ALX - Earnings call 2 2021 | Alexander's, Inc.

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Operator

Good morning, and welcome to the Vornado Realty Trust Second Quarter 2021 Earnings Call. My name is Hilda, and I will be your operator for today's call. This call is being recorded for replay purposes.

Our speakers will address your questions at the end of the presentation during the question-and-answer session. [Operator Instructions]

the to turn now will call Ms. over I Relations. Creswell, Director Investor of Cathy Please go ahead.

Catherine Creswell

to section. Second well on release under Realty Yesterday you. Commission. are XX-Q Vornado Thank Welcome available and Securities Truck supplemental quarterly on issued Investor Exchange the financial second with package the our documents afternoon, our www.vno.com, Quarter our quarter our filed earnings as website, and These report Relations Form as we Call. Earnings information

be we call, most will certain risks, these deemed statements measures documents today's In factors. from these Please release, the call during measures. these that financial and to uncertainties this are to differ during earnings may forward-looking variety a of financial directly and materially supplement. discuss due Reconciliations XX-Q our be and non-GAAP GAAP and other of statements Form included actual measures aware made in statements, results comparable may

filings annual The not for be The Exchange regarding as our include XX, only and XXXX, risks with more Securities Form to that information does time-sensitive date. year may December of accurate the statements. undertake uncertainties. and any on company refer a for to these duty update report today's Please ended the our call information including may forward-looking Commission, XX-K

and the today Franco, and Michael Officer; Chairman President for from Chief our management and opening Financial On Executive call Roth, comments are Steven Chief Officer.

for and present senior available questions. team also is Our

now will I the to call turn Roth. over Steven

Steven Roth

I to vigilant vaccinated. be morning, you, Thank continues Cathy, and good hope everyone healthy, everyone. is and gets

again. get it please Everybody, say me Let vaccinated.

as U.S. is might ground, which things leases signed that find resilient, record few it's In is happening climbing at achieving each of results. and I interesting. new and higher even and tech is during by is to had booming, which dropped say the all I York, are sharing so being as New Financial, on start a I'll growing. numbers hope industries rapidly you back all economy almost with occupancy, higher XX% rents. apartment York. The are low COVID, New record now week

Condo at that's discounted proud This work except good South at from very condo and our a demand sales, active, that XXX and to which are sign. a York, resales now where I'm folks Park is apartment who Central stalled premium. COVID, had albeit are in during pricing, and say New coming live

up, X-floor resale Central $XX,XXX understatement. XXX is which where we that. basically that resale foot At foot, A spectacular are is think South, XX,XXX at and square sold traded a an a about is Park public, out, recent square example, record-breaking that's pricing now per

RFPs looking Our his is now requests way, the of office and By active advantage incoming record sidelines large including very busy. division large, occupiers during very Tech important the are more team COVID. New is York's from diverse and New and space Glen York who had tours, experiencing Big many for on in been workforce. New York educated now for take to and highly

has COVID XXX XXX,XXX study fact, XX% of the space to square during were and house feet, planning, X,XXX looking now XXX,XXX a market. originally occupier Fortune house for dropped household to who the back they employees. come Here's and out increase an a same name market are extensive after X,XXX to seeking need Post-COVID, interesting They feet square employees.

will occupier same is less need not many, hearing the that post-COVID And is the more space, is same that occupancy needs that space contrary but The expectations, in-office more are projected their instances, this the we to from tenants but all analyst post-COVID. XX% not our XX%. all, many although fact. fact both of In they

District hoardings, decade and wrote It a took is to PENN [ vast the from as goes, fatigue, ] our analysts our that us but friend PENN recently same suffers over of One our true. a assemble this company time. our

Here's Their full work their feet. XXX,XXX where to square delivered all have of going Farley, At bore. is we tenant Facebook stand. we

PENN XXth The now is massive million of and just campus. X and will at from West X the nucleus we X-level PENN unrivaled a transforming site, cutting-edge construction Side our Seventh into where PENN X.X are Street Avenue, our be to X completed XXst of X year-end. the XXth The offering lobby blocks connected the opened, amenity Street, square along stretching foot Street

XX% Our full more off building be bustle We transformation, a to fair and bought out X budget is the and on couldn't excited. PENN including reskinning, start.

from with is sales Our multiple that XX,XXX office in clear, and occupiers. reviews It's videos to center designed building conference tell square a now way. presentation busy. foot sales center rate Floor It as and X story models is and a our of persuasive and open that PENN is the brokers the Seventh dealmaking -- unique

of the market with the center, Josh After the new of West quarter By every working side year, the side way, Glen understanding District, York. leases the share market and PENN by is the every and -- of is weight, jewel share growing plans signed. sales the its to in above west crown ambitious way the make leasing New punching high and measured our

The the PENN even early rents. aside of date, this confidence our we and asking market's are enthusiasm, at our raising

to the town. the shortly Hotel development of will in create best We begin demolition site Pennsylvania

million, cost. which demolition land about as $XXX to look you expect at should and We be shutdown costs

Our And make separate security. in property PENN basis to the public a high-growth book we District in the is process unique investable today are this million. midstream $XXX

our in Michael a New moment, in and tell York overall, the ] in statistics occupancy story. are will Development can PENN leasing Weiss Langer team misleading cover best Dave a Mandelbaum Our I say business that, in but the [ results Barry Leasing, District leaders operating Glen Construction. and

since of lower XX%. overall While XX%, availability assets built rate much a or repositioned is newly direct vacancy XXXX have

Class you Last assets new Midtown product. the to should assets Class know X/X pricing this the Class in A that set. higher place and of competitive you expect, for all substantially quarter, in XX% repositioned and in clear repositioned fact, assets B, are activity than would that voting of market is a and our A It's was be leasing command is new As higher. Obviously, this

employers coming is York where with the month. it's have work mandated neighborhoods by life. home. return ] now vacation allowing in shortly largest staff or utilization office back some XX%. thereafter, bustling, a flexible Manhattan August, Residential is New the so to commercial office full work The others Remember, [ with program from canyons some approximately Labor are and Day in a less to

work not per number week us. table. not or a do to of negative tenant's And said employees home by do As the I kitchen will believe threatened believe have from a by days that some office I even before, X X be I will the be that

month again. in region, with take first no will to that date. you I, for Last to All in unable soon opening deals Manhattan happen be week, our There store office Manhattan that enough. will be I'm magic that Broadway full its up premier XXX to replacing to it at we the several more announced bet Wegmans. buildings can or whether the for quarter predict matters do will is canyons Northeast a And is one, teeming and Wegmans, we is back grocer it that Kmart. a the

the Wegmans with creating that and announcement. at print coming count, is last articles excitement it broadcast XX is The celebrating fact press

as in-home interesting Here to will that as it. from volume -- delivery. its be XX% home appropriately much Wegmans expects delivery from of fact is an to

in be over increase will rent. million We TIs, with rent Kmart's leasing $XX and commissions investing XX% lease in a free long-term this GAAP mark-to-market

the acquire share our ROFO announced to rate in-place we a in accretion. we $XX at building Avenue Based Park floating One partner's per that million. project exercised year values that on loan, quarter, transaction we first cents $XXX $X.XX This in interest XX% million, the a

restrictions brought to to California and at value, of and are COVID market height Last we XXX with withdrew, we Street so forth. summer, sale the achieve fair understandable for unable travel

said refinance at same we loan on we this and floating to loan. We $XXX just ] will can is share. million new time, the billion almost as $X.X that smaller At us of much past rate the rate we the the exactly tune approximately [ old netting carry fixed quarter, did

I financing say this one with this better asset outcome. might free believe, is to So accretive a $XXX money. Ironically, actually continuing outstanding the is superb own million

estate will York quickly a been and New past always decades, this pro-log, is values. undoubtedly the past to real costs replacement rise continue here costs a has the key eye cost value a replacement has dip as with future far Replacement as many lifting can over similar replacement And if is all In cost relentlessly. of rising rising there umbrella predictor risen see.

And poster New York is this of phenomenon. child the

retail Here guidance is for our updated business.

expect guided NOI of the a we million. bit. little through cash we halfway XXXX, And For now to do year, $XXX

which million, we For NOI guided XXXX, $XXX cash of we affirm.

we guidance less $XXX For than not million. XXXX, new cash NOI announced of

exercised of Regis, Swatch a know $X termination expected, their should You effective million with XXXX which is the a March option that, for termination space fee. St. as at portion

pricing owned Swatch Harry case, its the of ways, guess TIs have account and bottom so the in us will New in I have we the York termination. is Swatch our real If and bet York lease New betting guidance remain expiry. man, will XXXX best June were that In store New in estate better that under I the of Winston York The I and that already in through will and above worst bottomed. would takes The stuff rate, some am, a put better get behind and space. occupancy I

thanks great a operations you. development talented all have to and leasing, team, Thank we Finally, them.

to Michael. Now

Michael Franco

a on the second morning, Thank quarter you, I good our start and Steve, and capital comments with will leasing few with results financial and end everyone. markets.

FFO second increase for per $X.XX comparable year's quarter, share as adjusted quarter to of $X.XX an Second $X.XX. compared was last

release and on for you Page X on X. financial supplement our provided We in quarter-over-quarter a have earnings Page in our bridge

from businesses, improvement $X.XX our primarily primarily from interest expansions or Company; rent the and York resulting expense increase lower $X.XX from following in $X.XX of was prior ]. variable BMS, nonrecurrent overhead start including driven The our certain impacting the the lease & tenant-related New and write-offs from and [ G&A reduction by commencement items: JCPenney period, program; savings from and of claim activities, straight-line

overall second year. discussed consistent fourth comparable year quarter we full at results the our the of run the is Our for expectation rate quarter as beginning are the with

pre-pandemic pick a BMS the in our second levels. nearing to are of of see to signs with return Signage with year. starting we normalcy. is bookings is up the healthy businesses, of half to Speaking variable recovery beginning

well we trade up finally, Our garages and are the for back should XXXX. in fully of quarter. as be have fourth number scheduled a And picking shows

we expect the second for to Penn's quarter XXXX. XXXX year year-end prior our of Hotel over by balance income the by cash recover most increased with than second NOI the quarter. businesses in Other from variable same-store income, the Company-wide X.X%

X.X%. Blending Francisco, continues our Consistent Chicago up up with was New the X%. over representing its business core in and with tenants. quarters, long-term Our overall own, was business, hold York our office prior XX% office company, leases protected business by San office core to credit of

Our the JCPenney's lease July of retail But for to was due JCPenney's remaining X.X%. same-store NOI X%, down primarily cash business excluding XXXX. was lease retail rejection impact in the the cash rejection, same-store NOI up

Our coming expected office was This percentage by back XX.X%, quarter XXX X move-out service. as quarter. expected from the down at well Avenue Seventh ended points and as XXX Avenue XX long and Park occupancy Tenth Avenue driven into at the first

occupancy in activity XX.X%. Retail occupancy, was and With to from our the we quarter should improve quarter-by-quarter have our bottom office represent slightly up pipeline, it of here. this should the

Now the New York month. of leasing last City each activity turning in leasing office picked successive pace call, Since up has to markets. our the

market and heal. office the With continues improve majority back sentiment many soon after the as to their the a companies in fully during York vaccination New on to to Labor the expected return office and now Day. summer Predictably, rates with the returning are company's focused return high, overall continues

active XX has During quarter, onset square its with Manhattan leasing of highest volume since exceeded more the And was of office requirements. tenant feet in million tour the than pandemic. the now second activity levels pre-pandemic

the recovered, we're office-using more in employment now XX% strengthen. of XXX,XXX continues pre-pandemic city at the peak. than With to Importantly, jobs

And ]. Tenants now that thaw have longer There demand asking assets; XXXX small additional our alluded by transactions, leases entered the have assets. occupiers [ we dominated While from are for stabilized. in continues for market and as asking many entering recently types Steve first during by terms formally market. larger well-capitalized have leasing half industry to increased medium-sized rents and rents services of fact, technology as the our into in pent-up to, the reflecting driven we all financial tenants, demand was seeing best-in-class concessions strong signals across are volume in the top-tier are to now

signed high-quality across feet, quarter, the new XXX,XXX second joining totaling our city. the square XX companies X/X with leases, from During coming we portfolio

square quarter feet. transactions The transaction at Healthchoice of these square square The X, a the largest average foot. rent with resounding was new highlight XX,XXX starting The of per feet our XXX,XXX redevelopment further leasing this to $XX was for market's a strong PENN lease was validating for Empire the reception property.

main our and dramatic Plaza's buildings [indiscernible]. Midtown, both Our premier in Downtown in to competition was here amenity constructed access and lobbies best-in-class newly transportation campus program new

leasing newly of including towards discussion. Looking our users includes active significantly interested PENN XXXX, well vision at XX as additional since Avenue, square new Experience with with our seeing Center. at after as than large quarter feet X.X the negotiation, feet the of in grown square stages leases Tenth in million X various more several million half leasing has second This discussions square last of in an of X pipeline feet XXX,XXX

new balanced deals Our in with activity is advertising a and the combination the of renewal our with sectors. companies technology majority and of financial, activity

expirations representing only with portfolio, of in square in square XXXX, and XXX,XXX for expiring PENN of are and X. X% is total, of this very the XXX,XXX office the footage Our X XXXX PENN and remainder modest feet

our look are, X which expirations of square year-end. with anticipate feet, transactions and and X.X XXX,XXX by many X, toward trading dialogue companies already is announcing paper in of PENN XXXX in we these and important course, As of million PENN we of

the in also tenant life, out theMART coming of market is and the showing Chicago, is pandemic. where office returning to of turning signs Now demand

new the during second completed almost leasing are While market the though of short-term leasing unusually up X dominated quarter, picked has renewal XXXX, activity high. square during concessions with million feet

square a technology have XXXX. of we in foot new Chicago's XX,XXX an feet theMART, and office premier square XX,XXX long-term negotiation. for renewal At entrepreneurs completed incubator deals with additional

at the This country. Two XXXX, pre-pandemic February was with exhibitors weeks featured we positive. ago, in produced same International and produced manufacturers theMART higher very pre-pandemic. show outdoor since trade Association attendees Furniture our than of and feedback Casual partnership show in XXXX largest was first the furniture Attendance the from show XX%

X reach Francisco San of we cube. expect year. small, focused have shows NeoCon North calendared We remainder a levels upcoming in commercial strong our we leases this [ other October, don't trade finalizing the including the in tenants of America though XXXX, show largest on during are to XXXX the fall XXX, in couple In ] design, the at than

open additional capital Street we Turning wide billion office to no markets loan high-quality and taking for million companies all-in bears the and markets XXX now. $XXX repeating low buildings, California in of $X.X upsized It the aggressive coupons. with financing and that May, advantage are interest to The costs. are from we our

support paper, with off remainder reentered and a paid on X for offering belief City. the also robust and underscoring in added New million We market was unsecured of X.XX%. investor There the our York demand loan at the our We green our theMART the for bond proceeds for to the blended treasury. debt tranche $XXX franchise yield

billion strong Finally, including $X.XXX cash our billion billion, billion and undrawn revolving $X.XXX a current under credit of our facilities. and cash liquidity $X.XX is $X.XXX restricted

With that, over it the for turn Q&A. operator I'll to

Operator

question [Operator Evercore Instructions] Sakwa have from from ISI. a Steve We

Steve Sakwa

curious, just re-tenanting sort where retail Mall the I into out, box figures fit of and JCPenney's Manhattan threw does the you guess, I'm on Steve, that? that first the of

Steven Roth

credit occupancy those new that for yet. in guidance no number any There's in -- space for any

Steve Sakwa

of want with what space? or of the do to on thoughts And thoughts any you behind updated any do that sort of just timing sort you on that initial have sort

Steven Roth

is answer thoughts. we The have

in working that's was think things on we're rent I Obviously, that, that And term. be us space few about all I to really to We And JCPenney I imminent. in nothing that realistic have that have expect short market. is paying today. say a the that today's the leased wouldn't not

Steve Sakwa

good too a Michael, us those of Could X give PENN in PENN activity maybe, of PENN getting give then maybe of of kind in you X. for expectations can seeing talked specific, up maybe flavor kind kind but terms about us you your are and just what and particular? just discussions at X you And Okay. both you're leasing without

Michael Franco

Glen, don't why take that? you

Glen Weiss

Glen. Sure. it's Steve,

day are buildings, PENN we happening negotiates multiple both have lease every So X X. we busier and X, at PENN PENN now.

has remarkable. be. building. will how to you As big accelerated blocks are like a which feels physical great, no The opened now we now, know, there's feel a certainly putting attraction together, real has redevelopment activity. there, brand-new lobbies full great been are People the floors but the asset It the the to only and new getting

At have Center. daily PENN at the Experience presentations X, we

have blocks. on RFPs certain in We the door

the are in in be better rushing as great deal-making feeling but but We We're It's way, not know going on mode, the we're about the it's it it. construction because unfurls. rushing. not that to By early, we're certainly we market. we're

Steven Roth

would reaction I that proof the the add talking we're with team in careers We in the short what's all, it astonishing. terms space, brokerage and day West is happening, never of we're Glen and the second in prospective just every Side of that is our of had I and tenants. the my whole The all, reception putting market. first to as market the mean, pudding community been cents. two Steve, this the has of in together. unique his to to program the seen of nothing

extremely we are very and outset, now not rush and because convicted time I marketplace said that important so are is we a we we with PENN prices. have to we to the is that the the raising centering the are respect are at of Glen so -- to enthusiastic, let we're a our pass enthusiastic level most thing we said, a So as in little are strategy, until

lot So you can that. take a from

Steve Sakwa

Great.

Steven Roth

By your the should see put and come way, construction you boots and on us. over

Operator

comes question next Korchman Citi. from Manny The from

Michael Bilerman

about Steve, I made Fortune comment, XXX,XXX to at, the house employees. in XX% said further I looking company hope by you're was a employees. well, here you space but their opening XXX remarks needs think your number feet. of made Bilerman same then actually increased It's comment X,XXX Michael a square a about for going It And they with you Manny. you upon review,

about of a in lease firm I the XXX. thinking does leasing. a they So tenants have your how tenants, than that cost a lease take where to medium-sized but how of you average or bigger little smaller their someone's to point? an willing tends have often are to terms space? space? Obviously, size thinking of smaller total about bit think How -- come of lower situation And how number of size want get up that to the more that are those

Steven Roth

probably to in cost one the of answer thoughts. qualified more I'll you is Number that than I these have one, real remember line is smallest their Glen tenants to but P&L. am, you my give estate for items

perspectives, So work. per capita space was Well, we per to there down the doesn't through WeWork economics went footage as from a what square as okay? feet number are low the the down stupid management experience, okay? the driving capita square like that teams, XX where -- whole So were XXX different different capita per before,

their of has the to So employees. this is going a with how to management's treat do they're philosophy to lot what as

is recruiting per a of So more especially dictates number of real view, tool, estate point New capita. that York. in health a in And one, space terms from

and want as look So do space feel management's to vision they like to what employees a with of of to want and the they lot what their experience that like kind the have. has to

if that's just to to going ] space, XX% work saying of obviously, people XXX So take they is [ row XX out true. what a not are home, from need I'm well, less

that's there's was community square tenants, over that is And home, so footage but certainty I lower it's a from which by all the requirements not analyst the that what work COVID a in marketplace it's think feeling lot, the true. I'm in saying -- the and that

Some yes, many no.

you thoughts? additional have Glen,

Glen Weiss

is remarks talked -- Yes. on in to thing Michael's one mean quality. I flight that we about

cetera, with new been exactly what and tenants Steve better on with the So number in that, there's day these the exactly buildings. of on better buildings of going a better upgrade desk every seeing an review lot what's a and deal it's With for terms plans are in one, locations. ground. the space landlords space, said. in to sharing, the the making et of there no that's And out reflective I dimunition terms mean we're

Steven Roth

the space communal of more more Now space, just all from seeing to cetera. teams more whom with conference is of with every add space, planners all deal them management hangout to we things day want that, one we're space, et the

an cubicle And cases, So desk it's individual or office not or in it's the down. entire where sits, package. don't just most the believe, that's particular I going

cases, even in it go many fact, up. In may

Michael Bilerman

we think right? different And a the employees talking not employees survey plays resolved? Because the to senior when United would that suggest tell Steve, that landlords. most how they how of would talk to flexibility. forward immense is does be How the corporations, at how there I real a that you going when do the the to of we story, actual their But of say They about view want but than across you the they commentary tension you're will talk the different when CFOs tails, of States, that get curve vast ultimately can of it have How teams the work majority out? employers. exceptions, a CEOs, consistent management bulk want estate

Steven Roth

principal to Different of the you believe a the office. will if I And Well, the I where And think employer okay? driver made. don't -- I at different beat a ways. are believe phrase et kitchen continue business the out cetera, will be -- core table, gets think different decisions, going creativity the things. the use I to commerce. basically, think going office I kitchen Michael, of to do tables the are I bet the it office as in bet firms on resolved can on I'm in the employees. But employers, different,

hampers strange continue or it. Right [ getting going that more is from in phenomenon, X not or pay who're and now, out a full the to quarter folks another very X. ] That's and there's enjoying than

at in them, the thinkers, touch their them paychecks feel the and where pay interact. people insist they gang, to that So office some their point, are and creators their going their they're see team, who are the can back

will always work there the be desire a office. Now time always or some from the their carry to or office. plays not the whatever has week home they're from will out, works anywhere full Everybody as XX-week in Nobody this staff employer's has. X-day the some have where in There work whatever. But I in office believe the day.

Michael Bilerman

Okay. just least color spin-off. more market terms office you little exploring a alternatives, you And just today, shunning you secondarily, where And give Can at the still of just question, then filings? some second bit given stocks. we of a private in expect when is terms whether stand should just in are the public

capital or is there get alternative nonpublic use where you to private to structure be? And to opportunity an to want an so

Steven Roth

all in explore We creating of day. sure. is answer alternatives terms The value every

probability create because public a We to what a call I with the That's at to midstream are respect way the it activity legal I look to et cetera, like banking, shareholders With to will is and deserve the the security. to our or that, separate in tradable invest respect that contemplated, menu is transaction, either ability as completed. be -- think B. I the high A in to menu have

current not at know going to we're to when predict the file we're time. papers You'll going

of study we consider transaction other that course, will, some kind of that. If surfaces, and

-- way no ]? full on alternative As transactions the of that separately now, tradable [ the considering, there this is slide and security. we're And the for speed ahead are by the we're

opportunity, enthusiastic important fully something to think totally a have District. more real of that okay? couldn't the think unique this doing strategy. estate which conviction country I wide. strategy is Michael, the the is most and -- And we superb are about one industry I And Thanks. developments we're in the going be PENN about be full We the We about idea what is

Operator

comes question John from BMO. next from Our Kim

John Kim

the yields? mentioned far dollar provide Can percentage? we on the the or rents And you are trending Steve, PENN development asking higher. any as you expecting should that color as be amounts

Steven Roth

John, I'm sorry, I didn't you. hear

John Kim

That's okay.

increasing. wondering higher And or PENN some dollar cost more the by provide about rents that, yield or either that higher asking or if on talked I was color be the increase expect you TIs? development we percentage should You increase? amount the should to if also, could offset also

Steven Roth

asking aren't to respect they? the -- think published, so I that I they're are mean, rents, With those No published. not

will So a not that could with is asking believe can raise our to we But are yields have costs going strong we're I construction obviously, if conversation which them. into and that prices. so get conviction our raising you that are I supplement rents stable, numbers yields. the conservative. in extremely that possibly are that lowest we of terms our in the be they tell

with the Tower, rest at will conceived have for our premium kind the occupiers, of Park this And we the job to the will, XXX rents we beginning just of Central adventure. South superbly that the to go for created a of Bloomberg we We're or our we space create market. we the example, atmosphere expect and and do time, if over right at

John Kim

immediately? still remind years a Michael, are PENN that the few this [ Maybe unleased, until a ]. capitalized being those you be redevelopment floors do we're stabilized. question Or Okay. if expense stuffed us they'll can But is but interest there capitalize stabilization leased from policy, you floors for do of until on you are away just your

Michael Franco

back we're policy. we then bring capitalizing right? them interest, that We service, I stop then of mean, they're that service, out

So we've all is service. PENN service X obviously, PENN of out supplement. in is today the laid that and X those in numbers out

think it's So I -- I straightforward, that's think John. pretty

Operator

of Bank from from Feldman comes Jamie question next Our America.

James Feldman

very Big few last us of your Can mean, years. Steve, the I want just on or Big lot maybe we leasing saw help Tech you obviously over quantify a understand, to to just active. go I being comments Tech back

how that come And And might leases together? of really Just they actually it how large where may to some think take looks? see you these pipeline be going? long

Steven Roth

Glen. for question a That's

Glen Weiss

big have as you the all we So tech. know,

could with as sit touch call. in them on continue. We to the expect. to this And specifics but get I revved often, phone have thinking not obviously are, hiring about discussions on paces their New more expansion as you Facebook, space mode again Apple, York Amazon, into start as all tell on Google. for they're in plans or going up searching our we in and their what would you and engines they're We're I'm are

would on. watching that as just this So year action I be for goes

Michael Franco

is big The earnings These significant surprise at the is, mean by I don't are of think I tech, at difficult your growth But to large law if by sort and numbers sense rates, I despite in tech, produced it's been size. Jamie, voice. being it's surprising. all fintech. of look what's their medium to even I historically, have do. growing do mean, companies you

they business, -- vertically their sales, in engineers, So doing need it's already. and continue et to to whether cetera, what laterally additionally they're people, grow or

And to whether a continued pause big XXXX. choice, need tech, had so these it's and to of right has be of the they in that X-month going Steve New the gangbusters a they drive York terms But They're medium growth, in going continue people forward. outlined. to tech, companies, reason market now for probably earnings

Steven Roth

ambition capital basically of reserves have mean, shy and to and they big spending are tech I a and if at the not the they stocks, limited of and et limited invent capital. their And beyond look they limited balance cash has and innovate is and and investing. cost X, capital their their sheet that, and you grow have their cetera, a a

New love clients favorite believe the ability ours, the New obviously, X engineers They and that. of the of York, reason year. and for to York, So the there's X,XXX are they in and else, scale hardly York. They New They can't a of very hire the importantly interestingly, the they and any of do education place space in up they that love population. open love diversity size

James Feldman

the it's should Or they it's you space point just do How think leased? enough have what view like this they at can all seats? feel and heads you they we those just get about fill -- can? to about I while XX-year the guess, already

Steven Roth

not city, customers in Look, having about the I our that York, they're don't complained of that. trouble New upset they're recently tech filling know. one certain seats. anecdotally, And a big

We heard York. in that have not New

happy a they're has large with New workforce it. and York very

So if or years million X.X lease, X if something about feet of big so, like about was the there square -- that. in think tech it, you last

take foot what a per square X,XXX is you capita, that if employees. So XXX

So numbers scale are it New large. of satisfy the beauty And to is York the their aspirations. has the

going So continue the they're to that. growing, they're and to answer hiring, is they're do

James Feldman

office? And a you rents give Okay. occupancy can you bottoming, of mean occupancy for where the about New us bottoming. think secondly, you goes trajectory talked York sense I then

Michael Franco

don't basis matter, about I you projections, to want I'd a an by last Jamie, just the team was and mean, points this again, I than of talked it. mean, XX, significant, his quarter, absolute higher we say pipeline, But And it finalized depends we and give leases, be XX is significant when right? it it just the on much basis. Glen on it'll off clearly specific bottom here It's know a there. I is or

punchline happens the So the And X at the be it in of the will reached number It quarter, based it But we've next think points queue. could improvement the be point bottom. time. could is be whether depends year. We just the the quarter, higher, following the on this see meaningful quarter, trend higher I what's end line on X up.

Steven Roth

where opinion as this to my you goes. give I'll

okay? this rates our transition little we dipped over building while, Park almost we Avenue. XX-year look at there's a If over you a In and even XX-year down cycle, occupancy a reasons are have once period, generally case, at XXX maybe bit. Every or that. a we a pinch at And XX% in always that for higher,

amount instances, enough and those double Tenth vacant fill that building are talking prospects space more. or Avenue. XX have And is transition we both to a the in in of there We that

So occupancy the always my that percent or we matter where to That's back a expectation it just a is are carry. of going rate whether to go takes we're we XX-plus years. X going. year It's

Operator

from Goldfarb Alexander question next Piper comes from Sandler. Our

Alexander Goldfarb

ask And Steve, South believe enough in you XXX questions. double bought to I Park to talked But given just Jamie's still Midtown, Obviously, guys to the and question, the One of the Central. about tenants resurgence you demand. Grand question you going you of going Manhattan Park. to West, if tilting I the you just actually, was was two sort recasted So the to ask.

Central Midtown, as believe to wrapping I the is Or do see Grand tilting to to New up So submarket? about XXX, guess, still still because York you returning the ask dominant I'd market you do and the like South that the West?

Steven Roth

I predictive York the like that the New phrase is that tilting. years I ago, some invented phrase

be Park a York sought I what's Midtown Avenue that a a will grit. lots and South call going of which that's place, smaller, submarket just there. okay? lots is And in fine. There's highly -- is South, it's New submarket. what So to So new very is think it's of of very it culture, mysterious, after do And's great not the but construction texture, case. lots we wonderful a any great still with Notwithstanding,

XXX market? that I Broadway would as you part think characterize of

Michael Franco

Yes.

Steven Roth

course, in So now I the we is building and the XXX Wegmans that own Facebook. Broadway, home which think submarket of of premier

So It's now been stepchild tighter and world. to for Park gotten role the its going aggressively. let's of reclaim as and is changing go a that great to while. the in conventional older Midtown. a Avenue commerce Park is has boulevard Avenue now

which have stupendous Chase rebuilding headquarters and we're building we a JPMorgan a with it familiar So Norman using because down building, they're with Foster. tearing

Street. are and there's that teardowns -- potential that, own about. at We Park Avenue. building Foster brand enthusiastic rebuilds another X -- have So have their we're X other to we plans published. Avenue, up building new in adjacent going Park XXth which been There's to the There are happen very and more XXX

that's what boulevard premier Avenue always it is commerce. to of and should Park become a be going So

X West Midtown demand faster we'll the relative will than market the have and market, and going than basis, So do or the into believe all going basis is a relative city in the be others to are that all higher of X the well. parts PENN do District segregated on a submarkets, others these not on to others. grow submarkets than We the will better

said, as the York really about that New and there the going how I c*** district district each District to is except And But is, done plenty statistics, in at buildings, to thrive, large of much wins market is them. share, are everything in compared a race. if the for leasing look how PENN you

Alexander Goldfarb

on Penn Penn Grand into Station for after Side Side you you still Steve, even obviously East will the the you of XXX, race your don't but think Central And be East XXX access Access, your neighboring great and great over opening confident feel buildings, other still winning which Station? eat your for on bet -- East Side would Access

Steven Roth

No.

for I okay? at think -- of the I look, look from the kinds come Station, region and the been Penn into of has and all always way think XXX All it's Station -- the of the transportation spiderweb negative designed. can networks it's this you all years, XXX hub that's Penn issues. of transportation degrees the

little -- Penn Now fine. be going There of and be with think in obviously, that's Central, is to Penn but Grand will okay is -- business Station a to a going me. will is it Station. be We Central [indiscernible] nothing, be Central. in with there's race relative fine. Grand Grand be to plenty not and not going I'm

Alexander Goldfarb

fine. then that's No, for the And Michael. question

Steven Roth

on, hang on, Alex. Hang way. the By

Alexander Goldfarb

sure, Steve. Sure,

Steven Roth

is is public of project, the the being to real enormous amount project. is, more sure of that course, I'm And seen you ours sure retail, of Penn which I'm adjacent an in improvement, a you've now. invested cetera. et estate aware Gateway Moynihan all be There's infrastructure the massive capital which couldn't

the to you and dollars. you're mean capacity sure billions XX-year huge I'm Station's these which of infrastructure are the projects -- expand tens to and focus trackage aware projects, I also is is South, government's can which I the have means of And of plans tens And take Penn. which that Penn tell on

Grand we will. doesn't well. going to And Penn. hope mean in thrive believe that will, and It it as we isn't Central that So

Alexander Goldfarb

next handily I The Okay. beat there it, number, quarter, second the On I'm is quarter missed Michael. is the -- Steve, you Michael, in guidance, question of guidance, but of second see and onetime curious, Street estimates. for is maybe coffee. what didn't in lack quarter? guys just I mentioned And the sort second you that just

of a And that much of So And rent whatever or is think how as about that or onetime what of sort $X.XX that either is sort just how collections stuff? not would onetime true-ups of number? number, repeat? sustainable go-forward we much that was

Michael Franco

XXX. $X.XX, gains think obviously, includes I the from

] So assets, is New Company. a were not from from in look at commencement $X.XX, last which up of the write-offs, pennies which had from But is having York $X.XX year. rent [ straight-line recurrence at several positive. principally which Obviously, ], comparable we benefited that [

or a closed from better rate So ] Alex. -- bit [ as said, we've overall bit the which consistent, were run basically depending fourth is worse little yes,

a enough I think year. positives remainder prognosticating doing here And things. today, thing right yet. think -- that's as the on But so the it's little we up sit there I I those Obviously, to short than better. But picked withstanding think straight-line that not are were the for not we're better that those other write-offs, is answer model of trend the the lines getting

So a good all on rate pretty run basis, I think number. that's a

Alexander Goldfarb

of there mic. went I over was think then the And paper piece a Okay. that

Did the something muddled. rate quarter, things? fourth was You said it run about that cite you but

Michael Franco

of was No. year, the said My year run the comment a that's of decent entire the was for we case. fourth when and we the still think 'XX we XXXX, started rate quarter

Operator

Our next from comes Stanley. question from Malhotra Vikram Morgan

Vikram Malhotra

done NOI of activity leases a but Maybe call XX us not just you months first you've rough signed on leasing over so. last, it, estimate from Can the all that commenced? the or give contribution the

Michael Franco

We don't have fingertips, that. at We'll come numbers back those our to on have Vikram.

Vikram Malhotra

sort And a I playing No wanted divide you just see about A/B Okay. the class dig quality small guess [ A how tired proportion guesstimate sure dollars incremental I would very rents proportion. a the spend that or what to ] and into of sense the that kind out to building. But portfolio, get of it's in TIs. in get for were of comments Vornado worries. up CapEx to I of them you divide? Steve, to to And speed to And if more need divide I'm today specifically versus you wanted terms

Steven Roth

to going much is, is any And how cost fix if do how buildings? so, to them? think I saying B we you're -- have what

Vikram Malhotra

Yes.

Steven Roth

for minimis, And can't we little space put I number X a we We've there, The been little years have Glen, class reposition and Greenbaum and with on. on all so maybe space have a it's been answer surrogate X we've to but is so de on -- here, program inventory none. that it's ago a even our XX a that program new. first started David of

Now when systems, appearance, elevators, I reposition, cetera. mechanical physical mean, I et tech say lobbies, service,

we're buildings of. any that So not we don't have proud

Vikram Malhotra

initial that that does Okay. cash? Great. sorry, Or include occupancy includes on just, a and to is ] portfolio? it number provided. rent then street the just retail the but you for converting And rents street obviously XXXX specific existing portfolio [ retail bumps, clarification one That

Steven Roth

Tom? Where's

Thomas Sanelli

we it we leasing also have includes have some up the So would that space vacant today, something retail, be today. that includes it don't Farley in-service Vikram, and which

Steven Roth

But it's retail. a the Farley amount very of small

almost the the if -- vast a include the huge really it you mean new would it The that number the -- of not it's majority majority a adding basically it's retail, amount of same-store we're So majority because Farley same-store [indiscernible]. is it, space. vast of of

Operator

from is next caller Nick Scotiabank. Our Yulico

Joshua Burr

Burr Nick. Josh on with is This

hearing to office case your the you're about be returning Day, scenario? consider after to your utilization for what's what hard tenants a you based it's office on know Labor from expectation would Day? estimate, but I And bull Labor after So to what

Steven Roth

my remarks -- one answer for can't question. in said I think one, that I that I I,

to by very that There pals to is no conference the have idea. have come all calls certain happen up of have my a and this I is with of I strong is a date. All date, about magic no number listened conviction going

that exactly. York can't will in happen it to remarks normal to does will that believe, and quarter, population from work believe tenants a my is X just turn we that bustling the that it may robust normal take quarters, it it think when in New talking sense and is, self to normal take somewhere I shorter our predict return. I But And may say nor theme its will I'll headcount, I whatever said to I it work make again predict try term.

Joshua Burr

the And office. return betting you're the than you're out then employees that rather figuring to mentioned on employers you Okay. when

impacts And do So I'm think curious, businesses the that for about office? mandate can ruling Justice Department what their of employees? the do return you how you think that to vaccinations

Steven Roth

to question, law you're have not basically, I that to mean, company ethics. think I -- that's vaccinated, fired. both the very and going I is And complicated you're to each extension goes is which a if think of

going into Now what policy our whom don't to that's a or don't that's for really our is interesting the situation. employees very will to be want cherish me. a what with I I get -- I respect we to market don't important question do. think

Operator

Green question from Street. a from Ismail Daniel have We

Daniel Ismail

curious, to pre-COVID going Just you levels? just a I'm those times. of back couple rents on rent, raising are District net back basis, mentioned rents still is to a at discounts? effective PENN Or some there

Steven Roth

off rents. In and $XX the $XX District, we're PENN coming

there's that expenditure of X supplement guidance district. that that's And I PENN in obviously, foot and number is the the we the $XX part and creates going think better X, expenditure a $XX the fee, -- -- budgeting our million which uptick. our PENN X.X are our So justifies so with somewhere also is capital what a and to nucleus the be of in in

achieve and so. numbers will those we that more believe We budgeted

talking So is number actually think because answer we're numbers. about the pre-COVID not I old new relevant we're your that's pre-COVID building, the We're not is -- the it's buildings.

Michael Franco

to going raising than those. if to higher for reflect I market's And right, are is Dan, reception they I aspirations, or comments would you're look you PENN, rents pre-COVID, where were, comment, the the expectations just equal on and right? Steve's our where at I they think add to think our

And today if bullish Pre-COVID. than go back more were so we you are we

Steven Roth

Yes.

Let's bit. about little a it talk

that the X, of block that hub is have the collection strategy we most important and transit in Our XX city the unique, X, assets a in surrounds actually property huge country.

we not that know from is developers. Our strategy We're we're with just owners -- developers. the

appreciates. assets pay is something and assets our quality creating that and to willing in is strategy that market the for Our is redeveloping

-- as did cutting and the terms is that examples experience the of some is it you years if at So what we very have X It's it, user of extraordinary. in ago business, Bloomberg XX we building, prominent which a building. into age years still look done did which in I

who a have lot of to achieved Go achieved where thought be that Central to Mike upon of with the interior could nobody very extraordinary. we Block has a are based given. way, himself designs have quality as something the do that XXX that possibly offering the By ever we South -- the

to that because I'm stores ago lobby, just lobby, we begin sorry, you unique, you the and we and respects marketplace see what brokers, opened understands creating, into PENN is the and half PENN we're what opened, tourers If -- which it's we environment which go whatever the X of only could the done. think already weeks that know X X have occupier

our effect more. develop, value on assets think we that creating. There's of to that we our to So that, develop the vision an ability are enormous has the

We in dead, in into it tenant, to XX be to needs move grow tenant buildings offer XX million, single have move say will complex. can In I'd before, XXX,XXX-foot again. also tenant going believe which this so A you XXX,XXX-foot able to provide what if our that and X away. feet, by tenant eventually Glen we is clusters multiple with that complex, always he's to square building to a XX out blocks tenant a feet, foot and even square that another wants he the will maybe of get buildings or building. I've million said and like XXX,XXX uniqueness our million, that XXX,XXX going that can't a

ground So uniqueness above premium is the buildings creates will creates in ground the believe district, command a the of and the cluster and what below interconnected we marketplace.

Daniel Ismail

older step Appreciate And all difference for office mentioned taking building and York, York lower-quality they New picture you has view properties? What properties. redeveloped? stay maybe those New few B share fair the mentioned buildings? a What to think do get and just a do color, Steve. of And bigger you times buildings? higher-quality the between is they office happens for back, office Do Class a long-term those the

Steven Roth

it depends part first think I of the that is entirely owner. upon the answer

keep or without owner whatever, vision the building building, the going a building to may own at provide to that find the able the organization, or rents. and of c*** may stay good and market resources may it able not be the much not is and to single its owner TIs And a lower in repair. owner So the or be may will of the is capital, course, if

a depends it the of and there's order that. So lot upon

and teared If are will Class the eventually, umbrella. and owner at will A below a that there'll is be fit multiple firm a the buildings, leased large be buildings owner they make down of over them take decent so be time, or and the rents or buildings sophisticated new they the to buildings whatever

So with if sophisticated with and always discount capable capital base, for organization halfway rent low a you be a market owner building a buildings. get an those a decent will there

up bought and be will C of those and or years. of developers be be couple be I complicated a But teardowns. underneath don't I'm not -- time and B land of great the by There'll pieces that's thing, about know. of So great years X those. locations those will and buildings There number XX talking a over every huge X will

Operator

Ismail, Mr. that question? does your answer

Daniel Ismail

Thanks, does. It Steve.

Operator

time. for Roth call to this at Mr. I questions turn further no have over remarks. Steven the We final will

Steven Roth

both management in preparation Well, calls. -- questions the room person thank of call. you, that call whole our We ask. enjoy everybody. from the We our this the on terms these all and in is for them, team in learn you We conference

again will the quarter stay very that. for of in good I and say you health, what you vigilant, everybody was the wish thank next we for I'll we call Thanks call. said see beginning we vaccinated, So get much. the

Operator

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

now may You disconnect.

Alexander's (ALX) 3 Aug 212021 Q2 Earnings call transcript