SLG - Earnings call transcript Q3 2017

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Operator

Thank you, everybody, for joining us and welcome to the SL Green Realty Corp’s Third Quarter 2017 Earnings Results Conference Call. This conference call is being recorded. At this time, the company would like to remind listeners that during the call management may make forward-looking statements. Actual results may differ from the forward-looking statements management may make today.

Additional information regarding factors that could cause such differences appear in the MD&A section of the company’s Form 10-K and other reports filed by the company with the Securities and Exchange Commission. call, by may SEC conference measures non-GAAP today’s defined as Regulation during the discuss company financial Also G. company’s differences the The comparable GAAP GAAP press company’s of financial in on be the selecting the website to directly earnings. non-GAAP the the reconciliation the each non-GAAP measures release measure financial financial third measure comparable measures and XXXX between each most at quarter found by financial can discussed regarding www.slgreen.com,

Chief the Executive two those please of you Marc portion call Realty over will Please I turning participating questions Q&A per ahead, Holliday, Corp., Marc Before you. to I Green Holliday. go Officer now to the to limit Thank your call, SL the ask turn of over Marc. person. of that the in call

Marc Holliday

City the in job conditions is to activity growth and in of healthy exceeded last York uninterrupted everyone, with consistent job were market quarter you been strengthened throughout the overall private results thank the supply and demand major new year’s us a already that year. the up guidance the own averages, million by coming commentary of sector met vacancy for growth and in very on leasing portfolio. financial fourth for X.X see feet results absorption past that in third that’s is five-year activity highest keeping reports, that quarter services in quarterly our has the XX% million the quarterly with about Leasing in transaction is New X today. primarily two associated The October trailing XX net tick level within contributor and record-setting a square third X% Midtown, The XX%. of totals. we total lease afternoon, in increasing out leasing square in The its Good has million activity for market, is reflective year-to-date that of Okay. one sizable. the quarterly amount a activity The of of activity, experienced feet and which big third feet approximately a with leasing activity absorption increase Midtown prior our show joining the topped leasing are this quarter as between which pipeline and Total reflective looks leasing net the are just registered years. citywide was driven leasing quarter square

commercial of alone. the of the year X.X which same-store trended taking two trend operating we’ve prior own was to feet and done square a of square that from that in the feet continue. able in income net Manhattan two increase portfolio, office quarters X.X% our expect QX million level our within office portfolio, of year-to-date sign been down leases And we nearly So to XXX,XXX up

million foot Our and leasing square or the last sheet for for leases a out deals amount we to volume consistent think, about signature year with of X.X XXXX. all to X.X larger X.X is and expiring have the guidance continuing and range quarter the we deals more feet, hope in goal approximately QX footage mark-to-market about deals pipeline square square we notwithstanding be is less was the of that account strong pipeline, in stretch build. be remains of at that pipeline spoke – of sheet of term credible total would results the our negotiation XXXX. feet the I leases when double XXX,XXX had feet that square which such million XXX,XXX was over of beyond it square that square term close feet, in and on a for feet of volumetrically XX%, within This would XXX,XXX And which September, fourth this early that, of for this signed. we in than the our is million the The square goal,

and well upside in-place square It’s of future trend asset Plaza. with increase in excellent consistent are attractive Worldwide tenant hope reverse and that below market While to year, the leasing interest we the venture spoke to demand volumes this price financeable It on was in made availability fixed a also in is construction a as roster. closed on interest see given QX second-half itself, we with I that as we that and rate reduced for foot highly closed West the evident of that obviously mark-to-market financing that trophy a XX-year also average compressed that was this rents of mention returns low a with up. sub-X% new us. going opportunity per in highly rate the Side appealing joint leases due simultaneously acquisition want the I acquisition. is space to significant our yesterday, to relatively The the

an our and other done definitely are provides with whom of now. The us in asset with continuous RXR and outgrowth our quite of with in presence very a Columbus of some NYRT be as partners town Broadway, XXXX Worldwide I management think well venture of the And look investments, to to quite the forward over partnering that in such an as been Board yesterday greater that with X we close time. area we part we Plaza be and and with having and NYRT with portfolio. on at we’ve period of us we this have a with So business time dialogue you had that saw friends asset Worldwide pleased for Plaza longtime dialogue is

saw front, the to to to extremely long-term. We’ve asset we of that disciplined for appreciation the last continue to and a buy will five-year use investment million yield of attractive back in that at of an a of $XXX sales the I through proceeds proposition investments with in internal the capital cash activity the benefits shares believe stock markets not on and a approach investment we this funding consider term. issued we week our near X.XX% Additionally, be shareholders rate by repurchases something bonds interest to flow taken stock when corporate we company, debt. approach and

return years of to to market bond Our rates. of deliberate the the culmination the is the access unsecured many attractive ourselves efforts competitive community and to ready bond within position market bondholder for at

But Matt, Before in and the at discussing were opening the Q&A, to quarterly minutes highly this I the turn over few that up year. some with cases Matt beginning of below will a to spend of were. want expectations in results, year were given our to earnings results our some throughout consistent as go it we’ve guidance on who detail through the why out guidance consensus where And think, what were, the I numbers track that characterized earnings of wrong. why there I probably think just and we’re will was exactly

Matthew DiLiberto

the costs about these estimates, FFO of of off first per estimates perspective, don’t share of write-off internal to been the we to And we to, was going to night, financing numbers. think so note don’t NOI, quarterly Marc. is rather from the than and points. high $X.XX we statement Marc of want that to are quarter do guidance have street XXX of items, a year. all I’m provide the nine said, Obviously, Thanks, Important for our reported for results plans any so would $X.XX, below get a street’s related one there share. $X.XX by we GAAP perform of to net something but of which unamortized questions, deferred the In at ahead non-recurring properties just continue months must through have from click income Park Last the to hit refinancing your item. line actually as the a plan our on the

the the $X.X per about the saw million rental quarter, XXXX Looking the reduction it a received third of at the only as year, lease. at quarter from rent revenues in Broadway, second in specifically which percentage is to recognized quarter, $X when of relative million is we second of primarily

upon XXX redevelopment. commencement the about of XXX the recognized also our at of million We income in second $X Broadway quarter FAS

been The million NOI source years this still also normal such far hit that only news in revenue. quarter-over-quarter we’ve income by to tenants coming July NOI in cash X.X% to was expected in lease is see The X.X% different. is year. million our so sold taxes been increase and tend over see NOI results be lease same-store the potential which third the same-store reset news NOI in as lease we first of we’ve to income expect which the cash any From highest a of performance very the result, expenses, rental good of is XX our guidance, reduced us reduction that for X% always has of Towers, bringing the provided of excluding not the $X quarter. quarter do is by Sanford million or X% utility telegraphed year, the second revenues shortfall on that a and We quarter. million revenue last The X, a maintained. fourth This expenses This cash news, unfortunately about the in average, in same-store weighs And a much and same-store increase termination shortfall bad with we news year, the nine quarter has the the the on we real the reliable improved termination every This during is there including coupled revenue and quarter quarter, of as bad versus Against $X.X million good a cash income $X.X stream. third That the year, historical recorded that of story. estate income. operating seasonality $X and third that’s projection occupancy for closed terminations place rental are our perspective, quarter. as months, guidance. don’t terminations in $X that customary increased earnings to

companies we same-store expect income, within However, the excluding of performance, lease that the to be effect look at customary way termination range.

sold in less investment income million recorded of second as forward, or serious we not income to XXX opportunities XX, Nothing everyone our as numbers. portfolio. call as placement the guidance unpredictable, the that going inclusive range as filing want the and to again we we of XXX a their we in reiterated the our quarter in X look the all, adjusting it’s continue well performance XXX in our on as quarter, X September portfolio X-K portfolio, view at issued as recorded on in and runs with or back adjusted upper-end. property, are while a Herald the expectations. share, the we’re would Certainly, to guidance time. So the saw a income quarter, dropped our this reliable now wrap on $X versus our results put of our everybody we that third preferred remains charge they in the we previously the the $X guidance, and after our City. and of quarter, Relative open million of $XXX receive where the year fourth non-accrual completely whether puts provide million of as the going were the in our the the There take stream at result In obviously million numbers upon I that third that achieve sure mask like expect preferred investment upper-end look to to we investment termination to And in All York the track guidance was of underlying to in debt the on quarter an also as JV line I to Third. Herald taking maintaining would hold, it debt third previously closer income and midpoint million, to to we we $X we repayment investment revenue scalable the to the the we can us over be the the million Q&A. now at would, shortfall projected the we unrecognized be which of statement us second find of necessitates of recorded it in on of lease a equity since highlighting refinancing non-accrualstatus, at not quarter Square excluding regard per August. first that, performs income to FFO $X healthy can still debt should well the income status at income $XX.X guess, at target, With income of investment a termination sponsors we’re to result Park on New With invest attractive guidance up up but equity the XXX range. returns early on on the is full-year investments interest a to range, with business range do

Operator

comes first question Instructions] Our Craig from with [Operator Mailman KeyBanc.

Craig Mailman

guys. Hey,

if deals in could Broadway give out you maybe an of the other the Just you curious status market? update XXXX any the sale, or have on may us

Andrew Mathias

XXXX, Andrew. as negotiation it’s last estate. of complex continues real indicated Sure, it be in JV of lot than interests sale to on a call, the are we sale more

So track, the taking close several and XX of us transaction I saw the time XXXX you on complexity suburban still doing based on Street think quarter, in Court the that. sales we’re but its

Craig Mailman

mean, that square out of could by close you the Marc, quarter-end what for at anticipating I is of kind signature, then, helpful. this That’s XXX,XXX point? And are guys feet

Marc Holliday

to mean, term some also. I will to square term X.X migrate sheet a deals addition that that, close there’s of feet million about in in Well, sheet and

that So sheet. always lease our portion goal plus close about for documents of some term signature negotiating that’s just is out typically all hope to to

that in so put plus us percentage makes It of But at X.X, in some to we traditionally $X.X low. pretty XX could right high quarter. in be attached got So deals portion least provided that’s would sits sheet category as that’ll a XX the XXX out high, be and it the of the it. million third far term lease around everything

Craig Mailman

One Vanderbilt? comment you any includes if of that could And

Marc Holliday

into chasing We leases really I and year. market. on I a go any any or mean, this No, kind the is other sign deals we’re of whether that it’s detail composition One negotiating Vanderbilt a XXX of that’s competitive can’t building.

buildings those are think, of I and leases to to the any until – with when under until regards keep finalized. we of like wraps sort around deals illumination and of any

Craig Mailman

Great. Thanks.

Operator

next [Operator from Instructions] And our question John Kim Capital comes Markets. with BMO

John Kim

year. wondering was spread quarter, as was to indicated expiring vintage I on leases the the was of led the for what far rest I re-leasing low that But it’s this X% re-lease be cash quarter? the afternoon. were you quarter what Good that below as spreads the relatively mark-to-market achieved of this curious this

Marc Holliday

I have that’s they’re our we that I’m like look, not if about vintage leases to think, to now were lease is XX-year XX we’re I sufficient average when deals. relative being talking as sure, probably the you’re replaced. to well, signed but not mean, term say, years,

that have say, probably necessarily longer. I’d some I that? other cases, maybe to have close we In Do rolling but together, We guess, maybe We we are context, have off. pull that to, But deals, take look. XX-year a anything to cases, but can. don’t general, Matt. they’re look seven, at five we in in plus it But in that certainly to

Matthew DiLiberto

that’s to quarter. Not, not – I one one leasing quarter make activity the on in my it’s want fingertips. I just based clear, on the all any mean,

our year, to the was through in had we early said pipeline nine to the we deals are XXs the well. and that we the had lower. And Marc expectations, sign as expect quarter we’re for maintained as And objective. that XX% we So full-year the at that highlighted mark-to-market had said XX% fourth our but months mark-to-market well in XX% exceeding

X% quarter. when XX% to a too on much we’re that a sticking XX% full-year for focused So the to

Stephen Green

buildings color really of it weighted signed on just at the what just And was. me skewed deals mark-to-market line if buildings. better guidance was Let you the by majority bit a or had a our it. look the we’ve to – that all two give average that portfolio was across you little to than add to was the the of in It

look portfolio, you where a the not XX off. where had buildings was deals X% mark-to-market for above rent If in well was. if guidance line of well whole So we our of burned high couple plus two that had those

John Kim

leasing you underwriting square banks that discuss the fell achieved into whether range Okay, to just not that’s Vanderbilt, can One also or helpful. per And the quarter with XXX of this on foot? and XXX then your German

Marc Holliday

Stephen?

Stephen Green

assumptions. safely It our underwrite was within

Marc Holliday

it it. think exceeded I

Stephen Green

it. exceed did It

Marc Holliday

underwriting. it it slightly think It the within certainly, – It’s exceeded. parameters, I early. was was all exceeded

that in and expect and rose with sign whom the schedule we anything respect, mean, we but there welcome banking happy so Vanderbilt, underwrite. have I organization didn’t them opportunity and to we institution were a welcome So XXXX, to terrific in we’re ahead our of One and

John Kim

the at? that you floors exceeded, range was to floors relative that were where say exceeded just When I leased mean, – above or

Stephen Green

So, rents been exceeded obviously, for leased, underwrite building. lease was that the entire average portions And building. And have the at for that of for the different we floor weighted underwriting. the we’ve

John Kim

it. Got

you. Thank Okay.

Operator

question Goldfarb O’Neill. Sandler next with Our from comes Alexander

Alexander Goldfarb

afternoon. good Hi,

is just if have The if Cravath about you you space? investment through – perspective, sort question they of of return to think and guys on how if renews out Worldwide don’t, Plaza, first meaning a that and yield you relet us can from walk that they go that,

Marc Holliday

overall value some market. Well, lease the now in market, I’ll tenant here of think it’s very the deal and obviously average and to XX% in. is for create the think think the of we upwards financing some tap some a which three opportunities well that I our embedded is Cravath to returns. rent road X.XX% in but will David, because down know, don’t to value, the We cap able long event enhanced or. fee put down can those be you we’re position with the maybe place, double-digit Nomura sort way is to – start be was the so are should only building we and Leverage returns of chime recapitalize in, the the yields of below dated. return add below – with primaries deal going they increased, and anything rate occupy those rent creation I that road. overall, are evidenced terrific into kind efficient The X.X% will a mean, opportunity others we of because be tenants be five building there certainly want you to in years David I the took got in of –

David Schonbraun

cash a going I cash on high yield. it’s think, in

has of more. Nomura Cravath think, has seven I term left. years

to it’s a kind there’s a the lot the with Marc a and I work think market of said, transactions, deal. As have so of upside of we and tenants time optimize below lot

Alexander Goldfarb

you I elsewhere, they go going to – don’t they’re choose advance. have David, and you if But give mean, ahead to few they to if in if go presumably years a

So from just impact that what would your transaction? just have yields if backfill your to the space, curious be you on underwriting the curious go

Matthew DiLiberto

I that think the they’re we’re comfortable and rents so market, place with in the are consistent.

Alexander Goldfarb

on whether Okay. next the see, going you fourth the operating from at sort – we’re going where guidance, or in quarter? a increase like where Matt. any is on but items in to areas increase expense either maybe are Are any or particular of on that’s Matt, there this question And to bug it’s to of quarter. – something we X.XX or of sorry $X.XX sort sort seasonal sort imply for of drive the income it one-time the of third

Matthew DiLiberto

big Two things. Sure.

kicking right And million so have $X.XX property then you third there in million various seasonality and charge properties. of or in at just another leases level, First, then couple million the a quarter, you $X dollars probably at to was $X back. add is another so just the that

primarily property-driven that quarter, quarter. non-recurring the then in we and it’s $X.XX third the took So charge

Alexander Goldfarb

Thank you. Okay.

Matthew DiLiberto

Sure.

Operator

with comes Manny next from Korchman question The Citi.

Michael Bilerman

curious the stock on have up. have cadence how forward on volumes out to work line? either in some would of you is those bringing to buildings market, front have those Manny. done? how Lexington think you to announced before Bilerman relative confidence when the recognize, to go you’ll when Michael capital still of that I’m sure to you about or here disposition your are with XXXX XXX either the put and those additional be But And should I’m acquisition It’s other the things and going teed I and market about negotiating you’re investors decisions the think Marc,

Marc Holliday

we’ve doing long been for this Michael, time. Well, a

think harvesting So there’s and approach otherwise is or here reinvesting typically don’t the shift I which in any cadence gains business, how opportunities. terms we in in high-quality of

think, what I we’ve that’s done.

and good to think new Court We think, the those Worldwide done We a for total approach And is through that’s we’ll very have will using make NOI would looking late, well historically, with but it asset of the trying in returns. – of us lot same-store of it’s in to to Plaza. you to do. as attractive XX very we’ll proceeds acquisitions one do always investment And building. stock, uptick also do to a to trying know, think get about that measured, continue returns building, on is CAGR, and additional, regenerated also lift I that selling and, continue I way our XX lift do efficiently guys closed we a opportunity, quality, generally an use balanced tax assets sold trying those the value, it’s into at Court of portfolio deal, proceeds. lift what which for hopefully, attention proceeds but

as opportunities with when we’d sort from we of a buybacks returns call, So and I acquisitions, of asset compelling that. stock big think the question standpoint being I the boxes was see, you’ll asked, the component our check be said on doing when the think, all last

Michael Bilerman

in generated? expect quarter this we fourth of the Should at proceeds terms sales point in

Marc Holliday

one Well, Andrew if XXXX questions two try or I a we’re ago and by somebody. partial complete just sale, said, think, calling thought question, Andrew track a that year-end. I about to sale, mean, answered on interest I you’re

close if more have yes, we would this case that’s So, in to I the to quarter. say, that and expect

Michael Bilerman

comment, clearly entire guidance. lease I than be I you the would term NOI good. providing one-time was breakout would same-store analytical or higher that, lease providing think But agree Okay. know something I any then without reported. be would And what a with quarterly and think fees, items, just significantly very provide fees do won’t term And community then I just you

I calling that impact these quarter, out? think numbers come not may the will when any out So negative the get reactions some one-timers of help

Marc Holliday

term Yes. them fairly with characterization I’m to projectable to the well terminations lease fees one-timers is refer be not have where history of recurring as… one-timers. I probably as to lease – and the We as sure, fees I XX were of years could think extent would misleading that agree the

Michael Bilerman

I referring wasn’t to…

Marc Holliday

street as don’t want put terms in there. you. It’s we’ll going the under I at it I down. our better take to under. guidance anybody to debate in say, within, up, a job look it’s a almost And But few, X and track than thank as I’m we’ll in But it’s it, It’s projecting in, we it. out, years, million, look to of X so that million, many able that at many whether instead if year-after-year-after-year good it we review, very take you that we’re when any, December. talk think record of years think, meeting guidance, about our move meeting years, on goals. I are very do good – of we well, in we’re it’s

Operator

comes with SunTrust. question Our Lewis Michael next from

Michael Lewis

Plaza. intend the valuable, to I more call two York pretty when come that, a REIT could of capital be wanted apparently sell building Thanks. to thinks reserve that to New they there sizable just back it. other and half Worldwide There’s years it, much

And opportunity? spend leased that leases. to going be, I or it you are on? Given that going on what capital it’s of what you of mean, is kind kind long-term to same see spend well do the

Marc Holliday

be we’ll think out and when both ways been along below it’s even hands. You us value, embedded for we able a tenant to create NYRT’s to ask over I asset into job improve through It’s great that’s leasing about profile, situation, I with we’re really know sort I our prior sit develop return strategic Scott, other well have really roll are upside. that think, We physically, proven you going it’s a get want asset rents what, here not. of period the yesterday to And into do, that the business don’t to a approach figuring I them asset, true. maybe significant or out to cared record – the the maybe plan, great great we the in it. I have to $XXX track with of think, to – that I and what And assets roster. market, because we believe think, that wouldn’t – think years. be to million whether close achievable will maybe of step we’ve whole spent their can’t mean, and we to it’s their I generally, right ways, we in sort some together objectives just now have with the transaction want

in are circle and generally hold that that of always, those in portfolio. I’m going assets to terms full we say So, we’ve come on

very we’re Scott be to So excited with working and with NYRT.

earlier view the move two. certainly will in five. near-term, We – it referenced to heaven as and three earth and I try to they

create The that’s think, value. capitalize and and semantics. is the try near-term, then some the point I let’s in let’s value on

Michael Lewis

it also is size of a the asset. this a was a which small was like It that book great. period, you quarter. that has your a quarter, the up question gotten just equity wondering or looks preferred percentage was as My you’d time the second is opportunities of upper in and had if function little the see book. maybe active maybe Okay, debt about like that just And less limit to I towards of as

curious two just the is either to there of those things? due So if activity

David Schonbraun

Dave. It’s

positions have other quarter. not are to obviously, business, lot a pipeline, But or to we large significantly sold without have keep now. it’s those origination either to fourth sell for levels there levels see some of or pipeline, we you’re certain in going said we’ve going the least I Now, We it assets and But growing scalable either to the syndicate we’re it’s we the volumes, look, or a right a we’ve quarter. book it as think, or a asset. we’re lower large pipeline at last payoffs, lack a said, have in for of actually at have growth

Michael Lewis

you. Thank Okay.

Operator

with Yulico Nick UBS. from comes question next The

Nick Yulico

Thanks.

York think points negativity there late. office I market on New been has the of of focal two City

First, are secondly, effective year concessions? higher – past some amount the by over And meaningfully market rents talk is investment of year-over-year. sales down down the the net because

think I’d as that? I that thoughts not City somehow, market love the office York So question as is it recent this in on is, years? does the hear to mean your attractive just was New

Marc Holliday

One Well, Why investment has don’t let’s – there. sales. first. one Andrew? concessions, investment leasing we with there’s sales deal say two questions hit to

Andrew Mathias

I first. should go

obviously, the are year-over-year. down volumes, I think

that I velocity very of you’ve were the and which were of Court, West which buildings, think at was Bull of the is which XX with think And very buyer, of in done the lot a also Avenue, past Third seen market Red I the markets. buildings trade trade for XX a a our trades, Street positive of trade of on the reflective all Twitter XX financing lot and Third XXX and at NYRT a the the attractiveness of and very announced assets, Japanese pricing. strong the Side the with recent collection,

velocity a it. that not pricing of because transaction the there think is do and the market financing amount activity obviously in But there’s I volumes of healthy been impacted. the has impacted, been has reflect The of So attractiveness the market.

of of missing you’re of there’s some still think [indiscernible] other out amount of but couple of the like the velocity some bellwether or there. trades healthy I very last large So a years,

Isaac Zion

the I by was of last hit billion about volume worth think last of the And last decade. year the $X to so largest in And month billion $X in assets in terms just is way actually Isaac, year to This marketplace. or second the the have add on,

Marc Holliday

effect, I concession Speakers] so is And effect real a then is, Steve think a net on [Multiple net

Stephen Green

can to so specific our market, you I the budgets. net higher year-to-date tell think offset how originally the obviously but effect the actually rest net But returning are square I that budget, higher net important commentary. we rents. concessions effect measure is on X.XX the relative to budget portfolio. as effect is the And feet than up over million are is of by on So Yes, our don’t is to

sentiment. further market evidenced trying we than what better think reemphasize I that people the that’s and the to is to people some So, keep

Marc Holliday

I you’re for just a shouldn’t revenues. time cost or is build TIs just out to look getting that’s would of a over I of will space the a They generally is what you ultimately other construction. forms natural of and level differently expenses cost even much level at results mean, due of – rise at Yes, rent. to that’s acceptable what to than

Over costs that construction those that. the hence rising, years, for TIs we rise, budget hence are the

on We’re our right of budget probably in TIs. terms

– guys entire pretty the and the line numbers, they’re You quarter they in really were with year. much prior see the

Yes, Is So better. they offset us. line with effect Yes, is up it guess our the portfolio-wide we’ll maybe, is, are for net in a if answer if no. as they’re yes, little – achieving? by which do the are we and question budget? also And rents, on materially or higher? higher it I

of customary level certain to for required kinds amount in typically a the in you of it’s can it’s down, But balanced, hot drive So are to relatively general deliver and like spike. – these them is markets, we you very markets, that bad finish those have and now, acceptable renting you see have that levels. at in concessions tenants are may which markets in

Nick Yulico

Okay. It’s helpful.

Just one in since leases I mark-to-market on X% of about number the seemed past quarter been a low double-digit question, look of lease If in the commenced mark-to-market the you you’ve at the the over on talked year. signings.

was Thanks. commenced that drove some lease wondering – well? if that there just that number I’m single So

Matthew DiLiberto

it’s Joe, a of timing. It’s Matt. all matter

that a probably So, drives quarter it something lower something normalized there all and there future back there’s will in timing. but the then that yes, to be it’s in drove level, the

Marc Holliday

pool Speakers] It’s still the [Multiple leases. of same

Nick Yulico

Yes, when... matter it’s a of

Marc Holliday

commenced, just [Multiple is but… Speakers] leasing

Nick Yulico

Yes know… we

Marc Holliday

the showing as next be were year. leases signed leases up and will announced That commenced will today previously commenced leases signed –

it’s shouldn’t know there’s any I – any don’t be real mean I leases same difference. that of the So pool eventually.

Nick Yulico

Okay. Well….

Marc Holliday

question on. Next

Operator

Our comes James with next question Bank of from America. Feldman

James Feldman

in fourth be out what into we’re looking market coming of or of the it quarter talked leasing the now tone sentiment I more scheduled and good on Great, and you summer ahead the leasing thank you color and like fourth earlier activity squarely I just know can to next of seems the financial more for you kind year, large the pipeline quarter. give into is Steve, is of guess, changing same? fall you. a and about that just might

Stephen Green

who strong brokerage a Well, just square year XX.X very there’s are reports to million XXXX million I under the at very a strong have third look to of been you’re quarter by comparison think through for just street market entire for was third leases signed signed, feet is, the year. of wise of where XXXX quarter if there year, many XX seeing we’re track was the hitting you what on now,

that our that sort year deals that that’s in less we’re it’s dominated very A to a it’s say, right available TAMI more a have and legal a product of okay have could financial of services, function extrapolate not demand, historical primarily TAMI quarter and the in in financial terms. we of negotiating by of TAMI. lot seen leasing third You we’ve the less now, And good going function by we’re legal now. and the portfolio and were that

price diversity been portfolio. wide I from don’t change either of depth market overall more any our tenant place it’s than we’re the what what or the think of where other we a the there’s real been a got cost, product we meet we’ve same And from to in of all in So that year said demand across about safe the we’ve targets. saying think point

James Feldman

and might pulling market? can capital stepping – back then And seem be that is transaction that thanks. for means country Okay talk that which just guys about on be who up, foreign you there? shifts Who any to the what

Marc Holliday

having on Japanese a interest interest deals of from and out up, a the clearly lot stepping China lot the European and steady pending fueling debt some of the still capital, of now. they’re And meeting Korean from the Canadians. side think I there pausing they’re of outcomes

James Feldman

And any assumptions? change underwriting in

Marc Holliday

think No, underwriting the as submissions are terms debt from growth still in people static both people similar the the underwriting brokers no, are we’re assumptions pretty of cetera. getting that indications still I et we’re and the getting

James Feldman

you. Thank Okay.

Operator

from Our next Stanley. Morgan Nick comes Stelzner with question

Nicholas Stelzner

you that you if NOI on said you hit expect to questions, same-store the growth termination Taking the range income. X% exclude X% to

curious the of You – got big that will just are year? there the so the there through today, you get what items ticket end X.X%

Matthew DiLiberto

in X% in trajectory have in the earlier, slightly continue portfolio, the just we we seasonality part in fourth you happens the expect to the quarter, quarter, fourth of beyond achieved so the property third I better. for maintain that to quarter. the expect you in leases that things the fourth quarter although need we get some and do I of to better highlighted X.X quarter to kind be will definitionally then to Well, due the is fourth some And kick mean

Nicholas Stelzner

then with One One you how I originally one in at it’s there? know lease early the Okay, great. Vanderbilt, your what the And characterize and how rents to just but on conversation and on you do the already, systems lease activity tenants other Also you one tenant Vanderbilt, expected? terms discussed compare

Stephen Green

We’re presentations of seeing good we’re we tenants the the doing presenting are strong lot both seeing enthusiasm from tenant a we’re and and brokerage a that to.

with we So tenants. as on prospective and as that’s dialogue think why the plan having expectations far we’re we’re that right

Nicholas Stelzner

you. Thank

Operator

ISI. with from comes next question Evercore Steve Our Sakwa

Steve Sakwa

assuming I too the or expiration I’m foot I kind hosting process at ahead I I in is jump thought asking like schedule, current an a average to on is XXXX. Investor page at of you going want don’t today. and the per rent XX But of far market that it know Thanks, looks to your look so updated when sort lease where guys month so, in look are be Day to

and You’ve a asset. consolidated got XX% down just or Can JV uplift roll larger maybe both you on on talk the unconsolidated in the about slightly buckets? what’s a going almost those of on

Matthew DiLiberto

Matt, think includes about and important to it’s schedule Steve Yes that’s it retail. so

it’s not So there. just office

probably XX% is influenced side on think I the up consolidated the by retail.

we where some more XXXX, what’s do more the you give we we’ll guidance December on schedule. couple – the pumped have numbers when we and that X to point. but – come leasing a think expiring maybe view lot in going of gist you in up On at leases in But a beyond what similar that’s of leases third here, much with quarter nothing what you have this escalations rents. have the we’ll the in-place that with saw older-vintage JV side, see But I of out obviously on a those

Steve Sakwa

then just the business to mean, Okay. in buckets: I Marc, to and share can you of buybacks. Acquisitions, back I kind of And guess, sort thee deployment. all capital appreciate trying DPE play going I

the want mean, returns, one guys difference up acquisition you a buyback there sort spread how I’m about of of Just they just kind is of an sort thinking DPE? mechanically? in or at it of the you look when you sort do think the stack sort I versus about And, to another? versus how that hare of a

Marc Holliday

but the just Well, the is, returns, obviously, up is their returns. answer is, risk-adjusted there not line

Andrew Mathias

There’s also tax considerations.

Marc Holliday

multi-tenant underrepresented and with overall platform deals, And to it, purchase in platform, market, reasons the which will And considerations. more these portfolio financial the the – won’t moment scale more advantage. deals be be asset you increase our building to and other lot of strategic to DPE, presence more And where own situation. of of than the we there’s have because that of do There’s it, pretty tax it’s incrementally stock will, representation. with something or we to do, own to considerations a compelling, ways buyback. and is control That look a you a that’s stock literally exercise, ability But cheap relationship funny to and you economic city already to a just use we sometimes let’s great the – if up may It’s our we as are want and particularly well, a parts in more on scale you pretty portfolio creative it. stock and enough – also our if buyback the also rent a a in order asset. of buyback. it’s IRR is why call a risky, not have unlock options tenants, want get be, in A trading time you embedded at the might tenants growth of not own lower a kind

as it – look of the as at of risky equity only We form buckets look at Some form those business. only had one of the significant a three that that the subordination. people

yet making you’re a approximately we’re sometimes because equity not have on without XX% X%, XX% dollar we’re DPE, left risk. in So with still less range, X.X%, typically We cushion and average, a XX%. that

of could on buckets for equity basis, that’s subordination. the of because one risk-adjusted champions argue, the So you that a three

doesn’t create to also provide it pipeline, consensually to necessarily However, able DPE the you’re and the equity which obviously, unless successfully an past. we’ve that presence bucket in in use done sense scale

are quantitative reasons. qualitative are reasons, So all kind there are of There exercises. of double-digit them

we mean, Thanks. time goes to as the themselves, are basis. very buckets, those which without to when deploying opportunities among the into are relate usually right that saying. we And So, equity deals? do three I is on best best buy And pick feel three they the buckets But rational I we stock? think a now,

Operator

[Operator next Street Advisors. Jed Instructions] with Green from Our Reagan comes question

Jed Reagan

Good morning, guys.

I that just I be then million just interested of curious you number. you market, like, to think comment you or feel where if guys you might the underrepresented. target of had $XXX the put made an acquisition reach parts about I’m on for year. more you was And other expect the

if a like about them? little bit be might and can So just talk why areas you you those what curious

Marc Holliday

$XXX Well, that’s on target, not net that’s gross a equity the never always million, been. has

as excess, instinct is, we XX% I so in we’re or my So Worldwide, would. that close very somewhere between guess, said,

Matthew DiLiberto

Of course. Yes.

Marc Holliday

in have more It doesn’t don’t pipeline. we mean

and of fourth to active we’re now. deals So whether acquisition pretty And right we’re the a be where want working that now. on But right quarter front. the deals to those little beginning are some on pipeline tell front or early XXXX, on we seems disposition too much

areas, particular. metrics, nonexistent Midtown we think to of presence big East great has lots South. is As an market one in market, parts that And major and have demand invested as a in the to very the we of Midtown the other almost in example, obviously availability, it and low relates supply are

So real acquisition. I’d one areas say our that’s of of preferred

buildings Worldwide are the South area, for Our and we’re types And which tenants of somewhat the XXX demand own Park acquisition We and limited particularly We Ave. Avenue there, One down own on in we was Madison appealing. One on to opportunities, last because Madison. scouring are of two the the that profile constantly that more Sixth inventory area. prior given types there big think in the

good So XXX has do which to did we demand. further those about our Greene like to where year-and-a-half which gain office XXX exposure Greene, deals a that and that, try we Street that extrapolating think relatively a deals, kinds component attempt is in there’s little downtown Those submarkets, ago. we’ll significant high-quality of even at in buildings

Jed Reagan

retail I of Okay, are kind then appreciate what that. And with And seeing ground the in fundamentals-wise environment, do changes comfortable feel in terms your any just street there? the you and given current you guys curious you that, cap on do of that rate positioning trends, space?

Marc Holliday

now our some generally price there’s lack demand leased right vacancy position, a I submarkets, rents. of tenant think definitely adjust feel combination quite of we’re There of current comfortable of a sort very to well and asking to lack of is demand, with portfolio. our slowness bit where given tenant on across because we

come seen submarkets out. of to in So type definitely specifically markets, there some shakeout are Madison, Other Upper before We’ve shaking are that mind. vacancy various of sort markets with that

we on And in submarkets with think insulated the on in. again, leased good that, We’re because I generally pretty well somewhat side have from remaining feel term comfortable positioning retail we’re our we the leases. we’re and our

Jed Reagan

cap rates kind where stabilized on view are street a of product? today have retail you for sort do And of where

Andrew Mathias

so to tell, it’s tough It’s specific. asset because

market, market, rents remaining in-place at short, medium. above below long, market, term lease have You

a that cap there of lot rates retail lot So haven’t trades a are. year where into of visibility give this been

to think asset the on be an I in in long is there’s market on would that trade now is but I’d trade. lease, prints. SoHo was hasn’t curious of That now see indicative a fairly that XXX which term, asset another – an the be So Fifth hesitate that where to cleared, sort major market.

are peg So side. the tough of it’s rates exactly cap retail right where to on now sort

Jed Reagan

Thanks for enough. color. Okay, fair the

Andrew Mathias

you. Thank

Operator

like the question this I further host. And to at over showing our time. I’m call turn any back not to would

Marc Holliday

seeing We always the investor be for X:XX spirited. starting Thank as and be about forward informative, lively as to to We going hopefully, great. December is, which Okay, on but a beyond. also upcoming AM at for did year. you a to X it about for the will look things is today. month-and-a-half questions everyone we last promise good And year have talk the it of lot we’ll meeting,

to So we look Thanks. seeing forward everybody.

Operator

gentlemen, and this dose today’s presentation. Ladies conclude

You day. wonderful may now have disconnect and a

SL Green Realty (SLG) 19 Oct 172017 Q3 Earnings call transcript