-only mode.
Speaker #1: 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 touch tone phone.
Speaker #1: I will now turn the call over to Mr. Steve Borenstein, Executive Vice President and Corporation Counsel. Please go ahead, sir.
Speaker #2: Welcome to Vornado Realty Trust fourth quarter earnings call. Yesterday afternoon we issued our fourth quarter earnings release and filed our annual report on Form 10-K with the Securities and Exchange Commission.
Steve Borenstein: Welcome to Vornado Realty Trust Fourth Quarter Earnings Call. Yesterday afternoon, we issued our fourth quarter earnings release and filed our annual report on Form 10-K 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-K and financial supplement. Please be aware that statements made during this call may be 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 Fourth Quarter Earnings Call. Yesterday afternoon, we issued our fourth quarter earnings release and filed our annual report on Form 10-K 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-K and financial supplement. Please be aware that statements made during this call may be forward-looking statements, and actual results may differ materially from these statements due to a variety of risks, uncertainties, and other factors.
Speaker #2: These information package, are available on documents, as well as our supplemental financial 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-K and financial supplement. Please be aware that statements made during this call may be deemed forward-looking statements and actual results may defer materially from these statements due to a variety of risks, uncertainties, and other factors.
Speaker #2: 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, 2025, for more information regarding these risks and uncertainties.
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, 2025, 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 statement. 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 available and present and available for questions. I will now turn the call over to Steven Roth.
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, 2025, 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 statement. 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 available and present and available for questions. I will now turn the call over to Steven Roth.
Speaker #2: 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.
Speaker #2: On the call today from management for our opening comments are Steven Ross, Chairman and Chief Executive Officer, and Michael Franco, President and Chief Financial Officer.
Speaker #2: Our senior team is also present and available for questions. I will now turn the call over to Steven Ross.
Speaker #3: Thank you, Steven. Good morning, everyone. Here at Vornado business is good and getting better. As you all know, Vornado is a premier Manhattan-centric office company.
Steven Roth: Thank you, Steven. Good morning, everyone. Here at Vornado, business is good and getting better. As you all know, Vornado is a premier Manhattan-centric office company, and I'm sure we can all agree that Manhattan is clearly far and away the best office, and residential too, by the way, real estate market in the country. As predicted on our recent calls, New York is now on the foothills of the best landlord's market in 20 years. We believe this landlord's market in Manhattan will continue to tighten and last for a long time. Fundamentals are truly outstanding, the best ever. The long and short of it is that tenant demand from finance, tech, and most other industries is extremely robust in the face of declining availabilities in the better building subset. Take a look at our assets. We have the Penn District, our city within a city.
Steven Roth: Thank you, Steven. Good morning, everyone. Here at Vornado, business is good and getting better. As you all know, Vornado is a premier Manhattan-centric office company, and I'm sure we can all agree that Manhattan is clearly far and away the best office, and residential too, by the way, real estate market in the country. As predicted on our recent calls, New York is now on the foothills of the best landlord's market in 20 years. We believe this landlord's market in Manhattan will continue to tighten and last for a long time. Fundamentals are truly outstanding, the best ever. The long and short of it is that tenant demand from finance, tech, and most other industries is extremely robust in the face of declining availabilities in the better building subset. Take a look at our assets. We have the Penn District, our city within a city.
Speaker #3: And I'm sure we can all agree that Manhattan is clearly far and away the best office and residential too, by the way, real estate market in the country.
Speaker #3: As predicted on our recent calls, New York is now on the foothills of the best landlord's market in 20 years. We believe this landlord's market in Manhattan will continue to tighten and last for a long time.
Speaker #3: Fundamentals are truly outstanding. The best ever. The long and short of it is that tenant demand from finance, tech, and most other industries is extremely robust in the face of declining availabilities in the better building subset.
Speaker #3: Take a look at our assets. We have the Penn District. Our city within a city. A roster of our other assets in the better building category where in-place rents are well under market and market rents are rising.
Steven Roth: The roster of our other assets in the better building category, where in-place rents are well under market and market rents are rising. We have an irreplaceable portfolio, very scarce. Think scarce as hen's teeth, high street retail assets on Fifth Avenue and in Times Square. We have the largest and most successful and growing large format signage business. We have in-house, our wholly owned, vertically integrated, cleaning and security company. We have the best development program in town, highlighted by 350 Park Avenue, PENN 15, and now 623 Fifth Avenue. And most importantly, we have the best management team, leasing, development, finance, and operations in the business. In short, we are a very focused Manhattan-based office tower specialist.
Steven Roth: The roster of our other assets in the better building category, where in-place rents are well under market and market rents are rising. We have an irreplaceable portfolio, very scarce. Think scarce as hen's teeth, high street retail assets on Fifth Avenue and in Times Square. We have the largest and most successful and growing large format signage business. We have in-house, our wholly owned, vertically integrated, cleaning and security company. We have the best development program in town, highlighted by 350 Park Avenue, PENN 15, and now 623 Fifth Avenue. And most importantly, we have the best management team, leasing, development, finance, and operations in the business. In short, we are a very focused Manhattan-based office tower specialist.
Speaker #3: We have an irreplaceable portfolio of very scarce think scarce as hens teeth, high street retail assets on Fifth Avenue, and in Times Square. We have the largest and most successful and growing large format signage business.
Speaker #3: We have in-house our wholly owned vertically integrated cleaning and security company. We have the best development program in town highlighted by 350 Park Avenue, Penn 15, and now 623 Fifth Avenue.
Speaker #3: And most importantly, we have the best management team leasing, development, finance, and operations in the business. In short, we are a very focused Manhattan-based office power specialist.
Speaker #3: And while not in Manhattan, let's not forget 555 California Street, the best building in rapidly recovering San Francisco. We're occupancy is 95% and rents are north of $160 per square foot in the tower.
Steven Roth: While not in Manhattan, let's not forget 555 California Street, the best building in rapidly recovering San Francisco, where occupancy is 95% and rents are north of $160 per sq ft in the tower. At Vornado, we had an industry-leading quarter and an industry-leading year in almost every performance metric. And when I say industry-leading, I mean better than the other guys. Here's the scorecard. During 2025, Glenn and his team leased 4.6 million sq ft of office space overall, consisting of 3.7 million sq ft in Manhattan, 446,000 sq ft in San Francisco, and 394,000 sq ft in Chicago. This was our highest Manhattan leasing volume in over a decade and our second highest year on record.
Steven Roth: While not in Manhattan, let's not forget 555 California Street, the best building in rapidly recovering San Francisco, where occupancy is 95% and rents are north of $160 per sq ft in the tower. At Vornado, we had an industry-leading quarter and an industry-leading year in almost every performance metric. And when I say industry-leading, I mean better than the other guys. Here's the scorecard. During 2025, Glenn and his team leased 4.6 million sq ft of office space overall, consisting of 3.7 million sq ft in Manhattan, 446,000 sq ft in San Francisco, and 394,000 sq ft in Chicago. This was our highest Manhattan leasing volume in over a decade and our second highest year on record.
Speaker #3: At Vornado, we had an industry-leading quarter and an industry-leading year. In almost every performance metric, and when I say industry-leading, I mean better than the other guys.
Speaker #3: Here's the scorecard. During 2025, Glenn and his team leased 4.6 million square feet of office space overall, consisting of 3.7 million square feet in Manhattan, 446,000 square feet in San Francisco, and 394,000 square feet in Chicago.
Speaker #3: This was our highest Manhattan leasing volume in over a decade and our second highest year on record. Excluding the 1.1 million-square-foot master lease with NYU, our average starting rents in Manhattan were $98 per square foot, with marked markets of plus 10.4% cap and plus 7.8% cash, and with an average lease term of over 11 years.
Steven Roth: Excluding the 1.1 million sq ft master lease with NYU, our average starting rents in Manhattan were $98 per sq ft, with mark-to-market of +10.4% GAAP and +7.8% cash, and with an average lease term of over 11 years. For the second year in a row, Vornado was the clear leader in $100 per sq ft leasing, with 46 leases totaling 2.5 million sq ft, or two-thirds of our activity. PENN 1 and PENN 2 led here with a total of 23 deals, comprising more than 1 million sq ft between both properties. In the Q4, we executed 25 New York office deals totaling 960,000 sq ft at average starting rents of $95 per sq ft.
Steven Roth: Excluding the 1.1 million sq ft master lease with NYU, our average starting rents in Manhattan were $98 per sq ft, with mark-to-market of +10.4% GAAP and +7.8% cash, and with an average lease term of over 11 years. For the second year in a row, Vornado was the clear leader in $100 per sq ft leasing, with 46 leases totaling 2.5 million sq ft, or two-thirds of our activity. PENN 1 and PENN 2 led here with a total of 23 deals, comprising more than 1 million sq ft between both properties. In the Q4, we executed 25 New York office deals totaling 960,000 sq ft at average starting rents of $95 per sq ft.
Speaker #3: For the second year in a row, Vornado was the clear leader in $100 per square foot leasing, with 46 leases totaling $2.5 million square feet, or two-thirds of our activity.
Speaker #3: Penn 1 and Penn 2 led here with a total of $23 deals comprising more than $1 million square feet between both properties. In the fourth quarter, we executed $25 New York office deals totaling $960,000 square feet, at average starting rents of $95 per square foot, marked markets for the quarter were plus 8.1% cap and plus 7.2% cash, and an average lease term of 10 years.
Steven Roth: Mark to markets for the quarter were +8.1% GAAP and +7.2% cash at an average lease term of 10 years. Half this activity was for leases with over $100 per sq ft starting rents. 2025 results reflected the market's growing appreciation for our transformation of the Penn District. Tenants and brokers get it. High quality office space, the best transportation, literally on top of Penn Station, the region's transportation hub, and the plethora of amenities and hangout spaces are unmatched. In 2025, at Penn Two, we leased 908,000 sq ft at average starting rents of $109 per sq ft, with an average term of over 17 years.
Steven Roth: Mark to markets for the quarter were +8.1% GAAP and +7.2% cash at an average lease term of 10 years. Half this activity was for leases with over $100 per sq ft starting rents. 2025 results reflected the market's growing appreciation for our transformation of the Penn District. Tenants and brokers get it. High quality office space, the best transportation, literally on top of Penn Station, the region's transportation hub, and the plethora of amenities and hangout spaces are unmatched. In 2025, at Penn Two, we leased 908,000 sq ft at average starting rents of $109 per sq ft, with an average term of over 17 years.
Speaker #3: Half this activity was for leases with over $100 per square foot starting rents. 2025 results reflected the market's growing appreciation for our transformation of the Penn District.
Speaker #3: Tenants and brokers get it. High-quality office space, the best transportation, literally on top of Penn Station, the region's transportation hub, and the plethora of amenities and hangout spaces are unmatched.
Speaker #3: In 2025, at Penn 2, we leased 908,000 square feet at average starting rents of $109 per square foot, with an average term of over 17 years.
Speaker #3: This includes 231,000 square feet leased during the fourth quarter at average starting rents of $114 per foot, with an average term of over 13 years.
Steven Roth: This includes 231,000sq ft leased during Q4 at average starting rents of $114 per foot, with an average term of over 13 years, all well above our original underwriting. We have now leased over 1.4 millionsq ft at PENN 2 since project inception, putting us at 80% occupancy, hitting the target, which we guided to. We expect to finish the lease up this year. Based on the leases we have executed and the activity in the remaining space,... We have increased our projected incremental cash yield from 10.2% to 11.6%, as you will see on page 22 of our supplement.
Steven Roth: This includes 231,000sq ft leased during Q4 at average starting rents of $114 per foot, with an average term of over 13 years, all well above our original underwriting. We have now leased over 1.4 millionsq ft at PENN 2 since project inception, putting us at 80% occupancy, hitting the target, which we guided to. We expect to finish the lease up this year. Based on the leases we have executed and the activity in the remaining space,... We have increased our projected incremental cash yield from 10.2% to 11.6%, as you will see on page 22 of our supplement.
Speaker #3: All well above our original underwriting. We have now leased over 1.4 million square feet at Penn 2 since project inception. Putting us at 80% occupancy, hitting the target which we guided to.
Speaker #3: We expect to finish the lease up this year. Based on the leases we have executed and the activity in the remaining space, we have increased our projected incremental cash yield from 10.2% to 11.6%, as you will see on page 22 of our supplement.
Speaker #3: At Penn 1, we leased 420,000 square feet during the year at average starting rents of $97 per foot, also well above our original underwriting.
Steven Roth: At PENN 1, we leased 420,000sq ft during the year at average starting rent of $97 per sq ft, also well above our original underwriting. Since the start of physical redevelopment at PENN 1, we have leased over 1.7 millionsq ft at average starting rent of $94 per sq ft. At PENN 2, we have just 348,000sq ft of vacancy left to lease. At PENN 1, we have 177,000sq ft of vacancy left to lease, plus 500,000sq ft of first generation leases still to roll over. The good news is that this will all generate income very shortly.
Steven Roth: At PENN 1, we leased 420,000sq ft during the year at average starting rent of $97 per sq ft, also well above our original underwriting. Since the start of physical redevelopment at PENN 1, we have leased over 1.7 millionsq ft at average starting rent of $94 per sq ft. At PENN 2, we have just 348,000sq ft of vacancy left to lease. At PENN 1, we have 177,000sq ft of vacancy left to lease, plus 500,000sq ft of first generation leases still to roll over. The good news is that this will all generate income very shortly.
Speaker #3: Since the start of physical redevelopment at Penn 1, we have leased over 1.7 million square feet, at average starting rents of $94 per foot.
Speaker #3: At Penn 2, we have just 348,000 square feet of vacancy left to lease. At Penn 1, we have 177,000 square feet of vacancy left to lease, plus half a million square feet of first-generation leases still to roll over.
Speaker #3: The good news is that this will all generate income very shortly. At Penn 11, we finalized two important leases during the fourth quarter, as our major tenant there expanded by another 95,000 square feet, bringing their total footprint to 550,000 square feet, and AMC Networks renewed for 178,000 square feet.
Steven Roth: At PENN 11, we finalized two important leases during Q4 as our major tenant there expanded by another 95,000 sq ft, bringing their total footprint to 550,000 sq ft, and AMC Networks renewed for 178,000 sq ft. In 2025, our office occupancy rose from 88.8% to 91.2%. Let's pause here for a minute and dig in. There has been some recent chatter about physical occupancy, call it lease occupancy, versus economic occupancy, call it GAAP occupancy. Most look at the difference on a square foot basis. I prefer to look at it on a dollars and cents basis. The former, lease occupancy, is based on signed leases, including those not yet recognized by GAAP.
Steven Roth: At PENN 11, we finalized two important leases during Q4 as our major tenant there expanded by another 95,000 sq ft, bringing their total footprint to 550,000 sq ft, and AMC Networks renewed for 178,000 sq ft. In 2025, our office occupancy rose from 88.8% to 91.2%. Let's pause here for a minute and dig in. There has been some recent chatter about physical occupancy, call it lease occupancy, versus economic occupancy, call it GAAP occupancy. Most look at the difference on a square foot basis. I prefer to look at it on a dollars and cents basis. The former, lease occupancy, is based on signed leases, including those not yet recognized by GAAP.
Speaker #3: In 2025, our office occupancy rose from 88.8% to 91.2%. Let's pause here for a minute and dig in. There are some there has been some recent chatter about physical occupancy, call it leased occupancy, versus economic occupancy, call it gap occupancy.
Speaker #3: Most look at the difference on a square foot basis. I prefer to look at it on a dollars and cents basis. The former, leased occupancy, is based on signed leases, including those not yet recognized by GAP.
Speaker #3: The latter, gap occupancy, represents leases that are recognized as paying gap rents. At Vornado, the difference is over 200 million dollars, which is revenue signed and committed that will be gap recognized over the next several years.
Steven Roth: The latter, GAAP occupancy, represents leases that are recognized as paying GAAP rent. At Vornado, the difference is over $200 million, which is revenue signed and committed that will be GAAP recognized over the next several years. That number represents gross rents, but since the buildings are already paying full taxes at almost full operating expenses, that gross revenue number is very close to net. This income is pretty much of a sure thing. A word of caution to those who are modeling, there are lots of ins and outs that go into our financials, and I suggest that you not use more than a $0.40 uptick in the 2027 year. Our New York office leasing pipeline remains robust, with nearly 1 million sq ft of leases in negotiation at various stages of proposal.
Steven Roth: The latter, GAAP occupancy, represents leases that are recognized as paying GAAP rent. At Vornado, the difference is over $200 million, which is revenue signed and committed that will be GAAP recognized over the next several years. That number represents gross rents, but since the buildings are already paying full taxes at almost full operating expenses, that gross revenue number is very close to net. This income is pretty much of a sure thing. A word of caution to those who are modeling, there are lots of ins and outs that go into our financials, and I suggest that you not use more than a $0.40 uptick in the 2027 year. Our New York office leasing pipeline remains robust, with nearly 1 million sq ft of leases in negotiation at various stages of proposal.
Speaker #3: That number represents gross rents, but since the buildings are already paying full taxes at almost full operating expenses, that gross revenue number is very close to net.
Speaker #3: This income is pretty much of a sure thing. The word of caution to those who are modeling: there are lots of in-and-outs that go into our financials, and I suggest that you not use more than a 40-cent uptick in the 2027 year.
Speaker #3: Our New York office leasing pipeline remains robust, with nearly 1 million square feet of leases in negotiation and at various stages of proposal. Michael and Glenn will talk about this in a minute.
Steven Roth: Michael and Glenn will talk about this in a minute. Recognizing the shortage of large blocks in the better buildings, we can make available and are bringing to market prime space of up to 380,000sq ft at PENN 1, up to 350,000sq ft at PENN 2, and up to 400,000sq ft at 1290 Avenue of the Americas. We are making available to the marketplace what our clients need and want. Demand for our retail assets is robust and accelerating. Now turning to our development program. Construction will commence in April, two months from now, on our 1.85 million sq ft 350 Park Avenue new build, with Citadel as our anchor tenant and Ken Griffin as our 60% partner.
Steven Roth: Michael and Glenn will talk about this in a minute. Recognizing the shortage of large blocks in the better buildings, we can make available and are bringing to market prime space of up to 380,000sq ft at PENN 1, up to 350,000sq ft at PENN 2, and up to 400,000sq ft at 1290 Avenue of the Americas. We are making available to the marketplace what our clients need and want. Demand for our retail assets is robust and accelerating. Now turning to our development program. Construction will commence in April, two months from now, on our 1.85 million sq ft 350 Park Avenue new build, with Citadel as our anchor tenant and Ken Griffin as our 60% partner.
Speaker #3: Recognizing the shortage of large blocks in the better buildings, we can make available at our bringing-to-market prime space of up to 380,000 square feet at Penn 1, up to 350,000 square feet at Penn 2, and up to 400,000 square feet at 1290 Avenue of the Americas.
Speaker #3: We are making available to the marketplace what our clients need and want. Demand for our retail assets is robust and accelerating. Now, turning to our development program.
Speaker #3: Construction will commence in April, two months from now, on our 1.85 million square foot 350 Park Avenue new build, with Citadel as our anchor tenant and Ken Griffin as our 60% partner.
Speaker #3: At our Penn 15 site, we have been busy responding to anchor tenant requests for proposals for substantial blocks of space. We recently acquired two very high-potential development assets in unique locations which I call in the middle of everything.
Steven Roth: At our PENN 15 site, we have been busy responding to anchor tenant requests for proposals for substantial blocks of space. We recently acquired two very high potential development assets in unique locations, which I call in the middle of everything. 623 Fifth Avenue is a 383,000sq ft asset that was originally built to the highest standards by Swiss Bank Corporation as the US headquarters. Our asset sits on the top of Saks Fifth Avenue collection and starts at floor 11, up to floor 36. We acquired the property in September for $218 million, or $569 per foot. Here's why I think this is the best deal ever. The location is the middle of everything, with unique light and air, and city views.
Steven Roth: At our PENN 15 site, we have been busy responding to anchor tenant requests for proposals for substantial blocks of space. We recently acquired two very high potential development assets in unique locations, which I call in the middle of everything. 623 Fifth Avenue is a 383,000sq ft asset that was originally built to the highest standards by Swiss Bank Corporation as the US headquarters. Our asset sits on the top of Saks Fifth Avenue collection and starts at floor 11, up to floor 36. We acquired the property in September for $218 million, or $569 per foot. Here's why I think this is the best deal ever. The location is the middle of everything, with unique light and air, and city views.
Speaker #3: 623 Fifth Avenue is a 383,000 square foot asset that was originally built to the highest standards by Swiss Bank Corporation as the US headquarters.
Speaker #3: Our asset sits on the top of Saks Fifth Avenue flagship and starts at floor 11, up to floor 36. We acquired the property in September for 218 million dollars, with 569 dollars per foot.
Speaker #3: Here's why I think this is the best deal ever. The location is the middle of everything, with unique light and air and city views.
Speaker #3: You can reach out and touch Rockefeller Center, St. Patrick's Cathedral, J.P. Morgan Chase's new headquarters, and even our 350 Park Avenue. Just for the fun of it, take a look at this location on Google Maps.
Steven Roth: You could reach out and touch Rockefeller Center, St. Patrick's Cathedral, JPMorgan Chase's new headquarters, and even our 350 Park Avenue. Just for the fun of it, take a look at this location on Google Maps. The building is substantially vacant, which is a huge advantage to us as a redeveloper. Built in 1990, the building is modern. Our business plan is to create here the 220 Central Park South of boutique office, i.e., the best of the best. We acquired this asset for $569 a foot. The finished product, all in, soup to nuts, including tenant concessions, is budgeted at $1,175 per foot. We will be creating here a new soup to nuts building, every bit equal to a ground-up new build for half the price at, in a premium platinum location.
Steven Roth: You could reach out and touch Rockefeller Center, St. Patrick's Cathedral, JPMorgan Chase's new headquarters, and even our 350 Park Avenue. Just for the fun of it, take a look at this location on Google Maps. The building is substantially vacant, which is a huge advantage to us as a redeveloper. Built in 1990, the building is modern. Our business plan is to create here the 220 Central Park South of boutique office, i.e., the best of the best. We acquired this asset for $569 a foot. The finished product, all in, soup to nuts, including tenant concessions, is budgeted at $1,175 per foot. We will be creating here a new soup to nuts building, every bit equal to a ground-up new build for half the price at, in a premium platinum location.
Speaker #3: The building is substantially vacant, which is a huge advantage to us as a redeveloper. Built in 1990, the building is modern. Our business plan is to create here the 220 Central Park South of Boutique Office, i.e., the best of the best.
Speaker #3: We acquired this asset for 569 dollars a foot, the finished product all in soup to nuts, including tenant concessions as budgeted at 1,175 dollars per foot.
Speaker #3: We will be creating here a new soup-to-nuts building—every bit equal to a ground-up new build, for half the price, in a premium platinum location.
Speaker #3: We will deliver to tenants by the end of 2027, half the time of a new build. Recognizing that Saks Fifth Avenue now in bankruptcy has an uncertain future, I believe that any outcome to the Saks Fifth Avenue bankruptcy will be good for us.
Steven Roth: We will deliver to tenants by the end of 2027, half the time of a new build. Recognizing that Saks Fifth Avenue, now in bankruptcy, has an uncertain future, I believe that any outcome to the Saks Fifth Avenue bankruptcy will be good for us. And the punchline is, at a 10% return on cost, with, say, a 5% exit or measure of value, we will achieve a double or with leverage, a four-bagger, or an $0.11 incremental increase to earnings. In January, we closed for $141 million on the acquisition of 3 East 54th Street, a development site that is between Fifth Avenue and Madison Avenue on 54th Street, adjacent to the St. Regis Hotel and our prime Upper Fifth Avenue retail properties.
Steven Roth: We will deliver to tenants by the end of 2027, half the time of a new build. Recognizing that Saks Fifth Avenue, now in bankruptcy, has an uncertain future, I believe that any outcome to the Saks Fifth Avenue bankruptcy will be good for us. And the punchline is, at a 10% return on cost, with, say, a 5% exit or measure of value, we will achieve a double or with leverage, a four-bagger, or an $0.11 incremental increase to earnings. In January, we closed for $141 million on the acquisition of 3 East 54th Street, a development site that is between Fifth Avenue and Madison Avenue on 54th Street, adjacent to the St. Regis Hotel and our prime Upper Fifth Avenue retail properties.
Speaker #3: And the punchline is at a 10% return on cost with, say, a 5% exit or measure of value, we will achieve a double or with leverage a four-bagger or an 11-cent incremental increase to earnings.
Speaker #3: In January, we closed for $141 million on the acquisition of 3S54 Street, a development site that is between Fifth Avenue and Madison Avenue on 54th Street, adjacent to the St.
Speaker #3: Regis Hotel and our prime upper Fifth Avenue retail properties. We previously acquired the $85 million mortgage on this property, which accreted to $107 million, and that was credited towards the purchase price.
Steven Roth: We previously acquired the $85 million mortgage on this property, which accreted to $107 million, and that was credited towards the purchase price. The development site currently is owned for 232,500 sq ft as-of-right. The location is excellent for hotel, office, and residential uses. We are considering several options for the site, and have already received interesting incoming. On 34th Street and Eighth Avenue, we will develop a 475-unit rental residential building, and expect to break ground in the fall of this year. My use of the word junky in last quarter's earnings got a lot of attention. I don't know why.
Steven Roth: We previously acquired the $85 million mortgage on this property, which accreted to $107 million, and that was credited towards the purchase price. The development site currently is owned for 232,500 sq ft as-of-right. The location is excellent for hotel, office, and residential uses. We are considering several options for the site, and have already received interesting incoming. On 34th Street and Eighth Avenue, we will develop a 475-unit rental residential building, and expect to break ground in the fall of this year. My use of the word junky in last quarter's earnings got a lot of attention. I don't know why.
Speaker #3: The development site currently is owned for 232,500 square feet as of right. And the location is excellent for hotel, office, and residential uses. We are considering several options for the site and have already received interesting incoming.
Speaker #3: Our 34th Street and 8th Avenue our 34th Street and 8th Avenue, we will develop a 475-unit rental residential building and expect to break ground in the fall of this year.
Speaker #3: My user of the word junkie in last quarter's earnings got a lot of attention. I don't know why. In any event, we will replace the junkie retail on both sides of Seventh Avenue along 34th Street to gateway to our Penn District with more modern, appealing, and exciting retail offerings.
Steven Roth: In any event, we will replace the junky retail on both sides of Seventh Avenue along 34th Street, the gateway to our Penn District, with more modern, appealing, and exciting retail offerings. This will be another step forward and enhance what we have already accomplished at Penn. Our 50% owned Sunset Pier 94, with partners HPD and Blackstone, Manhattan's first purpose-built film studio facility, has just opened, and all six sound stages were immediately leased by Paramount and Netflix. These are short-term leases, but a great start. The Perch, a large glass pavilion on the rooftop of PENN 2, with indoor and outdoor food and drink, meeting and hanging space, has been so well received that we did it again on the 17th floor setback at 1290 Avenue of the Americas.
Steven Roth: In any event, we will replace the junky retail on both sides of Seventh Avenue along 34th Street, the gateway to our Penn District, with more modern, appealing, and exciting retail offerings. This will be another step forward and enhance what we have already accomplished at Penn. Our 50% owned Sunset Pier 94, with partners HPD and Blackstone, Manhattan's first purpose-built film studio facility, has just opened, and all six sound stages were immediately leased by Paramount and Netflix. These are short-term leases, but a great start. The Perch, a large glass pavilion on the rooftop of PENN 2, with indoor and outdoor food and drink, meeting and hanging space, has been so well received that we did it again on the 17th floor setback at 1290 Avenue of the Americas.
Speaker #3: This will be another step forward and enhance what we have already accomplished at Penn. Our 50% owned Sunset Pier 94 with partners HPP and Blackstone.
Speaker #3: Manhattan's first purpose-built film studio facility has just opened, and all six sound stages were immediately leased by Paramount and Netflix. These are short-term leases, but a great start.
Speaker #3: The perch. A large glass pavilion on the rooftop of Penn 2 with indoor and outdoor food and drink. Meeting and hanging space has been so well received that we did it again on the 17th floor setback at 1290 Avenue of the Americas.
Speaker #3: This pavilion is just opened, and together with a 10-stall five-iron golf operation and new restaurants to come, makes 1290 the single best building on Sixth Avenue and that's, in my opinion, and that's a mouthful.
Steven Roth: This pavilion has just opened, and together with a 10-store Five Iron Golf operation and new restaurants to come, makes 1290, the single best building on Sixth Avenue, and that's in my opinion, and that's a mouthful. We invite all of you to come take a look, just call Glenn. Our tenants love these spaces, and they represent our continuing leadership and innovation in the hospitality side of our business, all to the delight of our tenants. Credit to, credit to Glenn and Barry for design and execution here. Not so long ago, $100 rents were rare. Now they are ubiquitous in the better buildings, with some rents reaching $200 and even an occasional $300. Why? It might be, as I said, that there is a profound shortage of, quote, better, close quote, space.
Steven Roth: This pavilion has just opened, and together with a 10-store Five Iron Golf operation and new restaurants to come, makes 1290, the single best building on Sixth Avenue, and that's in my opinion, and that's a mouthful. We invite all of you to come take a look, just call Glenn. Our tenants love these spaces, and they represent our continuing leadership and innovation in the hospitality side of our business, all to the delight of our tenants. Credit to, credit to Glenn and Barry for design and execution here. Not so long ago, $100 rents were rare. Now they are ubiquitous in the better buildings, with some rents reaching $200 and even an occasional $300. Why? It might be, as I said, that there is a profound shortage of, quote, better, close quote, space.
Speaker #3: We invite all of you to come take a look. Just call Glenn. Our tenants love these spaces, and they represent our continuing leadership and innovation in the hospitality side of our business, all to the delights of our tenants.
Speaker #3: Credit to Glenn and Barry for design and execution here. Not so long ago, $100 rents were rare. Now they are ubiquitous in the better buildings.
Speaker #3: To some rents reaching $200, and even an occasional $300. Why? It might be, as I said, that there is a profound shortage of 'better' space.
Speaker #3: Or it might be that the cost of a new build has doubled. It now costs, say, $2,500 in Manhattan. You can all do the math.
Steven Roth: Or it might be that the cost of a new build has doubled. It now costs, say, $2,500 per foot to build a new tower in Manhattan. You can all do the math. Even at these higher rents, it's touch and go to make a new tower pencil. And by the way, these new builds are multi-billion dollar monsters, which are very difficult for most to finance. Here at Vornado, we have always believed in maintaining a highly liquid, cash-heavy balance sheet. Our liquidity is $2.39 billion, comprised of cash balances of $978 million, and our undrawn credit lines of $1.41 billion.
Steven Roth: Or it might be that the cost of a new build has doubled. It now costs, say, $2,500 per foot to build a new tower in Manhattan. You can all do the math. Even at these higher rents, it's touch and go to make a new tower pencil. And by the way, these new builds are multi-billion dollar monsters, which are very difficult for most to finance. Here at Vornado, we have always believed in maintaining a highly liquid, cash-heavy balance sheet. Our liquidity is $2.39 billion, comprised of cash balances of $978 million, and our undrawn credit lines of $1.41 billion.
Speaker #3: Even at these higher rents, it's tough to pencil. And by the way, these new builds are multi-billion-dollar monsters, which are very difficult for most to finance.
Speaker #3: Aaron Fernando: We have always believed in maintaining a highly liquid, cash-heavy balance sheet. While liquidity is $2.39 billion, comprised of cash balances of $978 million and our unutilized credit lines of $1.41 billion.
Speaker #3: Over the last several months, we extended maturities through 2030 and 2031 on nearly $3.5 billion of debt, and we sold $500 million of 5.75% 70-year bonds to pre-fund the maturity.
Steven Roth: Over the last several months, we extended maturities through 2020 and 2031 on nearly $3.5 billion of debt, and we sold $500 billion 5.75% seven-year bonds to pre-fund the maturity of our $400 million 2.15% June 2026 bonds. Why'd we go to market six months early? We followed the golden rule that that it's wise to take the money when the markets are wide open and welcoming, and that certainly allows us to sleep at night. We are pretty good at math, and it's clear to us that there is a huge disconnect between our stock price and the value of our assets. Accordingly, we have gently put our toe in the stock buyback water.
Steven Roth: Over the last several months, we extended maturities through 2020 and 2031 on nearly $3.5 billion of debt, and we sold $500 billion 5.75% seven-year bonds to pre-fund the maturity of our $400 million 2.15% June 2026 bonds. Why'd we go to market six months early? We followed the golden rule that that it's wise to take the money when the markets are wide open and welcoming, and that certainly allows us to sleep at night. We are pretty good at math, and it's clear to us that there is a huge disconnect between our stock price and the value of our assets. Accordingly, we have gently put our toe in the stock buyback water.
Speaker #3: Of our $400 million, 2.15% June 26 bonds. Why'd we go to market six months early? We followed the golden rule that it's wise to take the money when the markets are wide open and welcoming.
Speaker #3: And that certainly allows us to sleep at night. We are pretty good at math, and it's clear to us that there is a huge disconnect between our stock price and the value of our assets.
Speaker #3: Accordingly, we have gently put our toe in the stock buyback water. Over the last few months, we bought back 2,352,000 shares, for $80 million, at an average price of approximately $34.
Steven Roth: Over the last few months, we bought back 2,352,000 shares for $80 million at an average price of approximately $34. Since our board authorization in 2023, we've bought back a total of 4,376,000 shares for $109 million at an average price of approximately $25 per share. Think about this, Vornado's stock is a better buy today than it was at $15 three years ago. But as a believer in the predictive power of the stock market, I am certainly aware of the recent decline in our stock and, in fact, the decline in all real estate stocks. In our case, the decline was in the face of best fundamentals in Manhattan in the last 20 years.
Steven Roth: Over the last few months, we bought back 2,352,000 shares for $80 million at an average price of approximately $34. Since our board authorization in 2023, we've bought back a total of 4,376,000 shares for $109 million at an average price of approximately $25 per share. Think about this, Vornado's stock is a better buy today than it was at $15 three years ago. But as a believer in the predictive power of the stock market, I am certainly aware of the recent decline in our stock and, in fact, the decline in all real estate stocks. In our case, the decline was in the face of best fundamentals in Manhattan in the last 20 years.
Speaker #3: Since our border authorization in 2023, we bought back a total of 4,376,000 shares, for $109 million, at an average price of approximately $25 per share.
Speaker #3: Think about this. Fernando's stock is a better buy today than it was at $15 three years ago. But as a believer in the predictive power of the stock market, I am certainly aware of the recent decline in our stock, and in fact, the decline in all real estate stocks.
Speaker #3: In our case, the decline was in the face of best fundamentals in Manhattan in the last 20 years. While this most likely represents a great buying opportunity, we will proceed with care, looking over our shoulder.
Steven Roth: While this most likely represents a great buying opportunity, we will proceed with care, looking over our shoulder. There are few investments we can find that are more attractive right now than our stocks. If this disconnect continues, we will become more aggressive. As you can see from my opening remarks, we have a lot going on. I can tell you that the activity level in the market and in our office is double what it was. All good stuff, and it's fun. Now, Michael, your turn.
Steven Roth: While this most likely represents a great buying opportunity, we will proceed with care, looking over our shoulder. There are few investments we can find that are more attractive right now than our stocks. If this disconnect continues, we will become more aggressive. As you can see from my opening remarks, we have a lot going on. I can tell you that the activity level in the market and in our office is double what it was. All good stuff, and it's fun. Now, Michael, your turn.
Speaker #3: There are few investments we can find that are more attractive right now than our stocks. This disconnect continues. We will become more aggressive. As you can see from my opening remarks, we have a lot going on.
Speaker #3: I can tell you that the activity level in the market and in our office is double what it was. All good stuff at its fun.
Speaker #3: Now, Michael, your turn.
Speaker #2: Thank you, Steve, and good morning, everyone. Comparable FFO was $2.32 per share for the year. As previously forecasted, this was slightly higher compared to 2024 comparable FFO, and better than we had anticipated at the beginning of the year.
Michael Franco: Thank you, Steve, and good morning, everyone. Comparable FFO was $2.32 per share for the year. As previously forecasted, this was slightly higher compared to 2024 comparable FFO, and better than we had anticipated at the beginning of the year. Fourth quarter comparable FFO was $0.55 per share, compared to $0.61 per share for fourth quarter of 2024. This decrease was primarily due to higher net interest expense and the lease termination income at 330 West 34th Street in the prior year's quarter, partially offset by rent commencements net of lease expirations, higher FFO resulting from the NYU master lease at 770 Broadway, and higher NOI from our signage business. We have provided a quarter-over-quarter bridge on page 2 of our earnings release and on page 8 of our financial supplement.
Michael Franco: Thank you, Steve, and good morning, everyone. Comparable FFO was $2.32 per share for the year. As previously forecasted, this was slightly higher compared to 2024 comparable FFO, and better than we had anticipated at the beginning of the year. Fourth quarter comparable FFO was $0.55 per share, compared to $0.61 per share for fourth quarter of 2024. This decrease was primarily due to higher net interest expense and the lease termination income at 330 West 34th Street in the prior year's quarter, partially offset by rent commencements net of lease expirations, higher FFO resulting from the NYU master lease at 770 Broadway, and higher NOI from our signage business. We have provided a quarter-over-quarter bridge on page 2 of our earnings release and on page 8 of our financial supplement.
Speaker #2: Fourth quarter comparable FFO was $0.55 per share, compared to $0.61 per share for the fourth quarter of 2024. This decrease was primarily due to higher net interest expense and the lease termination income at 330 West 34th Street in the prior year's quarter.
Speaker #2: Partially offset by rent commencements, net of lease expirations, higher FFO resulting from the NYU master lease at 770 Broadway, and higher NOI from our signage business.
Speaker #2: We have provided a quarter-over-quarter bridge on page two of our earnings release and on page eight of our financial supplement. Overall, company same-store gap NOI was up 5% for the quarter, while same-store cash NOI was down 8.3%.
Michael Franco: Overall, company same-store GAAP NOI was up 5% for the quarter, while same-store cash NOI was down 8.3%. As explained last quarter, GAAP is more relevant to earnings, given the cash number is impacted by free rent from the significant amount of leasing in recent quarters, as well as the adjustment in cash rent related to the 101 ground lease true-up. Now turning to 2026. As we've previously mentioned, we still expect 2026 comparable FFO to be in line with 2025, due to the anticipation of some non-core asset sales and taking income offline in connection with our plans to redevelop 350 Park Avenue and the 34th and 7th retail at Penn.
Michael Franco: Overall, company same-store GAAP NOI was up 5% for the quarter, while same-store cash NOI was down 8.3%. As explained last quarter, GAAP is more relevant to earnings, given the cash number is impacted by free rent from the significant amount of leasing in recent quarters, as well as the adjustment in cash rent related to the 101 ground lease true-up. Now turning to 2026. As we've previously mentioned, we still expect 2026 comparable FFO to be in line with 2025, due to the anticipation of some non-core asset sales and taking income offline in connection with our plans to redevelop 350 Park Avenue and the 34th and 7th retail at Penn.
Speaker #2: As explained last quarter, gap is more relevant to earnings, given the cash numbers impacted by free rent from the significant amount of leasing in recent quarters.
Speaker #2: As well as the adjustment in cash rent related to the Penn 1 ground lease truck. Now turning to 2026. As we previously mentioned, we still expect 2026 comparable FFO to be in line with 2025, due to the anticipation of some non-core asset sales and taking income offline in connection with our plans to redevelop 350 Park Avenue, and the 34th and 7th retail at Penn.
Speaker #2: The first quarter will be more impacted due to gap rents ramping up throughout the year, higher interest expense from our recent bond issuance, and some seasonality relating to our signage business.
Michael Franco: Q1 will be more impacted due to GAAP rents ramping up throughout the year, higher interest expense from our recent bond issuance, and some seasonality relating to our signage business. As we previously indicated, we expect there to be significant earnings growth in 2027, as the positive impact from PENN 1 and PENN 2 lease-up takes effect. We had indicated on prior calls that we expected to achieve New York office occupancy in the low 90s in 2026. We got there early. New York office occupancy increased this quarter to 91.2% from 88.4% last quarter, due to the significant volume of leasing we accomplished, principally in the Penn District. As we execute on our strong leasing pipeline, we anticipate that our occupancy will continue to increase over the next year or so. Turning to the capital markets.
Michael Franco: Q1 will be more impacted due to GAAP rents ramping up throughout the year, higher interest expense from our recent bond issuance, and some seasonality relating to our signage business. As we previously indicated, we expect there to be significant earnings growth in 2027, as the positive impact from PENN 1 and PENN 2 lease-up takes effect. We had indicated on prior calls that we expected to achieve New York office occupancy in the low 90s in 2026. We got there early. New York office occupancy increased this quarter to 91.2% from 88.4% last quarter, due to the significant volume of leasing we accomplished, principally in the Penn District. As we execute on our strong leasing pipeline, we anticipate that our occupancy will continue to increase over the next year or so. Turning to the capital markets.
Speaker #2: As we previously indicated, we expect there to be a significant earnings growth in 2027, as the positive impact from Penn 1 and Penn 2 lease uptakes affect.
Speaker #2: We had indicated on prior calls that we expected to achieve New York office occupancy in the low 90s in 2026. We got there early.
Speaker #2: New York office occupancy increased this quarter to 91.2% from 88.4% last quarter. Due to the significant volume of leasing we accomplished, principally in the Penn district.
Speaker #2: As we execute on our strong leasing pipeline, we anticipate that our occupancy will continue to increase over the next year or so. Turning to the capital markets.
Speaker #2: The financing markets also recognize that the New York office market is back, and performing at a level superior to any other market. The financing markets for these assets are very strong and liquid, with CMBS spreads reaching their tightest level since 2021, and banks continuing to expand lending for class A assets with solid rentals.
Michael Franco: The financing markets also recognize that the New York office market is back and performing at a level superior to any other market. The financing markets for these assets are very strong and liquid, with CMBS spreads reaching their tightest level since 2021, and banks continuing to expand lending for Class A assets with solid rent rolls. The unsecured bond market also remains strong and continues to be constructive for office credits in the right markets, with new issue spreads remaining tight. We took advantage of both these markets recently. As Steve mentioned, since last quarter, we've been very active in refinancing our near-term maturities and bolstering liquidity, with nearly $3.5 billion of financings.
Michael Franco: The financing markets also recognize that the New York office market is back and performing at a level superior to any other market. The financing markets for these assets are very strong and liquid, with CMBS spreads reaching their tightest level since 2021, and banks continuing to expand lending for Class A assets with solid rent rolls. The unsecured bond market also remains strong and continues to be constructive for office credits in the right markets, with new issue spreads remaining tight. We took advantage of both these markets recently. As Steve mentioned, since last quarter, we've been very active in refinancing our near-term maturities and bolstering liquidity, with nearly $3.5 billion of financings.
Speaker #2: The unsecured bond market also remains strong, and continues to be constructive for office credits in the right markets, with new issue spreads remaining tight.
Speaker #2: We took advantage of both these markets recently. As Steve mentioned, since last quarter, we've been very active in refinancing our near-term maturities and bolstering liquidity, with nearly $3.5 billion of financings.
Speaker #2: In addition to completing several mortgage refinancings, we also refinanced our unsecured term loan, upsizing the loan amount by 50 million to 850 million dollars, and extending the loan's maturity date from December 2027 to February 2031.
Michael Franco: In addition to completing several mortgage refinancings, we also refinanced our unsecured term loan, upsizing the loan amount by $50 million to $850 million, and extending the loan's maturity date from December 2027 to February 2031. We also refinanced one of our two revolving credit facilities and upsized the second facility. So now we have $1.13 billion revolving credit facility that matures in February 2031, and another $1 billion revolving credit facility that matures in April 2029. We very much appreciate the strong show of commitment from our banks, including a few new entrants to our facilities. We also took advantage of the strong conditions in the unsecured market and completed a $500 million seven-year unsecured bond offering at 5.75%, which was significantly oversubscribed.
Michael Franco: In addition to completing several mortgage refinancings, we also refinanced our unsecured term loan, upsizing the loan amount by $50 million to $850 million, and extending the loan's maturity date from December 2027 to February 2031. We also refinanced one of our two revolving credit facilities and upsized the second facility. So now we have $1.13 billion revolving credit facility that matures in February 2031, and another $1 billion revolving credit facility that matures in April 2029. We very much appreciate the strong show of commitment from our banks, including a few new entrants to our facilities. We also took advantage of the strong conditions in the unsecured market and completed a $500 million seven-year unsecured bond offering at 5.75%, which was significantly oversubscribed.
Speaker #2: We also refinanced one of our two revolving credit facilities, and upsized the second facility. So now we have one, 1.13 billion revolving credit facility that matures in February 2031, and another 1 billion revolving credit facility that matures in April 2029.
Speaker #2: We very much appreciate the strong show of commitment from our banks, including a few new entrants to our facilities. We also took advantage of the strong conditions in the unsecured market and completed a $500 million seven-year unsecured bond offering at 5.75%, which was significantly oversubscribed.
Speaker #2: A portion of the net proceeds from these notes will be used to repay our $400 million senior unsecured notes due to mature in June. In total, since mid-2025, we have refinanced or repaid almost half of our balance sheet, including almost all of our unsecured debt, terming out our maturities, and putting our balance sheet on even stronger footing.
Michael Franco: A portion of the net proceeds from these notes will be used to repay our $400 million senior unsecured notes that mature in June. In total, since mid-2025, we have refinanced or repaid almost half of our balance sheet, including almost all of our unsecured debt, terming out our maturities and putting our balance sheet on even stronger footing. Our net debt to EBITDA metric has improved to 7.7 times from 8.6 times at the start of the year, and our fixed charge coverage ratio, as expected, continues to steadily rise. We expect these ratios will continue to improve over time as income from PENN 1 and PENN 2 comes online.
Michael Franco: A portion of the net proceeds from these notes will be used to repay our $400 million senior unsecured notes that mature in June. In total, since mid-2025, we have refinanced or repaid almost half of our balance sheet, including almost all of our unsecured debt, terming out our maturities and putting our balance sheet on even stronger footing. Our net debt to EBITDA metric has improved to 7.7 times from 8.6 times at the start of the year, and our fixed charge coverage ratio, as expected, continues to steadily rise. We expect these ratios will continue to improve over time as income from PENN 1 and PENN 2 comes online.
Speaker #2: Our net debt to EBITDA metric has improved to 7.7 times from 8.6 times at the start of the year, and our fixed charge coverage ratio as expected continues to steadily rise.
Speaker #2: We expect these ratios will continue to improve over time, as income from Penn 1 and Penn 2 comes online. In recognition of the significant improvement we've made in our balance sheet metrics over the past 18 months, S&P recently changed their credit outlook on our company from negative to stable, and affirmed our triple B minus unsecured rating.
Michael Franco: In recognition of the significant improvement we've made in our balance sheet metrics over the past 18 months, S&P recently changed their credit outlook on our company from negative to stable and affirmed our triple B minus unsecured rating. We are hopeful Fitch and Moody's will follow suit as our balance sheet continues to improve. With that, I'll turn it over to the operator for Q&A.
Michael Franco: In recognition of the significant improvement we've made in our balance sheet metrics over the past 18 months, S&P recently changed their credit outlook on our company from negative to stable and affirmed our triple B minus unsecured rating. We are hopeful Fitch and Moody's will follow suit as our balance sheet continues to improve. With that, I'll turn it over to the operator for Q&A.
Speaker #2: We are hopeful to fitch in moodies will follow suit as our balance sheet continues to improve. With that, I'll turn it over to the operator for Q&A.
Speaker #3: Thank you. We will now begin the question and answer session. If you have a question, please press star, then 1 on your touchstone phone.
Nick: Thank you. We will now begin the question-and-answer session. If you have a question, please press star, then one on your touchtone 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 headset first before pressing the numbers. Once again, if you have a question, please press star, then one 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. The first question will come from Dylan Burzinski with Green Street. Please go ahead.
Operator: Thank you. We will now begin the question-and-answer session. If you have a question, please press star, then one on your touchtone 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 headset first before pressing the numbers. Once again, if you have a question, please press star, then one 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. The first question will come from Dylan Burzinski with Green Street. Please go ahead.
Speaker #3: If you wish to be removed from the queue, please press star, then 2. If you are using a speakerphone, you may need to pick up the headset first before pressing the numbers.
Speaker #3: Once again, if you have a question, please press star, then 1 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.
Speaker #3: And the first question will come from Dylan Brzezinski with Green Street. Please go
Speaker #3: ahead.
Speaker #4: Hi,
Speaker #4: guys. Thanks for taking the question. Maybe just touching on the 350 Park announcement in the release. Is there anything that's changed in the structure at all versus what was originally disclosed back in, I think, December of 2022?
Dylan Burzinski: Hi, guys. Thanks for taking the question. Maybe just touching on, on the 350 Park announcement in the release, is there anything that's changed in, in the structure at all versus what was originally disclosed back in, I think, December 2022?
Dylan Burzinski: Hi, guys. Thanks for taking the question. Maybe just touching on, on the 350 Park announcement in the release, is there anything that's changed in, in the structure at all versus what was originally disclosed back in, I think, December 2022?
Michael Franco: Good morning, Dylan. Thanks for joining. So, you know, in terms of the agreement, you know, Ken Griffin wanted to accelerate the option exercise, which we were fine with. And, you know, as in the course of that, you know, there were some amendments, you know, related to the overall deal. Nothing, I would say, tremendously substantive in terms of the economics, but it gave Vornado and Rudin the flexibility to effectively, rather than just a fixed equity percentage, investing anywhere from, I think, you know, we put our percentage of 20 to 36 percent. So, you know, that's the main change. A couple other minor things, but I think that was the most material thing. But it's a project, you know, we're very excited about, he's very excited about.
Speaker #2: Good morning, Dylan. Thanks for joining. So in terms of the agreement, Ken Griffin wanted to accelerate the option exercise, which we were fine with.
Thomas Sanelli: Good morning, Dylan. Thanks for joining. So, you know, in terms of the agreement, you know, Ken Griffin wanted to accelerate the option exercise, which we were fine with. And, you know, as in the course of that, you know, there were some amendments, you know, related to the overall deal. Nothing, I would say, tremendously substantive in terms of the economics, but it gave Vornado and Rudin the flexibility to effectively, rather than just a fixed equity percentage, investing anywhere from, I think, you know, we put our percentage of 20 to 36 percent. So, you know, that's the main change. A couple other minor things, but I think that was the most material thing. But it's a project, you know, we're very excited about, he's very excited about.
Speaker #2: And in the course of that, there were some amendments related to the overall deal. Nothing, I would say, tremendously substantive in terms of the economics, but it gave Vornado and Rudin the flexibility to effectively, rather than just a fixed equity percentage, investing anywhere from, I think, we put our percentage of 20 to 36 percent.
Speaker #2: So that's the main change a couple of other minor things, but I think that was the most material thing. But it's a project we're very excited about.
Speaker #2: He's very excited about. Obviously, in the filing, the clock started, but we're excited about it and I know there were questions about the put or so on.
Michael Franco: You know, obviously, in the filing, the clock started, but we're excited about it, and I know there were questions about the put or so on. You know, we intend to be part of this project.
Thomas Sanelli: You know, obviously, in the filing, the clock started, but we're excited about it, and I know there were questions about the put or so on. You know, we intend to be part of this project.
Speaker #2: We intend to be part of this project.
Speaker #4: Okay. That's helpful. And can you guys kind of just talk about sort of yield expectations, what that implies on sort of a required rent level, just anything as it relates to sort of the economics?
Dylan Burzinski: Okay, that's helpful. And can you guys kind of just talk about sort of yield expectations, what that implies, and sort of a required rent level? Just anything as it relates to sort of the economics. And I guess, is it still Citadel's plan to sort of take down, I think it was like 50% initially?
Dylan Burzinski: Okay, that's helpful. And can you guys kind of just talk about sort of yield expectations, what that implies, and sort of a required rent level? Just anything as it relates to sort of the economics. And I guess, is it still Citadel's plan to sort of take down, I think it was like 50% initially?
Speaker #4: And I guess, is it still Citadel's plan to sort of take down, I think it was like 50% initially?
Speaker #2: So we'll publish that as we go a little bit closer to that date. There's a few things still moving around. But as we indicated originally, there is a formula that determines Citadel's rent.
[Company Representative] (Vornado Realty Trust): ... So, you know, we'll publish that as we get a little bit closer to that date. There's a few things still moving around. But, you know, as we, as we indicated originally, you know, there is a formula that determines Citadel's rent. It's effectively, you know, it's, it's based on a premium to what, permanent financing costs are with a cap and collar. So that, that was unchanged. You know, Citadel is still finalizing their space planning, but I would tell you in general, their appetite for space has grown from the original deal. So, you know, when, when we finish all that over the next few months, you know, we will publish that, but I don't, I don't wanna jump the gun just yet. Needless to say, we think it's gonna be an extremely attractive project.
Steven Roth: ... So, you know, we'll publish that as we get a little bit closer to that date. There's a few things still moving around. But, you know, as we, as we indicated originally, you know, there is a formula that determines Citadel's rent. It's effectively, you know, it's, it's based on a premium to what, permanent financing costs are with a cap and collar. So that, that was unchanged. You know, Citadel is still finalizing their space planning, but I would tell you in general, their appetite for space has grown from the original deal. So, you know, when, when we finish all that over the next few months, you know, we will publish that, but I don't, I don't wanna jump the gun just yet. Needless to say, we think it's gonna be an extremely attractive project.
Speaker #2: It's effectively based on a premium to what permanent financing costs are with a cap and collar. So that was unchanged. Citadel still finalizing their space planning.
Speaker #2: But I would tell you, in general, their appetite for space has grown from the original deal. So when we finish all that over the next few months, we will publish that.
Speaker #2: But I don't want to jump the gun just yet. Needless to say, we think it's going to be an extremely attractive project, economically. We think it's going to be best building in the city.
[Company Representative] (Vornado Realty Trust): Economically, we think it's going to be, you know, best building in the city. And, you know, we think the space we're gonna have to lease is gonna command the highest rents in the city.
Steven Roth: Economically, we think it's going to be, you know, best building in the city. And, you know, we think the space we're gonna have to lease is gonna command the highest rents in the city.
Speaker #2: And we think the space we're going to have to lease is going to command the highest rents in the city.
Speaker #3: The next question will come from Steve Sakwa with Evercore ISI. Please go
Nick: The next question will come from Steve Sakwa with Evercore ISI. Please go ahead.
Operator: The next question will come from Steve Sakwa with Evercore ISI. Please go ahead.
Speaker #3: ahead. Yeah.
Steve Sakwa: Yeah, thanks. Good morning, Glenn. Could you maybe just provide a little color on just kind of your overall leasing pipeline and, you know, the conversations that you're having with tenants, you know, about space in the market today?
Steve Sakwa: Yeah, thanks. Good morning, Glenn. Could you maybe just provide a little color on just kind of your overall leasing pipeline and, you know, the conversations that you're having with tenants, you know, about space in the market today?
Speaker #5: Thanks. Good morning, Glenn. Could you maybe just provide a little color on just kind of your overall leasing pipeline and the conversations that you're having with tenants about space and the market today?
Speaker #6: Hi, Steve. So our pipeline continues to be really strong. I mean, that's even after leasing 3.7 million feet last year. As Steve said in his his remarks, we're creating opportunities of big box space within the building, namely at Penn 1 and 1290, to meet the market, have the inventory as we see tenants expanding and coming into New York rapidly with immediate needs.
Glen Weiss [EVP: Hi, Steve. So our pipeline continues to be really strong, and that's even after leasing 3.7 million feet last year. As Steve said in his remarks, we're creating opportunities of big box space within the building, mainly at PENN 1 and 1290, to meet the market, have the inventory as we see tenants expanding and coming into New York rapidly with immediate needs. So those are all great signs. You know, in the pipeline, more than half of the activity are tenants that will be new to our buildings, and the other 50% are renewals and expansions. We're seeing financial services and the law firms expand a lot within the portfolio right now. Our Q1 lease activity will reflect that. The tech tenants are also growing a lot.
Glen Weiss: Hi, Steve. So our pipeline continues to be really strong, and that's even after leasing 3.7 million feet last year. As Steve said in his remarks, we're creating opportunities of big box space within the building, mainly at PENN 1 and 1290, to meet the market, have the inventory as we see tenants expanding and coming into New York rapidly with immediate needs. So those are all great signs. You know, in the pipeline, more than half of the activity are tenants that will be new to our buildings, and the other 50% are renewals and expansions. We're seeing financial services and the law firms expand a lot within the portfolio right now. Our Q1 lease activity will reflect that. The tech tenants are also growing a lot.
Speaker #6: So those are all great signs. In the pipeline, more than half of the activity is tenants that will be new to our buildings. And the other 50% are renewals and expansions.
Speaker #6: We're seeing financial services and the law firms expand a lot within the portfolio right now. Our first quarter lease activity will reflect that. The tech tenants are also growing a lot.
Speaker #6: As you saw at Penn 11 last quarter, we're seeing action everywhere. New York is hitting on all cylinders. Our team is hitting on all cylinders.
Glen Weiss [EVP: As you saw at PENN 11 last quarter, we're seeing action everywhere. You know, New York is hitting on all cylinders, our team is hitting on all cylinders, and coming off a huge year like we had last year, we don't see any letup in that at all.
Glen Weiss: As you saw at PENN 11 last quarter, we're seeing action everywhere. You know, New York is hitting on all cylinders, our team is hitting on all cylinders, and coming off a huge year like we had last year, we don't see any letup in that at all.
Speaker #6: And coming off a huge year like we had last year, we don't see any letup in that at all.
Speaker #5: Okay. Thanks. And then maybe as a follow-up, Steve, you mentioned the share buybacks and the disconnect with NAV. In other property types, we are seeing some of the public REITs lean more heavily into dispositions and both paying down debt but using those excess proceeds to buy back stock.
Steve Sakwa: Okay, thanks. And then maybe as a follow-up, Steve, you mentioned the share buybacks and the disconnect with NAV. In other property types, we are seeing, you know, some of the public REITs lean more heavily into dispositions and, you know, both paying down debt, but using those excess proceeds to buy back stock. Is that something that, you know, you would entertain more aggressively given where the stock is today?
Steve Sakwa: Okay, thanks. And then maybe as a follow-up, Steve, you mentioned the share buybacks and the disconnect with NAV. In other property types, we are seeing, you know, some of the public REITs lean more heavily into dispositions and, you know, both paying down debt, but using those excess proceeds to buy back stock. Is that something that, you know, you would entertain more aggressively given where the stock is today?
Speaker #5: Is that something that you would entertain more aggressively given where the stock is today? Any
Speaker #6: Yes.
Glen Weiss [EVP: Yes.
Glen Weiss: Yes.
Steve Sakwa: Any other comments beyond yes?
Steve Sakwa: Any other comments beyond yes?
Speaker #5: other comments beyond
Speaker #6: Double yes. We have a few assets up for sale, which will generate capital. We think our stock is stupid cheap. I think in past years, I said stupid, stupid, double stupid.
Glen Weiss [EVP: Double yes. We have a few assets for sale, which will generate capital. We think our stock is stupid cheap. I think in past years, I said, "Stupid, stupid, double stupid," so that's double yes. And the stock is probably the single best investment we can make now, other than 623 Fifth, which is obviously I'm in love with.
Glen Weiss: Double yes. We have a few assets for sale, which will generate capital. We think our stock is stupid cheap. I think in past years, I said, "Stupid, stupid, double stupid," so that's double yes. And the stock is probably the single best investment we can make now, other than 623 Fifth, which is obviously I'm in love with.
Speaker #6: So that's double yes. And the stock is probably the single best investment we can make now, other than 623 Fifth, which is obviously—I'm in love.
Speaker #6: With that, the next question will come from...
Nick: The next question will come from Floris Van Dijkum with Ladenburg. Please go ahead.
Operator: The next question will come from Floris Van Dijkum with Ladenburg. Please go ahead.
Speaker #3: Floris Van Dykum with Leidenberg. Please go
Speaker #3: ahead. Hey, guys.
[Company Representative] (Vornado Realty Trust): Hey, guys. Thanks for taking my question. My question is regarding your... The difference between your cash and GAAP same-store NOI. And I think, Michael, you indicated that throughout the year, this is going to inflect. Do you get-- Can you give us a sense of when that inflection point will happen and when your cash NOI will turn positive? Good morning, Floris. You know, I think I said on the last call; it remains the case that we would start to see that flip over in the second half of 2026, and that remains the case.
Floris van Dijkum: Hey, guys. Thanks for taking my question. My question is regarding your... The difference between your cash and GAAP same-store NOI. And I think, Michael, you indicated that throughout the year, this is going to inflect. Do you get-- Can you give us a sense of when that inflection point will happen and when your cash NOI will turn positive? Good morning, Floris. You know, I think I said on the last call; it remains the case that we would start to see that flip over in the second half of 2026, and that remains the case.
Speaker #4: Thanks for taking my question. My question is regarding your the difference between your cash and GAAP same-store NOI. And I think Michael, you indicated that throughout the year, this is going to inflect can you give us a sense of when that inflection point will happen and when your cash NOI will turn positive?
Speaker #2: Good morning, Floris. I think I said on the last call, it remains the case that we would start to see that flip over in the second half of '26.
Speaker #2: And that remains the case. So I think you'll see it improve quarter by quarter. But it won't flip until the back half of the year.
[Company Representative] (Vornado Realty Trust): So I think you'll see it improve, you know, quarter by quarter, but it won't flip until the back half of the year, you know, when those tenants start, or many of those tenants start paying rent.
Floris van Dijkum: So I think you'll see it improve, you know, quarter by quarter, but it won't flip until the back half of the year, you know, when those tenants start, or many of those tenants start paying rent.
Speaker #2: When those tenants start, or many of those tenants start, paying rent.
Speaker #6: I mean, the answer is when the very ugly and painful free rent burns off, that's when the cash begins to become positive and thoughts and reflect similarity to GAAP.
Glen Weiss [EVP: I mean, the answer is when the very ugly and painful free rent burns off, that's when the cash begins to become positive and starts to reflect similarity to GAAP. So that's coming-
Glen Weiss: I mean, the answer is when the very ugly and painful free rent burns off, that's when the cash begins to become positive and starts to reflect similarity to GAAP. So that's coming-
Speaker #6: So that's coming. That's coming and coming pretty
[Company Representative] (Vornado Realty Trust): And maybe.
Floris van Dijkum: And maybe.
Speaker #3: And maybe.
Glen Weiss [EVP: That's coming and coming pretty soon.
Glen Weiss: That's coming and coming pretty soon.
Speaker #6: soon. That's
[Company Representative] (Vornado Realty Trust): Which, that's encouraging. My follow-up question is regarding your retail, particularly your Upper Fifth Avenue retail. Maybe could you talk about what's happening to rents there, relative to in-place? And maybe remind everyone what your in-place rents are for your Upper Fifth Avenue JV, and then potential monetizations for that. And I believe... What's happening with the 657 Fifth Avenue, I think that's a new Meta. Is that a permanent lease or is that still a pop-up lease?
Floris van Dijkum: Which, that's encouraging. My follow-up question is regarding your retail, particularly your Upper Fifth Avenue retail. Maybe could you talk about what's happening to rents there, relative to in-place? And maybe remind everyone what your in-place rents are for your Upper Fifth Avenue JV, and then potential monetizations for that. And I believe... What's happening with the 657 Fifth Avenue, I think that's a new Meta. Is that a permanent lease or is that still a pop-up lease?
Speaker #4: encouraging. My follow-up question is regarding your retail, particularly your upper Fifth Avenue retail. Maybe could you talk about what's happening to rents there relative to in place and maybe remind everyone what your in place rents are for your upper Fifth Avenue JV?
Speaker #4: And then potential monetizations for that. And I believe what's happening with the 657 Fifth Avenue, I think that's a new meta. Is that a permanent lease or is that still a pop-up
Speaker #4: lease? Oh
Glen Weiss [EVP: Oh, boy! The... There's activity on the Meta lease, which will be, which really... It's inappropriate to talk about it now. So that's step one, which involves the Meta store going long term. With respect to the leases, generally,
Glen Weiss: Oh, boy! The... There's activity on the Meta lease, which will be, which really... It's inappropriate to talk about it now. So that's step one, which involves the Meta store going long term. With respect to the leases, generally,
Speaker #6: boy. There's activity on the meta lease which will be which we really it's an inappropriate to talk about it now. So that's step one.
Speaker #6: Which involves the meta store going long term. With respect to the leases generally, the retail market on upper Fifth and Times Square is improving dramatically and rapidly.
Steven Roth: ... The retail market on Upper Fifth and Times Square is improving dramatically and rapidly, but it is still struggling to meet the top tick rents of four or five years ago. It's getting there, but it's struggling.
Steven Roth: ... The retail market on Upper Fifth and Times Square is improving dramatically and rapidly, but it is still struggling to meet the top tick rents of four or five years ago. It's getting there, but it's struggling.
Speaker #6: But it is still struggling to meet the top tick rents of four or five years ago. It's getting there, but it's
Speaker #3: The next question will come from John Kim with BMO Capital Markets. Please go ahead.
Nick: The next question will come from John Kim with BMO Capital Markets. Please go ahead.
Operator: The next question will come from John Kim with BMO Capital Markets. Please go ahead.
Speaker #7: Thank you. Steve, you gave some very interesting information on the difference between the GAAP occupancy and lease occupancy. I'm assuming that $200 million difference is annualized.
John Kim: Thank you. Steve, you gave some very interesting information on the difference between the GAAP occupancy and lease occupancy. I'm assuming that $200 million difference is annualized. But I was wondering how much of that you expect to get by the end of this year and by the end of 2027?
John Kim: Thank you. Steve, you gave some very interesting information on the difference between the GAAP occupancy and lease occupancy. I'm assuming that $200 million difference is annualized. But I was wondering how much of that you expect to get by the end of this year and by the end of 2027?
Speaker #7: But I was of this year and by the end of
Speaker #7: '27? It's
Steven Roth: It's actually not annualized. It's an absolute number. And to be honest with you, and my finance guys are sitting here right across from me, shooting daggers at me, the number is higher than $200 million. But in an abundance of caution, they wanted to keep it at $200 million. So $200 million is a slightly low number. It's a one-timer number, and it feeds in as tenants go into GAAP, it feeds into GAAP. As tenants either take occupancy or they meet the standards for GAAP recognition of income. So that's what that number is. It happens over the next, you know, as the leases mature, not mature, it's not the right word. As the leases become-
Speaker #6: actually not annualized. It's an absolute number. And to be honest with you, in my finance guys who are sitting here right across from me shooting daggers at me, the number is higher than $200 million.
Steven Roth: It's actually not annualized. It's an absolute number. And to be honest with you, and my finance guys are sitting here right across from me, shooting daggers at me, the number is higher than $200 million. But in an abundance of caution, they wanted to keep it at $200 million. So $200 million is a slightly low number. It's a one-timer number, and it feeds in as tenants go into GAAP, it feeds into GAAP. As tenants either take occupancy or they meet the standards for GAAP recognition of income. So that's what that number is. It happens over the next, you know, as the leases mature, not mature, it's not the right word. As the leases become-
Speaker #6: But in a abundance of course, and they wanted to keep it at $200 million. So $200 million is a slightly low number. It's a one-timer number, and it feeds in as tenants go from go into GAAP; it feeds into GAAP.
Speaker #6: As tenants either take occupancy or they meet the standards for GAAP recognition of income. So that's what that number is. It happens over the next as the leases mature, not mature, it's not the right word.
Speaker #6: As the
Speaker #6: leases income. The
[Company Representative] (Vornado Realty Trust): The tenants build out their spaces, right? It's when we can start recognizing GAAP revenue.
Thomas Sanelli: The tenants build out their spaces, right? It's when we can start recognizing GAAP revenue.
Speaker #7: tenants build out their spaces, right? It's when we
Speaker #7: can start recognizing GAAP revenue. The GAAP
Steven Roth: The GAAP recognition is the tenants have to either build out their spaces or take occupancy.
Steven Roth: The GAAP recognition is the tenants have to either build out their spaces or take occupancy.
Speaker #6: recognition is the tenants have to either build out their spaces or take occupancy. And that happens quickly over the next year or two. I don't have a plot as to exactly how much per month.
John Kim: Mm-hmm.
Steven Roth: That happens, you know, quickly over the next year or two. I don't have a plan as to exactly how much per month, but a lot of it comes in the first year, a lot of it comes in the second year. I mean, but the interesting thing about it is that is income, which is in the bag. The leases are signed, and it's just a matter of a small amount of time as to when they go into GAAP recognition. Now, the $0.40 that I put at the end of that paragraph is a kind of strange guidance for something that's two years out, which is something we never do. So it's kind of, like, strange. I wouldn't rely upon it too much.
Steven Roth: That happens, you know, quickly over the next year or two. I don't have a plan as to exactly how much per month, but a lot of it comes in the first year, a lot of it comes in the second year. I mean, but the interesting thing about it is that is income, which is in the bag. The leases are signed, and it's just a matter of a small amount of time as to when they go into GAAP recognition. Now, the $0.40 that I put at the end of that paragraph is a kind of strange guidance for something that's two years out, which is something we never do. So it's kind of, like, strange. I wouldn't rely upon it too much.
Speaker #6: But a lot of it comes in the first year, a lot of it comes in the second year. And I mean, but the interesting thing about it is that is income which is in the bag.
Speaker #6: The leases are signed, and it's just a matter of a small amount of time as to when they go into GAAP recognition. Now, the 40 cents that I put at the end of that paragraph is a kind of strange guidance for something that's two years out, which is something we never do.
Speaker #6: And so it's kind of like strange. I wouldn't rely upon it too much. It's not a guaranteed certified, "I'll bet my life on it" number.
Steven Roth: It's not a guaranteed, certified, I'll bet my life on it number, but it's sort of a number. But the $200 million, which is a little bit more than that, with 100% certainty, comes in income over the next number of years. Now, the interesting thing about it is, which I tried to say, is, is that it's the company is, it's a simple company, but the financials are sort of a little bit complicated. There are ins and outs, so there are some tenants that'll move out. There are other things which will affect the earnings positively and negatively. But that's the, I think, the story. Anything to add there, Tom?
Steven Roth: It's not a guaranteed, certified, I'll bet my life on it number, but it's sort of a number. But the $200 million, which is a little bit more than that, with 100% certainty, comes in income over the next number of years. Now, the interesting thing about it is, which I tried to say, is, is that it's the company is, it's a simple company, but the financials are sort of a little bit complicated. There are ins and outs, so there are some tenants that'll move out. There are other things which will affect the earnings positively and negatively. But that's the, I think, the story. Anything to add there, Tom?
Speaker #6: But it's sort of a number. But the 200 million dollars, which is a little bit more than that, with 100% certainty, comes into income over the next number of years.
Speaker #6: Now, the interesting thing about it is, which I tried to say, is that the company is a simple company, but the financials are sort of a little bit complicated.
Speaker #6: There are ins and outs. So there are some tenants that'll move out. There are other things which will affect their earnings positively and negatively.
Speaker #6: But that's, I think, the story. Anything to add?
Speaker #6: there, Tom? No.
[Company Representative] (Vornado Realty Trust): No. No, I think you said it.
Thomas Sanelli: No. No, I think you said it.
Speaker #7: No, I think you
Speaker #7: said it. Thank
Steven Roth: Thank you. Did I do okay?
Steven Roth: Thank you. Did I do okay?
Speaker #6: Did I do a?
Speaker #4: For those of us you.
John Kim: For those of us who like to look at percentage terms, that 91.2% lease occupancy, what is that in terms of physical or economic occupancy?
Speaker #4: who for those of us who like to look at percentage terms, that 91.2% leased occupancy, what does that in terms of physical or economic occupancy?
John Kim: For those of us who like to look at percentage terms, that 91.2% lease occupancy, what is that in terms of physical or economic occupancy?
Speaker #6: Well, it's 90-whatever. What is it? 91.2?
Steven Roth: Well, it's 92, it's ninety-whatever. What is it? 91.2.
Steven Roth: Well, it's 92, it's ninety-whatever. What is it? 91.2.
Speaker #7: In New York City. In New York,
[Company Representative] (Vornado Realty Trust): In New York City, in New York, it's 91.2.
Thomas Sanelli: In New York City, in New York, it's 91.2.
Speaker #6: In New York and Manhattan office, it's 91 and change versus 88 and change. And, by the way, we expect that occupancy number to go up.
Steven Roth: In Manhattan office, it's 91 and change versus 88 and change. And by the way-
Steven Roth: In Manhattan office, it's 91 and change versus 88 and change. And by the way-
Nick: Next question.
Operator: Next question.
Steven Roth: We expect that occupancy number to go up.
Steven Roth: We expect that occupancy number to go up.
Nick: The next question will come from Jana Galan with Bank of America. Please go ahead.
Operator: The next question will come from Jana Galan with Bank of America. Please go ahead.
Speaker #3: The next question will come from Yana Gallen with Bank of America. Please go ahead.
Speaker #3: ahead. Thank you.
Jana Galan: Thank you. Good morning.
Jana Galan: Thank you. Good morning.
Speaker #8: Good morning. Maybe also following up on some of the strange guidance. If we could get some more details on 623 Fifth and did I catch in your comments that it could add 11 cents to
Steven Roth: Good morning.
Steven Roth: Good morning.
Jana Galan: Maybe also following up on some of the strange guidance. If we could get some more details on 623 Fifth Avenue, and did I catch in your comments that it could add $0.11 to FFO?
Jana Galan: Maybe also following up on some of the strange guidance. If we could get some more details on 623 Fifth Avenue, and did I catch in your comments that it could add $0.11 to FFO?
Speaker #8: FFO? I'm sorry.
Steven Roth: I'm sorry, I didn't get the question.
Steven Roth: I'm sorry, I didn't get the question.
[Company Representative] (Vornado Realty Trust): Comments on $0.11 to FFO.
Speaker #7: Comments on 11 cents to FFO.
Thomas Sanelli: Comments on $0.11 to FFO.
Speaker #6: Well, it's just math. So my guys are laughing at me, but I mean, I'm in love with this asset. I think it's probably the best acquisition ever.
Steven Roth: Well, it's just math. So, you know, my guys are laughing at me, but I mean, I'm in love with this asset. I think it's probably the best acquisition ever. So the building is basically empty. The prior owner was emptying the building out to convert it to residential. We think that that's not the right program. We're gonna make it... Glenn's assignment to me is make this thing the 220 of, boutique office, meaning the best of the best of the best, which will generate the best, the best income. So we believe that, the finished product will cost $1,100 and change, say $1,200 a foot, rounding. And we believe that the net income on the project will generate a scant over 10%. Just about.
Steven Roth: Well, it's just math. So, you know, my guys are laughing at me, but I mean, I'm in love with this asset. I think it's probably the best acquisition ever. So the building is basically empty. The prior owner was emptying the building out to convert it to residential. We think that that's not the right program. We're gonna make it... Glenn's assignment to me is make this thing the 220 of, boutique office, meaning the best of the best of the best, which will generate the best, the best income. So we believe that, the finished product will cost $1,100 and change, say $1,200 a foot, rounding. And we believe that the net income on the project will generate a scant over 10%. Just about.
Speaker #6: So the building is basically empty. The prior owner was emptying the building out, the converted to residential. We think that that's not the right program.
Speaker #6: We're going to make it Glenn's assignment to me is make this thing the 220 boutique office meeting the best of the best of the best, which will generate the best income.
Speaker #6: So we believe that the finished product will cost $1,100 and change, say $1,200 a foot rounding. And we believe that the net income on the project will generate a scant over 10%.
Speaker #6: Just a minute. I think we have on the supplement 10.1%. So if you say that the project costs $1,200 a foot and it's going to have a 10% return, that's an interesting number.
Steven Roth: I think we have on the, on the supplement 10.1%. So if you say that the project costs $1,200 a foot, and it's gonna have a 10% return, that's an interesting number. Now, we think if we can if we sell that building, which I'm not saying we will or we won't, it probably would command. If any building will command a 5% cap rate in the marketplace, it would be that building, which starts on the 11th floor on top of Saks in a spectacular location. And by the way, I was being quite sincere when I said, take a look at the location on Google Maps. It's astonishing. So if you build it to a 10 and you sell it to at a 5, that is basically a doubling of your money.
Steven Roth: I think we have on the, on the supplement 10.1%. So if you say that the project costs $1,200 a foot, and it's gonna have a 10% return, that's an interesting number. Now, we think if we can if we sell that building, which I'm not saying we will or we won't, it probably would command. If any building will command a 5% cap rate in the marketplace, it would be that building, which starts on the 11th floor on top of Saks in a spectacular location. And by the way, I was being quite sincere when I said, take a look at the location on Google Maps. It's astonishing. So if you build it to a 10 and you sell it to at a 5, that is basically a doubling of your money.
Speaker #6: Now, we think if we sell that building—which I'm not saying we will or we won't—it probably would command, if any building will command a 5% cap rate in the marketplace, it would be that building.
Speaker #6: Which starts on the 11th floor on top of Sachs in a spectacular location. And by the way, I was being quite sincere when I said, "Take a look at the location on Google Map."
Speaker #6: It's astonishing. So if you build it to a 10, and you sell it at a 5, that is basically a doubling of your money.
Speaker #6: Or if you put 50% leverage on it, that's a quadrupling of your money. If, however, the value is in the income stream in the company, we think that that will generate a little bit more than an 11%, 11 cent incremental return.
Steven Roth: Or if you put 50% leverage on it, that's a quadrupling of your money. If, however, the value is in the income stream in the company, we think that that will generate a little bit more than 11%, 11 cent incremental return. How do I get that number? $50 million of income, less the cost of capital on the 1,200 dollar a foot cost, yields 11% or slightly more than 11%. I hope that answers your question then. What?
Steven Roth: Or if you put 50% leverage on it, that's a quadrupling of your money. If, however, the value is in the income stream in the company, we think that that will generate a little bit more than 11%, 11 cent incremental return. How do I get that number? $50 million of income, less the cost of capital on the 1,200 dollar a foot cost, yields 11% or slightly more than 11%. I hope that answers your question then. What?
Speaker #6: How do I get that number? $50 million of income, lest the cost of capital on the $1,200 a foot cost yields 11%. I hope that answers your
Speaker #6: question. Sounds What?
Michael Franco: Cents.
Michael Franco: Cents.
Steven Roth: Okay.
Steven Roth: Okay.
Speaker #7: 11 cents. Percent.
Michael Franco: Eleven cents.
Michael Franco: Eleven cents.
Speaker #6: What did I good.
Steven Roth: What did I say?
Steven Roth: What did I say?
Speaker #6: say? 11 cents. Sorry.
Michael Franco: Percent.
Michael Franco: Percent.
Steven Roth: $0.11. Sorry.
Steven Roth: $0.11. Sorry.
Speaker #8: No, thank you. That's very helpful. And then just in terms of the development costs and I think there's debt on it now that you probably need to term out.
Joshua Dennerlein: No, thank you. That's very helpful. And then just in terms of the development costs, and, you know, I think there's debt on it now that you probably need to term out. What are kind of your expectations on that?
Jana Galan: No, thank you. That's very helpful. And then just in terms of the development costs, and, you know, I think there's debt on it now that you probably need to term out. What are kind of your expectations on that?
Speaker #8: What are kind of your expectations on
Speaker #8: that? We're going
Steven Roth: We're going to finance the building as we always do. But it's not a great deal of money, $200 million. We're gonna complete the project. We're gonna rent it out. One of the keys to it is that we will deliver for tenants, probably the end of 2027, which is less than half the time than it takes to build a new build at less than half the cost. So those are part of the financial metrics as to why I'm so excited about the project. When we get done with the project, we will keep it in our portfolio because we will expect that the rents will go up and up as time goes on.
Steven Roth: We're going to finance the building as we always do. But it's not a great deal of money, $200 million. We're gonna complete the project. We're gonna rent it out. One of the keys to it is that we will deliver for tenants, probably the end of 2027, which is less than half the time than it takes to build a new build at less than half the cost. So those are part of the financial metrics as to why I'm so excited about the project. When we get done with the project, we will keep it in our portfolio because we will expect that the rents will go up and up as time goes on.
Speaker #6: to finance the building as we always do. It's not a great deal of money, a couple hundred million dollars, we're going to complete the project.
Speaker #6: We're going to let rent it out. One of the keys to it is that we will deliver for tenants. Probably the end of '27, which is less than half the time that it takes to build a new build, at less than half the cost.
Speaker #6: So those are part of the financial metrics as to why I'm so excited about the project. When we get done with the project, we will keep it in our portfolio because we will expect that the rents will go up and up as time goes on.
Steven Roth: We will finance it as we finance all of our projects.
Speaker #6: And we will finance it as we finance all of our
Steven Roth: We will finance it as we finance all of our projects.
Speaker #6: projects.
Speaker #3: The next question will come
Nick: The next question will come from Alexander Goldfarb with Piper Sandler. Please go ahead.
Operator: The next question will come from Alexander Goldfarb with Piper Sandler. Please go ahead.
Speaker #3: From Alexander Goldfarb with Piper Sandler. Please go ahead.
Speaker #9: Hey, good morning. Morning, Steve. Can you guys walk through on 350 Park? Just—I know, Steve, you mentioned that it’s part of the guidance this year and that on a recurring FFO, it’s flat.
Alexander Goldfarb: Hey, good morning. Morning, Steve. Can you guys walk through on 350 Park Avenue? Just... I know, Steve, you mentioned that, you know, it, it's part of the guidance to this year, and that it, the, on a recurring FFO, it's flat. But can you just walk through sort of the mechanics of the income and how that is. There's a master lease, but then you'll capitalize it. So just want to understand the net effect, especially as we think about our 2027 and what the carryover is from 350 going, because you're, you said you're gonna stay in the project, so just want to understand the full effect.
Alexander Goldfarb: Hey, good morning. Morning, Steve. Can you guys walk through on 350 Park Avenue? Just... I know, Steve, you mentioned that, you know, it, it's part of the guidance to this year, and that it, the, on a recurring FFO, it's flat. But can you just walk through sort of the mechanics of the income and how that is. There's a master lease, but then you'll capitalize it. So just want to understand the net effect, especially as we think about our 2027 and what the carryover is from 350 going, because you're, you said you're gonna stay in the project, so just want to understand the full effect.
Speaker #9: But can you just walk through sort of the mechanics of the income and how that is there's a master lease, but then you'll capitalize it.
Speaker #9: So just want to understand the net effect, especially as we think about our '27 and what the carryover is from 350 going because you said you're going to stay in the project.
Speaker #9: So just want to understand
Speaker #9: the full effect. You're talking
Steven Roth: You're talking, you're talking about the transition from the existing 350 Park Avenue building, which will be taken out of service and demolished starting next month, into a capitalized interest model. Is that right?
Steven Roth: You're talking, you're talking about the transition from the existing 350 Park Avenue building, which will be taken out of service and demolished starting next month, into a capitalized interest model. Is that right?
Speaker #6: about the transition from the existing 350 Park Avenue building, which will be taken out of service and demolished starting next month, into a capitalized interest model.
Speaker #6: Is that
Speaker #6: right? Yeah.
Michael Franco: Yeah.
Michael Franco: Yeah.
Speaker #9: Yeah. Because I think there's a master lease right now, right?
Alexander Goldfarb: Yeah, because I think there's a master lease right now, right?
Alexander Goldfarb: Yeah, because I think there's a master lease right now, right?
Speaker #6: There is. There is.
Michael Franco: There is. There is. So that's going to terminate. Well, it'll be adjusted, I should say, when demolition starts, which will be 1 April. So the answer is, there's gonna be a little bit of a negative impact in 2026 as we transition from demo to full capitalization. And, you know, next year, it'll be capitalized, and it'll be basically on par with what it was last year, but a little bit down this year.
Michael Franco: There is. There is. So that's going to terminate. Well, it'll be adjusted, I should say, when demolition starts, which will be 1 April. So the answer is, there's gonna be a little bit of a negative impact in 2026 as we transition from demo to full capitalization. And, you know, next year, it'll be capitalized, and it'll be basically on par with what it was last year, but a little bit down this year.
Speaker #7: So that's going to terminate—or it'll be adjusted, I should say—when demolition starts, which will be April 1st. So the answer is, there's going to be a little bit of a negative impact in '26 as we transition from demo to full capitalization.
Speaker #7: And next year, it'll be capitalized, and it'll be basically on par with what it was last year, but a little bit down this year.
Speaker #9: Okay. And then the second question is, Steve, on the dividend. You’re one of the few companies that still is paying a reduced, a stub dividend, if you will.
Alexander Goldfarb: Okay. And then the second question is, Steve, on the dividend, you're one of the few companies that still is, you know, paying a reduced, you know, a stubbed dividend, if you will. You talked about, you know, your liquidity, you talked about, you know, improving on the balance sheet, the rent that's coming online over the next few years, and yet there's still a lot of capital projects that you have in terms of various development projects. So how do you see the dividend versus taxable income, and when do you see a full normal quarterly restoration of it?
Alexander Goldfarb: Okay. And then the second question is, Steve, on the dividend, you're one of the few companies that still is, you know, paying a reduced, you know, a stubbed dividend, if you will. You talked about, you know, your liquidity, you talked about, you know, improving on the balance sheet, the rent that's coming online over the next few years, and yet there's still a lot of capital projects that you have in terms of various development projects. So how do you see the dividend versus taxable income, and when do you see a full normal quarterly restoration of it?
Speaker #9: You talked about your liquidity. You talked about improving on the balance sheet, the rent that's coming online over the next few years, and yet there's still a lot of capital projects that you have in terms of various development projects.
Speaker #9: So, how do you see the dividend versus taxable income, and when do you see a full, normal quarterly restoration of it?
Speaker #6: Well, first of all, we may be one of the few companies—I'm not sure of that—but there is a hue and cry in the marketplace for people that are overpaying their dividend to reduce their dividend to conserve the cash.
Steven Roth: Well, first of all, we may be one of the few companies. I'm not sure of that, but there is a hue and cry in the marketplace for people that are overpaying their dividends to reduce their dividends and conserve the cash. So we're sort of aware of that. But nonetheless, you know, as a large shareholder, our management team has a, and our board has a high incentive to pay a normalized dividend. A normalized dividend is in relation to two things: the Internal Revenue Code requires that we pay out our taxable income, but also common sense says that we should pay to our shareholders something which approximates the income stream of a normalized business. So it's not impossible that our regular income would be higher than our taxable income.
Steven Roth: Well, first of all, we may be one of the few companies. I'm not sure of that, but there is a hue and cry in the marketplace for people that are overpaying their dividends to reduce their dividends and conserve the cash. So we're sort of aware of that. But nonetheless, you know, as a large shareholder, our management team has a, and our board has a high incentive to pay a normalized dividend. A normalized dividend is in relation to two things: the Internal Revenue Code requires that we pay out our taxable income, but also common sense says that we should pay to our shareholders something which approximates the income stream of a normalized business. So it's not impossible that our regular income would be higher than our taxable income.
Speaker #6: So we're sort of aware of that. But nonetheless, as a large shareholder, our management team has and our board has a high incentive to pay a normalized dividend.
Speaker #6: A normalized dividend is in relation to two things. The Internal Revenue Code requires that we pay out our taxable income. But also, common sense says that we should pay to our shareholders something which approximates the income stream of a normalized business.
Speaker #6: So, it's not impossible that our regular income would be higher than our taxable income. So, we have an incentive to get back to a normal dividend as soon as we can, which will not be this year, by the way.
Steven Roth: So we have an incentive to get back to a normal dividend as soon as we can, which will not be this year, by the way. And as soon as we get back to normalcy in terms of our income stream, getting all of the renting that we have done paid for with a free rent and the TI, and get that all behind us, we will then revert to a normal dividend.
Steven Roth: So we have an incentive to get back to a normal dividend as soon as we can, which will not be this year, by the way. And as soon as we get back to normalcy in terms of our income stream, getting all of the renting that we have done paid for with a free rent and the TI, and get that all behind us, we will then revert to a normal dividend.
Speaker #6: And as soon as we get back to normalcy, in terms of our income stream, getting all of the renting that we have done paid for with a free rent and the TI, and get that all behind us, we will then revert to a normal dividend.
Speaker #6: And as soon as we get back to normalcy, in terms of our income stream, getting all of the renting that we have done paid for with a free rent and the TI, and get that all behind us, we will then revert to a normal dividend.
Speaker #3: The next question will come from Anthony Palone with JP Morgan. Please go
Nick: The next question will come from Anthony Paolone with J.P. Morgan. Please go ahead.
Operator: The next question will come from Anthony Paolone with J.P. Morgan. Please go ahead.
Speaker #3: ahead. Okay.
Anthony Paolone: Okay, thanks. I guess my first question. I was wondering if you could help a bit with sources and uses of funds over the next couple of years, because as I'm listening to this, you've got a couple of redevelopments that you now have teed up. You talked about, I think, last quarter, maybe building an apartment project. Buybacks are a priority. Sounds like you're going to be spending real money on 350 Park Avenue in the next couple of years as that gets underway. And just trying to add all this up and get a sense as to, like, you know, sources and uses, basically.
Anthony Paolone: Okay, thanks. I guess my first question. I was wondering if you could help a bit with sources and uses of funds over the next couple of years, because as I'm listening to this, you've got a couple of redevelopments that you now have teed up. You talked about, I think, last quarter, maybe building an apartment project. Buybacks are a priority. Sounds like you're going to be spending real money on 350 Park Avenue in the next couple of years as that gets underway. And just trying to add all this up and get a sense as to, like, you know, sources and uses, basically.
Speaker #10: Thanks. I guess my first question, I was wondering if you could help a bit with sources and uses of funds over the next couple of years because as I'm listening to this, you've got a couple of redevelopments that you now have teed up.
Speaker #10: You talked about, I think last quarter, maybe building an apartment project. Buybacks are a priority. Sounds like you're going to be spending real money on 350 Park in the next couple of years.
Speaker #10: Does that get underway? And I'm just trying to add all this up and get a sense as to sources and uses, basically.
Speaker #7: I mean, Tony, I can't—good morning. I can't give you dollar figure by dollar figure. What I would say is, as you would expect, we're not willy-nilly or frivolous, right?
Michael Franco: I mean, Tony, I can't-- Hey, good morning. I can't give you, you know, dollar figure by dollar figure. What I would say is, as you would expect, you know, we're not willy-nilly frivolous, right? We have a capital plan. We know what's in front of us. You know, and we have a business plan, right? And that business plan is a combination of, you know, financings, generally at the asset level, some asset sales, you know, et cetera. So-...
Michael Franco: I mean, Tony, I can't-- Hey, good morning. I can't give you, you know, dollar figure by dollar figure. What I would say is, as you would expect, you know, we're not willy-nilly frivolous, right? We have a capital plan. We know what's in front of us. You know, and we have a business plan, right? And that business plan is a combination of, you know, financings, generally at the asset level, some asset sales, you know, et cetera. So-...
Speaker #7: We have a capital plan. We know what's in front of us. And we have a business plan, right? And that business plan is a combination of financings, generally at the asset level, some asset sales, etc.
Speaker #7: So I would say in terms of the development projects, other than 623, which will be executed this year and next, the other projects are more back-ended, particularly 350, where our capital to the extent we invest above the land contribution, which we don't have to, although I think given the attractiveness of it, we will.
Michael Franco: And I would say in terms of development projects other than 623, which will be executed, you know, this year and next, you know, the other projects are more back-ended, particularly 350, where you know, our capital to the extent we invest above the land contribution, which we don't have to, although I think given the attractiveness of it, we will.
Michael Franco: And I would say in terms of development projects other than 623, which will be executed, you know, this year and next, you know, the other projects are more back-ended, particularly 350, where you know, our capital to the extent we invest above the land contribution, which we don't have to, although I think given the attractiveness of it, we will.
Speaker #6: I assume we will.
Steven Roth: Assume we will.
Steven Roth: Assume we will.
Speaker #7: We will,
Michael Franco: We will, right? That capital, you know, given that, our partner has to true up with us first, and the bank's gonna fund some of that, there's no meaningful capital in 350 for several years. So the answer is we have, we have a, we have a plan, we can do all the things that we've laid out. And, you know, we've sold assets in the past. We have some things in the works, and, you know, we're confident that we can execute those. And we're gonna be, you know, as Steve said in his opening remarks, we're gonna be mindful on the buybacks once we have, you know, the appropriate capital and, and, and to deal with everything else.
Michael Franco: We will, right? That capital, you know, given that, our partner has to true up with us first, and the bank's gonna fund some of that, there's no meaningful capital in 350 for several years. So the answer is we have, we have a, we have a plan, we can do all the things that we've laid out. And, you know, we've sold assets in the past. We have some things in the works, and, you know, we're confident that we can execute those. And we're gonna be, you know, as Steve said in his opening remarks, we're gonna be mindful on the buybacks once we have, you know, the appropriate capital and, and, and to deal with everything else.
Speaker #7: right? That capital given that our partner has to chew up with us first and the bank's going to fund some of that, there's no meaningful capital on 350 for several years.
Speaker #7: So the answer is we have a plan. We can do all the things that we've laid out. And we've sold assets in the past.
Speaker #7: We have some things in the works. And we're confident that we can execute those, and we're going to be as Steve said in his opening remarks, we're going to be mindful on the buybacks once we have the appropriate capital and to deal with everything else.
Steven Roth: So look, we have a lot of things that we want to do, which we think will create significant shareholder value. So one of them is buying back our stock, which is a separate thing, which has to be done with care, so that we don't screw up our balance sheet, which we will not do, ever. So one of the uses is buying back stock. So that's sort of like a subtraction. We do that with capital as it's available. The next thing is 350 Park is a very important, we hope, extremely successful project. The principal amount that we will be contributing to that is our land, which is free, you know, which is easy.
Speaker #6: So, look, we have a lot of things that we want to do, which we think will create significant shareholder value. One of them is buying back our stock, which is a separate thing that has to be done with care.
Steven Roth: So look, we have a lot of things that we want to do, which we think will create significant shareholder value. So one of them is buying back our stock, which is a separate thing, which has to be done with care, so that we don't screw up our balance sheet, which we will not do, ever. So one of the uses is buying back stock. So that's sort of like a subtraction. We do that with capital as it's available. The next thing is 350 Park is a very important, we hope, extremely successful project. The principal amount that we will be contributing to that is our land, which is free, you know, which is easy.
Speaker #6: So that we don't screw up our balance sheet, which we will not do, ever. So one of the uses is buying back stock. So that's sort of like a subtraction.
Speaker #6: We do that with capital assets available. The next thing is 350 Park is a very important we hope extremely successful project. The principal amount that we will be contributing to that is our land, which is easy.
Speaker #6: And then there's about 300 or 400 million dollars above that in cash that will represent our 40% interest or 30% interest and so that's not a great deal of money in relation to a $6 billion project because we're only a 40% partner.
Steven Roth: And then there's about $300 or 400 million above that in cash that will represent our 40% interest or 36% interest. So that's not a great deal of money in relation to a $6 billion project because we're only a 40% partner. So we have an 850,000 and growing anchor tenant that's signed, and we have a 60% partner. So the 350 Park project is a great project, which, from a financial point of view, is not as challenging as you would think. The 623 Fifth Avenue project is easily financeable. What else?
Steven Roth: And then there's about $300 or 400 million above that in cash that will represent our 40% interest or 36% interest. So that's not a great deal of money in relation to a $6 billion project because we're only a 40% partner. So we have an 850,000 and growing anchor tenant that's signed, and we have a 60% partner. So the 350 Park project is a great project, which, from a financial point of view, is not as challenging as you would think. The 623 Fifth Avenue project is easily financeable. What else?
Speaker #6: So, we have an $850,000 and growing anchor tenant that's signed. And we have a 60% partner. So the 350 project is a great project, which from a financial point of view is not as challenging as you would think.
Speaker #6: The 623, the revenue project is easily financeable. What else? The TIs, the most important thing we have from a capital point of view is the TIs.
Steven Roth: The TIs, the most important thing we have from a capital point of view is the TIs to put into occupancy and convert into GAAP rent, the tenants that we've already signed. That money is already allocated.
Steven Roth: The TIs, the most important thing we have from a capital point of view is the TIs to put into occupancy and convert into GAAP rent, the tenants that we've already signed. That money is already allocated.
Speaker #6: To put into occupancy and convert into gap rent, the tenants that we've already signed, that money is already
Speaker #6: allocated. And then the residential project
Michael Franco: Then the residential project is, you know, that's multifamily, finances very well. We already have the land unencumbered. You know, that, that comprises a chunk of the equity, and there's not much cash above that.
Michael Franco: Then the residential project is, you know, that's multifamily, finances very well. We already have the land unencumbered. You know, that, that comprises a chunk of the equity, and there's not much cash above that.
Speaker #7: is that's multifamily financed very well. We already have the land unencumbered. That comprises a chunk of the equity, and there's not much cash above that.
Speaker #6: So now, the next part of it is—so that's a little bit about the uses. Now, the sources are, I would remind you, that we have basically—the income-producing part of the Penn District is free and clear.
Steven Roth: So, now the next part of it is. So that's a little bit about the uses. Now, the sources are. I would remind you that we have basically the income-producing part of the Penn District is free and clear, with no debt on it. So, and those buildings have now become more valuable as Glenn and his team have leased them up. So we have the Meta building in one hand, free and clear. We have PENN 2, free and clear. We have PENN 1, free and clear. We have the PENN 15 site, free and clear, and on and on. So we have significant financing available to us should we need it or choose to. So, that's without, you know, giving you a piece of paper, that's a verbal description of our capital plan.
Steven Roth: So, now the next part of it is. So that's a little bit about the uses. Now, the sources are. I would remind you that we have basically the income-producing part of the Penn District is free and clear, with no debt on it. So, and those buildings have now become more valuable as Glenn and his team have leased them up. So we have the Meta building in one hand, free and clear. We have PENN 2, free and clear. We have PENN 1, free and clear. We have the PENN 15 site, free and clear, and on and on. So we have significant financing available to us should we need it or choose to. So, that's without, you know, giving you a piece of paper, that's a verbal description of our capital plan.
Speaker #6: There's no debt on it. So and those buildings have now become more valuable as Glenn and his team have leased them up. So we have the Meta Building in Moynihan free and clear.
Speaker #6: We have Two Penn free and clear. We have Penn One free and clear. We have the Penn 15 site free and clear. And on and on.
Speaker #6: So we have significant financing available to us should we need it or choose to. So that's without giving you a piece of paper, that's a verbal description of our capital plan.
Speaker #10: Okay, thanks for all of that. And then just my only follow-up is 354—I was wondering, what's the cost to build a smaller building like that?
Anthony Paolone: Okay, thanks. Thanks for all that. And then just my only follow-up is 354. I was wondering, what's the cost to build a smaller building like that? I guess we're getting used to well over $2,000 a foot for the larger avenue-type developments, it seems. Just wondering if there's any appreciable difference in a smaller midblock asset like that.
Anthony Paolone: Okay, thanks. Thanks for all that. And then just my only follow-up is 354. I was wondering, what's the cost to build a smaller building like that? I guess we're getting used to well over $2,000 a foot for the larger avenue-type developments, it seems. Just wondering if there's any appreciable difference in a smaller midblock asset like that.
Speaker #10: I guess we're getting used to well over 2,000 bucks a foot for the larger avenue, type developments, it seems. Just wondering if there's any appreciable difference in a smaller mid-block asset like that.
Steven Roth: A little bit, a little bit less. A little bit less.
Steven Roth: A little bit, a little bit less. A little bit less.
Speaker #6: A little bit less. A little bit
Speaker #10: Okay. less.
Anthony Paolone: Okay.
Anthony Paolone: Okay.
Speaker #6: But not appreciably
Steven Roth: But not appre-
Steven Roth: But not appre-
Anthony Paolone: Thank you.
Anthony Paolone: Thank you.
Steven Roth: But not appreciably less.
Steven Roth: But not appreciably less.
Speaker #6: less. The next question
Nick: The next question will come from Vikram Malhotra with Mizuho. Please go ahead.
Operator: The next question will come from Vikram Malhotra with Mizuho. Please go ahead.
Speaker #11: will come from Vikram Malhotra with Mizuho. Please go ahead.
Vikram Malhotra: Morning. Thanks for taking the question. So, so two ones. One, just to follow up, I wanted to just be crystal clear on the $0.40 going to next year. Is that an NOI comment, incremental contribution? Is that sort of an FFO comment? Just how should we think about that? And then maybe just other big picture moving pieces as we think about this massive earnings ramp.
Speaker #12: Morning. Thanks for taking the question. So two ones. One, just a follow-up. I wanted to speak crystal clear on the 40 cents going to next year.
Vikram Malhotra: Morning. Thanks for taking the question. So, so two ones. One, just to follow up, I wanted to just be crystal clear on the $0.40 going to next year. Is that an NOI comment, incremental contribution? Is that sort of an FFO comment? Just how should we think about that? And then maybe just other big picture moving pieces as we think about this massive earnings ramp.
Speaker #12: Is that an NOI comment, incremental contribution? Is that sort of an FFO comment? Just how should we think about that? And maybe just other big-picture moving pieces as we think about this massive earnings.
Speaker #12: ramp. It's FFO,
Michael Franco: It's FFO, Vikram.
Michael Franco: It's FFO, Vikram.
Speaker #12: Okay. It's Vikram. Helpful. Just on street retail, I think the team hired Newmark, and there's sort of a re-envisioning of Penn Station, Penn District, street retail.
Vikram Malhotra: Okay, it's FFO. Okay, helpful. Just on street retail, I think you know, the team hired Newmark, and there's sort of a re-envisioning of Penn Station, Penn District street retail. I'm just wondering, as you've thought about, like, the street retail portfolio there, is there like a broad range? Or like, after doing all of this, what's the NOI uplift over the long term?
Vikram Malhotra: Okay, it's FFO. Okay, helpful. Just on street retail, I think you know, the team hired Newmark, and there's sort of a re-envisioning of Penn Station, Penn District street retail. I'm just wondering, as you've thought about, like, the street retail portfolio there, is there like a broad range? Or like, after doing all of this, what's the NOI uplift over the long term?
Speaker #12: I'm just wondering, as you've thought about the street retail portfolio there, is there a broad range or after doing all of this, what's the NOI uplift over the long term?
Steven Roth: You know, we haven't split that out, and we're not really publishing projections on that. We will sometime in the short-term future, but we haven't done that yet. But, you know, basically, the Penn District is a district. It's office buildings, it's retail, it's events, it's a gathering place, it's the Perch, it's the town halls. It's a system of interaction and hospitality and work spa and workplaces, which is important. Each plays off the other and increments the other and helps the other. So the retail is very important as a separate business, but it's extremely important as it affects our demand for the office space.
Steven Roth: You know, we haven't split that out, and we're not really publishing projections on that. We will sometime in the short-term future, but we haven't done that yet. But, you know, basically, the Penn District is a district. It's office buildings, it's retail, it's events, it's a gathering place, it's the Perch, it's the town halls. It's a system of interaction and hospitality and work spa and workplaces, which is important. Each plays off the other and increments the other and helps the other. So the retail is very important as a separate business, but it's extremely important as it affects our demand for the office space.
Speaker #6: We haven't split that out. And we're not really publishing projections on that. We will sometime in the short-term future, but we haven't done that yet.
Speaker #6: But basically, the Penn District is a—it's a district. It's office buildings. It's retail. It's events. It's a gathering place. It's the perch. It's the town halls.
Speaker #6: It's a system of interaction and hospitality and workplaces which is important. Each plays off the other. And increments the other. And helps the other.
Speaker #6: So, the retail is very important as a separate business, but it's extremely important as it affects our demand for the office.
Speaker #6: Space. The next question will come from Nick.
Nick: The next question will come from Nick Yulico with Scotiabank. Please go ahead.
Operator: The next question will come from Nick Yulico with Scotiabank. Please go ahead.
Speaker #11: Yuliko with Scotiabank. Please go ahead.
Speaker #13: Thanks. Good morning. First, on Penn 2, I was hoping you could just remind us about for the leases that were done so far, when they're set to commence.
Nick Yulico: Thanks. Good morning. First, on PENN 2, I was hoping you could just remind us about, you know, for the leases that were done so far, when they're set to commence. I think MLS was assumed early this year, and then I guess, you know, the bulk is sort of 2027 beyond. But I guess in relation to, like, the 80% lease number that you give for that asset, just how to think about when that will actually turn into, you know, GAAP NOI. I guess how much of that 80% actually is fully in 2027, as you're talking about that ramp next year?
Nick Yulico: Thanks. Good morning. First, on PENN 2, I was hoping you could just remind us about, you know, for the leases that were done so far, when they're set to commence. I think MLS was assumed early this year, and then I guess, you know, the bulk is sort of 2027 beyond. But I guess in relation to, like, the 80% lease number that you give for that asset, just how to think about when that will actually turn into, you know, GAAP NOI. I guess how much of that 80% actually is fully in 2027, as you're talking about that ramp next year?
Speaker #13: I think MLS was assumed early this year, and then I guess the bulk is sort of 2027 and beyond. But I guess in relation to the 80% lease number that you give for that asset, just how to think about when that will actually turn into GAAP NOI—I guess, how much of that 80% actually is fully in for 2027 as you're talking about that ramp next year.
Speaker #6: That's actually a question about detailed guidance, which, as you know, we don't do.
Steven Roth: That's actually a question about detailed guidance, which, as you know, we don't do.
Steven Roth: That's actually a question about detailed guidance, which, as you know, we don't do.
Glen Weiss [EVP: The only, only thing I'd say, Nick, is that PENN 2, more of it will be online in 2027 and 2026.
Glen Weiss: The only, only thing I'd say, Nick, is that PENN 2, more of it will be online in 2027 and 2026.
Speaker #7: Only I'd say, Nick, is that Penn 2, more of it will be online in 2027 than 2026.
Speaker #13: Okay. I mean, just in terms of the commencements this year, then, what is it? I think MLS was assumed—what, early this year?
Nick Yulico: Okay. Then, I mean, just in terms of the commencements this year, then, what is it? Is, I think MLS was assumed, what, earlier this year. Is there anything else that's listed there from the tenants in the sub, where their leases haven't commenced, that you expect commencement this year?
Nick Yulico: Okay. Then, I mean, just in terms of the commencements this year, then, what is it? Is, I think MLS was assumed, what, earlier this year. Is there anything else that's listed there from the tenants in the sub, where their leases haven't commenced, that you expect commencement this year?
Speaker #13: Is there anything else that's listed there from the tenants and the sub where their leases have been commenced that you expect commencement this year?
Steven Roth: I would, I would make a suggestion. Call Tom Wolfley and see if you can wrangle that, that answer out of him, which I doubt you will. I mean, you know, you can use your own judgment. I mean, these are big leases, and they will come on, you know, in the next six months. If they don't come on in the next six months, they come on in the next twelve months. But from my point of view, as an investor, it really doesn't matter that much. So they're coming. Whether they come three months sooner or three months later, you know, that's interesting, but not dispositive. But call Tom, see what you can get out of Tom. He's sort of laughing, by the way. He's waiting. He's anxious for your call.
Steven Roth: I would, I would make a suggestion. Call Tom Wolfley and see if you can wrangle that, that answer out of him, which I doubt you will. I mean, you know, you can use your own judgment. I mean, these are big leases, and they will come on, you know, in the next six months. If they don't come on in the next six months, they come on in the next twelve months. But from my point of view, as an investor, it really doesn't matter that much. So they're coming. Whether they come three months sooner or three months later, you know, that's interesting, but not dispositive. But call Tom, see what you can get out of Tom. He's sort of laughing, by the way. He's waiting. He's anxious for your call.
Speaker #6: I would make a suggestion. Call Tom Wolfe line and see if you can wrangle that answer out of them, which I doubt you will.
Speaker #6: I mean, you can use your own judgment. I mean, these are big leases, and they will come on in the next six months. If they don't come on in the next six months, they come on in the next 12 months, which, from my point of view as an investor, really doesn't matter that much.
Speaker #6: So they're coming. Whether they come three months sooner or three months later, that's interesting, but not dispositive. But call Tom, see what you can get out of Tom.
Speaker #6: He's sort of laughing, by the way. He's anxious for your
Speaker #11: The next question will come from Ronald Camden with Morgan Stanley. Please go ahead.
Nick: The next question will come from Ronald Kamdem with Morgan Stanley. Please go ahead.
Operator: The next question will come from Ronald Kamdem with Morgan Stanley. Please go ahead.
Speaker #6: We're going back a minute. Going back a minute. I was really not trying to be anything other than responsive to your question for a company that really doesn't do detailed month-by-month guidance.
Steven Roth: We're going back a minute. I was really not trying to be anything other than responsive to your question for a company that really doesn't do detailed month-by-month guidance. So with respect, call Tom. Next question.
Steven Roth: We're going back a minute. I was really not trying to be anything other than responsive to your question for a company that really doesn't do detailed month-by-month guidance. So with respect, call Tom. Next question.
Speaker #6: So with respect, call Tom. Next question.
Speaker #13: Hey, guys. This is Matt on Ferran. Thanks for taking the question. Just going to the New York office TIs and LCs as a percentage of initial rent, I noticed that ticked up in the quarter.
Matt: Hey, guys. This is Matt on for Ron. Thanks for taking the question. Just going to the New York office, TIs and LCs as a percentage of initial rent, I noticed that ticked up in the quarter. I was kind of wondering what the drivers were, and how we could think about the trend for the rest of 2026.
[Analyst] (Morgan Stanley): Hey, guys. This is Matt on for Ron. Thanks for taking the question. Just going to the New York office, TIs and LCs as a percentage of initial rent, I noticed that ticked up in the quarter. I was kind of wondering what the drivers were, and how we could think about the trend for the rest of 2026.
Speaker #13: I was kind of wondering what the drivers were, and how we could think about the trend for the rest of 2026.
Speaker #14: Hi, it's Glenn. It's certainly not a trend—it was an outlier quarter. We made a couple of deals where we stretched the TI with not as much term on the leases as we would have liked, but we wanted the tenants in these buildings for reasons.
Glen Weiss [EVP: Hi, it's Glenn. It's certainly not a trend. It was an outlier quarter. We made a couple of deals where we stretched the TI with not as much term on the leases as we would have liked, but we wanted the tenants in these buildings for reasons. We love the tenants, we love their credit profile, and they were great users for the assets, but not a trend at all. I expect we'll go back, you know, to the. You know, we've been around 12, 13% over the last few quarters, and I think concessions will tighten going forward here this year. Free rent is already starting to come down, and TIs are really starting to squeeze. So short answer, not a trend at all.
Glen Weiss: Hi, it's Glenn. It's certainly not a trend. It was an outlier quarter. We made a couple of deals where we stretched the TI with not as much term on the leases as we would have liked, but we wanted the tenants in these buildings for reasons. We love the tenants, we love their credit profile, and they were great users for the assets, but not a trend at all. I expect we'll go back, you know, to the. You know, we've been around 12, 13% over the last few quarters, and I think concessions will tighten going forward here this year. Free rent is already starting to come down, and TIs are really starting to squeeze. So short answer, not a trend at all.
Speaker #14: We love the tenants. We love their credit profile. And they were great users for the assets, but not a trend at all. I expect we'll go back to the we've been around 12, 13 percent over the last few quarters.
Speaker #14: And I think concessions will tighten going forward here this year. Free rent's already starting to come down in TIs. They're really starting to squeeze.
Speaker #14: So short answer, not a trend at
Speaker #14: all. Got it.
Matt: Got it. And then, just as a follow-up, I noticed the projected cash yield on Sunset Pier 94 declined, despite what looked like solid leasing activity on the property. Could you talk about, like, what the drivers of that were?
[Analyst] (Morgan Stanley): Got it. And then, just as a follow-up, I noticed the projected cash yield on Sunset Pier 94 declined, despite what looked like solid leasing activity on the property. Could you talk about, like, what the drivers of that were?
Speaker #13: And then just as a follow-up, I noticed the projected cash yield on Sunset Pier 94 declined despite what looked like solid leasing activity on the property.
Speaker #13: Could you talk about what the drivers of that were?
Steven Roth: Reality, which is our business, by the way. The streaming business is, has some challenges, as you all know and read about in the papers. And, I mean, the fact that we leased 100% of the space at the opening, they're short-term leases. They're not even a year long. So that's an interesting thing, but not indicative of the future. And it's just a matter of our being realistic in our projection as to what the yield on the project will be. So the 10% went down to 9% as a result of reality.
Speaker #6: Reality. Which is our business, by the way. The streaming business is has some challenges. As you will know and read about in the papers, and I mean, the fact that we leased 100% of the space at the opening the short-term leases there, they're not even a year long.
Steven Roth: Reality, which is our business, by the way. The streaming business is, has some challenges, as you all know and read about in the papers. And, I mean, the fact that we leased 100% of the space at the opening, they're short-term leases. They're not even a year long. So that's an interesting thing, but not indicative of the future. And it's just a matter of our being realistic in our projection as to what the yield on the project will be. So the 10% went down to 9% as a result of reality.
Speaker #6: So that's an interesting thing, but it's indicative of the future. And it's just a matter of to what the yield on the project will be.
Speaker #6: So the 10% went down to 9% as a result of
Speaker #6: reality.
Nick: The next question will come from Brendan Lynch with Barclays. Please go ahead.
Operator: The next question will come from Brendan Lynch with Barclays. Please go ahead.
Speaker #11: Brendan Lynch with Barclays, please go ahead.
Speaker #15: Thank you. This is Annabelle Aron for Brendan expected retention rate on the remaining Lynch. How should we think about the 2026 expirations, especially the 600,000 square feet in the fourth quarter?
Annabelle Ayer: Thank you. This is Annabelle Ayer on for Brendan Lynch. How should we think about the expected retention rate on the remaining 2026 expirations, especially the 600,000 sq ft in Q4? And are there any larger blocks of space that you would call out?
Annabelle Ayer: Thank you. This is Annabelle Ayer on for Brendan Lynch. How should we think about the expected retention rate on the remaining 2026 expirations, especially the 600,000 sq ft in Q4? And are there any larger blocks of space that you would call out?
Speaker #15: And are there any larger blocks of space that you would call
Speaker #6: Great question, Glenn. out?
Steven Roth: Great question. Glenn?
Steven Roth: Great question. Glenn?
Speaker #14: Hi. It's
Glen Weiss [EVP: Hi, it's Glenn. We feel really good about the expirations this year, and we're on top of all of them, as you would expect. On the larger block expirations, we expect two of them to renew. So we feel good about our expiration schedule. We've taken care of, you know, huge expirations over the past three years... So if you look forward, 2026, 2027, we're in great shape. So, you know, I think we'll be more than fine as it relates to attacking the future X crews. Thank you.
Glen Weiss: Hi, it's Glenn. We feel really good about the expirations this year, and we're on top of all of them, as you would expect. On the larger block expirations, we expect two of them to renew. So we feel good about our expiration schedule. We've taken care of, you know, huge expirations over the past three years... So if you look forward, 2026, 2027, we're in great shape. So, you know, I think we'll be more than fine as it relates to attacking the future X crews. Thank you.
Speaker #14: Glenn. We feel really good about the expirations this year. We're on top of all of them, as you would expect. On the larger block expirations, we expect two of them to renew.
Speaker #14: So we feel good about our expiration schedule. We've taken care of huge expirations over the past three years. So if you look forward to 2026, 2027, we're in great shape.
Speaker #14: So I think we'll be more than fine as it relates to attacking the future experies.
Speaker #15: Thank
Speaker #15: you.
Speaker #6: As you can
Steven Roth: As you can tell from all of our remarks today, we're extremely constructive about the office market in Manhattan. We believe that it is tightening. We believe that rents are going up. And by the way, rents are going up more rapidly than TIs or tenant inducements are going down. So our projection is, and I know Glenn can give you his opinion, is that free rent can go down because that's a discretionary item. TIs will probably not go down because the cost of construction of the tenant spaces is not going down, and it's, in fact, going up. So we believe the easiest is for the rents to go up. The second is for free rent to go down, and TIs are gonna be very, very sticky. Do you agree with that?
Steven Roth: As you can tell from all of our remarks today, we're extremely constructive about the office market in Manhattan. We believe that it is tightening. We believe that rents are going up. And by the way, rents are going up more rapidly than TIs or tenant inducements are going down. So our projection is, and I know Glenn can give you his opinion, is that free rent can go down because that's a discretionary item. TIs will probably not go down because the cost of construction of the tenant spaces is not going down, and it's, in fact, going up. So we believe the easiest is for the rents to go up. The second is for free rent to go down, and TIs are gonna be very, very sticky. Do you agree with that?
Speaker #6: tell from all of our remarks today, we're extremely constructive about the office market in Manhattan. We believe that it is tightening. We believe that rents are going up.
Speaker #6: And by the way, rents are going up more rapidly than TIs or tenant inducements are going down. So our projection is, and I know Glenn can give you his opinion, is that free rent can go down because that's a discretionary item.
Speaker #6: TIs will probably not go down because the cost of construction of the tenant spaces is not going down. And it's, in fact, going up.
Speaker #6: So we believe the easiest is for the rents to go up. The second is for free rent to go down. And TIs are going to be very, very sticky.
Speaker #6: Do you agree with that?
Speaker #14: I agree with that. Although I will tell you, on the TIs, sample now because you have to produce the results. On the TIs, we're definitely squeezing them in terms of not being as flexible as we were.
Glen Weiss [EVP: I agree with that, although I will tell you on the TIs,
Glen Weiss: I agree with that, although I will tell you on the TIs,
Steven Roth: Careful now, because you have to produce the results.
Steven Roth: Careful now, because you have to produce the results.
Glen Weiss [EVP: On the TIs, we're definitely squeezing them in terms of not being as flexible as we were. So I think the first signal is they're not going up for sure. We're squeezing them, you know, at these ranges that we've been seeing and hopeful they'll come down. Although I agree with Steve, generally, free rents are coming down, and that's been more easy to manage with the deal making, for sure.
Glen Weiss: On the TIs, we're definitely squeezing them in terms of not being as flexible as we were. So I think the first signal is they're not going up for sure. We're squeezing them, you know, at these ranges that we've been seeing and hopeful they'll come down. Although I agree with Steve, generally, free rents are coming down, and that's been more easy to manage with the deal making, for sure.
Speaker #14: So I think the first signal is they're not going up for sure. We're squeezing them at these ranges that we've been seeing and hopeful they'll come down.
Speaker #14: Although I agree with Steve, generally, free rents are coming down. And that's been more easy to manage with the deal-making, for sure.
Speaker #6: Thank
Speaker #6: You. The next question will come.
Steven Roth: Thank you.
Steven Roth: Thank you.
Nick: The next question will come from Seth Bergey with Citi. Please go ahead.
Operator: The next question will come from Seth Bergey with Citi. Please go ahead.
Speaker #11: from Seth Burgie with Citi. Please go ahead.
Speaker #16: Hi, good morning. I kind of want to go back to 350 Park. I think in your opening comments, you mentioned that Citadel kind of had an appetite to take additional square footage.
Seth Bergey: Hi, good morning. You know, I kinda wanna go back to 350 Park. I think in your opening comments, you mentioned that, you know, Citadel kinda had an appetite to take additional square footage. I think they were kinda set to occupy around 850,000. Just could you kinda quantify how much more they would, you know, be looking to take? Or, you know, are you in any other kind of conversations about pre-leasing space in that building?
Seth Bergey: Hi, good morning. You know, I kinda wanna go back to 350 Park. I think in your opening comments, you mentioned that, you know, Citadel kinda had an appetite to take additional square footage. I think they were kinda set to occupy around 850,000. Just could you kinda quantify how much more they would, you know, be looking to take? Or, you know, are you in any other kind of conversations about pre-leasing space in that building?
Speaker #16: I think they were kind of set to occupy around 850,000. Just could you kind of quantify how much more they would be looking to take or are you in any other kind of conversations about pre-leasing space in that building?
Speaker #14: Look, the Citadel relationship between Citadel and Grenada was important. These are conversations that are still taking place. The Citadel team is still making up their mind as to what exactly their requirements are.
Steven Roth: Look, the Citadel relationship between Citadel and Vornado is important. These are conversations that are still taking place. The Citadel team is still making up their mind as to what exactly their requirements are. And so as soon as we know and they become firm and agreed to, you will know, but not now.
Steven Roth: Look, the Citadel relationship between Citadel and Vornado is important. These are conversations that are still taking place. The Citadel team is still making up their mind as to what exactly their requirements are. And so as soon as we know and they become firm and agreed to, you will know, but not now.
Speaker #14: And so as soon as we know and they become firm and agreed to, you will know, but not now. And on the second part of your question, the energy and excitement around this spec office space is excellent.
Glen Weiss [EVP: On the second part of your question, the energy and excitement around the spec office space is excellent. So we're presenting this, the project, to many tenants, as small as even 50,000 feet. So if you think about it, tenants who are expiring in 31, 32, 33 are already asking us to present the project. That's how much excitement there is in the market. There will be nothing like this available, in New York, and people realize that. They recognize that between us and Citadel and Ken Griffin, this will be the best building built in this city by far.
Glen Weiss: On the second part of your question, the energy and excitement around the spec office space is excellent. So we're presenting this, the project, to many tenants, as small as even 50,000 feet. So if you think about it, tenants who are expiring in 31, 32, 33 are already asking us to present the project. That's how much excitement there is in the market. There will be nothing like this available, in New York, and people realize that. They recognize that between us and Citadel and Ken Griffin, this will be the best building built in this city by far.
Speaker #14: So, we're presenting this project to many tenants, as small as even 50,000 feet. So, if you think about it, tenants who are expiring in '31, '32, '33 are already asking us to present the project—that's how much excitement there is in the market.
Speaker #14: There will be nothing like this available in New York. And people realize that. They recognize that between us and Citadel and Ken Griffin, this will be the best building built in the city by
Speaker #14: far. And by the
Steven Roth: By the way, you can tell we're pretty damn proud of it.
Speaker #6: way, you can tell we're pretty damn proud of it. I'd like to
Steven Roth: By the way, you can tell we're pretty damn proud of it.
Seth Bergey: Yeah, that's, that's helpful.
Seth Bergey: Yeah, that's, that's helpful.
Speaker #16: That's helpful.
Steven Roth: I'd like to try and end up today as close to 11 o'clock as we can. So it's 11 o'clock now. So how many more questions do we have?
Steven Roth: I'd like to try and end up today as close to 11 o'clock as we can. So it's 11 o'clock now. So how many more questions do we have?
Speaker #6: try and end up today as close to 11 o'clock as we can. So it's 11 o'clock now. So how many more questions do we
Speaker #6: Let's try and end up today as close to 11 o'clock as we can. So, it's 11 o'clock now. How many more questions do we have?
Speaker #14: This is it.
Glen Weiss [EVP: This is it.
Glen Weiss: This is it.
Speaker #6: This is it? No more questions, really? Well, anyway, thank you all very much for joining us. We're very excited about the business. We're very active.
Steven Roth: This is it? No more questions, really? Well, anyway, thank you all very much for joining us. We're very excited about the business. We're very active. The activity level, as I said, has, you know, is palpably double that, what it was, even as recently as a year ago. And thank you all very much for your support. We'll see you at the next quarter.
Steven Roth: This is it? No more questions, really? Well, anyway, thank you all very much for joining us. We're very excited about the business. We're very active. The activity level, as I said, has, you know, is palpably double that, what it was, even as recently as a year ago. And thank you all very much for your support. We'll see you at the next quarter.
Speaker #6: The activity level, as I said, was palpably double what it was even as recently as a year ago. And thank you all very much for your support.
Speaker #6: We'll see you at the next
Speaker #6: quarter. Ladies and gentlemen,
Nick: Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.
Operator: Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.