PGRE - Earnings call transcript Q2 2021

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Paramount Group second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. conference being this XX, today that XXXX. note call recorded is July Please turn to call President will the I now over Development Investor of and Sumit Relations. Business Vice Sharma,

Sumit Sharma

and everyone. good Thank you operator morning

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

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

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

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

Albert Behler

thank Sumit the morning. strong continue you to this We performance and a to for delivered as you operating quarter normalcy. everyone joining experience with steady return Thank we

FFO For the per share, core second by beat reported per of consensus which of quarter share. we XXXX, $X.XX estimates $X.XX

year-over-year proud Street. already have and Avenue Americas we lease as backfilled the despite Our at X% of our Centerview extremely XXXX the headwinds recent comprised Partners. same-store team's I of over am new the focused the cash announced of XXnd lease Bracewell West West XX NOI recent vacancies vacancy Street. This work XX grew from a at with previously of XX% at XXnd with

As half the by increasing we rental by head per diluted are of $X.XX second year, better-than-expected earnings details. midpoint guidance driven GAAP provide operations and the we portfolio the additional Wilbur will income. higher into of our share,

a some minute XX%. mark-to-markets will on Peter sharing to I detail square feet in into Bank XXXX, me deal the the spend markets but leasing we space at formerly including feet greater the XXnd of is XXXX quarter, continues we feet seeing pipeline square recover at team we and San total are XX% to accelerating square our a mentioned of is than Activity gain positive XX where, levels. observations. XX,XXX but and below XXX,XXX front, more still a quite approximately Street leased let West busy New of The backfilled as leased approximately earlier, our In more leased gradually, of XXX,XXX the capturing recovering have as During of been go TD our flow we both cash what in of is of leasing York markets, our activity on over than market. first second share fair have half Francisco. the

in in premium not to rents. declines asking are rents City, portfolio command seeing New it York and major which quality to We speaks continues high our

appreciate our Avenue and feature Avenue tenants premier York in the space at space the their employees' at the desirable our of that focus. amenities support Within that one the locations We primary wellness. quality city. remains submarkets Americas Our Barclays portfolio, believe of health the of most New XXXX attractive Sixth our is

XX with floor June prospective taking to the building fully measured space over very in offices plates, are submarket remains tenants a Our San on a approach located is efficient tenants which in attractive Francisco, reopened centrally that long large returning offices. to and high-quality and In term. to

leasing renewals still new favors activity over Our leases.

strong improved However, return to more the momentum gaining we more to in the the throughout our see continue as during more a market day plan Every modestly for and quarter, reasons markets second for companies optimism period. the office.

expect As and last meaningful to see to welcoming fall. in I a we ready to look to back based beginning with are utilization space uptick of ongoing We their forward highlighted to tenants, needs. office quarter, the space in more continue accommodate the tenants our on our conversations evolving

lease pricing. term conclude, to track. assets tenant continues and leased To a Overall with the half for San disciplined. and assets a our that quarter-over-quarter spend. hold buyers during need stabilization roster highlight long York interested yet to in last New transactions Francisco continue to small on manage well-capitalized remain remains the modest blue-chip of for opportunities uptick Recent strategy first market. in to compared muted capital steady average shareholders. To to our weighted deal of longer long risk-adjusted levels, Four highest there creating XXXX achieve command standards with eye have in Pricing been a though volumes an our shareholder towards are terms the prudent has the returns New in in Turning the value year. transaction since year been and allocate York. manner well term for highest volume portfolio to We strong

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

the quarter. stable portfolio case the continue allocate we that, well-positioned liquidity, trophy for end Peter. we our billion assets term. maintain been the past and amounts our to year, which to $X.X sufficient call With to will I With capital, to of historical remain for turn has ability at the the As long the

Peter Brindley

and good morning. Albert Thanks

quarter, During XXX,XXX leased Midtown we feet for accelerated consumer including underscores at the square demand of XXXX further tourist the which return feet for second in years Manhattan. and approximately space an XX XX,XXX theater growing optimism square Broadway, of

footprint building which announced and believe this which a XX% XXnd space stands at the is the a XX. We space, theater of approximately Street, Partners, lease-up is feet office feet West April with rate We that we leases investment the our Centerview tenant leasing be over of Bracewell, of and expiration with and XX square our at we at quarter-end, office portfolio previously April wide that Bank office from XXX,XXX will highlights trough of square lower now roughly vacated space on approximately at backfilled lease lease, quarter-over-quarter. weighted which subsequent X.X at banking advisory The the XX% XX,XXX XX Centerview an leased undoubtedly with years. and in quarter's leases share that XXXX. majority over Taking at a XX% completed leading basis existing feet XX of for the XXX,XXX XX points Aside portfolio of of leasing within average by account this TD's the in Street of XX% their term into the or West building. by XXnd firm. TD expanded West we square was signed

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

quarter-over-quarter, the activity X.X considering feet was Midtown, up trend sublease square sublease Midtown quarterly X.X% during basis opportunistically increase recessions. to the to ratio indicator the four pandemic Renewals million square have markets. below are did and an quarter peak quarter-over-quarter down the quarter-over-quarter second relocations consecutive second according term shifting short quarter, our to total during X% XX% important comprises is Important XXX,XXX for the months, that to renewals, realized feet, availability below and declined but of of XX% last early additions particularly tenants CBRE. renewals, above each XX now average note, favoring leases in average the gross XX%, leasing XX% longer is space slightly point in five-year however, term length of Turning In but five-year available excluding is accounted space, sentiment. commitments. suggesting of and previous of market improving

activity well-located particularly accelerate, to the buildings. Finally, touring tenant market high-quality continues in in

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

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

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

X.X% with at expiration Looking overall our ahead, approximately XXXX. square a expiring manageable profile per York lease annum share basis New through footage on is

As primary Avenue our wide and The in represent of activity currently are we getting engaging Americas fair market stated as share we remains than previously, the of variety of more space focus XXXX prospective of with industry. a the have this are block we market. tenants our we

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

office leasing to new Francisco availability an but JLL. capital have has fully elevated Francisco's market businesses. rebound declined X.X% Sublease reopens on in capacity lease venture as velocity appears Sizable begun plateaued resulted remains for in expansions now economy all per to as contributing quarter-over-quarter limits the San Turning it leasing Francisco. to lifted as has quarter-over-quarter. in increase to are high-growth and startups San San indoor funding

tour have increase, our experienced as in products Importantly, we portfolio. for to particularly activity well-located own continues high-quality

Francisco remain We San are the and term resiliency in cautiously optimistic market. of long the believers

basis is Francisco San at portfolio up points same-store a quarter-over-quarter. on share, basis XX Our XX.X% leased

more a foot. the leased years approximately averaging for XX,XXX per term with quarter, X.X $XX we square feet initial rents square weighted During second average than of

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

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

Wilbur Paes

Thanks Peter. ended as X% XXXX, which for operations. core quarter cash ahead $X.XX the June to portfolio largely we increased per prior Yesterday, quarter, better-than-expected was of FFO driven consensus. $X.XX compared NOI Same-store by the reported share, XX, of year's

quarter, XX,XXX term. theatre the XX including was leases executed square we square that XX feet of space, space feet year a of leased covering During XXX,XXX for

cash initial average which XXX,XXX to we of XXX,XXX square lease, at weighted leased feet the theatre amounted feet, $XX.XX square leased per the feet feet in square Of Excluding was XXX,XXX square XXX,XXX square the of rent foot. represented overall our by Third that leased a share share at mark-to-markets of X.X% quarter, driven note a X.X% basis. second-generation GAAP our that negative a which space XXX basis on negative and It lease were the is for were important to renewals Avenue. mark-to-markets negative largely on

XX,XXX was of leased at was majority that at fact, GAAP that cash X.X% on the In XXnd a TD square leased of positive basis. West mark-to-markets Street on backfilled vacancy the the XX.X% basis feet and a XX Bank

from per income share expect to of the midpoint, and on for is and share This which per year core are multiple we outlook better-than-expected now share the rental prior increase range the $X.XX in results $X.XX per driven straight-line our half at fronts. portfolio We remainder our higher the than estimate. the Moving driven full or from on and of higher $X.XX $X.XX FFO operations our $X.XX guidance guidance. first by share renewals lease between by XXXX $X.XX Based raising share the year, per per to is for quarter. year

X% Given we to same-store expect share cash now the NOI positive company's a be range of stronger between flat with and growth operations, negative X%.

between now feet We year. for and XXX,XXX have goal leasing also square the our for stands XXX,XXX XXXX, which improved

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

of this debt Our a share the loan and billion which hope The became to years. quarter-end was maturity average shortly. freely finalizing a at completion prepayable outstanding rate and $X.X refinancing, at and earlier interest XXXX we of average month we that has weighted X.X% are of weighted announce X.X

for that, investor our the updated on leases which can operator, free also have of With we and questions. $XX open Lastly, please million. schedule website sits including signed now commenced, our our not This www.paramount-group.com. deck, at be lines rent at information found

Operator

Instructions]. [Operator

Our first question Evercore with is your from Steve ISI. Please proceed with Sakwa question.

Steve Sakwa

Peter. lot year. through Maybe don't you you know the to went Good the a space have stats back a this of Thanks. and rolling of lot half leasing this morning. directed I of one's

and this look like second space do half under you XXX,XXX. the feet year XX thinking under as I much you have But in the what are rolling think for it's rates talk what XXX,XXX a about year tenants may over from months lower sense your But a of on XXXX? next the know this or standpoint? share space rate you either the to was renewal retention next rate I retention is year.

Peter Brindley

space the and the in balance are one every we tenants would front of discussions our Steve, year lease keep you and tenants. advance. having typically listing you space about advance we that of is tenants expect expectation XX many of in the that in existing these outlined Well, of majority of We typically are tenants, into with over as months lease of But and keep expect just will these this in our we expirations we of to XXXX.

Wilbur Paes

just, square feet XXXX, XXX,XXX that on let feet in that share of me point XX,XXX out square with that expiring at respect I XXXX, Deutsche includes Steve, should that's Bank. to

activity that is XX% So of right. known a vacate,

really, So we is so the or renew. you attempt on dealing XXXX feet is are that XXX,XXX number activity that would real to with looking be to square the

Steve Sakwa

The been variant And may Okay. I Peter, bit people's slower. you a as discussions are has follow-up, discussions offices a to that maybe talking into Labor tenants kind space of little Delta of with of on a create tenants coming having bit the and what Thanks. return like on reconfiguring as havoc realize kind opportunities, front? expansion you But existing space? with are Day. what tenants that needs, Just are just

Peter Brindley

much buildings raise like I bar, their bar landlords themselves and have the forth. raising so the think tenants are amenitizing how

employees looking but not overall to back only I their compel think tenants to are to space in the to enhance innovative their improve ways new and come experience.

how new and space office enhance creatively beige really and and deliver they a to their are it No And the the being different about at with experience are allows very is that. bland the brings talent that think thinking nice and overall result I and thinking importance and a think tenants cubes Centerview can are of about a acceptable example ways. have taken to They are as create these more nature now space. potential forefront more critically very attract they the tenants that looking. more They of acknowledge sea people really only creatively we the is can in more their additional build people get together is are about Tenants more walls. dynamic how floor and in very to more they going way is space. office that to realize them we together are to longer for so how a And in potential. communal of and a full realize the they full of seeing companies

Steve Sakwa

GAAP Okay. for were I point? discussions and backfill still year, Barclays is able frame the you a space. signed Thanks. time last know realistic I you me given of what space But kind the deal a don't realize various leases will end matter. of perspective? you And of by hard you that for from guys for realize in which get you at revenue a tenant this realistic maybe are start If just on make, lease would to the of just to what's size working realize kind tenants with and where are the then

Albert Behler

and are in get large spaces discussed Steve, their to take especially normally York. they negotiated, time have over as years, New the these we

And out where half this space. so are year of to we to do of you vacant stick expect point. you have rent that we put would we this expect goal the you and that's the second at half that space, in the should would that the and we that more And of

much want detail. don't in give we to you So more

most on probably at all revenue that will this get space, of We not much year

Wilbur Paes

our be to, do of assuming believe Albert this GAAP done outlined are revenue which of we alluding half the what gets But year-end. half is XXXX? in terms deal hit, Steve, in really the we I assume recognizing revenue the we would XXXX realistic. second to entirely a And would expectation think, from in let's producing you we of think I goal for second year, that be basis are GAAP going a

Steve Sakwa

I appreciate it That's me. for Wilbur. Great. Thanks it.

Albert Behler

Thank Steve. you

Operator

And our Stanley. with question. from proceed next question with Vikram Morgan your is Please Malhotra

Vikram Malhotra

more tenants are pipeline Good have remember expiring morning. one of and we of maybe flavor by looking much. you sector year next so Maybe yourselves? spoke, last demand you just and and a medium-sized from size that the you tenants. first at I had the on this kind outlined spaces us year. vacant outlined give of today, pipeline maybe small Can Thanks for

Peter Brindley

this Vikram, seeing service Peter. from our leading financial of quite They a is activity experience, that are, are I tenants. charge. we bit say would Sure. in the

think the think, I approximately XX% towards represented, I year-to-date. velocity in been leasing statistics reflected they that it's contribute

And services. more our we financial share so are of seeing fair than

such seeing of just product function we are I also large think tenants, because is a our right. that

Of which But but as the tenants to I of in are a market well. demand is in large services, seeing focus. XXXX quite holds tenants the being mid-sized predominantly our smaller as not course, true, There entirety. we made its well, point from bit primary are financial previously

generally feel represent convert we it and the activity portfolio. working more generally, that continues services sector our fire other week-after-week active to financial in to call that increase pretty broadly. or we But feel are prospective tenants from We industries aside

Albert Behler

a And quality. to of little flight bit you see

Tenants focused an this as on as their that's product best and security are building. a You focusing of employees to very on see offer in the there. a and to we into opportunity take Class the future safety get A where are tenants that the company

Vikram Malhotra

just of know And sort could shake you Barclays of space? had mark-to-market a expectation, am the like, nice on that rollup or your I TD is for how just updated wondering, on vacancies? basis. the out then space where I a other new thoughts Okay. cash at the big Just representative the

Albert Behler

have building couple every every like them, if has character. different. you It's Look, of a different you have with, child different, is a children,

every lease different So and every building has a is different. character

raw you invest space And have it have sometimes of get leased. capital to to you more and course

demand. in assets And some higher are

hard. So very it's

You asset-by-asset have to at it look here.

Vikram Malhotra

specifically And space, relative well, what's latest year you last at? to just on Barclays the the the started maybe where

Peter Brindley

I expectation, is still Vikram, think same. the the

began. I think digit double uptick in think now Nothing our has in was space. changed, the it to a I digit be And environment, pre-COVID mid uptick respect to low were the the going single to year in thought a are we when we view, where Barclays mark-to-market. we in relative with

Vikram Malhotra

Okay. of share is just million Can last $X things? $X.XX? Great. you income. income backed How the two Wilbur out. one, the And And that am you. impacting your then One, is just actually assuming at termination your termination I for clarify much

same-store is termination excluding X% income. the So

Wilbur Paes

That is correct.

So part on the same-store not our question, as we typically income termination same-store. include do of

that namely XX.X% million interest, XXX to there organically $X that to-apples if reconciliation, an a was an apples- impact backs the that that up Mission. termination impact termination excluding income out asset same-store is on the to That respect adjustment in have at X%, which is With arrive we basis. earnings, of So a income. of look negative on a

so share our million. $X.X was of And about that

termination So of $X.XXX how to with the this terms quarter's in beat respect contribution is this quarter's numbers. impacted really

Vikram Malhotra

much. so Great. Thanks

Wilbur Paes

Sure.

Albert Behler

welcome. are You

Operator

with Please question Deutsche question. Johnston And Bank. from with our next is Derek proceed your

Derek Johnston

The to XXX,XXX the a that on guidance believe, from full XXXX bit. everybody. went Hi has I It expectations feet leasing year low-end, square Good square XXX,XXX for little seems feet. range upticked from morning.

leads So positive this are if of a guys time? that Is to incrementally maybe this are vacated if question I paper you becoming space. believe Barclays at trading kind fair on perhaps us you guys more asked the it

Albert Behler

we were increase Peter generally ones, I more for as I especially we Well, mentioned these are of as having that's just the and And on we has activity process, the feel while. take larger beginning as we I comfortable think a as York, New paper pointed a this out a of year. In the we the up. out markets, leases, ago. In proposals side mean can is why long in target I go. of that trading kind that's the both leasing think minute Yes, And to has do. year. optimistic our that we feel picked But far

Derek Johnston

Great. Okay.

Wilbur Paes

did those from just also guidance originally That maybe weren't a came at on assumptions, add the activity of color Derek, as part lower we XX,XXX the noted, And has stemmed the that the square when we of feet with renew. on bump implied as leasing a you which renewal of we bumped Yes. the lot some direct tenants this guidance a end. our in to sure bump, would that impact well. midpoint quarter earnings up we And whether guidance.

is you straight-line as noticed right. $X.XX the income. So bump rental that related directly because guidance, bumped if That well, guidance on FFO leasing we core to of

renewals, So and that got the are in have the of on a some vacated would of otherwise rather and year. you up which the had a we have straight-line contributed that year. that as would space current But increase result renewed half not picking that straight-line back been to space

Derek Johnston

certainly activity it tech Thank see seeing think are then do that where city? Okay. slowly, Francisco San San more from? you has you. the But demand do point Great. traditional probably coming an really leasing in the you lockdowns. Or of from tenants? inflection when And see prolonged will Is demand Francisco? because rebounded leasing more you fire in And we in coming

Peter Brindley

has second of Francisco-based funding raised San by just levels reached shy billion capital most are recently $X record quarter, the in we Derek, seeing venture companies.

technology of of expand companies that market. of recipients are in a this seeing the lot are all we So the early-stage capital

real are that seeing quality estate also are private We lot rather. upgrade services a choosing of the financial their to of and tenants equity

active. have very been And so we

have competing to negotiations. of lease our had advanced buildings, that we we several at have offers now fact, In

that been in So financial services tech and say, they going, and it's experience. are I would active early-stage predominantly early our most have

Operator

Please And question Bank Feldman proceed next our your America. with with question. Instructions]. [Operator of is Jamie from

Jamie Feldman

you Thank good morning. and

So then operating I in back, for affect do also going to utilization expectations portfolio? about Day how we are margins? tenants guess what you the that's Labor and as think coming your And think

Albert Behler

a we is team the Paramount team, back XXX%. as Well,

over we So want tenants. contact be by We our are from leading companies somewhere an all still We that to know Labor example. tenants end of occupancy some property are our our indication year being after Day, time part-time getting close by and back to the get them surveying or we hopefully doing XX% work-from-home. of so with managers in are by of and around

the the it also whether depends rates, like a see issue. uptick half to a bit might and the because major of But Currently, now tenants New cautious. looks spread optimistically Francisco. Delta already We is I of second I the York be vaccination little and think tend a making of be high we it the a it's gradual for variant more into are little into not this. think that going to San of some bit looking year an

Jamie Feldman

the to Clearly, talking clients? what you trying am Like think return are you talking does apples-to-apples. guess. with where are it you do think to your to, things do your and clients, it like, rate, you to of about before question, are whenever based you. just guess, normalcy on pandemic the think normalized I the what you I seeing I was raise no? back or get Thank Okay. Delta But some

Albert Behler

into more be XXXX. will This Yes.

gradually our seen have If we XXXX. here will especially more announcement look we picking COVID, Labor at it's that before have seen directly. you the be up, saying and And I after from you at am tenants occupancies Day.

tenants the to, time offices? to longer opt of firms, might service law full-time And others little back. back to a want be in take especially maybe Some the work

the tenant one is lockdown to the XXX% have even during been and offices. has back who coming We

takes each very tenant So it differently.

this picking tenants be want be coming vaccination I to Our normalcy and further, in the up properly. think will rates to to seem manage XXXX. with careful But it

Wilbur Paes

meaningful have our the physical to maybe remarks, Yes. Jamie, over uptick going you see levels Albert mean Day. today. where on other that's post-Labor And we a around And as derail as realistically to And utilization a portfolio from our the pre-COVID of early said could uptick summer in meaningful And prepared just his is, it post-Labor buildings I to we our Day. we factors uptick are are our little XXXX are in expect that hovers a that. scenario. right. Obviously, dimension there that gradually returning today in expectation a today as But far XX%, based utilization, we are to kind where bit. seen

Jamie Feldman

you Okay. incremental? And normal That's to think you margins? go do helpful. and do back Wilbur or buildings, think back your just about it's of NOI of think these then getting I margins you you as cost guess, to the Or operating kind pre-COVID operating

Wilbur Paes

There is incremental. Yes.

stemming about the the operating we talked thus better-than-expected guidance. operations. see into We partially was expenses, better operating far half bumped lower saw first and what in That portfolio we You half. from really margins second

the one go back We year. come over achieve how the of second they and to at in velocity don't back the again, levels be, come us high-end help back which people depending guidance would the what would think of XXXX. way on to half So operating the until pre-COVID expenses

now. So re-forecast and We next that. we when the time. numbers close we us to And to caused that continue to that will we progress and attention fine-tuned you in update the on have speak pay baked update our

Jamie Feldman

about tenants versus to San versus the York do Francisco is there and as And San New York you. tenants? Thank Francisco San for you think going Francisco be think you return, New lag Okay. then a in meaningful

Albert Behler

had California Francisco, of institutions of culture maybe it's now, work-from-home being than our hit, But about had lag higher that financial the I the could home. XX% nobody tenants before think in so that more And Jamie. a week. it's per San that take working policy In York, occupancy even I rates There they to already and and kind a some people of is have from talked vaccination day a a meaningful about substantially pandemic even are the mean, currently you even different work-from-home in the space. many tenants New technology used to much. X%

is see what picking Francisco San we they up So are quickly. in steadily very

And come think they pretty to the time. this they think behind much way But same New same occupancy York to levels. so the I be I will that will

Jamie Feldman

approaching this? things are And just or real hybrid? seeing the how any demand whether difference side in of as flexibility you are on usage, tenants of employee it's we Or space about space Okay. per thinking out more get their

Albert Behler

Jamie. to too think say, early I it's

saw tenant. a You

another vibrant that's meet, You want employees the a it that collaborate saw have in and space I And approaches that also space privacy. be to there that flexible and their Centerview they And important tenant enough they sure think floor. will that more but make give and want to future. took very a to is who that

I think limited. benching will be more

more will that tenants think giving companies I and combat I that And space. So will on their focused reducing employees the think be flexibility. space think some about might

their tenants other space. have who We increased

say early plays So it's I out. how all this too to think

the outcome. are about We optimistic ultimate

Jamie Feldman

early Okay. on metric you provide I And any then can guess, Wilbur, the refinancing?

Wilbur Paes

crossing and in speak, as i's are t's. on we of We are, the dotting Jamie, process we

be full the by I the I through our to think that impact refi. we we the as It seen you will of will report next week. in you of news obviously a guidance. dollar-for-dollar that early have will tell this, refinancing have on part guidance, factored

sheet balance in the no debt. going utilized we is from tight. interest to there very was received Pricing market. paydown be that And tremendous So cash to

next the deal are will has out. And happy very of early very, on report so And where shaken said, like we I the this week. we by with part

Jamie Feldman

All Okay. very Thank much. right. you

Albert Behler

Jamie. you Thank

Operator

your Please And Blaine proceed with Fargo. Heck with question. from our next question Wells is

Blaine Heck

Thanks are no it want Okay. with that question. to Wilbur, there confirm, that at to morning. Is related on follow-up correct? last leasing seems I Good that just like just XXXX contingencies to refinancing. associated

Wilbur Paes

earlier Yes. There be mean am freely And to maybe account loan closing I it's is dollar-for-dollar, the I prepayable just up-refi costs. no slight full a some and said, month. million $XXX transaction other for contingencies, as it. this of Blaine. No going to contingencies. It's that's a became that

Blaine Heck

XX just and But at through a assets we a West you then you XXX other Third on move needle XXnd and are you to couple Street that And seeing XXX opportunity talked guys good. sounds for are XXXX That also these an any about Sutter? Can Great. calls Peter, on touch leasing. good there lot have of the interest reason.

Peter Brindley

XXX other At during you the in saw deals feet. any of XX,XXX than deals we Sure. quarter square more completed Third, seven buildings, excess

XXX So seeking at with Third And full are the most in that quarter. at we are other floors the we paper very were trading tenants building. active recent

heavily have the opportunity I that. full focused you another floors It building. occupancy at represents at an couple got are for of our top So to would right. nice some increase building on that of where we and XXXX we activity in vacant are throw us really in

at the on couple interest that that the of will an amount And earlier, way had course, for I well for increase property say suffer the So is goes did some we on nice charge. activity while in and the XXX back buildings slowly as XXX coming of mentioned West, activity course, on have weeks. at increasing, would occupancy XXXX really I say, building. below talk proposals most a Francisco has we the our know there we you a financial other huge, we I that them. fact by of other several some hyper tours of are to we Sutter, and is are San always well, occupancy. we of services are, Same leading full They XX last focused, XXX real seen have about We moveouts will really as there. exchanging would say, increase show floors. and the in which but expectation you recently. where, over has opportunities are activity I expect exceptionally some

we So building hard to to a it real increase convert market. wonderful are the companies. tech appeals It working has XXX. It's It's ornate. the level has very history occupancy certainly at and a in presence that and

to continues technology these fuel the So younger that of we this is especially beneficiaries companies be our will expectation that. funding as that

Wilbur Paes

Blaine, to in put let say me just perspective. this,

is building Sutter sitting that own XXX right. off. building is the well occupancy portfolio smallest that we are That we absolutely it's accustomed below and in said, are rate like. a a our would You part it at and we

share and that look less is you an building or asset when value. So of X% billion $X.X that so, at than company gross our

not of are think lose what that. it's to perspective I impact to we on our means as this, dimension focused the much that bottomline, as to So important

Blaine Heck

That's Yes. fair. Sure.

or are last one Okay. relatively And talk fund the about on put you the forward? Is front ability what yet opportunities there do getting hindering really then just for type to what value-add side many As things? to buildings have that too but said, me. can seeing your commodity-type Albert, strong traded. see bids going you core been you you that work? And are that of deals capital on haven't

Albert Behler

correct. mean the are core wouldn't value-add in opportunities focused or segment. opportunistic through a business. there much funds investments. fund on mean, asset I in been And be Yes. the are interested you The we that buying I hasn't

the B So than that some that change more the But the haven't been to buildings. there. many building because time be Class suffering might seem for A of opportunities being, there

Blaine Heck

Great. Thanks guys.

Albert Behler

you. Thank

Operator

end session. will of Officer call for And Chairman closing the Executive Behler, we turn the over the reached have Albert and to question-and-answer I President Chief and remarks. now

Albert Behler

you our to during quarter when very of look forward we an We the our third here. joining for update progress Thank results us report bye. today fall. continued all much Good providing

Operator

concludes conference. this And today's

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

Paramount (PGRE) 28 Jul 212021 Q2 Earnings call transcript