ALX - Earnings call 2 2022 | Alexander's, Inc.

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Operator

Good morning, and welcome to the Vornado Realty Trust Second Quarter 2022 Earnings Call. My name is Daryl, and I will be the operator for today's call. This call is being recorded for replay purposes.

[Operator Instructions] Our speakers will address your questions at the end of the presentation during the question-and-answer session. At that time, I will now turn the call over to Steven Borenstein, Senior Vice President and Corporation Counsel. ahead. go Please

Steven Borenstein

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

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

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

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

to and also Roth. present turn questions. over I call for is available team senior Our Steven now the will

Steven Roth

good and Steve, you, Thank everyone. morning,

another up good from quarter. XX% Michael second in As we with quarter last will cover FFO comparable moment, very a year's had

PENNX the half the interest lease. expected forecasted, business Overall, up continued year we still to what on right year to the be are our be first this ground charge incremental given to now and half below year-over-year. we the While the accounting from and expectations was of perform is noncash rates second well, projecting had our

year. for than signs Well, remain pauses very even not market, to hiring their retail the There the high. rapidly of and By have announcing headline of like slowing confidence, million beginning It of all way, cash numbers guidance $XXX companies effect. are consumer around NOI layoffs. seems falling the desired or less we reaffirm slowdown a efforts housing inflation a Fed's are

yield inverted and curve come predicts forward curve signals of a expect The couple back the years. recession rates market within participants that a yield down will

Pennsylvania important region. the protected by far are we leases are tenants, about that X,XXX expect transportation While conditions. we with piece Station our in by most long-term prepared for infrastructure do of is choppy

say in PENN manner speaking, gone years that might project has through In PENN, XXX early the at a transportation I at of last started PENN. either or ended

have course, critically and of large the District. approved the may Development important, as unique surrounding Corporation we many have seen, week, of this, makes of you holdings plan State and Empire a general the PENN PENN project Last the here. All District for

and This overcrowding addresses to The part important public Xth. for plan that modern a XX affordable maximizes in Hocol is of Out create and the we and is Station. overlay fix improvements housing. accessibility, GPP of subway and a mixed-use GPP public finally Mayor essentially transit-oriented zoning an piece to Governor a development PENN district in Adams robust involved X improvements entrances, station the new own realm including benefits, and sites

PENNX deliver concourse, of project long another public-private multiple was the including and district, around realm a Manhattan and ESD-led New that new Yorkers, new have in entrances XXrd in for which have trade railroad which improvements Long Hall, billion meaningful general transit at X station successful and beginning We've the and in XXth plan, properties $X XXXX. We in including will the Street Island led invested public and Station partnerships also PENN our delivered PENNX. Farley, in

of remainder design the advancing of the Station. PENN now is MTA the for reconstruction And work the

substantially enthusiasm. finalizing In for overwhelming District. addition renovation, us amenity package of PENNX, this the the and in significant to we best-in-class the of a the PENN been At accomplishments has GPP, been to completed -- year including one largest

and more our our us bus is than see X renovation It's for PENNX estate the exciting deal District generally for be of complete. reimagining total an development. centerpiece will the half real market and PENNX this structure block-wide and Our shape. taking to transformative the of PENNX current

be underwriting. completed As X.X Michael spot our interconnected campus on we foot producing are you, the square short in This term. and leasing will tell income million will

XXX at from We restaurant restaurants Fasano as new call reservation. in our as are imported Avenue completing to Michael and will Park as Street. a their incremental end of with on up certainly Brazil, ] Michael you an can't notices of additional plug about to one tell through and a living team million Kudos XXth and get by And [ if mean for billion that, town, for shortly. they you the new $X.X I their being stabilization. Jan much $XXX of which NOI refinancing I best me Fasano

Now to Michael.

Michael Franco

Thank good morning, you, Steve, and everyone.

we Steve had quarter. mentioned, As another strong

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

the driven by office estimated XXXX commencement rent of straight-line ground impact expense. rent This on recovery primarily continued and our variable partially new the businesses, and offset PENNX of was retail increase leases by the

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

the we in growth said at on favorable including both office last our high in of our single bears share our retail, It XXXX operating driven that that which variable repeating expected meta in this businesses be primarily rising rates business, call, digits. for we earnings is expected core the rate debt. recovery our leases from the comparable mid- per signed by to strength impact growth, factored to On of previously platforms continued Farley and in FFO and

impact strong Further, second we a we a levels sites. EBITDA year continue of hikes impact now, the recovery in higher additional affect With growth a rising than in anticipating. faster-than-expected Fed The from currently result variable magnitude of pace were will next debt been the and have the rise is year. the FFO as the expense earnings greater rates PENN rates closed will variable our interest our However, greater and XXXX have rates businesses, XX% lower anticipated. the excluding Pre-COVID costs to in Hotel development around X rate of in to see full for respect total we quarter than

District, Our location quarter very the largest the dominant strong. signage which and another Square the strong in forward had and bookings in with is the signs business, in best PENN city remain Times

of including typically design last took Our business the show pandemic. trade is Note hosting trade the our industries, trade largest due shows during furniture continuing second to quarter show. rebound which nicely, is year's place commercial at our theMART to NeoCon,

to in NOI continuing on business second recover income with track We businesses perform BMS same-store the full quarter continues return fully the still from quarter. finally, X.X% the XXXX. to cover cash expect to Company-wide healthy to this Our year this pre-pandemic increased second our prior for garages levels. year. And a the most near be are year by variable our over of

business X.X%. X.X% year New Our overall York up Office up to while quarter, second office business was the prior our was compared

Madison Goose Sephora new XXX at was due to leases, up Our primarily Avenue. XXX a at X Avenue, rent important Fifth XXX strong at Square, Christophe XX.X%, at retail Union on commencement including the cash and very Canada Wegmans and Fendi same-store NOI Broadway

New really that's our story. have blend occupancy reported but retail. That's the York and of analysts that is not Several XX.X%, a office

the against York quarter York. the New basis XXX of New peers of from ended Our quarter of flat points at industry occupancy in second which XX.X%, office but in trough quarter the XXXX, is and first the highest XXXX the still up our

Our service quarter. New occupancy decreased during to was the second being York that to due Farley space into XX.X% since entirely retail last at development placed the under previously retail quarter

which below turning are employment XXXX XXXX February is office has markets. total In since New leasing Now its X.X level highest near only X,XXX jobs feed. reached jobs to its and using York, March million,

leasing both has redevelopments expansion landscape activity buildings now with in half large with well-located but the sector most financial picked for the continues and best-in-class almost in ground-up Orix. office new Leasing many of to accounting the relocating some in Tech higher-quality across buildings tenants the transactions builds the market-wide dominate up differentiated slack, large-scale sector has city. slowed, to velocity

in tenant of older the strong, experiencing rates top vacancy space commodity higher and increase. rental pricing availability continues end to while the product less demand sublease in market remains is and Overall, demand tenant

Our office and pandemic portfolio leasing onset since of it's how reflect the the trends. our of results the best-in-class these benefiting resiliency

leases skills in foot team's than signed since have feet Our strong of average average XXXX quarter XX.X per square years. office rents of first at of the term lease and of deal-making X an $XX million more resulted

leased. feet During quarter, of we XX total square second a transactions the comprising completed XXX,XXX

We continue to the market. outperform

and portfolio at leasing the redevelopment impact quarter-to-quarter XXX. reflect metrics healthy quality consistently high of the our of our program immediate Our

PENNX we're going the also. at foreshadows This success have to

including portfolio-wide square per quarter XX,XXX redeveloped PENNX, our increase starting our at rents was assets. $XX foot underwriting this at amenitized foot, program strong our in and of for which average further highly square deals Our rent exceeds our validates to feet significantly per $XX square PENN

with include quarter and XX,XXX various XX,XXX foot XX Street. XX,XXX square Seventh foot a square firm East at a at this expansion with lease highlights new relocation of Madison, transaction a equity a transaction Other square XXX deals Avenue at XXX headquarters private nonprofit feet XXX

Overall, was and on years, Importantly, remains pipeline our negotiations activity XXX,XXX of deals active of more was XXX,XXX average in proposal feet lease cash. XX.X term additional positive lease GAAP than the mark-to-market this square an lease X.X% X.X% in quarter's deals while feet square and stages. our with these

other having world-class program elevated. summer is while leasing our longer be positive feet pipeline conversions is Chicago, XXXX, recently are fitness commenced theMART, will with leasing to discussion, amenities, the concessions a lagging our and XXX,XXX to and conferencing recovery. efforts. which York's turning market it remain already We and than office where taking by is our completed in impact capital behind on Now At active New square add more

work experiencing building square Montgomery rates which campus market return the square the is line California feet full remains vacancy foot. In leasing low our were quarter, to showroom we than and starting XX,XXX vacant record average per San XXX leased overall foot $XX other an XX,XXX square at within a Francisco, Street. expansions our Street renewals level of of XXX industries majority During numbers, our and at while

the to currently results Trophy existing we long-term the seventh with fairly Avenue. healthy new in District a a Tower, with in rents within PENNX mark-to-market. set at of deal PENN a XXX,XXX XXX along mark-to-market. retail the for market-leading and new positive highlight This very are renewal of XXX were a continue with square for We Chase feet than quarter, high triple-digit for watermark X,XXX Retail being deal see tenants dialogue modest at rents significant more with square leasing expansion feet

the in retail Island concentrated Retail leasing city be fair. activity spaces footfall the busiest is in the in locations. PENN for our Station's This typically true Concourse, renovated highest newly to continues proving tour Long Railroad

out leases rents of our almost watermark the and have fronting for for spaces Station. PENN concourse half XX the the previous We signature retail rents high for exceeding in

broadly, transportation More demonstrate New bustling retailers' reach and commitments in projected the belief return million These City pre-pandemic Station. XXXX city XXXX. PENN tourism to to is specifically and XX in visitors in public York to in levels with

is concerns offset momentum positive inflation making commitments. more about conscious becoming this are recession However, many and retailer and by about retailers being

balance year. to and Turning impacting much financing and to and The of down volume capital the last the markets the accrues spike sponsors which stronger and now. high-quality volatility significantly from the market Overall, increased sales of selective, is with rates properties. more CMBS debt in markets are asset being interest benefit both markets sheet capital the

spreads available. leverage widened As with have out lower such, generally

of X loan with X June, they in consisted as XXXX we December extending revolving well facilities and a $X.X lenders in sponsorship unsecured our as billion our quality credit $X.XX XXX XXrd completed spreads, attractive announced were completed heightened pleased properties. West million We're unsecured previously refinancing at and of as refinancings, quite and As on focus Broadway reflection Street. of $XXX XXX executions billion to these which

line the these more floating loans all historical the We refinance fixed with And improving anticipated XXX, while our ratio with financing in fixed rates, forward XXX markets over-predicted early. we curve And operations. that is which is historically becoming our to had challenging. XX-XX, broadly, we more to

have with of mid-XXXX. refinancings, through these all Importantly, we with maturities significant our dealt

the sale during Long [indiscernible] continuing the challenging million $XXX completion monetize of Island Despite office of on hard other to We the work building our City we our to our are for the at efforts in quarter, also non-core sales asset market, assets. go. announced

billion investments billion our current facilities. a to and I'll cash Finally, the billion, undrawn revolving cash, treasury credit for With $X.X operator $X.X it and over bills restricted is Q&A. turn including our that, under liquidity in billion strong $X.X U.S. of $X.X

Operator

[Operator Instructions]

Jamie comes question from first Feldman. our And

James Feldman

-- in more this where it, year your rates, magnitude now? your and starting with the your thinking 'XX year. you for higher 'XX? maybe about where Can earnings was is just talk from just model as and the we're outlook Maybe just change for drag assumption and both -- the on -- what next of about where how to And it

Michael Franco

Michael. to you and if be Look, at we look were early single last in time now it's mid year, double it's to digits projecting still where said up. the high Jamie, digits we

we rest roughly And thought take the in what XXX out just you so be. you're points on and model it the first looking done basis impact if you where quarters LIBOR at the we've X would from of year,

$X.XX a at of I've day. impact change from looking would been the billion, we in than thought I told obviously, higher with seen you're you you share be. But rates rate And come We've tell And every where today. would X ago forward around curve XXXX, it $X.XX weeks debt about down. already floating could have

X reflects on predict. that we where rate impact our can't very So really expected. quarters versus debt Obviously, we of

Next have a year, on year full impact we'll that.

a be, be another the what going so to the sit give here to it's probably expectations, and potentially. And I number. relative Again, want the overall in you ballpark. basis XXX will today curve by driven divisional It's points don't

Steven Roth

debt. the a bit Jamie, on little rate more floating

to it $X.X We the billion. little all, it fix some of down. a of very well more may pay reduce First of bit did we

a years, Second, last over rates interest rate during loan or benefited wrong took XX the fixed debt. XX low rate XX-year floating have enormously Every time we the fix and we wrong. from that were and we period, wrong, or

are forward. transition. many that's The that interesting, of but in thing is matter all assets doesn't going very So it next our

of the out many assets of for facilitates a rate course, seasons, which our be because the you Some when extremely are in data, list. that asset digital as And expensive. -- getting sale could fixed have on debt transitional floating rate of involves cases,

it example, and of activities debt what Michael? Some rate got the right, years perfectly was about California, executed -- we XXX we fixing floating X.X for ago,

Michael Franco

Yes.

Steven Roth

ago, years it. loan floating very at very on a we X.X share of basis, About rate our spread attractive a and attractive a fixed

a we refinancing, outcome blame X,XXX So real very the asset. guess a and similar I'll good. good I team was that for it. take a the very When did which was

environment. rate to interest rate years is for a it market course, debt the On of is it, protection next against piece debt current didn't rates mistake. small the go X of get when I it cap that And in We you is. up, And fix the as was that, long of about mean reflect and which increases. expiry, a fixed think interest as that of lasts. X, retrospect benefit to The rate protection no the there thing you fairly about rate is X, or rate whatever rates, to have really whatever by floating is, go

So it. you there have

of some it and next this give back will year We in year.

to of down have is. expect business substantially depending it. come We but upon what the there depth perhaps you slowdown quite And -- rates the

Operator

next Michael Bilerman. Our from question comes

Michael Bilerman

Steve, in your comments. opening

of how how So talked given the Steve, outlook that's change been asset it strategic sales, of choppy And you've still affecting so your have things little you about that sort on. about, of you a going bit in Is sort everything that tracker sort forward going there's recognize sort stipends the now stupid was I on many does marketplace. thinking conditions, put. direction? Obviously, forward this? today. you for the it's But cheap, stock Vornado. is going go want not of to stupid, are stupid, getting the where how stupid, you're many path with don't about you to if side And I the happy of know it price other And to

Steven Roth

First or through so. XX of or don't years business Xx been last at we've this, Xx or all, cycles the know, X over X I

missions our sheet. Number an to have safety always is our balance rigorously through on So important specifically that things, to serving job grand liquidity keep we do is, have example, the to to we plans us leased extent protecting sanctity PENN our the that, PENNX two, in District, respect to the with the which for market buildings there sheet the and and of our fairly our for balance certain the example, and that end. do, focus permits PENNX. preserving is And

basically and And upon -- so those of PENN a have those buildings all District. value the increased New And we will York-centric. based spectacular outcome we're the are surrounding

acquisitions, We is price that and around, continue off set aspirations. skill in comes have to think something to buy hits an we of terms our open if

with So the basically, important and a focus usual it's things on the as sheet. balance more rigorous business

in to nonessential expenditures. capital -- expenditures, G&A our cut beginning get We cetera. began of very, the et have We on and we tough reduced very COVID,

going are said the that of slowdown. And has kinds one So I've those of into things do to a business couple things. a

looks it the me think on recession. to like of a foothills we're I

everybody We the a which against I mode, Fed think is. probably bet in don't are

As And the disciplined. I possible. that in a their foot business hopeful said, the quickly we're to as be correction. we'll objectives their keep as will accomplish We'll Fed are of foothills peddle the we and

Michael Bilerman

whether there's that where the mindset sort is where there. Alexander's So stock you're we're out this asset activist I -- sense market thinking And stock it's sort differently get bats the happy to at a today But of sales tracking headed? does don't progression have with of PENN and trying Vornado. at -- about obviously, knowing the for you Like valuing that is District? your the doing of all or alter of where

even doing understand and what I'm change just given so last in? this environment spent better so we're that could just value-creating trying simplifying future, the potentially many to the you've I'm to and into activities year. And the continued decade trying understand,

Steven Roth

unpack that Let of a in me places. couple

all, security, to still is the of separating the believe First absolutely right tradable District or PENN other tracker some separately whether our it a I that technique continue shareholders. for a be to strategy

the PENN should as District ability shareholders have to expect that be our an we grower, We that isolated investment. and the is to in think a pure-play

So in of we -- will, to deal, sides counter air. whenever it continue lots totally we strategy. party, both that's things in of in I no speak, we have that occur that I that one. The the mean to That's between. up on we believe of And to that timing time we're to. is different so can want still subject a could

a can good we have of the we the where we our value basket, get be non-core you we're not to which been will our our enough Secondly, portfolio very we do more get improve all which between, shareholders balance better There group to that the don't at as buildings billion, if sensitive for And we would more of non-core so. a we sheet, the happy reasonable, but whole pricing, those have sell can we time. selling, execute although think incomings in assets are as could get we to buildings like it X that's Long of create that we are price ago, -- other if a think are would important out is will the to that We price quality. Nonetheless, once and and I X or process already is we on year execute. And $XXX good on somewhere buildings something City that. billion know, Island in asset. $XXX executed because

of last to was think that, Alex. to was investor for continue which was my with at I I going And answer part statement to I think I'll to hold Alex. to the I -- hold respect your the going Alexander's, activist

Operator

comes next from And Steve question Sakwa. our

Steve Sakwa

be spend the the for flavor over the Steve, a by give you PENN more how And of just you proposal, a evolving And was that little Station if you? wondering on new sites, X office maybe versus time owned XX just of residential? much are how us I could that sort see would those time? little

Steven Roth

was -- PENN times the District said do recent what multiple our, over I say... since years that over I the

Michael Franco

Big kahuna.

Steven Roth

kahuna cetera. was big -- eye, ground bull's et was Our the

that in important of PENN that years piece the property have district Manhattan adjacencies for of by the a entire sort put been of XX PENN they region. Yards and most in District which Station successful, We -- the believe where very actually accumulating the has West, been is believe infrastructure transportation were us projects, We on We now. the a map. large Hudson really very the benefited

neighbors. There incomings appreciative we're of efforts So the time. I for an our all is of demand of enormous the district. the get very amount we mean,

basically, footage buying option party. where zoning is is And so become dominant will And there a GPP basically square we to has state it. One value. the things is matter. at an each the of involved are allocable the have the multiple overlay zoning It's FARs increase existing city the the site market in for at by that that

intend there's So can I might we -- market X obviously ourselves is okay? we're can larger remember, additional paying FARs feet district, in build we the FARs. to can square million you -- million for those that buildings, of think we But say fair avail So X Barry, over. which value numbers, be build allocated round right, in that

second thing respect basically -- the is the our with that state The zoning, becomes our and EDC regulator and the cetera. state et overseer to of the

be to into city towards where pup payable the builds city is then will Station, new the the an is that to come the first revenues of basically off okay. taxes between a been the subject historically. had the allocated And actual most were third to is agreement ] allocated the that reconstruction that to that [ that state, city of basically and The PENN this the what

to anything? developer small forgot, I an amount on construction a and Some will what forward the of on to Barry, allocated was vetting scale access go to basis. economic what be the it, incentivize And allow Hudson of relatively the Yards have

Barry Langer

units of so... the XXX About park

Steven Roth

office might a we not time. a be zoning been of change, intention of will requires development, okay? mix determine XXX about How for over Yes. The has the units or principally The -- will long time might park, this that

of and is -- is involving this huge location. I we first eyeballs our Farley, which before, are of long-term redeveloping. in or it at whether buildings, And right to PENNX on in a we they said as irreplaceable piece part the deep -- existing have our project underwriting. PENNX, But up ankle are a the remember, Now are

We X from to stabilization. and X, now of years And incremental now X, between generate expect this to we those term, meaning be million short buildings expect additional to $XXX new NOI. relatively an

Steve Sakwa

struggling trying to understand Well, out I we marking some others know Great. that PENNX think because are Steve, income, into in return already $XXX is laid dollars income follow-up I that where these my of that you've a as on and how leads into the hurdles million, I to maybe supplemental. spent of is say, in or leases. statement guess, the flowing the market much you're and

you not to to double but counting want give we credit, sure want we're so or we And overstating. make

when So PENN there would PENN you what's contributing contribute? And X can a help actually way to is Farley sort then from today? start X us from of think about

Steven Roth

are in of I'm to to $XX finance don't at the care average rent I exact that over PENNX, going is know slap it year say like Nonetheless, because Farley, I next off-line whatever quibble but something this, team numbers going XX% which the the begun and with come let to so. like XXs. online high come online will XXs. an occupied, just that. or the from number, maybe me. million take approximately has my they're

rent to a building that be foot. expect market the $XXX We for

said, signed XX... and Michael we -- We have as

Barry Langer

XX,XXX.

Steven Roth

which handful XX,XXX me of or PENNX, square of leases, feet they're already. See and average, at this feet. underwriting. XX,XXX X leases we quarter foot slapping think $XX a in justifies X validates our a

the PENNX. for We expect same

a producing PENNX turn go okay? That's is, will And be new, over PENNX, the to X.X X.X feet, building basically a not time, years. which today. pick as leases come foot will the coming XXX,XXX-odd foot, fresh a that's means million, has in saying feet, $XX a is a leases period time, that less as feet, say, million it will building than X you times $XXX I'm pick income and or what be $XX will So has the turn foot over of over which over, square X for from, $XXX that's time million number, tenant and the completed --

lease-up and you. with have stabilization So and what

years, a be even so vacant foot. space X $XXX will of turn to produce million X.X So feet the we X, okay X that that's will me years out maybe -- with think now

that there's if expert you can the but I my you this, your you hope math, team, model help way So conversion will that's do which to is as detail, math. give finance will more -- very you I very, with I the and it, said, very, And like.

Operator

from comes question next our And Alexander...

Steven Roth

the and to Sakwa minute. And that go magnitude I has want -- development back I stock that this unique a public Steve company know reflect. of to any has prospects this think out other doesn't for a I a don't company there, okay? so obviously,

doesn't less than go sorry, I'm ahead. now to stock we for what the we think the and here. way begin have opportunities reflect is I have selling

Operator

Okay.

Goldfarb. Our next question comes from Alexander

Alexander Goldfarb

I get X that Is questions. correct? think we

Michael Franco

Yes.

Alexander Goldfarb

Okay.

So Steve...

Steven Roth

I'm here you. serve to

Alexander Goldfarb

all to wife we. serve -- my and just we here I'm serve And I'm someone so don't kids,

So.

Steven Roth

Get to business. back

Alexander Goldfarb

Okay.

District. first, questions PENN on Steve's the going So from off question X are

X more sounds you with will like a of outlined. But have it not like one, only XX Mendik. New that few importantly, the and York or second, are X, entered So guys you all I buildings guys guess

takes or stabilize talking X because for buildings build to you, Hard office but PENN to next X how of long XX to X up lease. that it or even believe in years XX been and online, not you'll that just You've the years. about get

rates. question there's So rising as far you're the paying spoke are you earnings more as asset earnings, because guys of sales, dividends, of yet you

understand is you longer, waiting years, of waiting out near lot How things be seems multiple us a investment the stuff near-term where all that's to still something because deliver. growth, investors nothing stuff guys. term. construction are for that in that How tangible public put lines have under think earnings for about are from the existing time expect this We're to where other vehicle in we but to already a more and are been this a versus -- in private you've vehicle this I much that

Steven Roth

do stock estate. don't I do I market. real

It and time will what billions stock I'm saying billions and the investment. I on to created and as that is you and that you what news we you're stock my time to prospects that that we and a imagination billions very and the tell And in period for do if time focused value a to future can only over and business, and decision. values I'm being market. the each make IRRs no that, the risk values be be X the -- speaks an begin and tell of bad are can PENN, X the I which high would and too be and PENN, focused that to remind market will that -- be You do certainty. full future for short-minded of the no put is that kids. I you multiple adjustment all earnings, you and as can model the can work that, deliver are on chooses their investors think on itself. the I the because I well these of be only takes sales investor by no the extraordinary companies the I market knowing know that almost out will I believe So worth buildings. way, you stock inherent the is IRRs to Farley over okay? stock time, the unique, even on And if business you're -- model justify impatient. creating. give with own want once market focused

Alexander Goldfarb

an Alexander's. around to the it's dividend said, next few the doesn't look or seems is On be that one, years. two, as then next you as given question thoughts and given as Michael second company interstate -- Okay. And although pretty of Alexander's, your the uncovered forecast And Vornado. it we covered for either to far do goes have tough activist, the the basically X/X just

Avino in is So and [ thoughts maybe Alexander's around offing some something Alexander's the ] thoughts just the around dividend. your up tie

Steven Roth

Activist. minute the spend Let's on a

could significant very in I significant. There shareholders. a Activist the they some their affiliated shares, small The way that I company that has that your they pretty are either you. the call target X whatever XX,XXX other control that have own business. X/X have see aligned about letter, courageous they we are very a of wouldn't on So it, is have is is, list large, what which or that that think closely that has be said to But shareholder them names -- entities it's company with a point the or --

shareholdings So what. got it an If we with very that will. We and notwithstanding of very the you the simply came respect from what from letter April. the take have treated letter We would incoming notified in a highest the share, in [indiscernible] or for way. we and think us folks quickly, same we X still them they shareholders the got that and act invited I

suggestions. that then letter later. them Board Alexander their sent over about highest the externally I May, million, treated they of present cash, the by we very We status We sits carefully Board suggested that exchanged cons them -- to on think a would was would Alexander's We of them as amount, very expenses very a the -- by with which and huge we saying we we raise amount, in take They of $XXX had Vornado, not had we significant quo. What presented, which the preferred years. the that was basically and Gary? them. to we pros and cause Alexander's the -- the suggested invited which in we the at the internalize which which carefully, a management of respect. Board next to proposal listened the managed debated they did stiff Alexander's about Alexander's full We meeting, then deliberated response them seriously We a them sent on very views.

many times uncertain that of of are of be chose not or the that pursue projects having $XXX and has recap that we a the expiries to a is out. more, lease choosing which for pay Basically, a with which Alexander Alexander's of million, to Board leverage has techniques more company uncertain, a company the number big idea. the Basically, set traditional X are different because special to potential up because activist stock. dividend -- suggested the because the conservative reasons, to They the that million shares. company, small

PR, into one There was believe the Alexander think I I that thing, other was And stock IR go market. that the and business. in

that's a having on. going which finish. going tell fine. Apparently, on without the they stock think and They they knows me to let of public, view have market man made unsatisfied I pitch just -- everything is point what's were were of their

or X/X on management to speak going and to and overlapping. are my of be The teams Alexander's. of my half. Alexander's this will call, speak externally formal I'm X and Vornado half manages This remarks a Vornado and response owns behalf minute going say basically, public. I Alexander's Vornado their now So, and that X, last I sort of is or

Vornado. very And for so significant investment the investment a is

me $XX dividends the so received is Vornado a Alexander's $XXX a from bit ago, which on purchase return Vornado's constitutes XX I I made math just $XX $XX was the is is XX% a the because it of receiving $XX you which basis, time about million million looked on price million, -- investment was of was up shares. Vornado give Alexander's. in was time, share, Alexander's it curious, Let investment. an so which has recently. years of a little Over share. Over total annual

compounding. it's So of compounding. friend I the think This about is Bruce definition who Flatt, my very talks

Now you about talked dividend. the

where doing or has the don't have which what you I would of math, the dividend things, So but cover option know get you. Alexander's multiple your

I dividend of have some is what dividend which shot. covered. caused retail which vacancies, So what the a don't know give There I a the your the result it let's you're math -- just saying or is, are part Alexander's decline. of to not -- conditions, market guess is may income be but as is

kind cycles And go a comes I lowering is not in go. tenants thing. Tenant and as that's $XXX more. think, tenant cycles Now million, bit and Board I try lowering, that little dividend is the $XXX thing out, come Alexander's raising regularity has, permanent come costing And goes, is of Alexander's the and raising, very debt, smoothness which interested think don't it. some second and the to get obviously to million of a rate floating

on dividend interest, the million my letter. extent the these my reiterate you recent find floating remarks that's most we that covered. have I of say that to all their think will that is over-traunched I formal that constitute to that have To sort to just about think $XXX at want friends I because And cash cash. response we're about will debt put that to this. So of I think million if we rate of to earning $XXX work you it, Lionbridge

Operator

our comes question And next from Kim. John

John Kim

about FFO quarter was if wondering run you the Michael, good million talked the XXXX. $XXX your remainder of of of $XXX GAAP, for rest rate the your rates of interest a cash second on million impact of But outlook year. I the is NOI for

Michael Franco

don't generally very the answer NOI, that Yes, in think you But John? the Of you the second specificity. was to answer generally, give want half a is, yes. is yes. strong some Like that I half half. second in with the things plays I strong first the growth see the

John Kim

nothing income. wanted onetime to in I was clarify, there on just your variable Yes. Okay. nature

minimal, the have pretty do but amount the in... marks, You at rest of of your a portfolio is but fair expirations

Michael Franco

Yes.

that of the known. negatives some So are

yes. generally, said I So

the very was as think prepared in good. we NOI the well. performing I growth business is core said remarks,

see that being be moderated. down the with rising flow you of We when the expect rates, that's growth there it FFO impact continue growth. But that to where you

John Kim

expirations. question on Okay. XXXX is And second my your

retail now fair you you to have a versus on that office, are vacate what You provide or X%. amount XX%, or today in have color percentage is renewing you a any leases high known immediately? confidence commentary backfill Can in

Michael Franco

take to that? You want

Glen Weiss

Sure.

feet Steve program John, In to was XXX,XXX that that to, have we 'XX, is to get forward rolls, lease-up As X.X to Glenn. that to expiring. office, as of feet this new alluded we it relates Of rents. about is look million the PENNX, which

lease X As of expiring. feet, it it. we're of but which space, terms in versus XX-XX it over who expect going people staying a are to lot now paper for remaining We're relates the on people probably million split in paper or We of the leaving, we're much to all the is it. stay in of

Michael Franco

Retail?

Haim Chera

New the York Our XXXX that rents focused timed to next to which tenants expirations. laser what expirations, very could our it and levels a is by rising will matter tourism have will we our be for pre-pandemic that and a are. And we year growing the City, are we stay, desire know be well rapidly on, of believe reach

Michael Franco

own we feel St. know, don't termination Swatch X of most the think, about their that we I John, at in now we And exercised good that looking those. I'm about But pretty and XXXX, I of down think retail option ago half calls list, Regis, obviously, maybe building.

in So that's move-out 'XX. a known

along the expiry, from got exercised they payment way -- We termination meaningful that's that. a a that But a notable XXXX when one.

we'll and in happens. The others, we're what active discussion, see

John Kim

And what mark-to-market be the that would on please? flat,

Michael Franco

tell to you. Too early

Operator

And our comes Camden. Ronald next question from

Ronald Kamdem

up on the bread XXXX. some of Just following crumbs for

next we PENN that's in year, different big sense versus Clearly, contribution think the the Does about that sense? modeling just the XXXX make change to to touched on question such 'XX back million think already. think in 'XX? should but interest versus term, the in makes District long potentially we the way, of I the into about a maybe asking $XXX year-over-year given part going the expense any a sense how 'XX trying difference.

Michael Franco

piece Ronald. Last again,

Ronald Kamdem

PENN makes contribution between for versus District, XXXX to and the the So sense. NY, that contribution the delta XXXX if

Michael Franco

my don't can have the take there, that's yet. to time think be leases, it, PENNX, In We that to XXXX, going to PENNX not Yes. phase numbers you you when get roll off-line. going we in. is at as you'll contribution again, see I over about fingertips. to although, those contributing

Glen of space to it spend -- We to average we're that and his an going years. year, over. just every PENNX, out right, quarter. quarter we're So are and knock team going X roll by

Farley, in to then going as more to flow And for see in going so comes in. retail the a you're online. to you'll flow time. PENNX, substantially you're of flow And see period that not start that see

even But as So PENNX until contributing realistically, a we'll that. and the yes, well. start give XXXX, not quantification or leases again, going beyond Steve going lines significant XXXX, is some the year roll. that probably. be you And improvement to year-by-year asked But offline in because an really X not as to of along others there's

Steven Roth

ground repricing PENNX PENN, in appraisal lease the Remember, process. we had

be seller, million number get process And the old-fashioned has it. so it for terms. was a Interestingly, it's the with fairly process. appraisal accordance Most probably old-fashioned these the are process -- all accounting of use the which the although last I is in The that I -- for and a process new of in asked significant upon predicted convention, distress, best unapproved no economic leases and buyer the call a land Interestingly, an rent it we quarter involved with experts think time. about the based old will the a a an and ground we issues. that the of the in market, begin $XX leases accounting about not going in of other multiple is willing highest the kind baked for same in with think normalized preparing. We as bit kinds it's willing to think of begun, no are doing side ground there's I little fall of

that appraisal This a be smoothed upon actually a could different the -- particular is out appraisal real be estate which a price in based of which the land than believe broker towards at oriented renewal particular situation, at, what process. kind we believe, would traditional sold lease, time, the point is a require significantly we

-- and markets lower if they economy a this one amounts higher most significantly, a the And situation the just rising not certain that in interest because much rates. conducive rates there. buying at the at assets interesting where admit -- in to the turmoil. debt now markets, and in debt they're more are estate real not markets -- capital are much is there, are they're players macro are date of And is are selling What's a we capital things markets

In addition, going are aggressively. construction costs up

where an could buyers this large is tenant addition, in extremely wherewithal very few slowing. In asset do the to is financial demand have it. And addition,

all will we can So be a process asset. to have be knows important something with. improve whenever This plays improvements million the outcome a in it. that capital still ground this value very have sort in will $XXX-odd live And that large, lease very equity where kind might lease of the to outcome of asset. Everybody this we think our certainly We're of spent reappraisal, a is constructive forward. we going very we enormous happy with

Ronald Kamdem

next if expected. -- the large could as year retail. second up, million. my on at took close about should contribution Last ask of just Any question reiterated we just ask in I or I we're better into guidance has sort than you rolling the other this think quarter. coming on $XXX Can the quarter, been leases that anything retail

Michael Franco

number leases that's so. worth No, talked of nothing of contributing. I will there's signed other a mentioning. that but think mean leases now I don't next about we contribute There's that a It's serial magnitude year, are just leases.

Operator

our question from Yulico. comes And Nick next

Nicholas Yulico

quarter on second in little have GAAP were to revenue property increase the you you of year about bit more hoping just this an did a was a first quarter, basis. I

think the I guess termination wanted to in think we benefits. And of see lease how about back rest any you've versus year done the you first the about fees signage, from year revenue the from still signage of also commencements, incremental just impact? or I commencements the some should the upside, GAAP, I a benefit of if you just of the were what half standpoint, as lease year. anything the said think from half

Michael Franco

online the contribution and We've was half coming quite like retail. both -- contribution from overall, got broad-based. the on first Look, I'd say, good office leases coming with

maybe been lease managing, got New lower York & Company this but from is piece variable recovery we've million bankruptcy of of XX. $X.X XXX quite West we small -- a expenses also about as termination, our doing from a little businesses quarter, got then And well. that piece related to there We've

that -- So I as but very wouldn't significant. characterize

things as in expectation recurring in the of is couple the flow just bulk will trajectory quarters contribution year. traditional to So level year's from last of some the be our we've overall, started the first going is in off continue. of growth second items. half again that second And this seen that of The half the to will that in

quarter-to-quarter probably a couple a significant get of as not again, of as on much uplift rate basis, we've But last won't the in you an growth as continue, year-over-year. So quarters. that we'll been

So.

Nicholas Yulico

revisit much guidance. et I you impact willing of for this the in an I there's company. But basis there's think guess, of your we're a to on cash reason really philosophy why on doesn't that we for the retail just terms sense guidance. giving widest see, right, of which for a year second lot office there's that And I that FFO, commencements, FFO some of guess you're make on figure your out, really to year issue an well, But NOI, for understand next wondering your of philosophy, estimates cetera. -- you if that rate question trying next Okay. is a off-line, all know NOI you standpoint exposure difficult to some online, is look are FFO which if I'm ask I a some if the lot not debt have at is over pieces now of the for going I floating providing be GAAP coming the from projects highest as to year. company

the guys to like year, next to trying this if all over revisit So over feels the on you for going really as understand guidance, FFO. are approach it estimates are all place particularly the just

Michael Franco

any have to don't we time, this at plans Nick, revisit.

hard given causing an this is do things XX year quarter, to impact versus the like more you quarter, seeing of given going as of you're the guidance this have underway right? it, half we in LIBOR environment historically significant redevelopments back impact up over online. Obviously, the and this, in hard from But when the expectations. we've last given we've come last than the do impact it think original I particularly months. it's the It's to

We So and space lease little we wait better drive manage But because We we do business the to outs. ins there's terms, it like bit don't growth. do manage a it to to that. we'll sense feel longer lot a extract of quarter-to-quarter. makes can

too given optimistic, So And outset I given artificial lack changing. we Obviously, et in cetera, it's reasonable it's we're I've a of the right environment board, year. proved mind the the whether the rates, I current view leasing, our gave going the something it's I sort is this said, of to don't as across in clarity an environment of think guidance quarter-to-quarter. And think start now. at

Nicholas Yulico

ahead. -- Yes, sorry, say, I mean, go look I would

Steven Roth

heavy Board the I guess as I'm And in the well. this.

board, So [indiscernible] we people very have, public very a on group our of companies. seasoned

And not are feeling we so in quarter-to-quarter business. personal feeling, a my is my that

not business. in are a day-to-day We

cycles We a which are XX in business years. X over and

short-term over is objective value cycles. create is to $X.XX and XX-year a me. modeling a $X.XX, kind our emphasis a stuff good for we've $X.XX, X- periods that to down job of and done And So of that raise and awfully beat we time. think The of over on share not getting long an

our we're the mind extent that mind to -- that in of extent short-termism, what in focuses about. my guidance some So Board's not on to members and that's the

had occasions were issues. However, time, over which where several we had happen, have we different things

off documentation PTO, the how and be now. of X -- at others office point had from thought downside ago, multiple our the patent view. And this prudent to it of and the to space. own we the now recollect fell a time least example, fairly trade to would the chose of opinions JBG I our know, way business. We space out income we cliff, that at I think how model or our out at was Similarly, For in business could feet Crystal that don't retail right exactly pages retail X much we millions was to XX move is and give our was detailed when as of investors a continue what in be, Smith process the a when emptied what with multiple time the re-leasing complex recently, can't there years City of that I analysts,

business. to our So that's guidance. account And basically, strong very a thinking in about it's my disagreement short-termism

Nicholas Yulico

those It what I look, just really all NOI And think be about right? and say just interest other what year, to It's which where we just doesn't are does understand NOI I rate number GAAP wide something should is just think is. model it's to -- is help interest volatile, rates that something an that factors, trade your level It versus trade -- it because decide understand we of I the on your this in number? How quarter-to-quarter we for all gave But curve number. be that, and we GAAP multiple. cash year? GAAP if the guidance. earnings can points. we're can is would would NAV, next useful NOI annual very about, think on estimates not just an talking some a are earnings could range you actually stock would NOI

So.

Operator

And our from Malhotra. comes Vikram next question

Vikram Malhotra

meta, I just just of that? have how to around any updates Broadway -- maybe the outs? ins XXX or thoughts about we And given on kind news think and should one,

Glen Weiss

So the the They've 'XX. of X of quarter first for X expires in lease Verizon with the renewed floors.

the the status to remaining, floors which We're We in unique, about that's good there's about terrific block. lease a market of prospects. the is The space XXX,XXX that and feel it great mean So location. X feet. is I now.

Vikram Malhotra

biggest creation? buybacks. you side the stock cyclically what would start you said, sort shift perhaps value years, to in investments, as west we're own sort of of, you changes next potentially at in question. and office the is I'm were it South. it view, guess, the of called what just over if I'm just growth? value the changes in to you just wondering, longer-term opportunity want then do both I and bigger in looking Okay. X mind, a debt Manhattan picture terms Great. hard terms you And taking years structural maybe assets? Is ago Is your some the a to in all of office external create seeing given in your kind many out of

Steven Roth

order, Nick. that's of highest metaphysical Well, question a the

have we XX-year debt a period. investments done over look, So

with debt We of lots to couple of I a debt, don't we're have reasons. into think the and get there's not business for -- recently that things. different going so And

you've value. publicly XXX% book hoped is that trades for best the its that one, business a debt for of Number been traded

a not kind earnings. It's basically capitalization value thing. a So basically, it's of of a book

believe equity we So gives that, don't debt returns.

we We think past our to investing or that the some. sell do that our actually rest all set little the the returns back PENN but I'll we get buy were not we balance our of without they So investments. are I District I in have we do small entrepreneurial our in stupid I to But of make buying is many, tried stupidly stock, back about made. stock, likely. would tempted business, uniquely may and have potatoes. our and think respect it's for it away the that's to have alternatives stayed certainly traditionally can our that going stock have hankering assets in some had Mr. is have had think least we we our for back a If at our to skill in would crazy. saying our assets. the to -- don't acquiesce opportunity We other fairly of buying We a but assets a are we anything, to of not we kind significant are is you Billman's to the handled it extent it we future, in sure stock stock buy one, And quarters that returns we we want may many way. The I'm of but we mentioned, handle although in we it step kind them. with baked the agree we the and in that our With it, could now, from done stock get cheap. And get we the to starting returns that by

Operator

is follow-up Michael question Bilerman. a next Our from

Michael Bilerman

a few just Steve, So follow-ups.

you much achieve perhaps per some have proceeds, how out of the you can months know loan I of to conditions? And XX the that XXX, terms agreement? of asset on what your additional Just are draw capital greater

Steven Roth

The agreement one conditioned leasing Verizon provides other for condition. an additional the million and It's space draw. $XXX upon

We make are will we draw. planning as that not if

Michael Bilerman

Okay. Alexander's know, go and trading you years you comments at And to going XX, all then maybe proactively to I just gave and back, back a the ago Alexander. discount XX appreciate Alexander's was I don't when I there a annual a corrected the and the letter the variety that you're market nothing And do. at had look to gone to was year take deep in options. going put and stock stock up a of later, itself

then something How to relates as Vornado, to Alexander's active. back stepping does you it where compared now also to sort just back in have and Alexander's? the contrast current back with versus situation and environment relation do to the then very trying been the but environment you Can of compare

Steven Roth

XXX -- Michael, I guess, couple dollars stocks fluctuate. And as it traded a was dividend days no as sells different. -- per of least share or Alexander's X going at ago. Alexander's high now high as for $XXX-some-odd share. Alexander's is X% low a $XXXs and as at of has

the of has of business not So basically credit the for million Alexander's, of the assets it. with balance sheet, the an $XXX-some-odd trade should of cash quality assets, X% which Alexander's, the on a dividend.

trade based stock So et that fairly which upon upon stupid mean that's totally dividend be would the valuation mispriced. It comparables, cetera, based to would the would Alexander's, the for priced alone X% at Alexander double. that would market dividend money a not be

impossible dividend Vornado multiple we happy shareholders almost impossible Alexander's be continue are combine going I've bucket That -- $XXX the may of market in stock pay going -- and said short of Vornado of going whatever it's to price the the to the for same what Alexander's times, reasons. going And term. We're to time. does. billion to to From and/or what the but change, are not shareholders to as the So lots at for do is determines out preserve would to to appropriate. the it's view, change point cash our before make that different out it's would we stock be figure happy

where the future of should shareholders for sits prospects. the its it sort and sits and moment, enjoy Alexander So dividend the

Michael Bilerman

my Steve, last at Okay. And one, then just the opening. in response to the question

mind, other on And is want the being too On tracker the a thinking committed of that you that that just which. techniques. I I District to you is evaluating about talked much you're pick other the separation the don't but can. fine. track, in company But word. I that's But avenues PENN way? of to separating up And in or and disagree, We ways structurally your than know that there tracking you're there about the other other stock,

Steven Roth

going to today. not them we're but Sure. talk about

Operator

from Jamie Our next comes question Feldman.

James Feldman

think quick a about this years? A, and the expirations, make you prior to move had I correct. XX% known does move-outs? time how Glenn, said to And I the sure Just And for talk some in larger discussions you out. want you can b, may XX% that's of you're compare that think of in follow-up. 'XX

Glen Weiss

cetera. know, target XX-XX moves you today's quarterly, The is et down, as weekly, production that

of speed. So ahead every been quarters all you over we're but variety I don't always, of it way get the specific top we'll could particularly we're specific buildings, those you of Jamie, past to as keep on or up it, have larger tenants one ahead into expirations. tackling to expirations. be of assured want But them, the

James Feldman

Or tougher think where a about year? be are going year year? time typically is that you of is And next do you this to

Glen Weiss

that Every in year is But as it's it's difficult. -- the tenants change every create putting day our standard the predicting Things -- fare. know, off I'd you range, can is, best different, far value. with year-to-year, XX-XX, all the it's XX-XX. I puzzles our we say in always not to always mean, together this buildings, we usually

hard it's that this. exactly yes, or So say, to exactly

where we So that's are today.

Operator

questions have at no we this And time. more

Steven Roth

let this again to appreciate me us all morning. soon. We joining you So we say everybody seeing forward look

Our third care. Tuesday, good look at will Take the again. participation be morning, XX:XX to your quarter earnings we and call on X, November in forward

Operator

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

You may disconnect. now

Alexander's (ALX) 2 Aug 222022 Q2 Earnings call transcript