PGRE - Earnings call transcript Q2 2022

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Paramount Group Second Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded today, July 27, 2022. I'll now turn the call over to Tom Hennessy, Vice President of Business Development and Investor Relations. sir. ahead, go Please

Tom Hennessy

and everyone. operator, good you, afternoon, Thank

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

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

expect. or Therefore, results as other usually risks identified impact our by use will, Forward-looking our interpreting to to expect, such SEC risks we relying you could filings should, and future materially for operating that phrases on could results detailed statements, uncertainties are in financial the which and what numerous similar them. of the subject to a condition. We are that of words you exercise from should refer and more cause caution discussion differ actual

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

Albert Behler

$X.XX core quarter for Thank you, this the afternoon. you, reported us of everyone, year-over-year. per same-store growing cash Tom, joining NOI share We FFO X.X% thank and with second for

raising our result the As a financial of FFO core XXXX midpoint. our by detail. results at review and greater year guidance full will our Wilbur we are results, guidance in strong $X.XX

During the above over square square XXX,XXX in feet, XXX,XXX outcome a leasing leasing our about leasing led second feet positive quarter, which at quarter's quarter was X.X more years. climate. feet, XX,XXX quarter this lease the leased of feet square first results, approximately and a which than our weighted portfolio, solid Of current leased our for in we XXX,XXX slightly XXXX New the term was XX% square the way York of accounting average very

leased, York points Avenue XX.X% Our of SVB by XXX fifth now highlighted where feet. floor, they comprising The of XX. the square compared building XXXX the at is New Securities to March leased expansion entire XX,XXX Americas the leasing over basis was up

in as improving year-to-date leasing New it recovered only of general. in flight daily. well in Market seeing San particularly retail leasing raise to returning buildings in general foot. there office this but as in to San results in continues starting We tepid. rents. to Plaza, own has city level Plaza, Tourism $XXX triple-digit to The fully square San per feet One Market business, is leasing are or leased Job XX% portfolio, XXX,XXX results. challenged accounted pre-COVID the our continue the all expected, the continues causing arguably businesses both return the Plaza remains is tenants markets totaling the benefits office about one well. about success perform strong, square almost portfolio, space and That grapple Not of to for keeping square are lagged, in with feet. At of remains particular. more their believe trend at tenants over our and below and we that to execute for XX% leasing to XX,XXX one utilization starting the with summer. we pre-pandemic One overall One bodes consistent, as are velocity. it Francisco, over leased best that in quarter, now is portfolio our deals after the Market excess Market Francisco. to quality, continues Plaza quality our to Francisco quarter's York markets activity do with office rates left was bar the the square account X planning well New at at XX% but for tech market remain space in Francisco floors of so work rents for to this of Of desirable approximately demonstrate of feet growth flight One plans, Notwithstanding which in prevalence did contiguous or the over our The be are San levels to and velocity, We XX% XX,XXX York,

seeking for We tenants well this employees. phenomenon well-operated, their expect are to from amenitized located, and to benefit environmentally well as continue conscious buildings

on one those of Our fronts. every deliver assets

from front, On achieved Agency, EPA; U.S. Star the the Department U.S. the Partner are that to Energy. of the XXXX Year ESG we Paramount proud and Environmental the note Energy of Award Protection

of to demonstrating Energy recognized for among recognized thousands the nationwide innovation leadership, Star assets sustainability. were superior and and buildings as Our XX% being in commitment

operations. we integral portfolio's we As of reduce sustainability the practices business. to opportunity an responsible footprint, to And advance to part our our further is embed on look every environmental mission capitalize our daily into

quarter. was muted Turning to the Activity during the transaction market.

and second imply. continues in and the than Pricing York. of saw higher A New volume trophy $X.X public to Class for assets The markets strong transaction be quarter billion roughly

continue aggregate. repurchased the part, For share average To million per our we a monitor always shares with our at approach disciplined we maintained weighted price that have of markets $X.X the end, carefully. opportunistically a XXX,XXX capital to or $X.XX in and

the we quarter. the to began, continue $X.X to pandemic the maintain end sufficient since billion of amounts which case the been has liquidity, As at about

maintained to remain we the since a of have well trophy the our our positioned with onset for portfolio capital, defensive stable pandemic of allocate the posture long proven term. assets and We ability

wrap Let saying to by be clear. continue up our goals operating me

focus are of while of and primary call the Peter. available Our always safe With manner, reintegration a also we on our and will the healthy tenants our space turn looking is the lease-up I in for that, opportunities. to

Peter Brindley

Albert, good afternoon. Thanks, and

we of quarter, second term XXX,XXX a the for weighted lease During leased years. square feet approximately X average

weighted expansion Our XXXX this Americas. leased the was during quarter's of at second the significant York Avenue Securities most heavily toward approximately the with Among XX.X% with leasing. quarter SVB feet XXX,XXX was transactions of activity or the quarter New square leasing more lease previously mentioned total

quarter Our healthy to up at best-in-class both end, XXX rate benefit we quarter-over-quarter year-over-year. of was leased occupancy pipeline San up as portfolio-wide our buildings in and and points same-store remains continue XX XX.X%, basis points pursuit from York share Francisco. New basis At tenants

our remaining expirations annum look with X.X% ahead, X.X% at year-end we share by As expiring lease through manageable per share expiring approximately XXXX. are at and

who realized activity tour estate quarterly all another more market, our services Tenant's the currently second of high-quality Midtown excess the leasing resulted net in second are Midtown quarter the can X the than and million benefits that marking for net increasing availability raise ever office improve has share Tenants, direct to solid, the of was activity desire accounts high-quality in enhance posted contributing transaction positive in X only yet estate of quality leasing be continues markets. and approximately well-located million York. compel feet. square realized was time people X.X Financial their X-year continue absorption. quarter second activity working A XX% Midtown's flight Midtown's discerning the before, when XX% average quality absorption consecutive New the rate, Midtown's quarter Class Turning activity X.X% Midtown. seeking and in in Midtown in market that of real feet, and particularly quarters buildings. together the quarter, quarterly the pre-pandemic to fourth excess leasing bar elevated of to space their drive to for of return during third Despite in the well of that in the the trend positive below during employees real person. the are to square to sector remains are in past volume quarter, excluding renewals, of has occupancy to the only

Our quarter-over-quarter portfolio points leased same-store is a New and up York year-over-year. basis XX% points basis currently on at XXX up basis XXX share,

average weighted second feet than a X.X years. leased XXX,XXX term at quarter, During of the we more square

by profile expiration in at share at through is lease share annum per expiring year-end and overall New X.X% manageable with expiring Our X.X% XXXX. York

returning San its to Francisco Leasing activity increased Francisco. but San measured quarterly approach office. a to to to now historical continues take average. market remains Turning the below quarter-over-quarter,

clearly with assets economics, San quality Francisco. a Similar to begun define utilization San the in the view Despite trophy to space Francisco-based the office end, was share. San leased for San relaxation as flight the Francisco quarter of for And increased rates, basis At earlier companies XX.X% more remains in market their availability momentum premier to to portfolio is rules, and at return San This continues York, assets a year. plans. strong. tight. that our have However, compared elevated to masking Francisco's remains has New particularly movement gain on resulted Francisco's same-store to in

largely years square we of initial and tenants in at quarter feet strength in weighted comprised quarter, portfolio of second and in of expansions Francisco. renewals, our with per term foot. addition approximately of XX,XXX our Francisco to X During to X.X rents the the San square leasing tenant new roster the But that second the a leased add San $XXX of prestige was several approximately completed we the average

Francisco lease is through and by per in with expiration Looking expiring X.X% at profile our expiring XXXX. at ahead, year-end share share San annum X.X% overall manageable

the that I portfolio call Wilbur, With who well the discuss the through results. over financial current to Our manage San turn environment. will will to Francisco is positioned summary,

Wilbur Paes

higher New Yesterday, San our York we in decreased, X.X%, portfolio-wide NOI Peter. better and the prior expected, $X.XX and Francisco X.X%. growth in reported by quarter. GAAP the with like second a ahead driven portfolio, NOI grew first you, the cash even York growth robust per which FFO New San as estimates X% again consensus by share, Same-store once Francisco of at at than second by X.X%. XX.X% growth the at year strong while our Much by quarter portfolio the a same-store quarter, was X%. XX.X% Thank core of was grew $X.XX same-store

GAAP quarter, second basis. Mark-to-markets second-generation executed on space a over X per leases XX,XXX was average weighted XXX,XXX the $XX.XX covering positive of of During years. X.X% term square and a we basis space rents of negative for of a cash starting slightly X.X% feet foot feet and weighted average at square XX square on on

mark-to-markets reminder, figures. space calculated included a has square in less Therefore, by with XX basis. on reported our not Securities was mark-to-market SVB of than basis vacant basically a on was space a That X.X% flat that the As for former months. lease are definition, had for on positive cash lease a mark-to-market and XX,XXX been Barclays GAAP foot the

line and lower midpoint FFO fronts. from by We midpoint straight FFO now of of in Given our second quarter the guidance, increase the $X.XX our core again at per from share better comprised G&A $X.XX year, once of The are between previous portfolio time, $X.XX share strong midpoint, the $X.XX raising from expense. results from higher partially is $X.XX expect rent; our per offset core the guidance. remainder be higher $X.XX outlook operations; several expense, following: and the higher this to interest we and for $X.XX the $X.XX $X.XX at or financial than on

for growth cash expectation midpoint, basis XX by growth cash We our range in are of and same-store also X.X%. the resulting NOI points X.X% NOI same-store at raising new

points resulting We NOI NOI of midpoint growth be a GAAP same-store in X.X% basis to by also new expect XXX X.X%. and same-store growth higher range GAAP the at

in cash the remarks, the growth first second for rest as referenced I to half the in tougher conference with to year. of call, my our we the of As contend expect quarter NOI previous same-store during comps year decelerate our we continue

half of sits portfolio-wide the cash up in Same-store at year-to-date the expected however, X.X%, the and accelerate second year. X%, to to NOI growth, our Our flattish growth range is the half is growth NOI implying of increased second year. GAAP in same-store now of midpoint the

a sits X% Our growth the our is straight-line from second midpoint year-to-date X%, NOI of at of implying up same-store year portfolio-wide range in expect and year the increased GAAP as now to growth we the benefit half commencements rent the progresses. to as X% higher

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

in debt been a managing We and mindful like balance rate sheet where very for disciplined this capital of a have and interest our environment. scarcity there's moments rising

We to debt. rate exposure limited limited and have variable maturities

end Our billion average and XX% X.XX% outstanding of of at has rate X.XX%. debt of $X.X weighted The of rate interest of average and debt interest average at a and maturity interest remaining X.X fixed years. weighted was quarter a rate XX% is a a average weighted our has floating weighted X.XX%. is

We no debt X% maturing roughly and XXXX. our maturing of debt have in XXXX, in share of

share. which investor have we investor deck, our deck related includes our rent from now at the updated by our schedule and sits which free at and $XX.X April burn-off, Lastly, of million increased X%

please that, found the line on website can questions. at With operator, www.pgre.com. deck open for investor Our our be

Operator

question the Brian Our line of comes with Instructions] Spahn first from ISI. [Operator Evercore

Brian Spahn

we transaction above And sell month foot about you price the saw foot, your assets. implied meaningful Albert, a for York this $XXX XXXX City which Ave is per mentioned your market. for New

So the the And year? debt curious market could how maybe and markets office you Wilbur, of see heading the transaction just assets? to the there in you as your half are tie into back And evolving where relates how that the well? of if financing thoughts

Albert Behler

an we have and market market situation was a say it It's about seller aberration. a New special A And to an think in has And the think I would traded transaction looked York there spaces. that this firm private their reflective couple TLC. of in York. Yes. that own of I is trophy asset time, that properties. have pricing. time a would I equity small from asset New opinion It normal that better at that tenant the office without at is Class The needs don't

As I circumstance. mentioned, an aberration, a special

difficult had debt was some be coming it was there due that task. be market think might and I a this and repaid to in

Wilbur Paes

mean, Sure, Brian, I quarter now that, is of XX% about debt I volatile. the very down XXXX. the relative to XX% first it's CMBS market and CMBS right can is just add from the quarter significantly. is to issuances fourth down

the the to It's market getting of market. that's and it's open you getting done little what done now bank is deals So where office have the some that's selectively, done. a do bit right more are in bank deals

Brian Spahn

it. Got

share And Okay. mentioned you buybacks well. as

talk the year? stock the And allocation just for the back leverage the is maybe is half us you capital can to of So through buying capacity what your plans continue where back just at? given

Albert Behler

Yes.

careful are use with We shareholders our for. very been in we we have capital allocation, what for opportunistic capital historically and the

an this been assignment attractive, we this took should Board the was have it And when the a price buy leverage while back be -- And we ago. We was approved opportunity. shares, neutral. when by

So we sheet. in with at a we but balance have careful are any capital. Paramount leverage And special situation very our some -- because we don't are ways on in

was the assets. the on our remarks, And is saying, assets, his leverage Our long-term in finance. as Wilbur

financing overall, approximately appropriate the to deploy we in course, our -- here. maintain, I that point. future capital do we we opportunities. and for earmarked you balance was do XX% of what buyback this on sheet opportunistic, and Board have have by are about all don't cash will to of that at the can't I We But short-term tell of liquidity. options want and we

couple to we of be put through with a ago, criticized our acquisition, We very and XXXX -- have own example, these prudent. quarters been for mean of for little cycles our we we of kind before, wanted in of it X% for got I want And and Broadway return of it are equity for a buy to them. disciplined partner opportunistic. We the but get that put who asset. stay that the X% shows and equity, We That manage proven equity. of a was very we that

Operator

Our the next Vikram Securities. from comes line with Mizuho question Malhotra of

Vikram Malhotra

guide? just Can Maybe Wall, XX start. Wilbur to already the in interest capitalized clarify you was

Wilbur Paes

No.

Vikram. for the thanks So question,

Wall volatility with And When guidance only we the a in the to probably interest table can purely expense at beginning plan tabled one the you, we that came Wall the up did potential refinance could being the there. expense interest higher on in referring opportunistically decrease debt you're it capitalization the because nothing think component basis, because an XX given That have we interest see year, maturing guidance of we has to not interest it's and the from in with came that and that was in being perspective tell was going for that of of to we if opportunistic you XX where debt. we have And done potentially to I I XXXX. of result interest. of of capitalization guidance. saw the expense been do guidance now. to upsize lowered plan the from, that our that's markets, that's because the the in has the an how

Vikram Malhotra

Got it.

Okay.

So potential yet? so -- not that I capitalizing you're mean it's

Wilbur Paes

yet. we haven't started No, capitalizing interest Yes.

Vikram Malhotra

Got it.

peers you XXXX? risks Okay. picture own one to sort 'XX. going big 'XX to us takes and And I puts out just kind not to laid be NOI can for your guide, any just of give maybe specific through walk and us and headwinds bigger numbers their should I we guess obviously, you're but know, for trends then considering of of picture

Albert Behler

Barclays Well, of a can leasing. spot to good in to portfolio. be reduction out going the seem XXXX, is up. was picked big of the picture, with regard I remember you of we leasing of to with say, And there pretty That be total a move

expirations. very have We limited

[indiscernible] TIs the look and reasonably the We in the been shape. the keep need commissions capital for we what positive. to portfolio should And the And done. for have have good earmarked situation the

Wilbur Paes

couple add on just going to I Yes. -- that. was a maybe

And Vikram, moving expirations XXX,XXX have is in two. both Agricole is the at a York; New about February One really 'XX in own far center, will Credit expiring. pieces, there's numbers. have by Whereas market you XXX% in 'XX, feet. moveouts. and Uber as our 'XX. impact XXXX, San Uber the on That's that so that as XX%. and These are Francisco. In square have of one known space that's we in Credit you then course, in the owned space Agricole New expiring XXX% July And is of at San Francisco, York, On PGRE,

have a But to going are -- that's to that on you blocks. that big So those rata to And the of but activity we about seeing will are number. talk moveouts. on Peter pro question, impact answer both the your those

Vikram Malhotra

et Yes. No, announcements I peer on clarify, that activity, -- the was the given more I be companies, But guess was was my leasing from question guess meant what your baking in interest was to economic costs, activity. going what slowdown, I cetera. tech to just all last higher specifically slower the slowing

will the So the some of are on other then definitely just about. those -- wanting piece color the the and statement. stabilized puts but should The think commentary helpful, other sort takes influence are factors on expirations and expirations below-the-line just one that portfolio the the that income of

Wilbur Paes

then look, we period. gone transact making sector-leading that's had sure in puts that in our start been the And we've terms and maybe activity. prudent we've the tenants with. takes, I'll COVID through the and very But during and on add very, because can been Peter of collections

is do any any in we our said, from or see we we portfolio. have headwind a moveout? not anything tenant can today The vis-a-vis sit happening believe asking aside is as of no. moving you're hey, known as to that happen do a for, answer bankruptcy here that reason That if out, a anything So the

Vikram Malhotra

could And give just some Great. us Peter, then, color. you Okay. if

submarket positioned. in You mentioned Midtown well the

maybe could of us tenants of on on users? the color lease looking couple that Are you're -- little flavor looking more larger give more full what bit to the where assets the one give pipeline, us the you're pipeline. On smaller there a you just up, tenants? type or Just -- floor

Peter Brindley

and building. which activity we have of rolls XXXX, course, Well, feet in pipeline Credit the of amount building the square It's lease as space that block by XXX,XXX those you the Agricole of Credit remaining February I'll for And magnet relates former feel have XXXX. as an the update floors, Agricole look then forward creditworthy-type base in what of as to can tenant no is it we're up New is start got as feet we've the makes Wilbur noted, see a tenants. space we a of York. square move with we, the roster, of And and on forward XXXX York. tenants. is of in our of At considerable roughly is would that that activity X/X typically demand. the This to the roll on garnering New in XXX,XXX type I in that different. tenant-type larger We're encouraged And giving interest in floors. -- some it's The a you larger we say

they space. activity opportunity positioned As I very we're to X. Barclays X, space, We've those former allowed good the which say a And would as tremendous on have with Recall, have X too. of floors, floors if left They the and on you extremely X. floors, block retail really connectivity will, center, we it welcome direct XXnd got to the that private branding show well. and relates which for we've file, the base

say has of market I back. in is in yet say, We center, of much can't, a get leasing it just has San spending where XXX,XXX that Frisco, of San XXXX square year. regard. time. where lagged. But that Francisco's been next Vikram, -- feet In So we're all to bit we course, suffice more know July quite

heavily say those at in expiration some market is, would have we're significant that And on it's point, Market, better role early, to a the product what productive. found to represents of this However, that we real interest, ways floors. still be And XXX the portion is on has XXXX. although I focused where going

once we look me activity than early that to think it on. for more forward But have to it's about pipeline But We say nice too, put say, some to you again, there, our suffice to feel will us updating pipeline. within we that. current which And range. our good much too continue I really our

Operator

Our comes line Tom the next of BTIG. Catherwood question from with

Tom Catherwood

said you to healthy. now and quantify leasing prepared about the the in of Can how pipeline usual maybe a comment Peter, compares midyear your levels? you that right your remains size remarks pipeline

Peter Brindley

Sure. I'll by productive start Francisco. had saying, we San a quarter in

You the X say will about predominantly brought into that. proud broader not into our three I we're that full San really to tenants services, is be portfolio. weighted want leases us clear to That It about heard on Midtown me New far range. new unlike done we seeing what our Francisco should add you out year-to-date the financial market. we've the tenants very year, -- heavily to that more been When said, which this our XX% say, about just is I York. services, based pipeline to we're leasing has think so what in financial bring

is. got diversified I of would more in services. say We've industries it's that our terms forward, financial Going represented, pipeline

have We tech.

We have legal.

I think the that's oftentimes of elements one New that's York overlooked. of

diversified tenant significantly. the several Over years, city base the has past the

has productive like second half. the about industry But of we're our I feel active that And flow, suffice think, forward. services good pipeline. were so and nearly has has that it range years ebb tech stepped see a to looking while we up, ago, diverse we'll We say, a been represented, financial for X forward they as it example, as fact to not going and and

Tom Catherwood

San comment a following Francisco. on And

for drives water, of obviously, saying Obviously, base business quality. tenants your leasing it the your below on One you the that at far as positioning it it Market else portfolio. think assets you as opening the do understand services? finally view to rents the demand there. Is in in we needs as especially thought were your there? the generate once momentum coming get a pickup something getting what the you're you away that When space some portfolio, of to of I back? Just of eye coming think lot market? a what tech there work flight you view from change back? Is small Is a to more Is space,

Albert Behler

right over with know. Francisco, York general leasing think Each building in as to market And I is move. we in And behind coming the said, some is is on is incubator XXX have softest in more not our now know, great. small maybe activity Sutter very we stake. minority I San as And it's designed small And it's affecting think and the the because and we a for back changes quarter different, asset space. tenant a as one New the the a own is partner. that But combination portfolio, last San we the that's that Francisco. office you

before. So doing come much, looks optimistic much the better better. larger will that city that better I to well. change And Francisco I'm assets think the than Peter back are the were as San things and once and I there really recently,

charge important with, city. that. was safety. and part it's what and And more of government the of that I care is it's necessary think security city And of we taken on the taking worked think that's I and work in

Operator

line Our Derek next question comes Bank. Deutsche Johnston with of from the

Derek Johnston

times. I gotten this answer. the don't I've But So couple of a if really know look, asked I've question

Albert, versus now expanded So And about pensions? JV If if San a right pool for assets? it And was cycles, especially potentially partnerships. seems just hoping, companies are like I sovereigns, Fran and right? talking is of previous maybe and New -- wondering, it's it's really, lot the York how that I'm now, deep investor

Albert Behler

Yes. Very good question.

all dollar working And over our we venture with I history partnership. XX have years. the we developed over last size capital people right last before see capital stable XXXX exposure. Paramount conservative derisks and we very with United even still we and And venture I fundamental long we over acquisition with are And assets they Broadway together. right so like a how now. new a partners larger -- this to last interest -- equity of last markets relationships public, positive group the little decade, want work But partners And have more proven joint of now, joint the source of are of rates is couple have is had that the means say long amounts. months, And those partners. we reliable history, for for went It a movement the could When have to potential the see mostly diversified develop, really the general in how now, States. we the right reason the develop. We are on focused think

safe a I and mean, world, If the you parts the look of stable it's as safe. not United economy. still haven to is a other States

currencies, is is If that -- maybe you dollar currently look strong. so handicap at little and the a bit of the dollar the that's a

investors a the also in exchange in about to it's little like they working are partners And mortgage. we bargain rate, mostly, that their so But out and the with very most in of even optimistic So like investments. future. cases, a hedge have runs not on group

of have We many multiple, they've in multiple assets. them, invested

Derek Johnston

then There's this out time actually. I nice into line, only taken but to of certainly we're helpful, Any That's possible been Wall service. very since Street XX tap a and thoughts, And stream redevelopment, here. X%, on conversions? partnerships, know has it's fee

pressure under -- So any submarket that somewhat on updates

Albert Behler

up would what new do office. it to discuss are different doesn't the we to converting to Derek, will And our Well, And it keeping time for while we as And a as at for at major kind capital wanted Actually, a an looked layout building. venture and and floors, currently, the feasible. it's we envisioning it we coming sticking about you be fantastic, other uses. nearly renovation, be long a of into internally, have sense. with ago partners scenarios investment a of it joint looked the ago not The know, long, the that, best renovation. asset are make we because

Operator

comes next of question [Operator Our line Kamdem Morgan Instructions] with from Stanley. the Ronald

Ronald Kamdem

Great.

Just a ones. couple of quick

on done. how something the JV Maybe of partner? you're to take to is that? there's Just first just it out opportunity I the say is transaction on it appreciate and but on to have much get are with about there, would to fair be staying sort opportunistic, an willing sort How the of comments activity, if thinking you comment you can just about debt

Albert Behler

special every whether whether say as was off we Normally, and We time get. us but have can and on an could was on that bought add, a a the as the where wouldn't I precious building, it's wouldn't core a that, asset-by-asset depends look partner of and allocation market core opportunity, basis, opportunity-to-opportunity equity asset. with that M&M just a We proactively it equity it's we right Paramount. a of underwriting on lot on buy we something Paramount's value opportunity core. for basis which building. buy and it an semi-off for right capital But spent the the

will, -- allocate in tell for I general, but lot time can the we equity. Paramount So you, a of being, not

or venture cooperation for We joint real as be venture partners, have previously, will we definitely a we would it do value-add looking opportunities. more joint with and done in

Ronald Kamdem

remind there's -- That's about is fee helpful. sort if or anything Great. was And then thinking question to just recurring? of us income $XX -- maybe you that the guidance midpoint, XXXX there can at of sort anything all on million what the earlier, one-time of the

Wilbur Paes

Ron, That one, we're guiding was you just recall: by onetime last question, rate. So a to not quarter, to 'XX, yet. said, relates saying, there me as XXXX let as answer obviously, start it may your to

the last first in of $X.XX at look was per income. of you If related fee There quarter, to $X.XX FFO share. was core results, quarter the one-timer XXXX

to be as that start should to But offset And get partially we'll so recur. that development receive XX fees will by Wall well. expected not

in income. to $X was one So of and about related XXXX million fee no, timer but there $X.XX that's

Operator

next of Green Ismail question the Advisors. Our comes with Daniel line from Street

Daniel Ismail

you and that maybe decision to the just at level? what start off, Board of Board prompted the can Maybe the discuss expansion Great.

Albert Behler

the very out was for And to this them. and Well, We And constantly great we Board and this time, we that's the diversity And Board. right person. and that's the this shareholder -- refreshing lady we shareholders looking brings was seriously. diversity. think quarter, reached the And had improving the something value. to take something when is in last we at promised the this changed we it that our found right we

Daniel Ismail

for Got markets? rents Peter. quick sit you where on just us questions it. And then Maybe maybe remind can relative leasing X in-place to

Peter Brindley

In-place rents market. relative to

particular a Danny? For space,

Daniel Ismail

rents. out these overall, would to portfolio rent days where just relative level No, shake market

Wilbur Paes

derive environment. in to to dealing is you're current that's very hard question product is what coming the that with Danny, that's you're function answer. that Obviously, of available trying and mark-to-market online, a a product mix

don't portfolio tell know environment. mean, the to to I portfolio you in relative here I market. sitting market entire to is we're that, if under pressure where marking and So the tell you can I rents this obviously, are

it the did mark-to-market reported have did we negative Unfortunately, this mark-to-market positive our think not quarter. place statistics. make definitionally the into we I

been for -- be some of the lease But we to so continue Barclays the space block positive up months, not XX mark-to-market. at it's because than vacant showing have more will that statistics. it's We in

where so And we we quarter investors not was highlighted a offsetting, was higher was of if our analysts couple large figures. there positive added And the color saying of you probably alike in on that are what than we providing mark that's And saw piece not people make thought. that it reported reporting. did and that into that reports a negative that a they space why the the mark-to-market done it will,

Daniel Ismail

the Got that just for I appreciate on I color. to appreciate question, it. of answer Peter just last trying Maybe And so concessions. one complexity the

upside a you as I'm you as you can concessions few they rates stabilization mentioned in any could at few are? the last any here? the think announcement given quarters. high though, tenants, Do You concessions slowing where curious, of times, do expect Or rental be we're that potential the where over concessions get from do level some think growth? with there's a from

Peter Brindley

high levels. stabilized, I think historically albeit do say. at think it's hard they've I to

happens have concessions. of time to or than year we'll would I transact. ago, In going give and we year had or to order I in so the given general, for specifically. a not, more leveling have to otherwise -- in economy in last would we say, off, over But market being, say, think the forward what see a seen I have the would our I give take, compelled give we think, felt don't have to

answer for we be feel to that will when firm. question, So your things I and things held think If as though, ultimately being start sort levels remains for able in bit have the to they these certainly than seen. albeit of -- seen higher the increases, ever velocity But think though before. improve time would when little time we being, pull in to be they've to at we've I a stabilized

Operator

line Heck Our Fargo. comes Blaine next question the with of Wells from

Blaine Heck

I rate But NOI looks guidance leasing guidance, But same-store is and if Just the me, one higher. it is and you guys addressed Wilbur, looking at lease unchanged. like for apologize this.

So that is what's can rents me just driving lower help increase? something you than original maybe that reconcile Is altogether? are higher OpEx it or expectations? else

Wilbur Paes

on the a is sources. coming, expenses it's And some helping helping So operating renewals of then variety beat early guidance projection. in the and increase the that we had Obviously, from it. NOI Blaine, is the

As that far as unchanged. the leasing guidance, left we

at laid enough touched look pipeline XXX,XXX we the Peter range we've you feet that within upon, square when that activity. gives done, of And comfort out. we it, is As of the robust has the that Peter year-to-date, quite call fall that us guidance

talk the the range And at we fall we keep a given the but soon sense the lack as we it too of that have the in thought be very a the enough and for time. fourth have, was activity to of tough another the to going months given they to now, when that things that visibility based we tweak we way we we start have pipeline the It's right it tall on leases the can for one are range probably within visibility into and now or because the and it meet us next tweak within confidence quarter. makes of of order. get We're signature to sitting here it's us Now to But guidance. market. summer

that the falling range range. tweaked get comfortable the whether that within when So low we stuff with the And end in the target, next falls we meet of will the feel or time. activity

Operator

Thank session. concludes Behler comments. floor I'll turn Mr. Ladies gentlemen, that the and back final you. for our any question-and-answer to

Albert Behler

We Thank our joining providing we when continued to report quarter you progress for an today. us third all look earnings. update on Goodbye. our forward

Operator

this conference. today's gentlemen, Thank you. Ladies and concludes

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

Paramount (PGRE) 27 Jul 222022 Q2 Earnings call transcript