SL Green Realty (SLG) 17 Oct 242024 Q3 Earnings call transcript

Company Profile

Participants

Marc Holliday	executive
Steven Durels	executive
John Kim	analyst
Harrison Sitomer	executive
Steve Sakwa	analyst
Matthew Diliberto	executive
Ronald Kamdem	analyst
Michael Griffin	analyst
Alexander Goldfarb	analyst
Nicholas Yulico	analyst
Michael Lewis	analyst
Anthony Paolone	analyst
Omotayo Okusanya	analyst
Jeffrey Spector	analyst
Peter Abramowitz	analyst
Caitlin Burrows	analyst

Call transcript

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Operator

Thank you, everybody, for joining us, and welcome to the SL Green Realty Corp.'s Third Quarter 2024 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.

You should not rely on forward-looking statements as predictions of future events as actual results and events may differ from any forward-looking statements that management may make today. All forward-looking statements made by management on this call are based on their assumptions and beliefs as of today.

of risk to other in reports appear factors MD&A the cause that the filed regarding Form Commission. and differences latest with such are sections and by information the uncertainties other the factors and could risk XX-K company Additional and company's Securities subsequent Exchange the set forth comparable measures selecting earnings to our under discuss our supplemental GAAP the as defined by measures the both press current non-GAAP on during conference the information Act. The discussed included release reconciliation earnings. and in Also, Securities financial and today's comparable in financial call, between company's can on to financial of non-GAAP XXXX relating the and be our Form regarding most GAAP X-K measure financial the financial Regulation found quarter third the www.slgreen.com each each company company's G directly website measure report may a XXXX by non-GAAP at the quarter measure third differences

the please X turning you. Q&A Officer Holliday, I Chairman Corp. Realty of to call questions your call that Marc Thank Executive those Green SL the to of participating ask in of portion you per and the person. limit to Chief over Before

now Marc. will Holliday. the Marc turn ahead, I call go Please to over

Marc Holliday

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X guests. closing million We are in now on

of really excited the of list expansion other an rare you and accolades new there on Avenue days think may that later sellouts, to York the X many think have Summit. in opening proud just the details And will out I Armani speaks unique to press this our and with SL even our styles Paris attraction as quarter. Also, it with further in York announcement comes we New through a what global seen be developed We're this named host on this we morning. Green. special up initiative guests an turn of enormous to summit to a as volume more queue. cities Paris turned many experience bring destination Giorgio been I to smile. the New bucket has with very most of Mr. begin week, the out the Madison everyone around for conjunction Expect his made the being world Summit yesterday City first in a boutique to November, at trip and sometime has it celebrate sell-outs, we're with earlier millionth day and residences

and the Armani a have relocated project. know, or sold out, anchored world's many the elevated of announcement you experiences store Madison the complete Armani's Avenue retailers luxury prominent residences are to retailing as has the completely on flagship Avenue luxury of after of and Madison revival As recommitted

come a in be check special those we and on investing lending debt are out you out and business to in the hiatus, you're SL please DPE on fully X-year loans profits stock. After by, and area, something Green it now the nearly the made If securities. in pick of with mortgage mezz sure have back

announced fund evidence not and thus serve I of This where is returns. million an will provider this us as subordinated dominant of provide my throughout amazing an can company, momentum, some New year years to was the was $XXX business of in would that we capital at fund so the for total surprise. activity we to this and of reestablish media year. ourselves will we on the footprint, debt the Bloomberg what renewing a of I This building top very companies, closed commercial foot of which business, other The with our of yesterday, XX various highlights marks one say here really in highlight we the expectations in investment speaks by on square XXX,XXX the who achieved to Bloomberg typically return market further square expansion debt XXX,XXX within being it and year but This the incredible investments Third. quarter, pipeline great XXX,XXX, best really strength XX% the a assets. And after worldwide relatively about a been City Bloomberg, York have XXX,XXX in closed they we've small profitable extensive ago, almost that's started this invested out we only guess of some DPE upwards earlier of The did quarter. was I'd partnership something Steve, for achieved outsized seeing that years I feet, leasing the additional XXX recall? capital it the the market think, the we've we far, even initial have with renewal pleasant closing not nearly of and telling within of to at a foot as say fourth tenant our investments And beginning enabling XXX was volumes, resources, more the combined extremely share building we recall anticipate expanded having the debt debt-like at over you I market, seed

Steven Durels

foot. XXX,XXX

Marc Holliday

ago? long foot tenant. How XXX,XXX

Steven Durels

XXXX.

Marc Holliday

less feet. than a million XX now in square XXXX, closing years on later,

positive fill I story it's help it's, the what trophy Bloomberg in a of traditionally Park partnership, Park demand think, Spine as about being on I space Avenue. have needs further goes, is us the the to in we businesses, referred demand proof great radiation the buildings the away Avenue complementary So to story growth able being there us building. about from to to Bloomberg's And about think serve limited

it's and is with say in Class of year-to-date. generally the other expect leasing projected this so million achieving where being being the same-store X such having in buildings million geographically at achievement not success year, now portfolio just East our Manhattan a sponsorship us not we that occupancy renovated have and this year-end as well XX.X%. A example we as particularly not consummated of have we're leasing eclipsing that examples that's year in to focused much when within heard feet You've of Midtown it square case, this X.X as feet strong demand And

We're X them. good So those that's book. proud Again, by team. stats. some my the pretty are in a good job months of Great

in it offensive which the a of that and while business East is back been affirmative our home. in and a well now think a assets we've market, New that to being amenitized is capitalize on for our illustrates in positioned portfolio worst is market The Midtown is saying without eyes, we A well-located Class what us, for call this York. market where now is I behind is and question there as scarcity

on open with it So I'd the quarter. up questions that, to some like for

Operator

from Kim first BMO Markets. question come will Instructions] line Our the from John of Capital [Operator

John Kim

pipeline Congrats X.X not the Bloomberg it And this on that described you size confirm I given million lease. that last just I transaction. to your think the that was square of the place wanted just offering in and concessions? feet us described if of being much pretty $XX economics versus share the of diversified. as in you with you any also, could the And on pipeline rent how your in the

Steven Durels

So deal it The quickly. was not in pipeline. came together very our reported

say we regards One, specific was so we're it three, an that it share can't the NDA, unanticipated that, pipeline the to So of from was so so economics, really rapidly. because it's lease so including other the because: obviously, today. in a our to lease, than With two, not large XX-year happens were and; something details and; under it size it's we

for it's would There diversity to mark-to-market with they towards the I and appropriate in tenant are for space. And to on term services. vacant below the XX-year regards renewal, extension, Like you been quarters, the heavily if about pipeline. positive past substantial financial weighted XX-year asked think concessions significantly we but So had is it's what on a replace have expansion. the

a market to services now. I that's firms, have lot it's we law industry of my business in it only tenants, not financial is towards because services, services. our the specific seeing reflection current but financial think of We're the and that's just vacancy, a where weighted pipeline, right

John Kim

really the a just has sentiment stake shifted over and question the still But last asset in venture few to I We need time, York track. also, on get One And if the Okay. is New wanted second on point Vanderbilt. in this on update if didn't sell And it's fundamentals given my you ask at the months. joint to an sale. positively in

has sources Your improved, capital our could tap. cost of there's other access you so capital that of to

and [indiscernible]. update So that whether just you're or wanted not contemplating an on that

Harrison Sitomer

modern we're going development. mind, only It's One the And of in Vanderbilt. be that Vanderbilt's premier process a transaction The will in a really affirms the our global of that also the quarter. at but transaction great office to conclusion not we'll York, New Yes. tower culmination as be or able One confident the position fourth close in icon

restaurants, Michelin-starred partnership continued building. X fully keeps and debt and and fixed the looking we're long-term rent at at Summit, story So roll expanding rate better, the the forward success here leased the getting to

piece second question, leave to Marc. your of I'll The

Marc Holliday

question the mean, we to to we do we're of On I don't sell, shape. great in anything. have do have

assets. our monetizing lots disposal have generate of We organically, to capital tools at

think And transformational at original debt is of It it return market. Third-party Vanderbilt fee somewhere XX%, asset. because original if to block it's as One That's to is company. and now has do We fund, related we sell XX% for maybe between this the enhanced not for of our the asset money, to was -- the would XX% do. the That perspective of the it a plan. Vanderbilt One was and optimized It and -- XX%. et building is off anything cetera. where business look this plan to down I generation it part between shareholders business was

we the but of that we certain fourth yield partners of to point the interim as will in to close company some and for into time, use line which hold be to some one bring that down will net component quarter, from that forward expect levels pay excess great conclude we it through this bring said, assets to from year of in should the us own around monetizing projected world. And We million in by December the Harry we of of the the had what in but year. just the to $XXX the international we the the quite remainder to of it opportunity last proceeds that expect welcome of to expect, in

well going for or possibly is that and which set on on little track to a leading up, year we're ahead will I think, So be quite this it us XXXX, company. a big, into I big think

Operator

moment next One for our question.

Steve ISI. question Our next Sakwa from comes from line Evercore of

Steve Sakwa

on the on more of see in the seeing what just more transaction the curious guys And the you direct are to than little are side side? side a the wanted things. purchase comment business. just direct I you're Marc, could if opportunities market. bit DPE the in Obviously, back DPE I'm pronounced you

Marc Holliday

was kind with et And loan point, comes cetera. lenders when irrespective Well, now themselves along function, we're coming Was pretty off is Manhattan and spreads New are today quite that's going liquidity the deals. And of I treasuries SASB next seen the quoting and trade And headed, in, is is there I compressing. to a there's of pricing think, this of of $X conduit Harry, SASB And which Center And up $X, the Rock market. balance some pretty in sheet Steve, my week, market it couple a of billion known York, mind it's of equity is and picture of equity year, a illuminating the and to are -- it's firming really are which head? underlying last top coming it in a year, some where which deal, seeing demand, there think pending be unusual. Park, values, SOFR and pricing end debt origination, This including different And quite follows we've fast deal, both. and levels, XXX spreads $X.X XXX your deals Park? was case comes, strong. others debt, it trade, back as the spreads,

Harrison Sitomer

XXX Madison.

Marc Holliday

investor user to was -- There user Bloomberg the to in some And a trades. XXX market tracking. Obviously, philanthropies. been there've a that been of was there's lot we're trades. that that deals have Madison

more But to moment. attention want on but and dollars longer isn't just oriented It's are look Our you couple a focus that particular really paying to. the deals term, of equity activity evolve into are the we expect direct we at and routine side equity. of if development at 'XX, like customary 'XX of do had there in most coming then focused a DPE, to of that we and allocated, be out our very is sort will which start to direct there downturn

Steve Sakwa

were least that had like then did that if were was timing a And notice some maybe issues I I Matt, follow-up, just at much and tax side. estate didn't if OpEx we got some than as there taxes on real Great. know modeled. lower refunds you things what there there, the

might level? Just back anything -- and was one some pulled those Or might that sort of have is those down up there a that timers normalized bounce in QX?

Marc Holliday

Nothing unusual in there.

Matthew Diliberto

They moved to even given much. of item, bounce contained. taxes fantastic size I this a No, work an job our time has job. our estate think great the operating they the team real line with think a the They've certainly, done done the from We expenses, not do. hard on and very team does them I time, seasonally do expenses keeping operating better operations year. job

but quarter, no. nothing looks we forward, going So on some within They're unusual right now savings. that working how saw the

Operator

from will Stanley. Our of the line Kamdem question come Ronald Morgan from next

Ronald Kamdem

quick NOI same-store to the same-store accelerated with the ones. X.X% in quarter. Starting Just cash two

sort Just hopefully, half trying through for about should back of think year the maybe are the what rest about into for what major the sort buildings XXXX, of you we're thinking could XXXX. as of expectations to or talk leases be we and the

Matthew Diliberto

better the to that about a at direction. But and similar where on the guidance. investor but performing months changing as through of trying for Fourth we reason do quarter reflect not appreciate has portfolio We'll through when results July part months is the trended raised trend we third expectations full we we X I'm up, in ahead the conference than in I give first our through least. ended better earnings, at trending that I the December you ask XXXX. than X the talk to guidance XXXX about guidance quarter. back Yes. year same-store continue with have but X we been first the expected

Ronald Kamdem

look, portfolio. alternative just was going Great. question back And then to second the strategy my

But you that negotiations? being can does in that's would color conversations you talked the bit of environment of coming in helpful. be qualitatively, terms better. how terms progressing Any a think help in, sort provide little sort strength I about those of on maybe of

Marc Holliday

already, one assets. And early the holder think good very X we've there Seventh, XXX think able again, in and the last seen as cases, Portfolio I of ASP a portfolio do on Alternative of out down. Well, we the to want that as a believe leaseholds, where and as work of lender so think that those ASP, of on, a perceived though win-win And had we ways for assets cases, Herald some the in those working And we've value I fruit or might for the year market little we'll other. many ourselves value, to year-to-date, the been everybody. to created that the probably shareholders Strategy recapitalize refresh current us or you've value that X assets Fifth, anticipated we that when there's there category to and assets. having strategy I value, as just end could is even indebtedness creative continue in little -- and out do as recall, work are get at returns. particularly XXX bear or to be we accurately do the address we for mine results, advantageous or mind, we're others perceived underlying the we in stick scenarios I But my long-term be hadn't more what

to was to parallel was dispel ] those guarantees in I illumination and one said, we recourse case, and very the that those gave and reasons that nonrecourse. With and successfully. with of And deference notion possible or out real everything would almost assets we assets try partners with they're takeaway the associated as recovery can we the X of optimize get those I do as every to the our or respect [ portfolio examples assets, there on that liability think any do lenders, of that. the to a full or respect and to continue for

to the point, no a have them those But there it. The we helps. disposition the we we can coming bit assets we means quarterly, ability we can. as doesn't to question, some of reevaluate some pop good accelerated the market assets. assets are we're which ultimate assets, it there's portfolio. market out much as as of do value that stay your just of There's certainly that an So work going timeline mean at hope and hard portfolio. those in It those and for as maintain may we can -- some back to We

Operator

One moment next our for question.

question of Michael from line Citi. from next come Our Griffin the

Michael Griffin

or on quantify function Sixth. some for to fair Park in maybe on submarkets relative York maybe broadly, deals. Maybe this demand of maybe And where the leasing are And we looking it better Park? for concessions seeing Is of of then to say Third is along limited you're then in overall. park or New of a just you maybe there outside availability can peak kind those concessions front, passed Avenue, tenants a out

Steven Durels

question new seen Well, deals for free no first. year. We've went our average for, they the on the better but for think, particular were Obviously, you quarter, why don't the -- I rent saw I that this increase by that or influenced TI work allowance case, year in last filling peaked we we've up, to last start particular opposed a TI. signed rent concessions the of We've they part And made with deal. said for where dollar number very skewed were a deals as was one deal what for leases perform reported renewals. of large high building a that as signed, tenant base the vacancy which to actually the to lot we contributed, a of lot that in

throughout TI all core, of year. this its number not has at changed But the

see $XX thing this But going then the last $XX that come tenants part off we're other Park a the more the thing of will rise ultimately, the saying concessions the is to we've the rents. up. consistently I free in the allowances rent. you'll avenues, I be tighten down. the probably will more see changes. With concessions rents been first And that to start versus we And see to that or of regards materially table come some think before to TI marketplace. lot year value Those we've of Avenue $XX activity are the some seen paying think

Park not on at with XXXX in Avenue Lex Sixth, us leasing lot seen XXX be they or type we've Third and So Third those do announcement whether the ] of tenants Seventh a particular, Bloomberg. Avenue Sixth and Avenue [ where obviously, then newest are on

Avenue. smaller marketplace. I of strengthening the is the the of continue just value market But is chasing are from I by awakening tenants of Park that spillover that it, of And to market. Some sort of a -- midsized think the the to see lot part an think, that to going those we're

statement a day reach was highest came that they're there to that is the non-trophy was back to the market fact, out way versus this level year their its pace In all new XXXX. on report just leasing other

you. puts So for that I it in think a pin really

Michael Griffin

about warm you insights. being lenders Great. the you Appreciate just maybe commercial the can lending And traditional more real you more estate broadly Steve. gotten a to a then started have maybe on open, bit up on maybe but CMBS I and financing know office color Marc, us the again? sense little to market And maybe talked have some give markets. then there,

on us where and down of in year You've that cut give a principal. mortgages you only lenders a can refinances paid sense to why obviously amount require due? But down pay come to you amount are a smaller those had of modifications willing kind deals would small pretty you a number of the extensions this

Marc Holliday

question okay. absolutely. portfolio about The Well, lending,

in extraordinary. I there. big money. It's think profits view to with new think if reserves broad-based, lending, is eligible a on the They're of net the and City the of then you're lot interest focus, you've York view with see And over properly going I -- New and And that's that any, going expectations in of banking, the prime because that. in revert money expanding. I and for is banks back you'll based I months past net that. And commercial topic, think new to on all good see to to there's from They're that mean locations, the to balance of I are earnings be years. center lending of or business, the I more think, establishment I exact making commercial the growth, focus high trading, a increasing will what the XXXX, less assets start and come trajectory think seeing worth so others we're the income the kind major operations lending sheet and -- of the us some on will these were is going ensuing announcements, growth reserved back banks be X think seen contributing. in institutions

relationships have of we're we some our banks. modifications doing, great to As the I -- it's with mean

most in We years the have sometimes and They're buildings great the the buildings XX.X% some paydown with projecting swinging in good to repositioned in our some come. But back outstanding these earning The with assets. And means able again, to balances under we state. overlevered an shape. leased just additional in tweaked state The of leasing assets, to fully to, buildings have are maintain cases, thesis are not be which that on banks great -- amenitized sponsorship, want of we're portfolio, a way the we're posting great hopefully, a in remember, and leased. well reserves. are fully of typically

I in, necessarily back. problems. you lenders there about refinancings where read it's portfolio. there'll not it for it's is extensions makes when are work natural is, are very for quite I more until on those then that market think And to with assets, for assets sense. the consistent But And traditional be and us those that So hear think the fully

Operator

from next Goldfarb Piper line Our Instructions] will the of from Sandler. Alexander question [Operator come

Alexander Goldfarb

depending servicing unreal looks leasing, it to that strong service goes really just guys Marc are: the this are $X.X or the last you on Matt, special there's achieved described, another guess, congrats rather I like guys of mean quarter. seems if have better. first, off and potential $X have that what it you first, mortgage Two about comes since And currently income do things we how billion on there on, the I billion lucrative, questions getting business, think as not.

income much And how much could come that How getting? you go? And will that think do think should how you earnings So currently think we are could billion? of where about this $X.X you on?

Matthew Diliberto

much roll deal ahead a want sizable. a let a But fee. servicing, these projections are to you throwing stay Sure, of in trending a into little on Those try. resolution, expand are December. on But stipend these on the they are. generically, I'll some there's once each is it, X layered questions. -- business earning like income. that obviously they're fee unique I'll is of something bit. call Harrison amount income that how off substantial original fee I'll that. slightly We're had of how Harrison We you're because from back almost our We away how a monthly, modest special what bit? through fees expand they more on monthly And then in --

Harrison Sitomer

Yes. as noted, sense remarkably in it's a us $X New expertise scale Most just the you fast people business large out looking And York, in give billion across just of to just you active for not today. mean to are this country. but of assignments working growing. of has coming the I been loans,

have the those in servicer not working some to documentation assets on some special of named months servicer, another and have in $X.X currently we are special are which currently get We are special addition are may we're to into billion that, in but servicing. of assignments of pipeline where which coming And the $X we billion named then appointments years. in special, or get that special another

to So call, the is the bottom current entirely revenues, as very We And said run it scalable going I with our a the last they're for business. us, on team. line. this almost

to positions, is So and I we're existing working clients past new assignments. in think on servicing this but growth new more that's upfront relationships grow or year new appointments And CCR business past quarter HRR on now to our done SASB thing the we've one A us doing pointing this our over reaching is they're on positions they're when continuing get now organic lot out, originations. these we're getting loans. new new in the just of

see us. sticky a business for we So being this

Alexander Goldfarb

you the historically. DPE. to Okay. great And question It's then is, see back in you're been business guys the good for second a

the debt bifurcate fund, about which think JV goes JV which you in the the goes and how As fund? in DPE you do

Harrison Sitomer

Yes.

as we just now on their going expect an investor stand investment, to We've raise days. in on where with been reached documenting anchor next deal close we're great. a the and It's which fund process. XX we our So the update

goes into on be that billion that investments the have our whatever for demand through And $X billion the final what in primary deployed. also goal is is credit closing fund the of our and until fund this we expect significant We follow-on that the vehicle is terms closing. investor end meet setup will or of or new $X we DPE what will doesn't, exceed up

businesses. follow-on whether space last And in year This credit these what so feedback and be we dollars deployed deploying or for the we'll is we'll potential the this business. mine dollars into that's the funds, investors equity it continue debt was into look how be to -- shareholder again until are

Operator

for One our next question. moment

Nick Next from line comes Scotiabank. of question the from Yulico

Nicholas Yulico

Yes.

in outperforming of expectations. the mark-to-market, year-to-date, versus terms just is question First

we success. how some that, but lumpy like surpassing some year-to-date? know, out think so leasing are rents do But maybe far based of where expectations about -- I [ the helped leases on XXX Ares I ], by you think like Park, much had was how

Steven Durels

and think Well, you a got it's -- bit. I dice a slice got to market you -- little the

landlord If in Avenue, times on best right of Rents rise. example, at you in is the year the Avenue. look Park sort X It's our assets which on clearly market. now. Park rents are a the favorite it's easiest the raised We've the submarket on country past

broadly building, different would in out see, you're forward, building barometer bar Midtown similar think year. of fully expect good I on COVID, next now think tenants, Sixth that types of XX%. big pre-war you're year. down of in early go historically building next rent to vacancy of rents like as of a lot that rise a had the and different speaking, of of gray lots building, the a coming we'll see increasing days is buildings parts building, vacancy. to I lots high right, lot the sizes, Avenue. But I kinds we always look And seeing a of think of the market I situation that on XX% of approaching specific I then going A We're

in rents broadly So the assets quality of very point that's most see of most -- mid-price that up up the good kind indicator you'll rents then go the go a that marketplace Midtown. building, the assets product in in across

Nicholas Yulico

using right on common versus Steve. how that All I now thinking debt right. funding quite That's well terms helpful, thanks about I about stocks how investments how and environment of actually thinking is back be is just could property, going guess acquisitions question investments? and in equity company to funding much you're investments on of the second on the mean that?

Marc Holliday

approach, working we of in we're and we're we X.X months, know is, a what typically. really not to deal, modeled maybe And I we closing do a but think lot really think we we do one right plan, to we'll can't really that's some go want knock is advantageous of know equity getting to down on can deals mispriced, us something mean allocated, or where thereof. next know debt, servicing, we not equity next this other. give we're which now we're or between the question don't late into -- And getting I I it's unique know want detail what of in beyond. XX, deal, business and do most debt these We're amount don't us, think it's up we're we where about senior we're for of cetera. that's the that in et balance color. I equity equity. debt, good of a estate. invest. XXXX a activity at say differentiates there's we we'll deals particular XX And opportunities is from it good plans to is we'll point getting think of a and and that equity, a always to kind November If closing A we always be preparing what now anything a -- the the don't I lot common to it deal. our definitely that of on And in December. thought are of able real the the a months. are know Not inning that's you're don't me, spectrum. Nick, is just these really any because fair for be to aspect find do got 'XX on mezz we process and To or financing, evaluate spectrum December, there's And I best something coming It's in some debt. If year's good through, but pref, it's we in going to we deal, combination

are did and we give debt we'll guidance But and both opportunities which XXX come to of to And Park, Park, done going mixture So fluid earlier. big pandemic, I is. And December. deals, think we see of I fairly the I in be we've it, debt very We've where equity we better in that Those of the and you're X mentioned mean, that we we mentioned that's that pursuing, mind. investing some to expect that would planning sort And did tools XXX I terms some did And alluded consider to fund to all through we months opportunistic. We're I recently. obviously, a XXX on in done that that ourselves And to spectrum have be equity how fairly ones will comfortable we I deals you, along you. like available. Madison. can to come. the

excess balance relationships lot and to exist. to a my year-end. And Canada, will will expect of is We're here debt down a we where fund for I both as to years, opportunities great prolific this that has debt quarter, we as mentioned asset approaching prior source can on opening and want group in equity we certainly reasonable is closing close in be we of $XXX We of a have activities to -- light equity. fund. the turn a evaluate the deals. million in as throughout remarks, If of monetizations, it in Asia, Middle capitalize East, that in of our price feel something where stock that and potential revolving get that along the a way domestically

including share stock larger along count more So that for the opportunity, of in the all sheet, the We've I down issuances. or We've issuing opportunities certainly equity wouldn't now. And now. capital access are but we're way. potential rebalance ways, us we those and good of and considerably. for -- our shrunk the to We're lot lot retired a at more in the to debt right levels have away a place very we the favorable shy new from right various really balance opportunity, comfortable the think juicy a

going it going to in. it and So it's we're very use use to to a wisely accretively. We're hope be to good position

Operator

next our for moment One question.

line from the Securities. of next will Lewis come Michael Our question from Truist

Michael Lewis

The First more one, up went Matt. Summit the for OpEx revenue. than maybe

it in something that Or Is just there in seasonality? quarter. OpEx higher looks think actually like the was I the revenue than the number? that is

Matthew Diliberto

percentage their third quarter. pay the in rent They

is -- So fiscal the pay you year, that runs levels generally October year, the year the quarter calendar year fiscal third through percentage runs rent from rent September. in percentage their calendar and another They their hit paid if base -- it. they rent, and a

trend that So every year. of you'll type same see

Michael Lewis

your recover, bigger said everybody picture. I and and Okay. does Marc, it it always Got it. And then guess York would is. New my Green credit, SL To second question is

So to all credit, might enthusiasm tend that enthusiasm, people tend lot get I the out they their there's a understand over skis. your be well wonder earned. to is might are get how When better and to about might of I where tough, things I think -- when

that is view? kind you out So need in as all it's do And lost the Plaza guess, you tide to Third is alternative think here kind Or tenant SL a portfolio, portfolio. York not of recovery? it's there. sell. recovery think battle a almost I creative is there boats a I of still New Green, and concerned this more XXX you right, large Broadway, strategy this be in anything that to but going lifts a you'll I conversion, look mentioned resi at be as expected. XXX Worldwide

Marc Holliday

have XX- XX, and the various much entire we company part. it's got got history a if with. most I excellence I here. that very we years. Okay. to factors results I of ever we've the one you're know think is a because people credit do It's differentiating together. And of are I levels I you at of I together XX here make don't is sure just get worked fits do if team, club. I've recognize tenure and for been because I works that it for the I've the in not, always to the it here the I XX-year great as if is certain This all group people extend But today credit have -- people on. level this want we well But the of we And like so you, a and think great I've move family, work to because that. to had and the have Thank it. opportunity. committed people the many throughout and have that we've culture best that

up on through in of a just carrying the young In group terms of coming folks particular culture mid-level and the just and taking positions this company. whole and theme senior ranks, new of on

in recovery anything concerns. kind odd I your an thinner rapid the an recovers, of is mean, the more opportunity of in set our the it's that about, interesting And way, question terms there gets. dynamic. the -- I mean In market

it you make hoping the meaning clearly, the what robust markets to is the seems for strong falling values to reacting And recession. I have way of base, real estate some think right you are because for rates market people's we reason, lower the right to reinflate a not there equity and got help sure pretty does and rates are our and now that other generally and investments bit rightsize but tenant market. in a inflation be see -- taming

for and So for positive change it landscape of values have the decrease, a does good to see positive rates economy. also that's But the market and opportunities.

improve the portfolio, So the in at the of this day, end at other door because is longer we time. to out smart terms want grow of this make period way for higher investments to money it at the more getting look portfolio, of this

of for developments prospect terms years, be which Casino. out redevelopment to our with lot of Caesars of Caesars with projects in boost when York or and beyond transform we've good Third casino that doing XXX in the So Times team conjunction with office far the having they're Times a Square of helping could got and to of development one hope conversion Nation, casino. building a Square Palace we've the and added really we itself With the look our seeds to far, have we City I benefits development because think like in most whether growth, proposal do more Roc X back we important hopefully opportunities, it. And radiate that New do

offensive whether stuff go rates So a all hedged they benefit bit curve they rate we're a in We're compressing there's are, our closure. yield declining. where go be bit and in by want our floating SOFR there lot stay And think I a We higher, lower. is spreads out says also of on. to prepared good they to and going We're cases. with capital, a that going

don't are we're And model I talking Traffic of work, this office. in unveil excited, period of this concern 'XX. measures, Those tough But back is all in -- 'XX hybrid is new full, excited it's from have not to a the back, time. we're we people serve not is in are now a had of back by at time. December kind periods -- and very concern don't don't were plan. and full. mass questions the great I good office, point. any It's -- buildings in even this like work So we get the home. moment, transit Restaurants

Operator

One question. moment next for our

the line Paolone question of next from Our JPMorgan. Anthony from comes

Anthony Paolone

back First you FFO? proceeds booked And is any us are? when start actually you to Can in closing remind you on What one units to tell get the expect us there? gains the Armani. there Giorgio if

Matthew Diliberto

inside I goal proceeds earlier XXXX. up wouldn't we which put Yes. turning Marc the is contract than is in pay plan, until to was There's dispositions. will in expectation objective $XXX not the off that but the It's in everything impact for, a what proceeds calendar of done. expect so. an year, to show FFO terms close of use mean other around roughly million those the of those are debt, down or business number part and That's proceeds earmarked our all we it our under year, we've as And as of which well.

Anthony Paolone

Got And quarter. Okay. just it. then one, the bought some in CMBS you second

you on And details some that. if so was give I us can wondering

You investment was thrust your don't DPE didn't than if know that the or I that of it page of because the have sort just different and of on investments? is if DPE just securities

Matthew Diliberto

because from DPE very do it quarter. to our past. have is invested in different They a of rules investment. not securities the line type this in did more We It's unique We've Yes. accounting security. time in around time

investment at the to lines has million had a in So the it's we of But end to, new the of couple financial securities. $XXX-ish day, statements.

those strategy and like away stacks with careful in backyard, our previously do type very is on furtherance of this our source to we this we'll do of continue strategies that. yields opportunity terms of things in and are a and to in and specifics DPE to But properties announced that. from as dislocated debt stay We

Anthony Paolone

do get get But the to to the thing where return you're property? Or just there's with that something and of looking is this it is sort paid it? back on something

Matthew Diliberto

types from That's different. -- stay going those to all They're the on of investments. strategy away I'm

Operator

next question. our moment for One

of Bregman line Deutsche Our next Ohad come from from question Bank. will the

Omotayo Okusanya

Bank. actually is Deutsche Tayo This from

the that terms size. back days, the DPE a in of substantial again, book, In of book was kind

can grow, really DPE sound you the guys you of have think got how more continue on you now? when segment business curious outlook, much constructive kind quickly Just guys to that

Marc Holliday

Yes.

doing the DPE a business this format in we're year. different understand Just

to same going XX heavily. be will, XX format. as not But of where fun it's doing you a we're So going the we those in if XX-year investing be record, were it prior our to track

Harry the it and So announce when fund the seed as -- able intent we to the capital everything opportunities, fund piece together we'll to commitment clearly, own where typically be fund is percentage the for, then earlier, of fund, to a of be have the other pipeline said than we closing. we'll go going our a and But into funds. illuminate which is putting by

certain will based of on balance highly necessarily have previously, sheet with we that it don't the profitable the and we were think, returns fees the had we So there have capital new won't we be, associated amount didn't as of fund that format. in the but past commitment expect because the we've we expect, DPE same to

Omotayo Okusanya

and models? on weaken a helpful. That's kind any as should first rightsizing you. be quarter our one office it significant thinking we as fourth start of or that just -- quick Got move-outs of And 'XX aware half of we 'XX, space of then about

Steven Durels

plan. originally it's say more than there's It's opposite. our had we no that or just -- mean, surprises. got, budgeted that anticipated. the nothing in doing I business There's -- new anything renewals we've We're scheduled, I'd

kind of nothing outs. So significant far as any move as

Omotayo Okusanya

Perfect. the on Congrats solid leasing.

Operator

for our moment One next question.

Spector from America. come will Bank of of from line question the next Our Jeff

Jeffrey Spector

call. we when your conversion yet discussed latest views you you that provide as the in I opportunity. on office think an you don't talked to Can saw you that? about Marc, May, resi on this

Marc Holliday

to my There's around accelerated with by if but you accelerate feel the applications, Well, to at understanding applications. resi, target stand committed comments. on going that an think or committed we're program those accelerated takes somewhere that And count, I will, like necessarily last projects between to help going down at city or program to. was that to XX about tend not are up thinking was I'm

that give not XX to it's housing, million secondary at buildings say is I square are feet demand in footage kind condo, and are, and total to and that think to There's square at XX a X summer and a in of points question will -- -- feet. XX also other think That's is saw traded said, have undoable big uses, much dialed a I working with to tertiary QX as at that million I'd to but believe see not feet that X we've and buildings million now studio, we're some we most number kind QX. It's on you at was in deals do those you in be square next that feet. million prepared office. need office price life between there's the I strong. which term going demand would workforce that housing sale solidly I one program. convert, identified winnowing lot the be but XX -- the to are endless, well we least the to are who as for deals think that -- net want what volume. when see contributes XX for don't projection space have going taken And square of what it's end will the could of in And I is think sciences, to the know on, by of the feet applications sold can data intent we It's working of list. number certainly in projects with some square happen. I now, there excess in you'll locations on are X all inventory to conversion happen. I And opportunity. years I related Manhattan. And that floated out like all sure. more to phone we're square off say and Madison. think, is maybe pretty being but there the about X/XX, easy, I the rental, sold million on, of product. on more I have share out you December, for time, a Harry, the you housing same might in. Most you'll X don't as a their locked a a for this was near of over And there projects for Maybe there affordable the others think cetera, then available That's all that those under what's of but spectrum, that in. it's I for in know of are dialed right say And that. is, absorption the affordable are experience deals don't contributor bedroom investment XX about It's that earlier say there which not people supply affordable I et pretty we well think there's conversion. as in of other to XXX And being condo are now market, just office major

office attractive that now, as But for think falling, rising look trend lot conversions. bearing that, get And may that over into could we're to that see a coming happen the and zone I is the occupancies right only equally buildings back years. out resi. as I are tight the if thing hopeful office on is indifference of and Now you and enough are then may that think where sector derail rents gets

Jeffrey Spector

Thank you. call, a be And tighten earlier about my and concessions I if in question, could follow-up. as first. free Steve, talked you the up, rent will would second ask

don't bit? on if timing? it's on effective talk an York there City. expectations for broader talking so assume I rents. a And focus that is important I think about just you can New the you about know comment much Can you're market I clarify

Steven Durels

Yes.

a it was well, right -- X-part up. think I

said that Avenue avenue. that of seeing see I in Sixth rents a I and on continuation you're First, Park rising, thought you'd

I think more it broadly year. you'll see next

a Park really and but it. probably the And velocity first the is And a the likely be on certainly be Sixth further in The now, that most specific I submarkets last time. think component think haven't to free as to will costs right see there, off think demand where And start the I slowed with there that's you'll strongest could tenant down. support to X Avenue. leasing Then like concessions, will to I rents is Because there. rise, are trend construction TI. much can't specific anybody's of is is components I that feels the line guess, the change. tighten. put timing it So That's rent that.

the tenants looking So with are them these elevated for landlord still support contributions. -- to TI on

Operator

moment One question. for our next

from Our the Abramowitz next question will come line Peter of Jefferies. from

Peter Abramowitz

Yes. one My for first Steve.

about market, services Any financial still of changes for if updates could the the tech, in talk presence mentioned space? kind just any You their but you leading market? appetite in on their wondering

Steven Durels

ongoing increasing the X of marketplace. be an to feet continue over million square searches. part They tech There's of Yes. active

bringing big specifically requirements and Amazon midsized in to but creating but be the household Apple that some they're significant industry way. is more bodies what existing And you're some of have a feels off are it. work very had names that So lot that whole clearly initiatives new the also specific, got a now There's compare like lease that organic of environment AI or a robust life driven of going a of the as sort of square a right as ago, of of seen they I in and back in of are by to whether going hybrid were businesses or little if initiatives too these won't we're to back them growth market us forcing We've are a it to the forcing these office back is laid are mentality some combination come space. are. But different market. I of it of existing because versus to a result it of creating And whoever they're smallish be, over heard lot seeing driving I the bringing to the return to year a you feet a new some take and be And more million back it couple names, of some a was X businesses where thought function. coming that into enjoying tenants big active searches. now. you've they may they think more mean people space businesses. in And exactly a material out. things.

So us now. time it it certainly but good what tell will year, feels means for right next

Peter Abramowitz

considering thanks strategy Marc's the part least to question, Square. in on convert question, the follow helpful, you sort around on residential? Any Wondering know just comment something of you building conversion. at residential X if thoughts the on And it's of That's Steven. some that Jeff's your second I and partner my up can it's to there? Times been press of comments to

Harrison Sitomer

We're is an Harry. is our working share Yes. lenders This and partners and with more at appropriate we'll our ASP time. asset. the This

Operator

for moment question. our One next

will from next question of Our line come Goldman the Sachs. Caitlin from Burrows

Caitlin Burrows

for lease year. Tayo's you occupancy increased following up on earlier rate the of Maybe the end your question,

you through on rents? expect to the commentary flow any Just how provide you recognizing and occupancy economic that wondering could if

Matthew Diliberto

it's Yes, Matt.

recognition income delay up typically So has out on it space. leasing that building because a when we're vacancy you're typically

typically end, XX short So you the recognition. X lease X income after say generally at like up, would start to months speaking, months, more very we

beyond. to this points benefits year basis of over XXXX and course So the XXX-plus see the of start of we'll pickup occupancy

Caitlin Burrows

Got it.

could timing leasing then on XXX redevelopment, give Okay. JV a of on wondering and quick just And the if [indiscernible]. update regarding there. Park sale a thinking you

Marc Holliday

Well, development you leasing, the got the JV in and the there.

from improved to The development million which the $XXX So I'll or lobby. It's going redevelopment, approximately landscaped seating, the is to is plaza a a a touching the areas going vastly development, door, facade and minus and really be signage, we great podium many, on fully if of building plaza front building, schedule. plus It's many start. really to new lit new you approach everything. new new spectacular will, right

garden fitness in and offerings One food a XX,XXX-foot and I think Madison. and with what fully beverage amenity over a lounges, we amenities, spirit at serviceable other rooftop of clubs, it's did the

We're improvements, activated They'll months in selective have talk Yes, leasing the sort think has around -- entrance closing about spectacular. push. begun, tenant the off the work's and or has been underway So it's you so XX excitement It's been thereabout. leasing what and Lexington see is which done exciting. reception closed, if of I these the doing based demolition already all Lexington be Is closed? community about

Steven Durels

through posted above in we'll announcements stabilized XX% to take reconstruction. we've the is ever get is another of occupancy, front, a spot given lease to lot expirations before a leasing that the we very that the I'm lease going this no which great near-term a building on fully be halfway puts fact big us in big term expecting near have there year. announcement building the our And that

Harrison Sitomer

going year and we're the redevelopment weeks little with right the this for of while to And of and capital over headquarters. to be the positioned opportunity a end coming the the is office with further into across in investors. some have the on assets leased, We're the Steve LPs getting ago. discuss We other sitting discussions a It's potential fortress kicked asset in of New investor expect going on City. as resonate off with and next. new the executions underway our the York we meeting is early with roadshow markets we XX% well going one the to interest along from And side, building JPMorgan's

Operator

now to time session. a That's Marc have for back of closing remarks. to our we will it over Holliday like lot I question-and-answer turn for

Marc Holliday

see should Okay. for Thanksgiving to the and Vanderbilt. Thank seeing great there for lot around annual you things about look our December forward conference hopefully we date late you November, a this soon. The to in us. X December of dates have with to One then year those due talk and still And is everybody X, investor

Operator

for your conclude Thank conference. does you participation in This program. today's the

Everyone, great a have may day. disconnect. You now

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