VNO - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

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. All lines are in a listen-only mode.

Our speakers will address your questions at the end of the presentation during the question-and-answer session. now call will to I Instructions] turn over the Ms. [Operator Director of Creswell, Investor Cathy Relations. ahead. go Please

Cathy Creswell

aware XXXX refer our risks, during statements on actual a XX, year our The may any maybe may Relations certain section. undertake call, call differ duty on forward-looking only time-sensitive filed that for Welcome more as financial In available earnings documents you. information due call. our included financial and release Commission, Exchange statements. deemed and the from Exchange package the Form we our and earnings Realty uncertainties annual are website, Securities The these the made other forward-looking today’s the our variety Yesterday results discuss report www.vno.com issued report in and including and supplemental maybe to to ended XX-Q earnings information statements with these supplement. XX-Q quarter filings and These Please most GAAP of we Reconciliations to Investor statements will include the information with December Thank and these second company directly non-GAAP under call Vornado materially measures. as during our Securities today’s and of that to of measures does Form date. as afternoon, to accurate uncertainties. regarding not Form XX-K Please update risks be a documents Trust Commission. these quarterly this measures on well our factors. for release, comparable second quarter financial are

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

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

Steven Roth

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

at apartment live At basically who few that. a that by is XXX U.S. is even example, is sign. happening good Financial, re-sales the are South almost and resale dropped low vaccinated. leases economy York. please you am public, spectacular pricing resale square recent things at out, ground, A that’s is during is I resilient. as sold rents. with on will rapidly new $XX,XXX occupancy, climbing about hope are I higher think a say Central so per condo pricing, as York, week COVID, achieving Central which which where and X-floor a The apartment New now at very premium. foot now sharing COVID all me get growing. which and Park foot, in stalled had it XX,XXX work again. interesting. Park to Everybody, and and I record a square record-breaking I New might that’s that and traded tech booming, albeit industries It’s Let record at start had numbers results. that to higher understatement. up we is are find discounted New each XX% an is say which a proud except being In York, say now are coming is from and Condo demand sales, where active, during back our This signed XXX are South, of all folks

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

of square the XXX,XXX XXX,XXX feet, both will COVID, extensive instances, their are in-office space, to In square from same not the X,XXX out Fortune contrary a all, who Post-COVID, a and market. has were the fact, The house looking And back study but interesting to space the come our less expectations, more needs an that this house is is market XX%. occupier planning, employees. and are of that employees. same occupier is post-COVID the X,XXX projected many to They not XX% space fact. for seeking although many, need post-COVID. same need Here occupancy we is more increase during all feet dropped tenants now analyst to name after they XXX XX% hearing that originally household fact but they

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

of we Here is square Penn cutting-edge a square now XXth The XXX,XXX going X massive campus. X.X Street at X the connected we the the foot transforming along construction Avenue, into from At their The tenant of offering will be the completed Penn feet. year is X unrivaled stretching end. X where Facebook we Street Penn all Street, amenity delivered and site, just side and nucleus full are opened three-level lobby million where our bore. of stand. Farley, have our Seventh XXst to blocks is XXth to with work west Their

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

way office that a Penn foot square multiple rave of as our It’s in the designed persuasive is After with Glen Our in center on videos growing at way, that from we date, York. of weight, quarter occupiers. and working X every Floor make story models Penn sign of reviews – punching now center the market’s west the and are the conference our market Penn every the share is above the year, raising the And the new and of and our and its west and By sales to deal-making high of plans It the with brokers clear, and early by enthusiasm, the the to our center, leasing open ambitious Seventh Josh way. confidence market this District, unique is sales signed. share XX,XXX jewel a tell crown asking building the side rents. is busy. side sales and leases measured presentation even understanding New is

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

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

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

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

newly XXXX was direct is have lower market a built voting XX%. availability rate assets that clear a is new product. repositioned or much overall It’s Class and of for XX%, repositioned Last of in vacancy XX% activity A Midtown the quarter, since While leasing assets. new

all in is higher. repositioned in expect, and than set. should one-third be As Class A competitive this B, fact, Class you are command that higher and place you of the to substantially this know assets Obviously, pricing assets our would

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

do be be be will some per announced at and Kmart. that not grocer Wegmans, to predict us. Last happen is opening As to work XXX teaming number I no the canyons back of in count, its by that replacing by table Wegmans. fact or believe with for will it creating I magic Wegmans able bet kitchen more I Manhattan The at that and is is do that home days office There And X will will our have first a XX excitement said is believe quarter office Northeast take and before, negative buildings employees even or print premier a tenant’s with the threatened that to a up several last announcement. X the that broadcast full the the articles date. that be and can you want week a I Manhattan in it All the soon not it deals coming do enough. celebrating again. week, region, is we will Broadway month store we press whether matters from to to

from an interesting from of XX% as in-home that is factoid. as Wegmans its be will volume probably expects much delivery. to-home delivery, Here

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

announced Avenue to in with in-place to to we at exercised Street as sale $X.XX of and we said this we we on We Park that market acquire we our the rate height a values the can at that time, quarter, of loan almost so a million, to are we for the project restrictions accretion. floating us building loan. One California the netting transaction on will partner’s at COVID tune the billion, value same $XX This Based understandable smaller summer, At $X.X is floating rate the we did fair $XXX old per first interest million. ROFO travel much XXX that the million share we achieve brought loan, share. exactly approximately year past in and rate fixed quarter, Last unable and refinance withdrew, $XXX just new forth. carry XX%

money. actually might outcome. continuing is this cost better this free cost York, outstanding accretive believe own say superb $XXX replacement financing New with is the rising asset one pricing – is is I quickly. million So, rising In to a Ironically,

umbrella far estate and see. with Over similar values. if And New this a here continue been a can to child replacement lifting is costs the predictor real as decades has undoubtedly past is And Replacement value, risen future key replacement costs all a poster dip rise phenomenon. of rising will of the many as prolog, I York has past cost relentlessly. there always

guidance is retail our business. for Here updated

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

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

Swatch as best expiry. portion a account March I Swatch is will You expected, If termination XXXX the would occupancy and stuff is termination. XXXX that The I I the New $X rate, the The betting already a through St. and in were Regis, June space. should fee. In some takes better bet New above that its estate remain better a of guidance million get and ways worst exercised we am, determination Winsenstole with pricing option in guess York lease in will real at have bottom York case, Swatch that their space know and of Harry TIs of our which us have under York New owned effective behind for and will man, I that in bottomed. the put so

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

to Now, Michael.

Michael Franco

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

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

driven bridge interest and for $X.XX impacting overhead was in write-offs and from non-recurring by New financial and the activities, commencement our items: businesses, savings from on JCPenney including York our X expansions from of Queen. lease of BMS start supplement earnings a expense our reduction tenant-related improvement program; $X.XX Company; resulting prior on and provided certain in Page our primarily rent quarter-over-quarter in and straight-line lower G&A from from release $X.XX following period, the variable Page The primarily the have of X. & We increase you

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

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

garages of X.X% income expect variable picking quarter. the be should our as Our in the in are Penn’s over the shows to with same-store XXXX. fully fourth number cash businesses income, back scheduled than year by for quarter And up second for Hotel finally, have Other XXXX balance a the and trade we well of prior second most year Company-wide NOI quarter. XXXX. end increased by recover the from we

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

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

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

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

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

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

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

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

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

companies the portfolio During two-thirds strong the X, property. with coming signed with we for a high-quality new $XX was second square average of square our Penn to feet, leases, The these lease transaction resounding square XXX,XXX was XX,XXX of further city. a for from largest the the The highlight rent across XX per leasing market’s Health redevelopment Empire square at quarter, totaling starting foot. The reception quarter XXX,XXX this our validating was joining feet. feet Choice transactions new

both here in Our was main buildings competition newly constructed Downtown and Midtown.

best-in-class one us a amenity implies transportation, premier lobbies to program dramatic new and Our day. campus access

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

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

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

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

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

of square was produced long-term up incubator positive. of the largest million Chicago’s unusually XX, same than concessions renewal featured foot entrepreneurs XX% XX,XXX at with market a our completed the feet new of While Attendance quarter, XXXX, in and outdoor square theMART, with partnership manufacturers high. was renewal we show negotiation. from February leasing theMART have new pre-pandemic. trade second leasing Furniture in deals dominated completed the very produced X the X show for International has during XX square office picked we premier XX,XXX The higher XXXX attendees the furniture exhibitors At and an are XXXX, Association technology feedback ago, weeks show short-term and in with though activity during pre-pandemic first feet almost since country. Casual additional

We on NeoCon XXXX, eight largest of have trade focused remainder October, during North commercial the design. show including calendar the shows upcoming America in in

So our the than we full levels don’t Francisco reach expect the XXXX tenants In in at couple cube. to are strong leases this XXX, San we year. small, a of other finalizing

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

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

strong I current Q&A. our $X.XX restricted cash revolving credit billion, undrawn With turn $X.XXX billion liquidity facilities. Finally, billion $X.XXX will a operator it cash including billion and under the is for to over of $X.XXX that, and our

Operator

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

Steve Sakwa

Mall guess, I the for of Thanks retail retenanting sort box I’m fit first that? of just curious, that figures the does all Manhattan out, you on Steve, detail. the into JCPenney’s the where threw and

Steven Roth

in new space guidance in credit – occupancy those any yet. no number for is There for that any

Steve Sakwa

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

Steven Roth

have The we answer is thoughts.

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

Steve Sakwa

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

Michael Franco

Why don’t you take that?

Glen Weiss

Sure. Steve, it’s Good morning, Glen.

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

As blocks accelerated the feels we real only the Experience together, It are are certainly how to floors the X, now, know, big the we there, been At asset activity. putting there has the no a Center. People lobbies like great you The has building. great full redevelopment daily but opened getting which is and attraction new field a presentations brand-new be. will at physical Penn remarkable. have

We in blocks. RFPs on have certain door the

not we’re feeling know because are certainly but it. to We way, construction it’s By be as better market. about on it going rushing the we’re great the we the early, that in [indiscernible]

mode, rushing. in not deal-making but we’re We’re

Steven Roth

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

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

So you can take a lot that. from

Steve Sakwa

Thank Great. you.

Steven Roth

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

Steve Sakwa

Thanks. up take that. will I on

Operator

from proceed. comes Please next Manny The question you. from Citi. Korchman Thank

Michael Bilerman

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

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

Steven Roth

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

So driving down there per went the we before. per were capita are per feet different economics was management teams, what through different perspectives, – whole where experience, the capita square footage okay? square WeWork XXX capita from the the So space

low Now number XX Well, a that doesn’t to as as work. like okay? super

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

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

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

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

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

Some thoughts? yes, many additional know. Glen, have you

Glen Weiss

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

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

Steven Roth

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

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

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

Michael Bilerman

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

Steven Roth

full think I resolved on different, Different will Michael, do employees. things. is who – can different or different it. creativity Well, table, use the the strange the as another now, the driver quarter the than okay? are are office. I And to I the employer it office of a to – That’s a to if principal believe in office I phenomenon, the made. going kitchen think where I’m tables employers, to or think phrase gets is two core continue the be kitchen the I hampers basically, firms enjoying and And you But going I will getting bet Right decisions, out three. out don’t beat the business in in not ways. more through bet at pay and going etcetera, there that of a continue are commerce. very on folks believe

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

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

Michael Bilerman

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

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

Steven Roth

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

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

of surfaces, current we know will, that time. the kind we’re other at some that. and to of transaction when not consider file papers going to You’ll If study going we’re course, predict

for As but separately of now, there the speed are tradable security. no alternative transactions full that we’re we’re – considering, on ahead and

Michael Bilerman

you. thank Okay,

Steven Roth

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

Operator

you. Thank

John next comes from Our proceed. from Please question Kim BMO.

John Kim

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

Steven Roth

sorry, you. didn’t John, Yes. I’m I hear

John Kim

okay. That’s

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

Steven Roth

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

possibly market. rents the our occupiers, create we superbly conservative. do our that for into a time, or And so extremely we’re Tower, that going of right of a over conviction stable, of conversation that we strong which conceived are costs have will the supplement that could expect with Central to our space the and are yields if they the that if I Bloomberg and the raising them. go kind yields. in raise is we the rest tell we atmosphere at rents job and lowest So have will you get terms to not in asking our example, to that with South believe Park will be our construction we created premium numbers we are can prices, we we XXX I for the obviously, But

We’re the of just beginning adventure. this at

John Kim

floors until question if of remind a interest Or being you on those stabilized. this expense but do years still capitalize stuff? are capitalized us will are floors can these Maybe policy, you immediately? redevelopment that there they from stabilization is away on Okay. we’re you lease few until your time unleased, for be the do But just Michael, a

Michael Franco

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

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

I that’s straightforward, – think I pretty So think it’s John.

John Kim

Okay. thank you. Great,

Operator

Thank you.

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

Jamie Feldman

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

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

Steven Roth

That’s a question Glen. for

Glen Weiss

Jamie. Hi,

Jamie Feldman

Glen. Hi,

Glen Weiss

all have how So are have – doing? tech. we as you big We you the know, all

Apple, Facebook, We have Google. Amazon,

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

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

Michael Franco

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

what it’s whether grow continue to people, – laterally in sales, they engineers, and they their etcetera, doing So are business, already. to additionally or vertically need

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

Steven Roth

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

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

Jamie Feldman

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

Steven Roth

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

in We have New York. not heard that

New York and has they happy very are a it. large workforce, with

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

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

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

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

Jamie Feldman

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

Michael Franco

know the talked and we there. specific line see happens the XX the up. the in time. line on quarter, about punch bottom we’ve the based could of to X it’s and I a just what’s just give depends than a significant want on leases, is the points Glen say clearly meaningful it don’t you point It X when it We mean, quarter, But reached basis could at improvement I next higher finalized is team is it whether And here I’d on quarter, be number It quarter, the projections year. queue. significant, basis. will be trend much by following bottom. the Jamie, XX, points on So think we this and or higher end And the the right? But [indiscernible] again, higher, matter. mean, just his I I was depends absolute it pipeline. last an this be

Steven Roth

my goes. you give as where will opinion this to I

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

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

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

Jamie Feldman

Thanks great. for everyone. Okay,

Operator

Thank you.

Piper Goldfarb Our next Alexander question from Sandler. from comes

Alexander Goldfarb

Thank morning. Steve. you. Good Good Good morning Michael. morning

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

the because markets up to wrapping Midtown, as I see ask about guess, tilting I like is Do XXX. Central South that still York submarket believe the you and do or the to to would returning you still Grand So that West? dominant the New

Steven Roth

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

still I the is place, case. wonderful mysterious, think York that’s great Notwithstanding, okay. New a

South. Avenue Park Midtown is which that call South, So, what we

not lots construction of it but leased is lots very South in submarket. of lots very There is a smaller, And going a with be it’s high any Midtown culture, of will fly. extra, new do a grid. – And submarket it’s great So, just there. to

the is way market. characterize you focus would we think I on that

Alexander Goldfarb

Yes.

Steven Roth

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

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

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

adjacent We Avenue, brand more two in own There other about. There XXX Street. very enthusiastic to are So, that is that are of to we have happen two Avenue. – and new teardowns their Park – XXth we force up are plans building which Park building there the have been another going potential and at published. are rebuilds

become So, be to going of always commerce. Park that is what and Avenue they premier should it

a thrive, compared be district if But So, relative believe rate. wins have that done one you large going are the others how will Midtown that relative on a faster for in and will plenty And the than crop statistics, into these share, all we on the others. how city basis, others. market to really going than market, will buildings, and And District the except the higher segregated not demand leasing to all look of submarkets the We as on going two grow do do District well. Penn at basis better or the York than about I district New to the submarkets, the to much a there market them. each West are is, Penn said, is everything is in of is

Alexander Goldfarb

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

Steven Roth

No.

look Station look, Penn okay. this hub been of I – all you issues. the for the XXX at think negative region think always it’s has kinds years, can – of I transportation

XXX all and the the and from spider Penn networks the designed. way that’s transportation it’s of of web Station, into the come All degrees

And I is in not be think is there to obviously, be relative nothing. Now business be plenty Central with but going going a not it Penn Grand is be – little. We fine. Grand – fine. Station. Central. to be is there will a will Station Grand in Central, to going There Penn am race of

Alexander Goldfarb

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

Steven Roth

the By Hang Alex. way. on,

Alexander Goldfarb

sure, Sure, Steve.

Steven Roth

aware And you that sure the and m project, am you tell invested project. dollars. in infrastructure of the that of And the am capital And of South, amount Gateway course, billions focus I of ours are you massive the you more There can etcetera. tens to plans government’s tens the package, all is which are is, means I enormous being improvement, I is which of Penn adjacent of is and take retail, also capacity is Penn which these Station’s an huge is be mean on sure like sure which I public expand Penn. have aware seen things couldn’t now. I infrastructure are a which to projects, XX-year – the projects

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

Alexander Goldfarb

of one-time $X.XX you Michael. that question guidance, see much Michael, is estimates. beat is you just collections coffee. as a mentioned either of would curious, Okay. of second missed is is sort stuff? Steve, or that sort of just lack sustainable the out, of is the but maybe I that guidance how And quarter, in for we I not handily of On number, what guys I And number? quarter was And and didn’t The think next am that it, – second much is Street just in how go-forward that what number, So, sort repeat? about the true-ups quarter? second rent whatever one-time or one-time there

Michael Franco

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

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

the little have basically from rate worse, overall is which said, flows we a consistent, than Alex. as better run bit So,

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

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

Alexander Goldfarb

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

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

Michael Franco

quarter the that’s we think when So, fourth was and rate was no, we that for the year still of decent the run case. started comment said ‘XX we of entire the a my year, XXXX,

Alexander Goldfarb

you. Thank good. that’s Okay,

Michael Franco

Thank you.

Operator

you. Thank

Vikram comes question from next from Morgan Our Malhotra Stanley.

Vikram Malhotra

leasing morning leases a us can months Good you all you estimate it, not commenced? contribution last, much. of so, give or rough XX that done so NOI the Thanks first from signed, the Maybe just but everyone. over the call on activity have

Michael Franco

Vikram. our at numbers those have fingertips, don’t We

We will have to come that. back on

Vikram Malhotra

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

Steven Roth

what de B one is I but on. a so, space is, think we little number here, are much so – fix you I saying how them. how And if space to buildings. can’t going The cost any have maybe even one it’s little none. put answer is there, do have to minimis, we have we And

with on Glen ago class been program have we for new. that a our reposition and years started of a program We to that its David and first surrogate XX a been on all Greenbaum inventory – so have

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

of. not are So, have we that proud any don’t we build buildings

Vikram Malhotra

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

Steven Roth

Where is Tom?

Thomas Sanelli

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

Steven Roth

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

if a adding mean majority same-store basically include it, majority – it is it majority vast of almost would of number a not it’s you same-store. are we retail, The amount space. new the – the So, really huge that best of the of the because Farley it’s

Vikram Malhotra

Okay, great. Thanks so much.

Steven Roth

Thank you.

You’re welcome.

Operator

you. Thank

Scotiabank. from Yulico Nick is caller next Our

Unidentified Analyst

This is Nick. Thanks. Jasper on for

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

Steven Roth

my that question. can’t said have think in I I remarks answer that I one,

it I pals with very by return. my and normalcy work just quarter, conference two have number a is, up quarters, that normal our of I will no predict it believe, certain date. And There magic talking nor and predict sense a to is conviction I say have this I But happen its term. all I shorter when the have headcount, can’t it happen the self said work take that exactly. try think population York from New take to going we of that listened tenants to remarks may may it strong date. in will I to normal about my whatever a to and idea. come that is bustling All to calls it does believe in is will all have somewhere will no turn robust make that again is I

Unidentified Analyst

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

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

Steven Roth

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

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

Unidentified Analyst

Thanks. Okay.

Operator

you. Thank

from Ismail question proceed. Green have Street. We a from Please Daniel

Daniel Ismail

Thank Great. you.

back going effective pre-COVID just a levels on or back discount? net District to rents am rents at Just curious, I still those mentioned couple rent, some times. basis, raising to there a Penn of you is are

Steven Roth

In the $XX off Penn rents. and District, $XX we coming are

in $XX guidance more uptick. and is so foot capital of those that what district. fall million believe justifies been the that’s are budgeted going also the And will that a our in to be and our supplement in of achieve numbers X expenditure nucleus a budgeting so. creates expenditure is – We the fee, we think the Penn X, I our that obviously, has we which – and $XX and Penn a So with there number somewhere $X.X

is So, pre-COVID think your are that’s we numbers. I not answer

the pre-COVID – relevant are is because talking it’s building, not actually are number the about the new we We old buildings.

Michael Franco

would Dan. add I just to Steve’s comment,

I higher Penn, think raising equal rents were, do expectations reception is if those. our market’s aspirations, right. the where right, to the we going our are think or you they to are they than for And comments I look at on what pre-COVID, reflect

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

Steven Roth

Yes.

about it talk bit. Let’s a little

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

we that developers. from we is know the Our strategy – are

just we are We are not owners, developers.

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

have user could the that a of you ago – a South to we at of experience himself By something two the we that is based what into cutting prominent very if Bloomberg – that I So, do way, years did the it, Block is the possibly offering achieved the extraordinary. Mike we nobody of which in still we the it lot look building, as some are designs has with age thought in very terms a XX done ever years who which Central have building. interior of quality to business, Go did It’s upon and have extraordinary. achieved as examples be that XXX where given.

just half we we we that stores go see what the marketplace brokers, X you whatever X creating, occupier tours and two know environment already Penn – respects the weeks Penn of Lobby, are done. and you that is could unique, into the only Lobby, because and to opened which the I’m If which we what think understands have opened, sorry, it’s ago begin and

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

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

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

Daniel Ismail

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

Steven Roth

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

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

the buildings lot upon a will it and a depends the eventually, So, take to and order buildings time, there rents owner large they sophisticated a If umbrella. multiple will A firm of that. is Class is will over that at and be owner or of there fit whatever the buildings, are be below the and they so buildings or teardown be leased them decent new make the

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

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

Operator

answer Does question? your that

Daniel Ismail

It does. Thanks, Steve.

Operator

Thank you.

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

Steven Roth

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

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

Operator

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

You may now disconnect.

Vornado Realty Trust (VNO) 3 Aug 212021 Q2 Earnings call transcript