SLG - Earnings call transcript Q4 2017

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Operator

Thank you, everybody, for joining us, and welcome to SL Green Realty Corp.'s Fourth 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 that management may make today.

Additional information regarding the 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 and on be the selecting the website to directly earnings. non-GAAP the the reconciliation the each non-GAAP measure release measure financial financial fourth measure comparable measure and XXXX between each most at quarter found by financial can discussed regarding www.slgreen.com

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

Marc Holliday

for to Fourth Okay. everyone Green's Earnings us joining for SL Call. you XXXX Quarter Thank

questions, we XXXX. since have wanted I to line briefly Investor that update our outlook the Day and Before some things occurred the December our open important to of note in for

continue exceeded the expectations First, up strong and as office compared office-using end-of-year XXXX. the Everything value the to growth half City York quite outlook year outlook space we even our fundamentals and moving pipeline last last the has in goals, discussion, December, in put from of year. strong for to an the the the SL underlying the new be our in increase program with Green's growth asset back presented talked happened performance has we've In stock preliminary scene. city to of FIRE York economy, XX,XXX. jobs our in exceeding this X to go strategy development in into demand and weeks the good. the share XXXX, the New jobs. presented place Investor majority numbers for driving let's Day for notable market and strong company by our The new for XXXX. buyback commercial price by having set operating and stretch underscored met context optimistic total which We reinforced news Job to XX,XXX about week, we XXXX for added and with office-using New acceleration time XXXX, its new the continues sector, of on jobs jobs sector released company quarter fourth those that of only This accounted ensuing private today's

for are year-end continues is planning outstrips when of business, and We for sufficient City expect of numbers to that reach released, new we've the coming foreign bedrock high expansion the demand growth space office tenants visitors. provide New our tourism The line bottom construction will Day, efficiencies office-using positive Investor still natural a at new similar domestic news and magnet densification space tallied And as for true our York by continue I the City's and as This noted evidenced online. growth. the supply looking job of and that space the level seen that to limits, New for plateau begin is confirming the now thrive. economy, their York number of to especially is

quantify that be indicators and about us even For have the are are but what of weeks optimistic also SL lead a in Green, more number over too to past that still there ahead positive X emerged lies opportunities to XXXX. that early

interest for of market investment for capital amount creating deals the capital. is XXXX. of asset in market. some full There is good up But want minority market the building deals capitalization, Most good right you'll of product more in value institutional an XXX% done deals, building and those you Also, who see We've a really for not are is office acquisitions, many lot enormous right full investors see there Asset in pricing well-located opportunities that of that passive, there somewhat done in LP, the for opportunities. for looking Manhattan. not now properties. a control, partial, now getting holding for scarcity in are

the to we of Now but those equity we expect come, that to more expect amount is kinds balanced and capital of transactions. it with the be debt for in market

high, evidence So I levels, stable the I transaction even supply think to and remain for product while XXXX may continue being at throughout year. expect most volumes overall And down demand prices the is recent market deals met very further pricing. One a it's good at that have by of Liberty, all announced, deal lot asset being balanced the with a Broadway, of XXXX been demand

of dynamic will, reinvestment and to market assets advantage assets to selling and in take joint buyback. this proceeds of by order generate neutral value-add mature venturing continue course, stock We for leverage

York rates, in not increase XX-year of year of fixed attractive vacancy improving generally modest rates improvement York are We of result and recent continued than in fearful is City and XX% our XXXX. treasury in economic unemployment should economic the in New City rise New X%, recent vast being indicative XXXX is the below the below the in With at conditions. treasury. long-duration a liabilities The majority better

closing stock Broadway. the stated of projected, pending the as buying playing XXX funding As notably XXXX and we've sources with December, our in of been closing Lex second-stage back out

even which Our already very asset million of of being course, square performance quarterly leasing better fund our solid what and conditions. sales portfolio and from partners in numerous to for our price. share outlook, market and plan is approaching inquiries We're XXXX now our Notwithstanding JV positive there feet, looked plan. are, light selective and business on external That influence factors the pipeline X.X that are December December's to fielding is monetize inbound current attractive up in pipeline. in looks

have driver to slow view REIT has with other immune from to share The REIT a trading, to year sector this underlying been direction. entire to flow the factors reported, and in federal largely seems our the off industries irony little gotten greatly recently changes in that. of bottom that with sectors stand has has do tenant our serve and and do benefit the that lines are York As to that business for base the not price more well performance City, to bodes start those tax the The is portfolio. that enhance to are capital started which the companies, capital in our greatly New other extremely will to driving aggressively which to main

earnings out has So a release guidance. Matt on field the before questions an of we'll do obviously yesterday. we put update But DiLiberto that, we about bit

Matthew DiLiberto

year on top we we include the right expectations out of our for Last couple there night, FFO the in expectations in that in that fourth press didn't in a our were Thanks, that Marc. items Yes. reported those full the release. we That laid results of initial highlighted said, quarter December. and XXXX were

primarily of we That is happen were was Brook, That per that regard our by we taking amount's the $X.XX clean. $X.X to the of involved cleanups offset outperformace accounting received range expired G&A. the On the by were share Kudos recipients. took you other XXXX, with estate in our to the the guidance pretty amount increased charge charge Otherwise, expense we've related plan, fourth for valueless to real of the our those forfeited. to awards $X.X the course, process. who result quarter included refund No in in related saw all has up items. real FFO appeal. expense accounting forfeited. The resulted the the charge every midpoint quarter at tax income. us a to unusual that in XXXX a quarter plan had completely to increase $X.XX OPP in were successful That in This end unamortized million cost following customary which Rye XXXX to year, is we at side, million in $X.XX With a the million included the fourth a the all of transaction in property was awards for like And that line. the that $X.XX. $X.X

very at our a and Our increasing generate definitely was further to place look it's range. still up incremental to of numbers further so our that I midpoint guess we guidance Obviously, out we But of we put could in to play per questions. be share to here sector-leading open for bit. nice early the the our certainly need be. the at already between in above initial see the new that, had us opportunities that With for to But can balance in vesting a which guidance looking over XXXX, final it guidance and positives year we're January and August we is those awards. things FFO be January as addition, earnings in that the would period the end take seeing out assumed year, of XXXX charge upper

Marc Holliday

Operator?

Operator

And our the question Markets. line comes of first Capital John from with Instructions]. [Operator BMO Kim

John Kim

on up York, to you you just follow have companies saw your maybe increase to on wondering like already some. what plans of necessarily wanted but seems leasing. just commentary of on as impact right bit your a if in It on not was regarding elaborate announced it's hiring now. for are the reform -- many a tax I New had and could I in But and especially it opening discussions comments, like some Manhattan Marc, turnoff

Marc Holliday

City. accurate include that don't York don't Yes. know that's that, I those plans New

very sectors those more not densify maybe tenants, in Steve tax the the probably limits. for advantage creating won't of or effects leases. gone tried within over earlier, leading opportunity where groups see either could level for of to another sure, deals XX much specific further XX practices and sector position Whatever of that to that think, we years, amongst see name, I done you best our for we've But we tenants, I past profitability so. years through address, combination that, or I bottom or portfolio expansion by will current-day XX and the probably I'm XX continued we've the see of is take of in there positive pending, through reform or natural expansion of or be, to expansion a said I the line general deals But towards are much or are not months densification cycled had, reaching that, terms, they most planning not some that almost Durels, And having contain those as efficiencies. with expansion, XX within of out and elements. industry think mean the most forward maybe

what economy think we've in York of New past years. seeing that benefit City is just Steve? strong I had we're a several very the now corporate the over profitability

Steven Durels

footage square million, tax the of that by To number hires can't hiring inside being new and of tenant have velocity of you feet the leading the is speak tell is can I of square needs. to of negotiated. with at certainly or And driven that that, XXX,XXX know being pipeline answer about least to new that climate our the business new expansion expansion the business. overall and I almost X/X we're what's almost of that seeing. specifically driven leases employees enthusiasm reform, I tenants X.X was their not whether And confidence being by that the it but that's leasing reinforced currently and tenants

John Kim

second And Okay. perspective? environment. interest the portfolio an an about and rate do is feel rising my DPE you opportunity How on rate both increasing hedging question from your interest

Marc Holliday

seeing of financing the payoff I And origination would on is entails better roughly think opportunities our us of for the seeing a a lot because we're I benefits place lot ability still DPE flat balances, just and our rather right which above-average have generate we in program to increasing deploy returns. capital. scheduled. the We're market. than market our I a guidance as a good stock now, year say buyback to balances, liquid think,

Operator

the question with of And our Bilerman next line Michael comes Citi. from

Michael Bilerman

may that give X terms -- on things maybe, wondering an Seven leases negotiating just Investor update of but exchanging was of come can you it incremental today both floors. think where paperwork, stand in those I I'm that or Vanderbilt. sort just have at One I weeks us other curious talked in. X Steve, ago, about demand Day, you were on you was

Marc Holliday

the give screen, Well, it as are the relates had had they that were several they're I to on Steve were But of floors you going high demand, put making leasing will the you and they're if that shown that X-week think But we a deals year. weeks -- in confidence address up think And date. update. they give we'll ago, incremental things you well Andrew of will, I going degree X sort throughout for going how several still well a going. and to of sense

over signed think one the statistics, which or in that date with One call. don't which leases, signed share in I very, imminently, call. at square that We'll to through not of and quarter-to-date on XXX,XXX feet the of But to a deal details I Vanderbilt. very multiple includes but have be the we've everyone We those went shortly, leases, on is about some XXX,XXX able

this that, volume to had leasing you we've was of first we've Andrew if part year. incremental what's Beyond want other add throughout good to the about with... talked And -- what whatever

Steven Durels

it Yes. months We're back is all a for tenancies. right tenants for accelerated it of tenants type actively floor proposals, was ago. certainly, dialogue The more with and, the prospective and than X more They're activity, sort with tour trading today feverish was forth ago the advancements Sizes proposals X than multiple vary. year now. request of

active And the people within our all with of well back that and So with we're underwriting expectations. economics tenants. forth trading are very we're

Michael Bilerman

was that in financing. mention you've as should just doing, optimistic things dispositions done, wasn't that are that to you opening a just I didn't you whether Marc, acquisitions to, Great. Investor and things know what you second you... would I you are making of was leasing were sure what your we of even relative of that referring targeting, sort make that question, Day, comments, categories that mindful be made are more

Marc Holliday

near starting just when -- spent. our reports be and something But it to high about like money the just certainly after general would a was community. also in here mean is our formulated list think business think that gets speaking looks gets there it is on I very I expectation is I few a term, but how And it our not that, is that, of financial hear we're But I meeting, their think spent, that the -- will business gets hiring. York Well, term, can passed and stimulative development and base be in to probably -- that the bill put we're the of foreseeable the the on could tax examples. investors. about it tenant you're And the see. near positive something a I starting lost And that I spent, have for think tenants the City on with effect we'll community and it New plans, where spent, certainly to

Michael Bilerman

rather So more were than to? something working sort that it was getting specific on you market the of close or

Marc Holliday

the think increase demand, has of want I plentiful opening probably accretion of Well, I'm into been a margins, ago. we keeping a strong, at the and get into -- to, back of are projected. quite translated I all not just translates sort so And sector business for a off a gotten just seeing tax inbound -- to bill where gauge in as capital, and leasing -- think things that like off pipeline REIT stood and a demand, mathematical domestic to the better that comments community for worldwide that high. capital, The start together on sense, that the high, which you we X that's pure debt my lower well is the taken 'XX values to go job than investor see sure. quite We're I mean, investor These is which equity about growth. bode more weeks than company. into has potential year referenced it's stock accretion in that while buying value earnings factor. I for the that leasing even pipeline I don't is our significant were And significant grown, and down put prices

Operator

next KeyBanc. comes the Mailman Our line Craig of with from question

Craig Mailman

your Marc, about any in I'm curious, market opening perspective? seeing thought or across were of transaction value I comments kind Midtown, look you your in helpful. the commentary, significant you from a neighborhoods just as demand differences are

Marc Holliday

as a defined specific, do Well, little the but more Eighth, is -- Yards. Third Side already West a over on statistics maybe over and the on leasing I mean, the include Avenue Seventh generally probably Midtown be or specific?

assets demand foot. very measure Downtown by -- if Midtown think pretty was price Midtown Liberty One was price and you for a per a the -- robust -- So I price

support Downtown think that that for strong transaction. showed on I

I XXXX strong we Side, side, the for on Broadway think of this that, good company. our our Broadway, all West that a also Worldwide felt the for very very the Lex, the deal was sale Square. to certainly, way over XXXX sale XXX deal, was Plaza, Times East so coming

I limited think per targeted So don't it's in any se. neighborhood by or way

Midtown, only South a generally square down have it's the pretty for couple trades a too. Midtown not market it's And good sale Certainly, with. points, lot highly I product XX foot just been think of there's to attractive, Downtown, lower continues million begin price be to throughout deals broad-based. of been a at where because there,

So I'd say broad-based.

Craig Mailman

Great. That's helpful.

an Secondly, us to about you of versus can maybe the want concessions kind changes conversations build-out year any the and seeing what tenants update are landlord take would give early burden maybe with on you've you with just how if this be? now had guys tax on they

Steven Durels

pullback but rent XX there's months, still we Over go, tenants' have all the fairly two we demand. on bit ended the experience But stabilized and and of TIs started some concessions for free particularly have relative our as sense XXXX rents little personally that as my over rich been new last and years, a is stabilized. go a have think Face I increased even as the concessions seen 'XX, far up, to the leases. we've rents past of

plateaued. they've at So over, in where hopefully, are where the place a concession that we're increases moment we're and

Craig Mailman

of misspoke I getting improvement more I things. with side concessions. was guess I the at

typically the just they'd going was now finance in guys... build-out any there's and are a versus shift give, landlords curious versus want to with what to I tenants if finance changes you from Just what what

Steven Durels

a occupancy every You know set answer capital? clear, different and Do want that higher to landlord of to cost putting I as to have that have manage a question. company towards good has finance lower don't the priorities don't to answer single to therefore, finance. I think there's are willing a a what, they a more own pay it? rent they think And I they because and, much they're their how

Operator

from O'Neill. comes question next Goldfarb Our line Alex Sandler of with the

Alexander Goldfarb

questions. Two

preferred spreads, maintain the equity rates talk your ability First, Andrew, just short-term the being rate you're As spread? average bit anticipate going to you able you rise, think compression Or just do charging to maintain and guys' do you back Can debt book. absolute a about to see little guys the so the earn? that will that folks spread we'll you rise? on

Andrew Mathias

those I seen we're over think months whole program, senior market but with the gradual the at XX spreads. loans we've originating XX, lot then compression loan a market. steady our into the tighter last -- Again, spread in selling and

maintain indexes So on far, earnings that thus in rising we been able we've to I the sort we've to able like LIBOR haven't the rates compression looking market. being our steady guidance of and don't rates those rising we drive to to an don't hold higher because and our generate given based based to mostly the project -- really XX-year. in book on on spread. of yields found spread We're higher date ability all-in

Alexander Goldfarb

at program. discount. additional Investor in back left, mean, But quantity $XXX you have Okay. of the see I it million million the about have like million disposition, on NAV the about guys is second on have you planned. to question looks buyback and you Day, awesome $XXX or $XXX you the And it's buying then and the that

reload is it disposition So see you to assumption? that therefore, is and we not once guys volume fair program, will you that, Or it that good assume rise? exhaust a can the current

Marc Holliday

that know can that. you don't I assume

prerequisite. that I of frame, happening somewhere June, plan Whether but dependent place the have roughly way think us first certain don't May, things on July, that know, through of in half time in the that's the through we now takes most I the year.

And can we that. not -- we on for buybacks we're hopefully But market. get mean can't the I they factors A any exist like if in can then of just we lot out were guess, months things, feel with enabled program, of that sales we'll deleveraging that or that's which would at not just right that that's now. the for like with five what lay with the -- hard it look, long So will We it's here now this level track I through, accretively take sit sure. But are we as prices things but along that Stock for stock first and that continue think done, shrinking very have that do sheet and rebound, that true, stock of the And point. scientific, think we've we a good factors of change, any gone time to predict then the is where better. the it's those balance and four, certainty, I exist done the smartly. to very and, that decision very then. we've then a would today better. done we've two

all, feel certainly just track, the and much stock all that. take a by for conference So very sense If we'll not and in good have call, again. better call, on midsummer's next we'll

Operator

line Nick of comes Our next the Yulico UBS. with from question

Nicholas Yulico

of appears plan for office some New the be worries reflect to the set tenants. Does fundamentals than Because rent better back your going that you leasing comments worse tax absorption better price love your some just XXXX not market? thoughts. are expect to Marc, so XXXX earlier this to I'd should or growth get mean overall better, about improved that net to hear helping your in stock and year and York

Marc Holliday

leasing that, things tries Maybe been. maybe causing what it more it's about be earlier the concerns, price of to tag business what is I some stock know. mentioned and to the don't attractive that's hear Yes. it's I mean, I I sectors. everyone it's

a that tagged only leasing concern. to market That's But it York been so I can XX actually think New don't outperformed I know year-to-date. days. City we've be --

There's up seems hope me, that sector out right very we of changes. are that favor. to deep market. in job to market and market and growth. a to a of look terms many tenant be our certainly caught a the to think I stock we look of certainly leasing are don't I points, the I how it's we're market to I demand. -- to And I a as pipeline that data peers, as it's lot the now that the look we that and is. But of look the seeing. predictor have

Our of don't XX.X% is to portfolio leased have space portfolio existing roughly, and big that's We of lease. very high. the around blocks space

think at space I pocket we of a have over XXX.

a have more go Tower of Lex with over like mean, space that's it. XX. pocket a XX We I bit at and little to

but or think, know rising very I think shrink mark you're the So keeping still going do the the don't cause see what to it driving out a earlier, packages to Steve I address rates to reasonable of a to way portfolio I plateau think I we're you're rise, year towards tenants in hopefully demand those market if question, stays at healthy. rates? going earlier, end level. retain maybe is specifically trying will obviously And I We're your even the to that where see and that to tight. concessions concession factors set said

generally. against competing still competition new are We

the fact the for X.X%, been are way it's landlords grows, inventory pretty that is has that around in the the as tenants. X%, there competing vacancy for last and rate couple been, much evidenced That still out by is balance growth of years. So as and

equilibrium maybe that or begin little So has been improvement direction. our packages there could bit equilibrium come 'XX, will of to in But those concession in plateau is met. Steve? with back favor a more shift landlords an in and that

Steven Durels

to of leasing which over XX me year. some ahead quarter is of X% average. feet was by People because -- betrayed the which of the leasing of million the XX XX% is off the velocity X-year quarter velocity just the we was And million the new over XXXX feet, best by square the of came leasing there's facts. level second market, weakness the let Midtown was with square leasing, over that add fourth the of think I itself that XXXX. of sense -- So quarter in since new prior leases

So have and then our the did a in -- in we in pipeline. than light wide of a diversity types of tenants pipeline bigger what today see that XXXX, in sizes of -- that we January we and pipeline, of have you more and we

feeling I'm I stand good feeling are where about and we rest So right very the good think us very of now.

Nicholas Yulico

That's helpful.

the dig whether that's is I a in are other offered packages can there point signs getting in face higher-end and where aggressive asking market the Just rents follow-up. a at any the bit little landlords? to Or more price the there mean, end concession you high being reduced of by of market?

Marc Holliday

Nick. Hold on, two We're getting a the questions. ruling on

Matthew DiLiberto

X or X.X was questions. That

Marc Holliday

Okay. Well, let's...

Steven Durels

the end of market like Vanderbilt? One The high

Nicholas Yulico

Yes. Yes, that's right.

Steven Durels

that imminent. mentioned announcement has got One Marc think I an Well, Vanderbilt Yes.

healthy. $XXX is end market is of that size And signed rents in The tremendous tenants I the year. market, $XXX $XXX-plus and size So think of number There that high what's part that most of growing, is leases the of that important very the $XXX the average is signal the was of increased that have rents and buildings dramatically. at the a signed rents are good getting of about being marketplace. last number very

$XXX square of matter a foot fact, rent leases. XX,XXX As last year was the average

Operator

Instructions]. [Operator

from of comes line Feldman Merrill question America Lynch. next Jamie of Our the with Bank

James Feldman

market, in guys the think coming talk term? general take the on for you what just your year both and you EmergeXXX of means about platform co-working it longer Can kind and and your

Marc Holliday

is Sixth. Emerge new Sure. three lease-up at facility. now right and locations relatively facility, on phase XXXX that a has so Park XXXX we're Sixth X Columbus, XXX in

healthy stabilized. as portfolio environment. tenants would of say more of a longer-term are our in a why we from facilities informal Emerge. fractional to space user, corporate open-benching two graduate have that that demand we type appeal tech, into a that's very other We I like The sort We've lot office seen tenants appeal sector. and don't a very to

to stable would they've trending been the We co-working healthy where and, the as with historically. evolving. So I explosive has trends don't with say, any forecast they're pretty is margins business profit growth been

James Feldman

into mean, convert do expect you Okay. I space more to that platform?

Marc Holliday

We're the the but we're space always spaces. The year have well business, that we on are works for XXXX. we still profitable lease-up additional evaluating because on have spaces anything and budgeted this don't

James Feldman

you you the Square, expect the -- year. about press expect that, release a you Okay. talk And this at then more Herald mentioned transaction you in that later X foreclosure? Can guys to

Matthew DiLiberto

So time necessarily which process, don't is a we're we that in and... the control foreclosure line

Marc Holliday

comment. really can't We

Matthew DiLiberto

can we say yes. all That's on it,

James Feldman

Okay. Do I it? get that's or one more question

Marc Holliday

and lender, that's foreclosing it. a We're

James Feldman

question, at my can for see XXXX now Then Sixth? you plans about construction. under just I your Okay. second talk it's

Steven Durels

Yes.

talking leasing you're the So front. on specifically

ranging redevelopment of early So that end the off square is to good program of on there feet of roll a roll. The square new leases out That's in right about we a XXX,XXX of we're lobby, some in new and knock that at number a now, us XXXX. of that and to to leases August start XX,XXX comes of elevator 'XX that entrance the XXX,XXX cabs, square between news have sizable story that that will XXX,XXX another feet, building. anticipation entails feet in

the term big dark, it space. for sheets actively we're pre-letting a before ever chunk and goes leases So of negotiating already

Operator

the of Michael our from SunTrust. And line with next Lewis comes question

Michael Lewis

point I previous question, type You Is because address Is Hudson by up a supply more new finally because with ask quality struggle that rather tenants the space it new question of to of this certain to answer some price is move it question, in high at that what So the in started there spectrum? thought the than Yards? mostly impacted me now to are space, me there Manhattan? your of continue one that's the competition city investors space I'd it to is areas pose is, risk? in experts. Are answer direct to often the things lower-quality but to start

Marc Holliday

So is, competes directly within construction the most question which portfolio, new space against of our our space?

Michael Lewis

lot like hasn't once. had brand-new New supply this at York a of

risk in like what from is So there space is the competition? Manhattan, when supply at new this most

Marc Holliday

Yes.

Okay.

was on it more we're the but front me, construction or so X instances. about get accustomed to done the So five to over all in very years, because have inventory. that of million going foot square than new except to to million thought delivered accustomed next hard without of net XXX again, square we're and is And was space annually a the subsidies, numbers isolated the I like amount of in feet X.X don't be I what

the million Yards square earlier, to total period ultimately Hudson opened against very what, long a think, leasing. that's said to feet million XX I X year's a million feet of ability Steve, up year square I million feet X think, an you of was but So bring time, over on, last XX

Steven Durels

XX million.

Marc Holliday

million of feet XX square leasing.

the to other say every be new would we'll maybe construction day. competing I wants but be it of the against not leases one the majority answer a gets in any know vast recognize might whereas, an are business most at question submarket I lot the out of and tenant built construction a in about given year, at year, new competition signed space So or the projects. looking headlines, also is XXX X The the we leases XX generally, in. of XXX for sure, as alternative, those

-- we're a talking that's a about very So fraction. small

So going is I new say, construction. generally, would new compete with construction to

are West sort X that But be to will couple or but tenant of with we generally competing there and exceptions. be X that talking existing about will X I -- Our tenants XXXX of these further that Midtown, a you're out hundreds. are have portfolio -- going Sixth, guess West. is going are

We're monthly daily, on weekly, against So a our other it's competing not submarket. something within we generally landlords encounter basis.

Michael Lewis

about wanted could that second like if they're sounds I'm nothing's working right. That's potential My it But that is Navillus I time this just there helpful. maybe But know in don't happening. everything if from ask to One as that delays cause bankruptcy. saying I at Vanderbilt? question, read, line I the some

Marc Holliday

think, think mean, that, I standing have I of we Liberty strongest there. No, behind Navillus, they're one now the out with contractors ringfenced. I completely

nor is be to And place court has we with surety what jobs I disruption has alignment most through And the want both the importantly, protections the think it. of been have plans. continued those to we we balance no So appropriate negotiate for the their presented do And them. there's an contingency think behind And we've of and even set were continue been would able standing that work creditors -- uninterrupted. in be, union there and there's surety the had bankruptcy project. see I Navillus, expect project to the an to if

Operator

And our next Rob with question of comes from Simone the line Evercore ISI.

Robert Simone

I have question on a buyback. follow-up on the earlier

or buybacks you guys -- to of portfolio additional it fully just program authorization the or just to discuss, like existing you conditions the vis-à-vis mind like expended, What's sense judgment, your made Like a in far for that? would once and mind, your assets. your theoretical asset sell is you overall JV take sell Let's size? your you limit are thought in disposition that a how couple couple doing -- assume could hypothetically -- additional that right in

Marc Holliday

Yes. a I buyback matter board-level these really it comes mean, it's -- programs. that's when to

out we I they're haven't we answer tied a when the can't I what-if a amount programs, I of generally everything I certain understand -- because of dollars, projected it. of it for just of mean, amount a scenario answer share, that I certain know kind played buyback just plan not have don't We that so can't to in funding. is and question. -- and approve of scenario a I eventuality. the

terms but we So and in incremental funding large of take in incrementally we it plan, buyback look plan, it very at steps.

$X billion. was one First

Second $X.X one billion. was

Markets next Funding discussion changes. as way as know, stays all without will all what change. price -- because today the the things will increment trip discuss, taking the Stock same. Everything same to think that a So we it we when it If everything the necessarily future don't change. with stay I respect sources be. next change. possibly be to could

strategies frame. take just increments of visibility. good I beyond call then, on of sort Even So will I to not know. we'll earlier, as executed of have more that, best time in it within that -- generally you -- let's when are have just are first we But these be good programs And for plans but said relatively planned guys kind you certainly And XX the it as these that, that's comes. perfect, it it's think or where months, visibility. to relatively X

Robert Simone

Vanderbilt. the just one -- quick really color really have One is helpful. And that's then, Marc, follow-up I Steve, on

your that slippage kind see Would the on year your where like are within into kind your any of has is there meaningful Or underwriting. been you stick kind timing mentioned on guys to some of to prior You progress leasing? still like 'XX? of following discussions comments 'XX really you'd that

Steven Durels

be a our transactions plan a nice we you'll that good to got shortly. We're a with projection. we'll think We And January, about Yes. of pipeline as chasing. we're on off we've sized lease with start hear in that sit

if for So that we targets we'll fruition, then feel year. come our the those to hit

Operator

comes of Stanley. one Vikram Our next from line Morgan with Malhotra the

Vikram Malhotra

question it quarter of had really you a Manhattan. of into then the mark-to-market sort of 'XX. of at to nice over sort year and the sort decelerates. Just look said on expected the first but I market know mark we cadence a it X% to seems sort If X% for you've breakout, have like in

to there's flat levers Just obviously, the maybe wondering negative where see any say, in XX, market there just wondering XX there, could at we, different over to least next, if quarter theoretically, months? mark -- are but

Marc Holliday

I week, out to trips is thought sound March year-end, a I caution I quarters. -- make mechanical, tough. to to read breaking only within months for into in much volume, April speak half said, day, be -- -- you that or And to than whether -- the than I X% start to and may mechanical. that the quarters, and and whether forecasted or rife we've it not misses but and due of And X% to early we'll not that range can't we've credit more urge it's credit it higher is leasing Matt, the mark trying month, the months, everything a to because a it range; to to feel be in feel too are by enough I at look changes. goes and be it's through everyone range. that's can at it XX expecting leasing even a or would quarters that. we the it's only more the what When would X% any next annually out X Well, from market. back give I the group down may given. are of the X then reality look leasing it leasing the times at and misses the would over XX.X The X really guidance results, X% than is distinction. to trip year, confident would we quarter's that X% and I some With we -- pipeline like X% assume without lower

Matthew DiLiberto

Yes, that's right.

Marc Holliday

be out But working bigger the market expected to rolling, leases fair goes And way timing-wise. just bigger to it doesn't transacted the it quarter. is have back speak not could. in the some X% It's credible. can't would mean mark guess of got half a I I does, say it of be in to We're any things that that. to whether we've negative projecting if it It have any to year. less X% lesser

Vikram Malhotra

some thoughts retail it. street maybe then process are And Got on an and where correction the just in just on give on you environment, update give us updated XXX. can if the we us

think the I like announce Investor at it Day. you there imminently lease the sounded were going to

would any helpful. So color be

Marc Holliday

more XXX been terms challenge. block I process. block. Sure. of was in phase think by is still than expected. sort We a still market a acknowledge deal's The in discovery we a it in we're the of challenge And of

need space. have, that would where we in definitely tenant market still stand good at vacancies terms activity. of really and but assess There's taking more some a I discovery to still very say in of we we're point. we are There the lot values price showing So few this rents

Vikram Malhotra

XXX, to timing-wise tough just first second? or now? it just say to on right half be is it clarify, could color? Any So Or

Marc Holliday

now. say tough It's right to

Operator

Our line next with Deutsche the Bank. Vincent question of Chao comes from

Vincent Chao

quality having assets volumes to the want relatively go seeing still lack your something you comments the a back Marc, prices and but transaction to of I early for in good demand flattish to just said supply a here keeping just XXXX in in market strong. regards pretty maybe

if the Just and supply would good. why curious market your what thoughts conditions are are the pretty constrained be

would volumes why curious flat. be Just

Marc Holliday

incrementally and others securitized, is referred to, top half you've York in a been owners deals group XX has far very the maturity, well-located landlords. where see of more when number we often, are this how Well, past a more true of more a Top just about with about the of its redevelopment put more often, even judicious have every sort like own in Broadway of asset, with gets very the And year us thereabouts. especially deal in what I heard level through cycle upside XXXX we terms a leasing, to talk growing. the and me the product time it's And And I monetize. of that has we traditionally and has -- valuable, and certainly market that asset case as hands concentrated met New XX still an like in think was inventory of feel others.

strategy. in XX% Vanderbilt, So the XXXX, or of -- sorry. of in One case in XX% the those of of and JV in top the deal, of a do we type the And case the a of cases, deal lot the maybe, for deal; of the partner landlords XX% bring same go out also

XX, not deals. So chemistry you bespoke foreign or that domestic with where much are capital is as years are They're and marketed of X, of will you're XX as the and more. and important just much years, negotiations They're creating product kind what longer-term important partnership have price, transactions. more last a partners, bid or terms more

take bigger especially XXX% on be of basis. a available sale bid those the would what supply otherwise the for assets deals from So for away

what did pipeline and good Worldwide, Worldwide Plaza. did on We It look of belabor kind did is like of there. the we they're But -- shrink I as I Liberty you sales. out deals capital these and those of on on at kinds see just to one one have a be XX% RXR And are -- very there'll of going on. deals, XXXX. of was we of they now a that And on that And Brookfield did not supply when them. those. So outright the very and and more there. I'm I'd One deal all lot half interesting. one kind do right just on Us NYRT said, of on a lot interest out say of a They're deal. pipeline, and

partner, to JV their there's acquire XXX want own who they market. buyer. investors to partner maybe objectives other every have For JV goals in one be and And or a the a product best

very those a think, New is partially only I hard environment, top among today's where of the lot it's in And right of York New in are to markets. still buy considered York, for sale. assets especially,

Vincent Chao

between if sorry guys bit question, missed second in did stats the the of and call, the the XXXX? then we've leasing And pipeline a today Okay. size renewal? much terms I is earlier, but you is on and pipeline breakdown XXXX the it talking then beyond within been versus share expiration quite what about of that the of maybe how renewal, new And

Steven Durels

total sorry, the term of out with feet to group new of that share of feet but of the negotiation And to opposed profiles the very firms. of -- feet XXX,XXX that a we've There's sheets, we square the balance in Well, XXX,XXX portfolio. are XXX,XXX the of that tenant of for XXX,XXX to feet I'm into over maybe in feet got, a that little There's tenants. are of sheets of tenants pipeline, think everything almost leases are engineering that Of leases leases that types more tenant then TAMI-type so probability makeup of services, feet, are over got square term business automotive square granular general are wide from feet square I'll XXX,XXX over there's leases negotiation. square of X,XXX,XXX general to about square high tenants. I've square Of negotiation have the financial-related tenants as XXX,XXX coming that the are are being a this you. leases. The converted -- -- the the that

So hopefully, that helps.

Operator

Stifel. from question line John comes with next Our the Guinee of

John Guinee

stunningly just per OpEx to -- basis, trading a to is a that pound lot believe tax that that Is increases me Green is anytime one? to SL abate which recently. there's is leaves of going going And or that accurate, soon? inexpensive on

Marc Holliday

there's than terms in -- of estate quite been been it's real increases, taxes, Well, OpEx contained. other

know of of kind from we're -- increasing the notion a to be scrutiny And is of as which term our quite And of estate has will a our tax million year-over-year of that rate lot at whole something can counsel really owners system, of -- I any second over of and increase But our I something were X% look we far for they a the period I lion's including rate is commercial warrants it team best of outdated X% insurance. bearing everything, his that and real portfolio. even the of portfolio inflation by for this out burden X% square appropriate of years, real generally of most foot XX X% our on which, teams increase. we heavily that think current us the and outstrips a the this outside If taxes, taken where taxes. operations around to think might very gets the share anywhere or administration. administration, subject Ed OpEx, on up vagaries really properties unfair like -- efficiency are during it managing of the a estate and

at I price. been why And to part that John, the from in value create certainly the portfolio, is point containing extraordinary those as generally, costs. would out, such we say, stock So you to able excellent rise we've disconnected in gives are which, wildly

Operator

Green Our next Reagan Street Advisors. line question with Jed of comes the from

Joseph Reagan

that for the Steve. question A Manhattan. in have you past face months over increased XX Steve, mentioned rents

you can seen increases than submarkets you've order and more which talk magnitude Just strength shown of curious others. maybe about if the have

Steven Durels

Manhattan say modestly. reports were went -- X% Concessions They Well, up would I they the were think rents around most up -- the the overall up went of year-over-year. in up.

on think our we're transactions many -- than execution is than seeing better we're over of flat I the where that deals. better sort effect budgeted we of year. net So And

additional of So see as trend just line we modest rent well. I to on some go into think a XXXX appreciation kind we're as

Joseph Reagan

others? Any sense of doing are than kind of which better submarkets

Steven Durels

very in the Sixth the Well, was the Grand in active. Midtown Central market, XXXX. active the quarter. the demand Avenue Manhattan the the was new good later-stage the lot was by done market. recent those certain the Yards, their for of Midtown get a value evidenced very program price market point. $XXX developer's exceed well commodity, active some part And I'm particularly to of and in lease-up of most active think entire buildings end year, kind at rents where the number. the Grand $XXX, the I those in seen you've are acceleration, fourth done And quite a you've underwritten that of construction, of of deals high Rock in leasing in fourth quarter. most market was Hudson Center being rent were The seen Hudson extremely market right? huge the sort Central in over on end of over rent appreciation on as then Yards, that numbers But the But single

Joseph Reagan

Lauren, at your year then one their And expiration that this roll-up space? helpful. one. And That's is just Madison. visibility like at looks third-largest into an at other plans are? Great. a It opportunity next there tenant, has quick point Any what XXX Ralph

Steven Durels

visibility of that it many Manhattan, of were on in conversations what rent They've really our opportunity a them. rent-attractive told portfolio, us. keep much from staying. we've goal been focused -- It's We're expiring New for by preliminary Obviously, lot they've their a in them. other Not some of it Jersey. -- leases with save in to had some very them is to

very be -- them aggressive hope So of proposal shortly. in we're with front to we a

Operator

Jon our from final line Jefferies. Petersen the comes with of And question

Jonathan Petersen

Just one for me.

your So the short a fell leasing volumes this of quarter XXXX little guidance.

it and in You said to slipped mentioned because it some guys leases XXXX. release was the press

I curious details that. some for So was more on

kind some at Vanderbilt. of keep about Because a think, You follow-up. of ones does Is the out just your I the pending of in one slipped? that also, square XXXX large that X.X mean shifted your a X.X talking and And stuff One that at into is of Investor you more the XXXX, guidance million Day? leasing million over laid feet instead like lease,

Marc Holliday

have of expected would at the end on I part in December. some leasing was that that -- of account say first occurred of the the to of we Yes. the January what

you'll So for hold be -- I and guess but. to responsible we on later that for that X have there'll reckoning Steve could weeks, a

Steven Durels

the part This is. is unappreciated where of lease

Marc Holliday

guidance because was But it would is up guess, -- say include it which probably yes. the the I part would for XXX that you certainly, year slipped, that not

I we think have operator, for. what And Okay. that's time

you on the And the very for you thank for today. round. to next much to questions in all So and we forward speaking dialing look

Operator

Ladies the your and and today's conference. participation conclude gentlemen, This Everyone, day. thank program, you great you for a have in may now disconnect. does

SL Green Realty (SLG) 25 Jan 182017 Q4 Earnings call transcript