PGRE - Earnings call transcript Q1 2021

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Paramount Group First Quarter 2021 Earnings Conference Call. [Operator Instructions]. Please note that this conference call is being recorded today, April 29, 2021. the Development to and turn President Sharma, now Business of Investor will call Sumit over Vice I Relations. Please go ahead.

Sumit Sharma

Thank good morning. and you, operator,

first Quarterly yesterday. Group Both Before everyone be the found and like Paramount I'd heading, can the information, quarter Financial Investors the our of Information, supplemental released we www.paramount-group.com. release in XXXX website were to which at under earnings Results begin, to point section

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

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

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

Albert Behler

Thank for healthy. We staying everyone, is you, morning. and you, joining everyone that and hope safe Sumit, thank this

We are the towards first performed unprecedented has are as end moving distributed that this team these am $X.XX of per reported we for Paramount are share. nationwide. optimistic the Yesterday, cautiously closer how times. of core FFO vaccines of I we very proud being the during quarter pandemic

and very to portfolio per our our as have XXXX results We we with driven In by exposure itself high where of recovery limited signs do office. continue These population grow This disciplined and its as superior see to safety been manifested number XX% San our is government's resiliency portfolio. numbers Francisco positive received even about the XXXX of early this to fully dose, overall XX% has about very received first rate tenant and their and higher about greater strength our $X.XX while in has vaccinated. an are have vaccine FFO investment impressive over to New rate as financial of at vaccinated. the fully been of XX% continues climb, we population first dose review core sign to their a for have That announce through passing have workplace called offices continues of of our public of so vaccination the reaffirming back many where more to with and to the home the to and retail. plans results demonstrated the we will share. the in operate our companies share the XX% and the Wilbur XXXX eager With quality our markets detail. them our approach see most York, $X.XX normalcy. are between our and come the the from day, pandemic, roster they throughout to guidance as per in a see rent We onset benefited health of every collections Since assets mandates. return so begin aggressive tenants, speaking optimism our guidance blue-chip demonstrating we reasons to years. In to impending the return for for

assistance to As to I their highlighted return last our tenants to an offering with Based regarding the these ongoing and discussions. on plans quarter, our maintain we if continue needed. office dialogue

will and We of see uptick are to be We however, probably half the when our office physical welcoming return their repopulate. we ready in be evolving tenants that It back most post-Labor needs. XXXX will Day, and to meaningful accommodate occupancy. convinced look space to offices normalcy the time when the levels to are forward second comfort a

the of we renewal the The was In square activity Theater activity lease of by driven quarter's leasing renewals, During at comprised most quarter, of leased this of York, the total XXXX last year. XXX,XXX the a was feet. majority like Broadway. Gershwin New of

not will Although the New needle lease bottom terms with gusto. City York conviction return this to to to contribution XX-year line, tourism its that Paramount's in mover a speaks of and Broadway

While Peter minute we on into will on go my the leasing a let what sharing front, greater me seeing are detail spend observations.

close act that that are increased. market. to Brokers to have serious and activity, fight beginning every to market time informing notwithstanding deal is levels plentiful is as the inquiries now see prepandemic landlords tours in-person of for the activity, We finally in nowhere are are the real tenants

to the the West design, very is us lined ability is to execution minimal focus trophy quarter government and difficult columns comes with former the the feet affairs. our to of with to efficient execution to the Post become our at lease, to square Bank signed we have XX,XXX reasons. loan desirable their The in lobby as are its XXX,XXX and primary in This reception to and from the same Bracewell underscores year. The at $XXX to our this square leader level As appeal several this most you XXXX that at refinance well TD to in it Bracewell times. the for core the XXXX portfolio. welcoming will transact the confidence enables but with West week in will highest in renovated we center New is the of be in of November the forward and It end, next asset, continue lenders the specifically you Wilbur Not know, speak newly availabilities, York we service space needs. remaining lease when additional lease also focus continues XX and our leasing that the legal space XX,XXX with asset, feet and Americas. and Bracewell block look square we location, market it to lease are subsequent a Paramount We an mortgage of matures vacant a of stellar, West on XX ability foot LLP XX to them million Avenue the XXnd. that portfolio. Bracewell update at up market only status.

the at recently the brand-new More announced report further asset. amenity center of add XXXX, appeal our will this We which to coming plan this in create on to to a quarters. also

their spreads despite small in volumes leased this are Turning remain and in terms believe of Core bargains with low maintaining command roster to continues period as unable quarter, lease a the the are price well uptick that market. transaction remained wide. the in Overall average expect bidder tenant blue-chip sellers market weighted quarter opportunistic to buyers discovery the the XXXX to fourth transaction superior longer assets to a they offer continues asking pricing. as of be with We find price.

to achieve returns ahead, long-term creating an Looking our the shareholder highest risk-adjusted prudent to our with eye strategy our standards towards to manage allocate the value remains and portfolio a manner in long-term capital for unchanged, shareholders. highest

current well remains of priority healthy availabilities tenants as our reintegration lease-up the in safe manner. Our as and our a the of

continue that, before, the we sufficient liquidity, and for Peter. to the remain to well which of the end With As capitalized at amounted term. positioned $X.X long call to billion turn and will we I the quarter, maintain

Peter Brindley

everyone. morning, good and Albert, Thanks,

This consumer excess XXX,XXX in in XXX,XXX it quarter, Not derisk it roll productions feet also but tourist our ways. does at in Theater leased New demand lease of our time. the square Gershwin XXXX first Midtown the including all home the of The notable Broadway. office successful York, Broadway largest included feet, in and X statistics, lease, Broadway not theater of we Wicked, in most XXXX underscores Manhattan. only long-term is return leasing During on square space to growing is the for at one of of approximately the and Broadway while eventual optimism XXXX

of renewal and Most a at XX,XXX rent serve reduce from square again and was to feet starting the foot. lease, per roll completed quarter beyond. leasing leasing Aside approximately of once square theater XXXX in weighted average lease activity this $XX.XX we of further based our

with expiration space lease ongoing share annum and profile future X.X% of at our to This per remaining direct our on pre-lease square derisk roll. strategy is XXXX. basis footage Our the through a lease manageable is expiring result approximately

Street. last As and at initial and West years. XXth as entire Albert with floors subsequent XX occupy Bracewell of night we XX,XXX a our Bracewell signed an end XXnd square lease stated press release XX quarter term XXth to approximately noted, foot will for the

during quarterly a XX, below with which signature to appeal activity of vacancy to to location, and leader was high Midtown, A team the XXXX. a velocity, million the X.X even is transact portfolio the square in tenant Despite for expected, tenant experiencing space the leasing number below by numbers XXnd headwinds, of first our more field, lease toward XXXX. space fits new times. reflects realized active the the all X-year larger return to above of renewals we in XX% square will negotiations of investments with continue recessions. Midtown asset comprises were disproportionately remain ratio XX% April total feet environment. X-year are inquiries, percentage expanding broadly this relocating, over portfolio. second feet out Paramount's ability new expect executed feet, that of of West approximately of previous Renewals during X.X the mix longer-term or desirability but according leasing backfills million encouraged renewals, in in wait-and-see square Bracewell our of the XX% overall And ever-increasing the activity excluding leasing average Importantly, the availability, The of upcoming the peak further is work quarter making on is and during in-person tour as to and our available that quarter, current rolled tours people these XXX,XXX for vaccine portfolio accounting and our current consistent of Street, the profile and quality XX a we increase of availability half high-quality the tenants Midtown's and now CBRE. a scheduled shifts In XX%, take approach of commitments. during in typically the the average their of expire at significant Sublease toward in uncertain space as

points on basis York of a portfolio Avenue a New basis, at quarter-over-quarter, is the Our Barclays XXX largely down lease XXXX as same-store of Americas. XX.X% leased the result

of to block Americas this level market to As In develop XXXX building, we recently on Avenue the of our amenity have we with primary concourse have remains the building's the we mentioned the overall center announced stated our and previously, of desirability. plans as adding connection of the previously, Albert building, space. an marketing focus as

proposals. getting today's in the more have on exchange capitalize chosen engaging at of activity offering especially evidenced tenants Our have increasing Prospective variety we compelling, environment, upgrade represent than of by a instances, number are the the currently our as of the of subsequent and and in are had industries their fair we tours many market is and offices. and conditions market we share to in with of XXXX quality

the also momentum executing Street, we XX Bank to the XXnd build West TD at created look We we the Bracewell on space marketing by are as deal.

We look base quality Midtown you tenants well-located, We trend highest-quality quarters. the expect and to the tenant diversification of forward the future as in to ongoing pursue flight updating and from our progress managers. on assets benefit to most

vacancy Francisco. had leasing were San to commitments. United JLL. now total realized taken space a as percentage disproportionately toward in during activity per direct of expansions more of limited basis This a quarter as of days wait-and-see shutdown quarter-over-quarter than have contributing other which the tenants pandemic the a result to high city offices, Turning the a any longer-term again, the is renewals States. approach the San and for Francisco leasing transactions relocations, city nonessential endured in Once XXX first point increase during

change orange at of then, tier, to in uptick XX% to capacity. number reopen an nonessential begun tours have have we the with San for of California's things Francisco the However, state seen Since the of requirements. moving offices into and allowing new number

led renewed venture string capital that are job market, postings, quarter unique companies, we heels billion funding, this excess in new to by Francisco. with more successful the Francisco million just funding we Ongoing in alone, in fact, or particularly square the record San XX the in is Despite this XX,XXX in in particularly and tracking days. San noteworthy a million. of raised In in the of San XX VC Francisco-based San in $XXX $XX In set large Francisco robust last tenants have a investment of remain first requirements of San given optimism receiving of companies increased the resiliency XXXX. comes $XX IPOs in which the long-term believers on Francisco-based pause of tech, market. This of feet

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

During leased we first feet the approximately weighted averaging square quarter, years average with rents per of initial term $XX foot. at approximately X.X square XX,XXX

just X.X% in portfolio at XX,XXX Francisco has San share or feet rolling Our XXXX. square

to expiration call ahead, square results. through annum current I in the say, discuss Francisco a through positioned well our that San overall profile San our on With summary, manage the financial approximately our per expiring to is turn to will share basis with who Needless XXXX. manageable environment. is lease Looking portfolio Francisco footage will over X.X% Wilbur, the at

Wilbur Paes

Peter. reported we Thank was of core of FFO share, $X.XX consensus. which $X.XX per ahead Yesterday, you,

same-store FFO of primary at the the than prior of expiration expiration the core result $X.XX of This the quarter's current as years was January XXXX in driver growth X, Americas. expected, share X.X% NOI was As Barclays per lower also a lease negative the lease Avenue quarter. cash XXXX,

quarter, Gershwin that was leased X leases XXXX first we feet the including space, covering square executed During the to of XXX,XXX at Broadway. square feet XXX,XXX Theater

While the have statistics we always in space. leasing of velocity only on our focused leasing have space our reported all for office portfolio, the types

As negative for such, negative $XX.XX XX.X% lease GAAP square rent average at the weighted average XX,XXX foot square second-generation feet XX,XXX a office the mark-to-markets XX,XXX in to Of X.X% feet basis a was years. square square the quarter, on in quarter represented of initial leased term of leased per a leasing of that for which feet cash amounted X.X a space basis. the our and were share on weighted

place the of much Francisco, All terms generally of office leasing in the San took in than that New quarter where shorter are York. lease

lease average However, share Center. a by was than even square XX-month this an foot shorter quarter's renewal usual driven weighted of and lease term at Market XX,XXX short-term at was

We guidance. year for our to Moving reaffirmed full outlook of XXXX. the

and to much been still to form tweaks our blocks year, that same-store share be package, Barclays some the FFO supplemental per been expect results per move-outs in the have to there known driven our for the $X.XX share core large between While outlook. X at negative we not and which continue of midpoint, the $X.XX this guidance, to has building basis We range TD and $X.XX overall expect has Bank. in by or outlined our changed

a goal XXXX square the for XX% this and XXX,XXX and with XX%. remains Our lease rate still to end occupancy feet leased between year between and same-store year XXX,XXX

$XXX of under sheet. billion restricted with revolving of capacity ended We comprised balance $X and $X.XX our and Turning in million our credit to the liquidity, the borrowing of quarter facility. cash cash billion

XXXX average billion in quarter and that years. debt to year. at end maturity a of mature was a includes of this average is of X.X the outstanding November and weighted rate weighted at course, of interest debt This, set X.X% has $X.X Our

debt, average the X.X the interest and Excluding is X.X%, weighted XXXX rate weighted is the years. maturity average

leased. to touched reception refinance upon, we debt. from only we has asset are remarkable, currently Albert As currently the notwithstanding XX% been lenders market the in The is this received that

$XXX quarterly lines the prior to will additional which during we million our With with operator, We to details. questions. that, the expect you please refinance maturing fully for provide call, open debt next

Operator

[Operator Instructions].

Morgan from Vikram with comes first Malhotra Our Stanley. question

Vikram Malhotra

the you Barclays on know the at prospects the outlined done. You ahead the that it's for getting tough signed you've environment. maybe that talk just space I -- incremental expiration Congrats Can additional space? about TD. lease of a new and

Peter Brindley

Sure. Thanks for the question, Vikram.

at paper Street West trading TD on XXnd are XX those We floors.

would the firms service instances X You deal obviously predominantly noted which take firms. I to X And we balance floors in that with, the completed or additional with we But very most paper trading firms Bracewell, space. those are there on financial and with really recently about. financial looking are law we say, excited of service

very generally feel we the So there. activity about good

to -- financial I floors, active more are since picked up handful the we're block, and I with we've we good the relates tour a tech. think Barclays it, of plate-based Because right we how those trading prospective predominantly would doing paper large services well to in those beginning markedly offering, activity floors feel financial the direction. appealing XXXX. of activity tenants, the it the year. and in we early been tracking of services we that has our But on would are of going As even floors, priced and say very both the about and say has

Vikram Malhotra

either incentives? been specifically, -- any of new restructuring has it beneficiary any requirements you And seen of have -- pertains post-COVID of potential actually this? square in a San work-from-home either maybe one just a hearing And or may what talk lot evolve. about, York, of you about New and more. then just there's agile Obviously, discussion Francisco both how maybe as to Can have footage or workspaces you're terms positively been Paramount

Albert Behler

in will second. chime a Peter in, Yes.

to of culture York. picking is up A based lot their that think is reasons can't a up. come purpose Francisco some as will they has are the opinion back. this. well goes for about New to today mind. that of their deals. increase you it, San -- that can't office quite space, and And we can, the on in the what but do a the big space We don't are And the would business our for for that a tenants looking tenants But train certain wanting but keep you of while, actually, come optimistic want ones quantity call looking winners are And as term for announced are have -- tenants serious who a think to who will in in the for along I the you you long company, be -- muddle ones is early we

Peter Brindley

open Yes. No to continue And question tenants about the importance of that from office. I more will flexibility of hear But we future. the more part think I San -- that up and JLL in be Francisco, find my In the speaking up at really Vikram, with things this you'll that since are interesting. March. quickly colleagues in began ramping to city pretty think

play back starting order narrative along, do, belief into office. in now. we've innovate and XX,XXX I of be, not the is I starting them move see tracking think and tenants acknowledge that interest we're that that that in And think is get out what think the to fact, which that's them is I they're XX things here fundamentally, but would for for think is to And expansion-based I would particular sentiment to tenants probably productive there. and all say right and And are I feet. what in be fact, looking you need direction people as space, as to to they think XX of I have that just they requirements, In excess what's believed that what really tenants square the all thought, like of in are would

Operator

Next question, with Blaine Fargo. Wells Heck

Blaine Heck

tenants of the is is the are appreciate focus, to presuming on that I XXXX that you that I'm some all prepared driven So of their you're was space. the looking and in rent. the more commentary interesting remarks. mentioned to it talking that Peter, obviously affordable upgrade by I thought many

those upgrade way bringing as any rent before, might their of your get have maybe you that quantify you underwriting? seen you kind thinking to in there elsewhere is think you've be any So then Do thinking on of tenants looser you're change driving space? that are take tenants and and to about afford And advantage can the couldn't things? side in tenant you'll that space how about credit there

Peter Brindley

served our -- fortunately, I functioned portfolio magnet as for a credit. good would as a say, it has

roster, tenant. So always know. evidenced prospective typically, to as well tenants, we tenant fortunately, But every we credit underwrite appealed as have by you our

albeit We no do with rent. single-digit higher much all the We period haven't Barclays' as high economics -- escalated that changed prepared feel velocity that number our will to it start There's level prospective levels, we've had, relative hit belief mark-to-market that fundamental at will are this starts about that at think that We been to time. outgoing of the expect our our historically stabilize, very over concessions on. we're expect eventually on positive we good market. still a a we as XXXX. back, is at they've But tenants that to to But be pricing communicating improve the the elevated. of to levels. activity have higher tours begun to I rent come on question based

communicating on rent along I your question, to the lease change our to on been to rent tenants. material And Our relative what credit don't answer front. is we've front, buildings objective the to a all expect

Blaine Heck

Got it.

And you with more long-term give it's very that? of done us Okay. lease Can the a on sticking Bracewell. all, first getting That's maybe you, detail with helpful. then on congrats any lease. Obviously,

a GAAP in basis? that mark-to-market we to any keeping when mind, you give on relative detail what on and is Any TD? package? expect the concession cash should sense And can commencement of then So the

Peter Brindley

per I in what say generally concessions would mark-to-market it, floors. free year $XX on that. is X.X rent be lease in free term. approximately, which rent basis, seeing year per Okay. term, or square deal we're Thanks, foot to take. X the realized with would market, per the positive lease And for of a with call line of that were TI give X.X We months the it, appreciate call Blaine. of I

were generally concessions about with relationship where we're the We the a them. we're line So very very about to rent. felt long-term good feel seeing looking with we tenant, having good and productive in currently. We

Albert Behler

rent TD an at took that space and over Blaine, the times is all level. additional same different comment. not and

are is as So rent Bracewell, floors what higher occupied here. where by comment to a is little there the going than an additional just currently be

Blaine Heck

more about to Great. talked you're getting opportunities relatively Is on open type That's Can to have helpful. hindering deals what maybe might investments? before, there you that you to aren't seeing fund do And those up any think strong Or about the I situations one your the you've talk core make capital definitely you're here? while Albert. just you, new whether side I of are think seeing things, ability of up value-add too bids, some but many work? put open opportunities.

Albert Behler

team -- debt of environment on too buys. That attractive market. of happening market market doesn't But a distress regard the and debt the the in a participants searching interest with side, there. liquidity what's optimistic rate that's are because there the our is And and real And in few it's very for available an markets who the happen might no to opened the in it equity. in not and very looking It lot mezzanine not of want few because look little potential soon. something the market. the asset sell currently. were is bit There's to debt I There's like a up And liquidity side. there think are it's players

will in we but very -- looking which it's very, at transactions, general, good. are So I be competitive, think, we is,

Operator

Feldman with of America. Jamie question, Next Bank

James Feldman

talked on this the Bay the talk And of about, the that get to in more year? Francisco hoping Area this companies Or all provide color you more a about in San can helpful. we've can these are Is be Any the CBD? is more was would really this are funding result demand I seen Peter. you color you overall?

Peter Brindley

Sure.

how it's it. Francisco-based. predominantly But it's we San predominantly about That's Francisco-based. think San think I

in mentioned at high, X the a year the all-time off venture very I capital funding As my remarks, for months were first XXXX. productive year of an in coming

I capital are San looking to a for these these in, reinvest of received of in successful these as in seeing million. additional $XXX firms Very companies lot Francisco. which, are allowing these And of the for mentioned, So being excess that IPOs venture companies XX of companies invested that a space. become we impossible like we're many to sublease right? absorbed which of options, in They number will in are and all of term. believe San ability tenants Francisco, to we some rights the the see We'd have space discerning, of in these a renewal which subtenant. want expansion near But as

vying So of availabilities, competing tenants the of got in for we've we for deals. In one one -- floor. one X case, we're our buildings, our

So San we're seeing activity really in Francisco, which is very encouraging.

James Feldman

you for XX% the still of year-end -- the of that with XXXX Okay. leased are -- guidance And by year-end? then your space comfortable Wilbur's I assume -- targets discussion discussion from the by

Albert Behler

we Yes. Yes, are.

James Feldman

at And from? me, And about the what XXXX? contraction are kind or coming you versus we about expansion Great. guess, should But contractions. of you're an tenant market even they for expansions think space, Bracewell I is does looking market about overall? or drag Okay. tenants the for your what of talked the as then economics. it I you're how just overall space to think can the finally just, you lease Just able even up to also it you talk know on do some if

Albert Behler

time. a that tenant is with long Paramount goes a back Yes. Bracewell Jamie,

Paramount a record, tenant that the Paramount a liked, apparently, of Paramount public, our recall Sixth at building building. we Avenue of track and they might You in They building And when were went we XXXX be to owned a in wanted for that again. company years. a couple lot,

And I think long-term how they we And space. our landlord, be so be the future for And are with how tenants the can tenant they're how really think there. tenants think are buildings, in buildings. employees that the that we those speaks a very how that's buildings. landlord more looking safe operate treating in want focus our And comfortable operates the a I for their and I their to

Peter Brindley

will think the say balance the I Jamie, it's difficult Yes. of absorption what for year. to look like

contribute of of equates realize I and market. think that, just entirety most space the square a of ours offering. all of we to than and way will in what by will subleased delisted. building less recently in see XXX,XXX their excess you'll some And of delisted their but had I our tenant XX% being initial sublease of absorption feet that think a seen space it sublease or listed where absorption to for more have and most We've recently in

the space to owner it's from We, that point tenants but more this requirement When are vary I course, if convert, don't very the may than taking about to of difficult a majority demand are think our really would of our is taking space. that, that's have they more tenants currently. know. additional space, need of little pipeline. is different. But that taking the generally, every such of I of or less our the about quality today. owner. We status good to that composition the feel Beyond inquiring say tenants say about at pipeline I are

James Feldman

Okay.

one more. just And sorry,

the now, to Just quarter. XXXX end thinking you this next about it like refinance you'll sounds by done by get think it the -- decision time

how that you maybe waiting guys is that can debt mean to made the I how markets just decision? talk get up. look First until you Or decision? leased it you about make

Albert Behler

will never decision, to to this. and We Wilbur made a be it's We large want refinancing add Yes. the you a end. and to until wait want --

for to X historically, financing years expiration are opportunity markets don't know reduction, and that to a ago only risk that's and how like we good want of these X And currently we do asset that. know markets and the clearly It's liquid, are of started in a to take -- refinance. You time. at years search started financings. before you why you advantage we point this very always And

Wilbur Paes

somehow to when That's say, because today, that know thing are the well. to Jamie, Yes. I implying, no, that -- there refinance? there where assumptions to the discussion. all talking successfully ability The They space. think space question building would the question, on is priced your market affect are. rents is lenders, only leased answer we're The that the would refinancing participants if the The is into had you don't know I

debt have should the that So the to take Barclays is call. the the the impending and away million, thing vacancy given should going was of we're we'll size our the next of and the that entire and you ability $XXX fully on the refinance market people of to concerned news general refinance report to our rest and away before and take

James Feldman

color are to lenders assuming rents some underwrite they vacancy? Like give how or on Can what vacancy for willing CapEx Okay. finance you are cost? and

Wilbur Paes

this basically It's to, where of little think we alluded right? a market were be paying. concessions what today, also in where bit are. are covered to roll today, I is relative to is Peter going mean, up the rents what He a Barclays

assumptions. basically data exorbitant is today, that's pricing what no they there's that's the what So in. It's are available and

Sponsorship sponsorship. People really know really, focused we matters. lenders this who are. of in that thing is thing kind on other The

And have so very there. going a we're we think successful to outcome

Operator

with Next question, Steve Evercore. Sakwa

Stephen Sakwa

couple been up? expense G&A, A down a the expense on leasing. changed. of questions kind But answered maybe Wilbur, kind color Any relates went items as of just A to G&A of on things, why line and of of lot like interest guidance. it my interest have couple went

Wilbur Paes

line. and in of G&A to of released was noncash. At more the We guidance, lot into time Steve, thing bottom a that the G&A we how all our equity have didn't translates the So granted

some we G&A. out. was where was we further bit of of Interest thought expectation refinancing the guidance, there changed we the made our on XXXX a of on little that that was again, at time the timing So based released tweaks expense,

the fee we the on and received, reception of in we are based expense done in some where because between getting now changed the slightly And we that and the and business interest see other market what income also changed Given assumptions. year-end. fee our

the you to midpoint, some that down. So core or items number tweaks or were there the up was point bottom within moved net-net, as real out, there no line these FFO change line

Stephen Sakwa

a don't was too just in at you technical, the above in there relative speak I came leases, want of other then and to why but the quarter, to you the can what And adjustment to first of and it kind below kind quarters? big Okay. when straight-line X question, get market the look next flip rent

Wilbur Paes

And is given And the you'll to leases with went that are terms close the to needed re-straight lease place being one referring chunky add then get inherently obviously be things challenging we complexity will XX,XXX when curve longer, not of weighted typical of our lined. is public, and that, size you that which in portfolio that bell average chunky. lining to, fact your the have you and its average feet Sure. be straight-line being will to square straight adjustment, The expected. that

a part to is X-year burn off So are -- of now of the years we mark over cause that the of public. X being going lot that

turn I the So go rest you starting into anticipate would straight year. -- negative of the lining to as we

turn is So quarter, the you're line positive first to that and be in first expect guidance with we in that sharply half that range I -- big the for to would provided referring straight the negative line. and

As you'll number are full that the we today where year. south of for is see, the

Stephen Sakwa

quality And of the distress. and assets, high just activity. been on for been Great. guys of good you lot question, hasn't then active pricing sort haven't been has and front last I buyback there a acquisition know

So buyback you activity? the at sort are how looking activity versus acquisition of

Albert Behler

we want I think the as in to it opportunistic past. keep

options have both we So open.

acquisitions. be very, to regard I with conservative think will very we

treat previous is calls, in and mentioned way. it valuable, very cash will the I we As that very, our

Operator

BTIG. Next question, Tom Catherwood with

William Catherwood

some likely below some think the filling you are too some your demand I you but that at up appreciated Or below-market have market growth of the that referenced? in of my me, demand early, in vacancy back have pretty San on improved memory market. it's color right tenants opportunities in San Are meet rejiggering If is to portfolio their the footprint important that space Francisco. in the it or you materially the have quarters think this to creatively serves a there Francisco of especially the about. pulling few that least San been question Francisco recapture the to now? just Peter, kind of some I the some focus in portfolio is And raises and

Peter Brindley

which our to and roll existing creditworthiness focus of is realize the best scheduled And a fundamentally the makes space for times focus the to you example, for course, vacancy. space outcome the from Our to question, at our answer in opportunistic a a on an primary with transact tenant standpoint back are large squarely and in is for that assemble, vacancies. of There can economic that's sense. and take But your block ways standpoint near term. user of space

Wilbur Paes

the relative And to levels. tenants capture point. towards low today It's Francisco, levels, the in to Tom, not like these any space time shoots. right? but and But market I I pre-COVID have it, one green obviously can in -- is is in to are maybe activity would the where and San an necessarily just that kind have versus itself, presents activity say, try We the COVID and a flurry just of lot new data you to the tenants rejigger in not comments grow tenants. that and these does should market opportunity there the a these eye flurry market of clarify wanted today Peter's the you It's call not versus market this that a of misconstrue mean

William Catherwood

kind moving XX quarters creative just why a couple too think past, I XXnd Absolutely tenants done likely I fair. between it was deals and you've XXXX. West of And said that's in of of early. the the

there. retail keep tenants pickup getting that in a the this small list last general, to of recently some near been has And spaces is of back and some on in kind your for one to your in just for kind those on out interest seen future. part into Have obviously know of I portfolio. me. your coming the term? more few portfolio? the it So But it the up with retail thought you in look we'll is the what of getting One market And there seems with availabilities taken in

Peter Brindley

I relatively retail Tom, think remains slow.

see to numbers. people return greater I consumer return and still we think the need in

have retail. We very little

the showing we I have and as saying slow fundamentally, probably XXX, answer very We retail come at remains retail, important remain are But you people and our back markets. to question space. know, until more your as would such will by

Operator

[Operator Instructions].

Omotayo question next Our from with Okusanya Mizuho. comes

Omotayo Okusanya

the would And pay order again, their implications the forward? that, really it or of tenants around cash has do how kind talk administration is So of Biden what to on of trying means to to taxes corporations. somehow preliminary your thoughts does of corporate actually for, my So of think corporations? flows us question the that about raise you one of kind are, abilities and of rent macro impact happen, taxes on just who thoughts more potential the the that, kind could kind your of going kind all -- again, topic to through, I and kind what If it. appreciate for just

Albert Behler

Yes.

negotiated. I end the inhibit what too it is. And little basic early here that I to don't don't think a the way proposals. their will proposed. These say business. it's think think tenants early I not I to think in will our out about. been They have And expect exactly are really it's it's that come outcome it

Omotayo Okusanya

happened think of did a increase you we time past the though Can demand? in office Okay. when corporate any big tenant in taxes? to what other have And

Albert Behler

about thinking past. is Everybody the

companies I'm So innovate their of especially the about normally not in all. been have always the impacting of business And, new at new directly and very it's something the I mean, at and improving strong. you demand ideas. very, to have ways office vibrancy worried San with maybe else, keep should San this tech York not going and so And it and creating business Francisco, Francisco always all. where expect that New will you find participants markets

Operator

of with We Bank America. have a from Feldman Jamie follow-up

James Feldman

to I just clarify. wanted

XXX,XXX does feet pro Or is the to share? Gershwin of square that rata the that consolidated? PGRE So it XXX,XXX And include lease? is guidance, leasing

Wilbur Paes

Jamie, we disclosed leasing we've disclosed and XXX%. guidance volume, When Yes. leasing volume typically at

to quarter, so in Theater. first your the yes, does Gershwin velocity the was And leasing it include which reported the included question, answer that

James Feldman

Okay.

total? it's it's pro saying you're rata share, not So

Wilbur Paes

provided, at that you XX%, When occupancy that's volume disclosed. disclosed We've that's same-store at No. XXX%. the look to XX% rata Occupancy figure always share. pro a we've leasing

Operator

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

Albert Behler

safe. the update of we this providing an forward report us all Stay joining when results Thank for you quarter We the progress second on year. during today. summer look to our

Operator

This concludes today's teleconference.

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

Paramount (PGRE) 2 May 212021 Q1 Earnings call transcript