PGRE - Earnings call transcript Q3 2020

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Paramount Group Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded today October 29th, 2020. I will now turn the call over to Rob Simone, Director of Business Development and Investor Relations.

Rob Simone

good and operator you, morning. Thank should By quarter to third access earnings now release everyone XXXX and our information. have the supplemental Both heading the the the found Quarterly website be Paramount in of Investors Financial www.paramount-group.com. at Results section can Information, under

will of within the securities forward-looking meaning Some be statements the of comments federal our laws.

regional cause should differ usually risks phrases U.S. similar could refer are impact the our from to of numerous are identified and SEC of expect, should limitation, economies which other you the exercise that statements, financial tenants' including, caution use more results to financial the conditions. such filings of the or in risks for you condition words to a uncertainties actual that what relying our we negative detailed We could and Forward-looking on materially and and interpreting the discussion our of them. Therefore, global by as results results will, expect, operating operation. without and future and COVID-XX, upon coronavirus, subject impact

some to to Treasurer; then and the Brindley, remarks, Chief will that, President, earnings for Wilbur Vice isolation prepared believe these as open information. Vice we is and A Officer measures should During we directly measures, supplemental turn GAAP not in which Paes, most call These the evaluating With comparable be and considered our of operating useful and our measure in I'll will we the Leasing. of available Albert. in be over accordance Financial Management Executive in Behler, non-GAAP with call, third will we Hosting the substitute measures results discuss call a the Company; release Company's XXXX Peter Officer call the our provide reconciliation President, can Chief Executive financial performance. Albert questions. or quarter opening GAAP. today, and to President the have our Chairman, Executive

Albert Behler

per back for results everyone once third straight-line this analysts. crisis. this of and with our the hope city quarter. joining were staying the our assets our in healthy. again you was everyone is thank Core of share the among $X.XX to my for and quarter and Rob the proud safe in consensus are roughly commitment and that onset was I'm resilience are and and FFO team's strengths the the We accordance this you by very FFO Thank line in during write-offs morning. and office of Paramount Paramount. demonstrating impacted guidelines. at outlook, state the the core our with resiliency Notwithstanding, uncertain pandemic in results their Since We

from trophy and benefit roster a assets very high-quality a blue-chip retail. to having continue limited with tenant portfolio to exposure We of

from have not levels. our changed collections and have and materially remained consistent Our solid pre-COVID

in were detail. fact, quarter. In second this quarter third the greater the in points in up in rent receipts Wilbur cover financial portfolio-wide results XXX XX.X% our basis XX.X% from will

and this of buildings environment. been The vantage environment. who arrive individuals our experience from tenants reintegration engage months of Our We quarter remained have continue who most the initiatives important their in feeling positive. to extremely operating thus with focused From return far are has to point, our work the safe to several during initiative was the healthy on and in to feedback tenants workforce. our a now secure

them vast their and return. workplace for keep an the return offices, holding highest in are said, XXXX to ourselves to health of majority measures to science effort planning execute we being tenants with of advance That continue an safety up to standards while gradually to continuing are ensure early that will several comfort. and the We our to the are

the in updated continue We keep on field. what we seeing to are you will

available space. our On laser-focused the leasing front, on remain we

Street. market. primarily As square Avenue the at provide Barclays are seeing the West of at foot what previously, Block in XXnd details we XXX,XXX this block will highlighted XXX,XXX XX comprised square Sixth is and Peter feet XXXX additional the on

the in was activity from renewal last Tenants longer-term the terms was clarity of quarter on as leased occupancy driven is environment trend of cautious XXX before by an the for at own evident amazing basis. quarter. for years renewals. success We needs. case we again ranging the leasing quarter to are results of the space Notwithstanding our Most once remain and waiting to respect surrounding same-store current XX.X% Avenue. Fifth that have a story ended most in This one with this quarter decisions better leasing making current environment, general three with the their discussions

have jeweler a with long-term lease iconic We luxury Winston. Harry signed XX-year

Let at manage. we provide Fifth Winston some square currently me a leases about background. retail XXX XX,XXX Harry is which Avenue property that feet

XX% venture owned is XXX joint also third at and XX% Avenue partner Fifth XX% a Our by Fifth of Avenue owns remaining party. the XXX

those initial of Harry reflects we of be provides current senior Harry the and The of leasing XX% over teams past, we and on multiple and to available XXX deal stakeholders XXX Winston the arguably by numerous deal we creative complicated it and creative being previously the Avenue for success executed XX Fifth this I'm approximately for of at this There here XX-year of few like Avenue availabilities square we XXX a retail transaction the the are demised Paramount integrated result achieve efforts of current involved a of space understatement. This the desirable essentially the fully both prior at retail lease combining part opened thinking between average it Executing broker that space two Paramount. avenue. would great of that fully XX% the per was conceived the space transaction, corridors on Fifth Street. welcome was rent weighted Winston a foot. in Harry This thereby to Fifth spaces the and West in seamless space. XXnd XXXX two now Avenue portion provides and and the was XX,XXX involved did to pride of and escalated an executives one adjacent in of two to delighted of ourselves rent into in tenant. immediately leasing at Avenue. walls our pursuit. in leased the at We is square Sixth most the the occasions and a confident XXX we expansion, As spaces $XXX Winston have Fifth prime say feet Much Harry at innovative essentially XXX space our environment unique with on will The combination our unrelenting spaces the no and prominence Winston

remains sellers asking and transitional bid The remains and incremental cost a average refinance very economy how debt debt aren't plays remain Volume longer is add in buyers Turning their lease-up would-be-sellers on to assets long to low looking will are opting the of market in current liquid core how offer do for markets global view a period reducing is terms of lease bargains, crisis. emerges our this transaction are are wide. with buyers is low and spreads prices. capital. this assume Opportunistic but levels this that price assets market. leased instead. capital discovery. historically The at out and to weighted from that blue-chip better unknown risk that require a with will well It and and market depend roster than lot tenant for How

remaining our know entered for an last early asset in sell agreement to into March, As XXXX Pennsylvania Avenue million. we in Washington D.C. you $XXX

scheduled to is during announced, As close fourth quarter. transaction previously the the

to in continue that completing work We frame. the towards transaction time

shares average $X.XX per in October, price the share the quarter repurchased opportunistically Wilbur give close at weighted During a or third $XX of and we aggregate. will X to details. into million million

in one course, Of of our a number course reintegrating numbers is safe healthy -- priority manner. tenants and our current

creative innovative to expirations continue prospective we to and on continue as incredibly with focus extending tenants. lease We engage and be

maintained well long-term. will at quarter of focused for I With amounted billion the the which and we $X.X positioned the sufficient to ensuring Peter. we are turn to We that, capitalized remain end liquidity, call the and on

Peter Brindley

Thanks, morning good Albert, and everyone.

Avenue. to down XX.X% were the figure served square $XX.XX, average rent Fifth and XXXX. square and The we for reduce further During mentioned based lease Winston points majority new renewal we more basis, leased of starting quarter roll quarter-over-quarter. third feet activity was at a XXX quarter, rent Harry lease feet XXXX previously quarter of same-store XXX,XXX XX basis at end, XX,XXX approximately the in third than with we which excludes completed a our leased weighted At on

York and share over year. a New at feet XX,XXX now expiring modest has portfolio the remainder of the square Francisco Our San

space X or TD XX% our at Avenue at XXnd together expirations. on laser-focused Americas the to Street, which ahead Looking the we XXX,XXX include West approximately Barclays lease-up largest lease Bank our expirations XXXX, feet square XXXX the of comprised and of XX space which of remain XXXX

Beyond ongoing our lease roll future footage per strategy pre-lease manageable that, role. a and expiring of between X% our square to with and annum result basis lease on the space approximately XXXX, derisk direct is XXXX

While among portfolio manageable increasingly and term, apparent it these become top lease us remain these in that well role will we has times. serve two our as comprised blocks through tenants best-in-class the of credit difficult of space work priorities near the

XX% below quarter any with approach million shifts several square and commitments. quarterly the velocity making to according in year-over-year the in a the of during consistent the investments a typically number mix quarter relocating, of CBRE. downturn feet chosen was that significant of space our or and X.X high percentage expanding total Midtown, wait portfolio. leasing down inquiries tenants toward The over person X In has to to for renewals past of Turning see approximately third markets. million increased accounting leasing overall and new during and expected and executed space activity largely XX% were excluding tours our square longer-term renewals disproportionately X-year With take months. new as leasing Renewals average said, toward feet being have

tours quarter instances tours are in currently virtual fact, in the In to underway. during negotiations have we which gave led the subsequent both many second person and

York on a is portfolio quarter-over-quarter. down points New same-store XX leased basis, XX.X% Our basis

required transaction quarter, the due square disciplines numerous itself, of multiple within only and Winston. This to pandemic, which organization. the approximately also square intricacy leased to XX,XXX XX,XXX we stakeholders not deal During third each was of the the feet expertise of to coordination feet lease extraordinary including but the the Harry

as include We Avenue. a are XXX tenant proud at Fifth to Harry Winston

America stated previously, the have remains XXXX Block Barclays of we we our of As focus as primary Avenue the space. market

today's to access only both an the even on offering private major way certain given control a transit compelling such welcome guests. for and create Our and affords to in our of hubs attributes XXnd not and environment and a more opportunity for overall ability as also Street that is experience walkability branding the a employees but enormous corner tenant large their Avenue, Sixth to center

Street, at we Additionally, are XXnd that TD most the the tenants. space to XX marketing property appeals a trophy discerning Bank of West

continue look progress. both updating and We presentations in present to through buildings virtual you forward person to tours our and on actively

to York, limited commitments. have on quarter term we Despite length and transactions, have the Francisco and remain are market. San sciences during basis believers approach resiliency the by Francisco. per the San firms, toward Francisco JLL. space in New market in tech, San announced point all and increase life October in recently renewal San Similar office and the as experiencing wait a tenants non-essential a vacancy to we is XXth. on the lead pause to the now relocation largely reopen particularly note, Francisco financial large-cap market, focused expansions cycles, will total offices see at services, this taken way Turning in short-term longer XXX out long-term Unlike the contributing realized another leasing anchored of in what third prior recession. activity quarter-over-quarter On positive to the mature of begin Mayor's which of would the

in New we occupancy increased new As increased seen have in leasing physical York, results activity.

down same-store Our San quarter-over-quarter. XX.X% basis on a basis leased points XX is portfolio Francisco

the that square also rents initial near-term we well of portfolio results. Wilbur discuss XXXXX over will has square feet leased $XX to turn term quarter per I The the a call through who the limited third average resulting With San positioned manage Francisco foot. in X.X the years During at averaging will role with a pandemic. summary, financial to approximately portfolio weighted

Wilbur Paes

$X.XX impact of per straight-line share Thanks below we core included share. The fee lease. aggregating of per consensus. FFO $X.XX $X.XX current per of which $X.XX core Winston FFO FFO These share income was negative write-offs balances core Peter. of from share and had net Yesterday quarter's to the $X.XX items non-cash Harry a reported rent per

Excluding these items, core per $X.XX share. have been FFO would

once pandemic our GAAP to As not expected, negatively third more election lease same-store the utilize by provisions to by were relief modifications. impacted our as relates provided for specifically, the by and the again it quarter results

highlighted and We believe certainly last been essentially I revenue whose As deferred quarter, in on abated remarks from or my cash are basis. one our tenants NOI was better in in we X.X%. rents the recording conservative the our by prepared more cash a true is period. generated negative business approach have cash This the current that same-store growth NOI represents primary driver being the

highlighted deteriorated Albert solid to tenants non-office collections to third from at the office over during and continued our remain earlier, collections As have portfolio-wide collections XX.X% XX%, have improved just to XX%. quarter slightly while

modifications. X.X% cash this X% who cash percentages the reported continued basis. covering XXX,XXX in COVID-related taking any of GAAP. collection Francisco before were modifications, are we in on negative Mark-to-markets Mark-to-markets square solid and X.X% leases negative on and account XX% quarter, and New basis GAAP our a feet XX executed report XX.X% reminder, San peers York at some a to lease COVID-related In GAAP. mark-to-markets cash be into a unlike our of metric at As X.X%

$X.XX $XXX price revolving the the Turning cash under at with million comprised $XX credit restricted October, $XXX the liquidity sheet, our $X.X capacity In over over in shares of average in we aggregate. into and million facility. billion weighted quarter or million we to share X.X of our third ended and and cash repurchased quarter a of of per balance million

weighted our our at end includes under was million interest rate is our debt has a has Other weighted borrowed and a X%. the X.X%. billion XX% years. of debt of debt interest rate of outstanding borrowings of and debt And has This weighted average remaining is maturity of is floating under X.X% $XXX and five nonrecourse. that Our fixed a quarter revolver. average and XX% rate a average weighted the all was than $X.XX revolver, our of secured interest and average

fourth We lines please have With of no are operator until laddered. and well open quarter the beyond maturing the debt XXXX for maturities our questions. that, that

Operator

you. Thank

question be first will Stanley. ahead. comes We conducting go session. Instructions] question-and-answer Morgan Vikram a [Operator Please now Our from with Malhotra

Vikram Malhotra

this Thanks bit on little that's metrics? the Could it's free you environment give for taking the Difficulty] -- difficulty] number for played? a very, first us the can new very to implies difficult I color know question thanks a what rental really retail say and My pertains question. And range for value background. lease Maybe providers. [technical more on one you color any [Technical give us maybe

Operator

Our question with Wells Fargo. Heck Blaine comes from next

Blaine Heck

Good morning. Thanks. Great.

to in that space more concessions So, And flexible activity biggest you or XXXX. Difficulty] I commentary have clearly, in just current you your much all level seen [Technical I be rents focus negative appreciate of but the there remarks, a and to be the lease prepared in guys that you at on discuss continues and at change on how backfill for a since question the think willingness little a guys the get Barclays positive signed give on can And again interest maybe in you've to tenant or there. last any either whether order noticeable quarter? color

Rob Simone

And it us. cannot Operator? Blaine hear looks like

Operator

line The is live.

Albert Behler

us? you hear Can

Blaine Heck

you hear got now. Can you me? I guys

Albert Behler

with discussion can we Vikram, were then Blaine. back Yes. with in that -- up go operator to and were maybe We we We a you. can you Blaine hear we catch

Operator

Sure.

Blaine Heck

fine. that's Yes,

Albert Behler

Sorry. Vikram, back? you are

Operator

live. Vikram, your line is

Vikram Malhotra

Can you hear me?

Albert Behler

back you are Vikram, on?

Vikram Malhotra

back. me? I Can you hear am

Albert Behler

disrupted and the call Yes, hear another I you we think But from we in line can now. had was Blaine.

did -- hear said? you what did So you I

Vikram Malhotra

not. did I

through. voice didn't come Your

Albert Behler

Okay.

again. start me Let

different not broker that teams The was only a as team solved this resolved was was and it and a be First tremendous Winston, the of achievement Paramount also lease a deal especially, putting it ownership. but remarks in the -- of Harry that together. between the my entire three in very prepared without done said with had I construction complex to ownerships all, the

to the is covered that space XX% by of available lease. your retail So got space of it question this about

three space the right. consists the the And at at the -- visually townhouse to asset, it's the of look look you retail townhouses. If far you if --

of If front the in to building standing asset, connected front the in XXX. of you're is that

smaller frontage. space about it -- feet as has is for I said a about XX future. of entire it's And of And XX to So the opportunity XX% XX% space. the of entire about the

Vikram Malhotra

Okay. free on rent just give And us how was does Thanks. at clarify what to you color for so grade? And provided? much this rent can imply any levels

Albert Behler

it's four that a it's -- that covers foot And and we floors figure per space. space basically the Well, it's was plus that's square total complex basement a of that reported the on $XXX are there average couple taken. entire in -- floors

Wilbur Paes

mean, is to X,XXX at fronted look square square the this And at effectively just I space feet feet okay? give X,XXX entire the Vikram, And when and maybe add what grade you at grade. did up lease

XX of that's less -- done. your was grade than that So available space at XX%

at majority you the leaves grade left that's with to it a vast space So of lease.

other is said imply what's out of as you on color you we what average floors across the So at this and Albert give should grade take what's and rents tremendous lot specific to a into figures rent to but get the the you outcome. floors we that could on been. it don't have a When want

Vikram Malhotra

it. Got

period pre-COVID -- give just a can and And changed? have Okay. how of sense the maybe you us free rent just may versus

Albert Behler

of would think execution. this pretty is pre-COVID I much kind a

I And very, very already in you execution. New retail York hit. a know before think strong markets were figures the it's suffering the that COVID

Vikram Malhotra

Great. back so my and for going it. questions. Got answering much Thanks

Albert Behler

Sure.

welcome, Vikram. You’re

Operator

Fargo. Blaine to Back Heck Wells with Blaine?

Blaine Heck

hear you Can now? sorry. Hey, me

Albert Behler

Yes.

Blaine Heck

Great. Okay.

real in noticeable just bit seen a either positive signed remarks, a I or but more you since but on question, flexibility commentary in quickly my if interest and heard guys your you can and last tenant color if in maybe the rents all to change sure little a order get prepared guys any negative just appreciate And give then quarter. it not on lease again maybe XXXX, the I'm was whether there? you've discuss concessions So in

Albert Behler

much Really has changed. Yes. last quarter since nothing

that that the recall I even ensued of lease we would when XXXX it. on COVID initially of might You footage with had because off some in all planned before took that the expire. Barclays leasing impacts square hit the goal

is rent end has activity to the sparked same. up but bit much compared hasn't significant been the So by on and little last Peter the quarter. impact been it virtual pretty Actually and tours August a doing

that -- the lease It might it's out. So we And not a because understandable take are confident tenants are a in they get how and we really plays pandemic situation to think want that's XXXX. decisions see a to for I done. longer make really because sure at rush that's

Blaine Heck

Okay. and you prepared how wondering leasing most for is of in renewals Albert, That's remarks of, in years mentioned maybe to helpful. terms your are I'm is, extension market treated for But deals much shorter Peter. more one that treated three this as sort the rents even essentially you than those new are guys they're unchanged, and concessions those negotiating maybe they though actually part of or as and are even are the the usual?

Albert Behler

XX decisions to develop or over just the and building. months take much kind delayed very an would next that's XXXX those XX It's how the me situation another environment of we're of same. of here. They months to to intended footage into for move potentially when some reminds and business tenants It more -- the them all the square Yes. XXXX see looking extension same

it giving the are way normally concessions is. lease not just and we the extending So

Wilbur Paes

statistics. that you Blaine our can see And in

annum $X.XX. leasing this put at leasing that foot look we were less the than TIs you I and the activity per and statistics If square commissions per quarter, out mean,

rent that right So was X.X%. as initial percentage of around a

instances getting kind not saving necessarily a expiration of deal, where the on it's we're a necessarily in -- short-term in big that's pushing So pop lease not you're but side. concession out near-term but market rent, tremendously you're

Albert Behler

Right.

have short-term. pricing power in So a And greater result as you them of exchange. Blaine you're granting flexibility

which So heard, that's have generally and fewer you've on we now as generally firm what the holding seen are rents. concessions

Blaine Heck

maybe and We your time. rents. wondering excluding an Wilbur. most calculated short to helpful. expect it in if rent Last But cash with a that the a more of from peers? they was approach quarter of booking comparison are appreciate your that as given your for apples of you it me, for to conservative way amount revenue question That's I same-store Great. within deferred competitors guys NOI little the to had recover bit apples that

Wilbur Paes

Blaine. appreciate Sure it. I

same-store cash quarter I treated NOI reported our clear doing of it think this you're and which NOI a in X.X%. some negative we negative positive that peers would was the that just are be X.X% the to referring growth that way And X.X%. cash to be

basis So point our effectively swing there's impacting results. XXX a

Blaine Heck

guys. Very helpful. Thanks Great.

Albert Behler

you. Thank Bye

Operator

Next Lynch. with Merrill question comes of from go Bank Jamie Feldman America Please ahead.

Jamie Feldman

the done. the kind getting that to that I that that out the that that tenants you're again? space were to done, deal guess looking needed kind Winston have still as also Congratulations go see you there and lease is we were of how about now space beat played that trees talking on think or to, at other of

Albert Behler

different have are other pursuing rent still around. -- team for you kind have options there -- which it's Peter large pursuing are and those. been many Avenue his the not of levels that space that and and large a that tenants at we on unusually Well Fifth space activities

tenant find So it it's unusual outcome tenants now, a because is same I'm square two over like Henri in one took it's laid very for think this in category. out very the that previously space. Bendel similar satisfied one XXXXX who feet very, or way a category attractive very with to I potential or And other

Peter Brindley

gives think Harry appeal Yes. ultimately terms space enormous on shaped the we left that of regular space Jamie very a who that, to. took, retail Winston in we've flexibility us ourselves based effectively I with

left I with marketable look piece space. that took, the space So what very think if you attractive a is at of Winston and Harry we're

of we are with we in sensible didn't together what discussing about reveal we by so we're thinking way can way negotiation prospective that piece and we're of how it now tenant. left about a of requirements course to with space. And thinking our the the any balance But the other

Jamie Feldman

you space it So first by floor, how or square -- all level? footage breakout the like by say did does remaining street or floor is

Peter Brindley

floor then... ground ground XX% of the equates space. -- Winston what the to Harry floor The equated leased to has approximately And

Wilbur Paes

feet was grade over. I just to have left No. that's you at square going XXXX say, basically

Jamie Feldman

other And grade? a It's just floors. nothing on

Peter Brindley

No. No. to on it other There's you at It's Basically floors too. look and a has floors four have basement. townhouse. this

I and on luxury you whether in to retail The location it think space can be be and I or to the So that's have is very lifestyle schemes to and there's going And XX,XXX the a opportunity. this saying to flexible with office feet very, don't so of is that months. next square now. or lease within to But prime be lease done into And optionality rest floors want Fifth of -- these another are top XX occupy. you gives X rush I the the space lot tenants, the XX connected to going and some to modern use. is of think leased

So we this plays how see have to out. market

across board. As is you retail down know traffic the

the a this So is direction. but first -- step step tremendous in right

Jamie Feldman

absolutely. Yes

you the is on much basement how and So floors grade that's is left? in XXXX at upper then how much and the said

Wilbur Paes

square on you're XXXXX square feet with first the of it take left bog want with on XXXXX the leased the XXXXX off-line grade But can we those this square and rest on down is remaining suffice feet you I floor. that of space. by don't you call block We XX% the give foot get Jim what's we can we flow details. say, to that is and and to XXXXX, grade an flow what's as off-line. and to think what's on going basement detail

Jamie Feldman

it. Got

then know time Okay. the talk TD you lot Barclays. on can about space? I plan the for spent And a marketing you've of

Peter Brindley

Sure. April building comes of back The shows year. next The in space beautifully.

up, have to lit of with been as a in virtual served have all person that precursor tenants have will and as said previously I've these tours if We sharing we you we which tours. have floors

We paper. activity considered have good currently. on trading cases are these some we all some In floors things

different very And so Paramount would brokerage really and what nicely. leased expect. think our than in requirement front no of And of the approach it reflects the our of previously. space all have to from I in up we've market pertains blocks as getting is seen the community every with We're the you large as that you material opportunity

is So tour highly have my whether virtually, team an think it effective it's been sharing we with unique conducting or in-person the in this we market. opportunity

Jamie Feldman

then And pipeline for characterize the how would you Okay. the interest?

Peter Brindley

person leasing it relates building We -- would say properties. more of say in I last X, activity weeks, down as to is we've generally would would had that as as in the is have you I seen would this but say this I which one new tours our X I active two categorize very strong.

Jamie Feldman

your have then the of some thinking good coming about or over about just your Great. I know versus some these talk in. capital with liquidity. needs and about liquidity? next CapEx months current just you the are have guys of think maybe you But then guess you you put Can needs. I And Okay. how capital so XX to expirations

Wilbur Paes

through at to effort plan that. I as preserve consistently spent capital of When we're enormous speak. we liquidity. in our our going forward that we amount again XXXX an going process update mean We time through Sure. to we in look XXXX

additional expirations move as feet Obviously the have TD we'll an to square upcoming with liquidity. at that equate very very, Bank. lease of continue XXXXXX into serve market asset we us and Barclays move outs the XXXX. known And mindful look the we sale are between in in are that to will which We that

we're basically way XXXX. that's the going And liquidity approaching needs so, into

Jamie Feldman

Okay.

granular give numbers. more You can't

the about I'm with -- spaces? CapEx guess these I some thinking big you So needs have

Wilbur Paes

to elevated. that don't coming believe space, is be in giving any It's lease-up the that the that needs Concessions lease-up what a TIs is to of going if whatever due right? function TI discovery The mean to of CapEx and we are the are a going price to to tenants at spaces So, market for is be will. you these largely concessions TI. The we question market from have is away you're today.

even remain as up that deal concessions that say if math market out expect doing to We are where you figure a you you can But, XX%, were to elevated. concessions think lie. and we

Now feet again, XXX,XXX in the of XXXX. that's all you assuming also lease-up square

lot is because TIs how you not be answer connection it that do much much base that is that those incurred. complicated, lot would we spaces building an otherwise the deals, excess tackle of in capital would of above-market not There's So in how a but you to be CapEx. on in of those it need There's and depends what work of XXXX, to have cause going to with needs give we not to a TI. the landlord very that

Albert Behler

Jamie, condition, have think extensively years. of years. from last witnessed the last and over take I pride couple keeping couple over elevator the the in assets both our of We in the we lobbies tours as have couple first-class great had renovated been assets seen, you of

So, I greatest think towards and swinging new think necessarily pendulum the an asset good pandemic, and we after be are more developed And position. on the of the not might location buildings. towards be in I a latest to

And potential accesses Sixth accessed tourists that where visitors. important have being an our already the traffic can it around will major in with I We of close by tenants. think assets is be and I more being the advantage. be think building will how to located, Fifths it see Midtown and and employees

Jamie Feldman

for then look don't you coverage, -- last you how think guess next year, these like? I And about do get you your Okay. me, That's coverage lease-up would your dividend think assuming what do helpful. dividend

Albert Behler

at we are this point. I think guidance not want we don't -- to giving

go I want you appreciate question that I think this And that we don't it's into at to Jamie, that point. too early. hope

Jamie Feldman

Thank right. All Okay. you.

Albert Behler

you, Thank Jamie.

Operator

comes Evercore. Sakwa with Our go next ahead. from Please question Steve

Steve Sakwa

you was buyback little hoping the I trading? Albert, stock a the about market the additional sales currently in Thanks. just today's given could about capital talk where is asset thinking How bit allocation, you're program.

Albert Behler

Yes, Steve, thank you.

position. good in market price strong we shape at asset diluted tremendous at We the XX% in per been square anything this We tremendously have squeezed pricing. that of know heavily year. We or And pricing not will these assets a and XXXX foot. sold are sell

pursuing it's focused that are have say like I past In an are developed see think stability to we and mentioned investors, watching. the and whether I lease-up and are as markets see So, have in really looks asset want decent that been returns. if assets so prepared our asset, be. And selling we too saying this But like, long-term be it we can on investors investors my remarks are especially can core parts we anything that point. to would of at story, I core I from that other or early an we in Europe, that investors, where considering

venture can't So we joint sales. I clearly size pursuing or another used are and We asset potential back any But have of specifics buy give to have you it, we that regard partnership but buyback currently approved kind sales with the $XX timing to seen of you million. program.

on want buy neutral. an worth to we have bought said of back we level as opportunistic before, million shares we available. leverage shares $XXX back and far, So we but And million $XX

Steve Sakwa

net right. follow-up maybe leverage higher burning of guess question. EBITDA in and go of a the The to high, TD. these to with and with today Well, I leases in Barclays speak debt to off sort some at is least on and Jamie's likely to just

at that to higher. leverage is go number going short-term So, least

get balance asset the for not So re-up I'm spend million of just you trying more sales? to you're on $XX the to the buyback program, if willing sense how the or aggressive a on are

Albert Behler

Yeah.

to look opportunistically. think this it's early say. we Steve, I would at too

levels. leverage the watching are We

it's about And really are We careful too to say. clearly that. early

you're want we this to and asking strategically, we do what about. understand but So --

Steve Sakwa

Okay.

Wilbur Paes

And A at where there's obviously ways to I'd is, debt trophy leverage, portfolio quoted leverage our different mean, operator. And a I look the thing add net level. only on to you Class on EBITDA Steve,

If you scenario. look our at I in loan-to-value leverage the from we're perspective, low worst-case the XXs in a mean,

debt opportunistically lease everything net will basis. to increase the largely buy you're that, metric So, in it said given been will expiration shares will that the executed that leverage-neutral we've a far we seeing Albert Having on said, look -- obviously, thus XXXX. near-term has to EBITDA as

back XXX per price north at of an foot that. assets we're call foot $XXX, $XXX bought We of, selling implied and have largely a it,

leverage. allocation capital very of while our being believe strategy sound we mindful So, is

Steve Sakwa

been that until is trying locked much in I'm behind if middle the just and guess it keep just term? to just really city other San maybe back. to San allowing And really Francisco – short longer does the has much I last to build York,. and the is like figure Francisco, contrast, when still than compare San are year, employees the allow down then come Peter, does of how of San question I just out of next Okay. Francisco kind beginning more realize has. to some seems New And Francisco work York to pipeline But begin companies much workers from markets kind New

Peter Brindley

Francisco San New the currently. back you reopen. allowed reason relative ahead us I activity. we XX is Francisco things offices, nonessential and occupancy But to New non-essential most the York now of subscribe mid-July as of when in are think that reversed and all and Francisco our original Mayor indefinite leasing the to know look, Francisco, the in to New new effective closed reopening that think San you was to plans we Francisco one offices announced October I here Steve, San will occupancy level relative physical are to portfolio was in recently San And Yes, And lags about which considerably that York, of generate think San regard that York. set effectively for entirely

San good office. really everybody my to others, and offices colleagues Francisco relative in week then allowed news So is I non-essential back here the to very But to San lagging. this earlier Francisco no speaking the is question think New reopen. eager get is York that, to with was And

in levels occupancy of Francisco new see made but to activating we'll that in important quickly decision start was suspect a as to I impacted result this our in a back component which increase critically So buildings mid-July. been that's San leasing has activity,

what next San So in very Francisco. XXXX several for months will be ahead terms lies I telling of the in think

Steve Sakwa

me. for it Thanks. That’s

Peter Brindley

Steve. Thanks,

Operator

Daniel comes Our next from question Ismail ahead. with Green Street. go Please

Daniel Ismail

from you. of well interest aspect that Thank seeing refresh what of how us in you opportunities you're us business, terms business? industrial your Can the fundraising as is Great. as on fund in tell

Albert Behler

say, investing, we – regard a one there's to the capital some The where of that would And rates low with better looking the mezzanine to they is the levels it's rates the the over distress are attractive for but opportunities believe. we relatively obvious rates the no I opportunities. that's want at looking because liquid. think of keep for are, And we very couple Fed have that will quarters, get interest fund would investments. number long-term that a and opportunities suavely really yet, some Sure. of – attractive time more there's with are And were The extremely lot of there last those XX will quite at stay for as a markets not support as level.

that for So we get mass opportunities fund looking better And expect investment we opportunities at XXXX. in the the will are there.

powder So we have dry available.

fund is mezzanine as But the the especially of interest, inhibited investors. as difficulties a by seeing safe bit On there special we raising debt are well for and little situations. side, course opportunities traveling

and pension getting inflows to they it make these of have gets some it's that invested. because the large funds investors So capital have sure and better

Daniel Ismail

next then on Thank in Great. voted And with measures week. ballot the California being you.

as if those question. about pass, potential terms measures capital of thoughts means San some dispositions business would your Just thoughts updated your thinking a two-part I York in what guess of acquisitions between in measures Francisco, And think on change more of particularly on in new San it your terms of portfolio? for unfriendly – and Francisco does New allocation, portfolios? or you one that then few the two,

Wilbur Paes

Because it everybody like is to our balance least again for the the that Having a one and referring were is in polling to think Danny, at public else relative not. to market, lot XX of to they is into put on going as And anybody means. recently analysts what on that portfolio obviously, market in now else the in impact have sure. least you're acquired. passes whether or Prop be split out that, Sure. it's in down right the watching that middle to said the assets sector closely November. reports the that that these We're

the at pass that remember fact is it, when in our there tenants. that whatever the to Now thing the to resulting have you on from impact ability look to is we

part bi-coastal in Look, that of going or transformed appetite And you investing when about impact think to is to That in of we've your to other market. with earnings a drag so question said, be strategy it net respect our terms the PGRE be to negligible. from REIT. to an the

no to Francisco York. invested San seeing. formula or has path invested us follow deter is we always focus decision be model want New say, That's been are X to in we that point, continue from Y opportunistically, Our There the this investment making opportunistically. to what an in program and we invest been to does will on and based not at

Daniel Ismail

Thanks Great. guys.

Operator

next ahead. Our Please Mizuho. with [Operator Omotayo Okusanya comes from question go Instructions]

Omotayo Okusanya

the Harry morning back Winston good wanted Hope everyone. to is well. to go Yes, just lease. I everyone

of Just least with space, of of Manhattan. is lease the much kind the part kind map rent that of than grid to based that be envelope of Bendel level on the at gave much back but than kind foot the some per out retail on of what street brokers the the kind the the information retail numbers seems lease, us, coming that even we're suggesting you better quoting lower of of still is seem a square in

with are market So, brokers why at than what I'm the so, kind ball of much the just as -- do if a we quoting rate? that? deal on lower are And

Albert Behler

And Henri square an precise -- so the of think The and we you was be lease. received about for by Bendel mentioned we've space foot we Bendel the XX,XXX is ground this wrong on it's XX% on Henri lease $XXX the entire lease have square of that. can square per far I space. or $XXX what which on that about are No, far, is another floor, part to XX,XXX-plus valuable feet on most most And only the call, the valuable the this had. as lease feet entire

have We more. even

to ground XX% about Winston. of that's leased Harry currently it's So, floor the

this lease. with already is covered of previous rent So, XX% the

Omotayo Okusanya

are think as implied leased Street There from numbers better. rent what Albert, market versus quoting on just get what you I Bendel, Yes. the square Street have maybe be… is for per math much misspoke, the is look I I retail Winston. the retail to as foot to question that versus I seems my brokers I guess, what versus the

Albert Behler

Yes, but property. the just not This is space floors combine on that back of have of is and to lot it. the four you in a retail. It's

it's So, hard. very

you through and are We to Street the separate call, more retail it the in with it you maybe in part. space to smallest walk several address happy is it's a But floor detail.

Omotayo Okusanya

Got you.

Okay.

Wilbur Paes

for that according The is you find not what you absolutely respect true. to space making market comment you'll not leased is that will absolutely this with what you is Street the feet find what today think, in that true. square was retail at are to imply that, I can that is up, X,XXX relative

Omotayo Okusanya

Okay. helpful. That’s

We will take I it. it offline, but appreciate

Operator

closing to comments. the I Thank like Albert to for would turn Behler over you. floor

Albert Behler

looking call next are you Stay our thank the for next much forward and very Well, meeting. here on we being to safe.

Operator

concludes today's This teleconference.

at participation. You for may lines disconnect your time this and you thank your

Paramount (PGRE) 1 Nov 202020 Q3 Earnings call transcript