Vornado Realty Trust (VNO) 2 May 232023 Q1 Earnings call transcript

Company Profile

Participants

Steven Borenstein	SVP and Corporation Counsel
Steven Roth	CEO
Michael Franco	President and CFO
Glen Weiss	EVP, Office Leasing and Co-Head of Real Estate
Steve Sakwa	Evercore
Alexander Goldfarb	Piper Sandler
Michael Griffin	Citi
John Kim	BMO Capital
Camille Bonnel	Bank of America
Daniel Ismail	Green Street
Derek Johnston	Deutsche Bank
Vikram Malhotra	Mizuho
Anthony Paolone	JPMorgan
Nick Yulico	Scotiabank
Ronald Kamdem	Morgan Stanley

Call transcript

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Operator

Good morning, and welcome to the Vornado Realty Trust First Quarter 2023 Earnings Call. My name is Sarah and I will be your operator for today's call. This call is being recorded for replay purposes. [Operator Instructions]

I will now turn the call over to Mr. President Counsel. Vice Senior Borenstein, and Corporate Steve Please go ahead.

Steven Borenstein

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

measures. Reconciliations these are discuss financial In release, and certain most financial the call, during included and supplement. earnings measures these will we of directly documents today's our Form GAAP to XX-Q, measures non-GAAP comparable in

be actual a risks, uncertainties, Please may and results call may this and other differ variety of factors. these made that to aware materially during due statements be deemed forward-looking from statements statements

Please uncertainties. more with our annual XX, on Securities Form Commission, ended Exchange regarding for information filings these XXXX, report and December including the and year our XX-K for refer to the risks

time-sensitive be forward-looking statements. The does duty any update may date. accurate to not undertake that company today's of include The call as a only information may

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

also is Our senior questions. for and team present available

to now turn the Roth. I will call Steven over

Steven Roth

Thank everyone. you, to Steve and good morning

out Let the me way a few of get things first.

Our business is performing environment. well in this

Our hasn't last since outlook quarter. changed

our total have Any X and over we on projects, plain incorrect million in current tabloids ahead the in comment District. just speed newspapers the this feet full PENN are or We stopped silly. that square industry

to PENN when three Station construction game. through you go look a a Just playoff at site our long the take or next go next block

are on stated, dividend there too. commentary reaction we and press some release on week's offence. Simply last going Now,

say that me again. Let

We are going offence. on

XXXX, was our A for or In million in about context. We $X.XX cash. $XXX dividend few dividends. facts know

have dividends in and dividends. happily million another paid the years, paid special Over and $X.X million $XXX XX we past in regular

sacred as I characterize of REIT I an sort week, and dividends agree. guess well, I Last analyst agree,

million cash this already For we dividend. have year, quarter first $X.XXX or $XX paid a

We in of out based second income, cash we'll scrip. asset known is income, and And in we cetera, quarters. reassess pay will paying must, combination the quarter, taxable cash a facts fourth including taxable wise will actual appropriate dividends in but we upon as pause sales, whether to or third and or it in et the pay

if or should as Shareholders be whether employed retained the scrip, they indifferent might more for corporation, whatever. cash cash, but buybacks, receive stock management, to or wisely be that by debt

have gap." sister from and As "close buybacks of and you to the resisting resisting years I resisted years, for copycatting pounding know, most industry NAV companies analysts the

a our I based. this But to level. level from even was price resistance lower believe has dividend stock low and declined announcement last XX% our an quarter's announcement, to quarter's fact since logical dividend

Seeing as program. authorized value our in opportunity dividend create buyback the press Board share in last to included our $XXX stock million an a Wednesday, shareholder release, value,

buyback We a even funding or will is proceed from from cash paying the asset dividend way, and carefully measured in retained scrip. the sales

based sized earnings. FFO income, on is dividend taxable our Since not

Here is income dividend. versus was taxable $X.XX the was $X.XX $X.XX a dividend. math. income a XXXX $X.XX XXXX versus taxable

The increased interest any at is primarily surely, is XXXX sales will without projected income XXXX difference taxable asset asset be taxable XXXX currently income there and and sales. rates. $X.XX between

everyone home. more now is good. XXXX. buildings we office. are week, With feels more for think seen time have More work CEOs requiring it's peak to of back office couple A other from each the their like of the employees back and we matter the believe just And passing in comments. a We before

the leading regard. seems to in City this be York New country

and our important CBD about with the office, is viability financial future concern to it great Lastly, I'm liquidity. of position all been crushed, having review office stocks our

billion had of including liquidity, billion of and We bills. treasury $X.X cash $X.X

We have paid unencumbered. will program PENNX all remaining unencumbered debt-free fairly over cash of to PENNX capital and of for $X out today's are and values been The be prefunded assets. balances. markdown complete at billion PENNX has

significant up, do that well-laddered recourse rents on our earnings debt, that These project embedded income growth is X.X% our Only and primarily future for maturities. metrics. as have wonders level rely mortgages. buildings old-fashioned PENNX will debt We and non-recourse debt incremental with of

X%, is and clear-eyed X% even an challenges. near-term pretty It rolls about over are We X% not market market. the to financial debt X%, when realistic or

certainly have but of of debt. with over is the deal couple deal to work point years. the to next But couple will that non-recourse a with, We over out the few next workouts to having

have maturities current sufficient with at no that don't level December limited that line XXXX corporate maturities to year, XX, next this property capacity reach the hospital in so and we maturities finance in We in current no our have matures asset -- on year, market.

Thank Michael you. now cover And over the of to market. side financial the to

Michael Franco

everyone. morning good and Steve you, Thank

comparable last we items reduction, from to be from XXXX earnings the interest effect certain $X.XX our provided of the we rising FFO of and impact rates. said that a known call, expect During XXXX primarily totaling down

more Though usual, current the sales. decent difficult absent asset the of impact economic remains a assumption, environment than this any makes forecasting

$X.XX $X.XX of a As higher increased interest driven was as per comparable expected, XX.X%. for adjusted from quarter decrease net decrease last rates. first was quarter, share FFO year's or to expense by This $X.XX primarily compared first

over NOI cash same-store for prior quarter. company-wide the first first quarter increased Our the year's by X.X%

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

resilient core and retail long-term businesses credit remain Our leases. office with

footprint encouraged has rate feet of of rents. for their new level largely the led accounting the of financial at industries, been Now record now trophy Amidst backdrop the year-to-date. has and availability demand we firms financial much first square with particular, activity the and many constructed million turning activity volatility declined growing in X.X Leasing firms, strong quarter. with properties substantially absorbed newly level from in space markets. and The XX% leased law rate traditional by leasing to of services the of remain interest concerns, recessionary by

are transportation on and the quality highest rents focused these buildings the Tenants in up which have West A redeveloped increasingly side, are Midtown in market that amenitized, the well in moving on our was in buildings. in resulting strong sponsorship Class near

office these Our of is types buildings. portfolio filled with

clearly in believe back are help pay to the track the work office. talent as they to the employees retain more them for as will their that right willing environment Companies well motivate

While there in large market, deal is requirement stubbornly is high. and concessions solid activity remain the lagging flow

portfolio. on Focusing our

cash first deal Citadel and feet with the Park During at square included starting healthy foot rents. square rents XX $XXX metrics, leases our a X.X% we XX,XXX full X.X% square at XXX cap. and $XX starting foot per totaling Avenue completed XXX,XXX This of at at XXX,XXX with positive and building mark-to-market feet including square quarter, PENNX

XX If our rents leases XXX,XXX we at exclude $XX our starting team mark-to-market totaling statistics, from a the completed square feet XX.X%. very strong with Citadel DL of cash

momentum with $XXX new continuing a of reflecting steady in at to at good tower redeveloped buildings project per the in the and the attraction stream PENNX are picking tenants the amenity most tenant's up can appreciate square we in experience city. the nearing successful PENN ever-increasing completion, activity now. unique well PENNX and the to leases offering now with $XXs foot product. location The is reaching floors, rents, Tour District We have as the in better is in high

generally very higher at we year ago. have Overall, our rents activity than of good assets, of a many

remains New York in leasing healthy. Our pipeline

in We leases sector feet next. negotiation of million line. and is X.X an this have have in particular, year XXX,XXX to active. where we at lease feet in this financial of our The square be plus more Much additional than activity move-outs buildings square significant continues

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

Operator

you. Thank

begin question-and-answer now session. Instructions] will the [Operator We

comes Please question Steve proceed. first Our with Sakwa from Evercore.

Steve Sakwa

buildings Yes, sure there. when on just thanks. dividend and offense, buyback you table the is really to that just as at well? is the that potentially Or make include buybacks? I Steve, on Good comments Or point? talk appreciate about on this morning. additional want only does really the color could the mean I thing the going buying

Steven Roth

is -- our back are in stock. Buybacks best much value buying the

buying our that be that used $XXX foot to expense focus in there. that a will a at our to If we buy $X,XXX building stock. we a see So, building relation the in tails here stock the and we on potential of foot, a for value

Steve Sakwa

Great. between of And wondering the renovation PENNX. if just PENNX, you're at leasing I getting and of the follow-up, traction when with the talked a talk you PENNX about dynamics you maybe good sort you'd really was could Michael, sort at then It rents the did as redevelopment. sounds like triple-digit about

at to signed some end getting are I'm secured of in kind to as year? tenants by what's just getting the the nears And holdup that guess, PENNX Or on I completion of project getting this you leases PENNX? closer curious,

Glen Weiss

Glenn. it's Steve, Yes. Hi

technology financial Leasing So, activity yes, really rents $XXX. strengthening accounting, now and week-to-week, tenants, PENNX piercing are on is consulting fire. great is

PENNX really along. we're is So, how pleased coming

the product month-to-month, better project unfurls flows continues looking and amazing better. And to action. the PENNX we're PENNX delivering. activity PENNX as in as is It's seamlessly strengthen, better, that the really, just And an

now So, PENNX. tenants boxed out we looking who at are of PENNX have getting

It than is amenities the double a will location. activity. transportation no PENNX, ever activities, with is like in now The It right market. It else higher two-floor product Our large in tour best is is perfect available single lease. one with activity some has. building some the a

confident we to great success we're look or and forward in So, the product less. supremely

Steve Sakwa

you. Thank

Steven Roth

moment. one hang for on Steve

Bussell lease floors had the Bussell the two different to companies, should we prospects, to the floors, You but and down. know turned that of we important half earlier, them opportunity

as of So, and the product confidence building, will we the Glenn great have the a in lease. building deal says,

please. question Next

Operator

Sandler. Goldfarb Please next comes Our ahead. Piper question Alexander with from go

Alexander Goldfarb

Good questions. morning thanks for and my taking

questions. two So,

your the guys of Obviously, environment else later, capital suspend did. to right, which to And the quarter a the in remained decided office months the few guys third leasing, you recently to everything needs same. the Steve, sort outlined company, call, the dividend you rate resize of the First, has then the stayed it. -- and you up potential

to in seem deciding the view the the all be to the macro it? changed what I'm what because and resize changed to to your balance quarterly same? and sheet of out dividend suspending trying Board's $X.XX $X.XXX to then the the view, between just from fundamentals the figure leasing So,

Steven Roth

decided and consider years for actually, we hi, be a years stock. our decided going from to I and we correct. my low we changed. really together in move buying to The financial avoiding you're changed time remarks, Nothing that level we back our was was now. reasons, down an back stock that that thing after back Alex, lower the of very good an said heads lots that even went offensive that buying logical buy put decided of stock to from, We were and We XX% only level. as stock

So, that's the first point.

to devote calling -- there. We the I'm company am it's think I resources way, think our going by buying financial saying the What is that We value bottom. not to is is stock. back a

that's first and it. the announced thing, we So,

By that it nonetheless, a matched the release, us stock little for a dividend we buyback were way, was they a together. thought payer. They but in awkward a press announce to

that's We're to that and So, to the back it. we're stock. about very buy stock. an excited move, offensive We going consider be

is next moving do dividend to Now, buy? the first where income that taxable question around. question the Things the are is the is get and Well, the we resources changing.

-- income presumably, cannot have be from asset predict how will taxable will them. We the we yet. will just be We sales selling the don't much know be, assets what yet we

the that's first So, thing.

or consider of will the end don't you actually deal. to dividend as we The of suspending the a in the but the year Maybe I at that these big announced two the but we dividends must, don't. do, pay be dividend we dividend we for quarters second that postponing the is

quarter, is. pay size fourth whatever the as We must we the we in the and pay in will dividend appropriate the will dividend

So one that's unknown.

in The and unknown announced cash we would cash it pay of that in scrip. we a or combination second is either

scrip. a I impossible are option. making that will but we saying prediction, being we the think I'm that dividend it's retaining pay that not not I'm

in believe We exactly dividend shareholder should stock that same. cash the a be of the lieu perceived It's and indifferent.

turn the it et stock cash, cetera. and You can into sell

issuing our amount significant think that we same the stock, that by has because lieu circular? issuing answer the but we're in that -- the And the going stock it the pro time round before humorous back the get believe percentage buying cash in in to minute the dividend be is rata. for they it's about a they stock we no, perhaps let's board to council round did our of room spend dividend, after going this. get room stock. of So, not way, to going ownership is exactly for the that and in and We're of on, stock a is Everybody minute isn't the and sort be just company,

to percentage in When because sell ownership -- a the and will or increase their sell company their make decision not a in the and is to reduce percentage company. ownership people discriminant buyback, of however,

-- that's to matter dividend in whether the will anyway, is determination as all we So, year, the at the the the or size end we to and cash a fact will part it cash pay that of of stock. make

we go buybacks whatever. a that And funding or will if it pay part to way stock, in long

thinking. that's I So, our the to offensive, think, our and it's mean do. thing thinking, actually, right we

Alexander Goldfarb

Yes, that next segues question. into the

this balance debt but So, cross looks buybacks billion. count it Hudson a your buyback. obviously, mean you sheet, swaps year. your like expire billion the a lot $X.X later of help, do I we evidence few that not I have mean, where you've seen did a of at there's here look when

is, be last the burning you Michael, would be swaps down that said are year off? spent that? question this Or incremental wouldn't million swaps that better includes that off debt? down versus or $XXX to $X.XX And these paying my So, these the in year, burning

Michael Franco

is whatever that cetera, et roll mentioned last off Alex, swaps, our expectation -- of year. No, quarter caps, we reflected this whatever

number. So, in that's that

Steven Roth

our balance majority confidence we that the the the We of think crucial of is sheet. great vast of -- debt that strength balance in debt our and a We our our our of in element deal have important are Alex, non-recourse, of most that's well-laddered. very and strength sheet. think a maturities

time our back we stock each situation of to of making get buying in our management contrast we time each consider the will -- that choice. into obviously We debt

that confidence make we way. have right by the will We the decision

Alexander Goldfarb

you, Thank Okay. Steve.

Steven Roth

Yes that sir. other dollars. one By of last There's point, is multiple billions the way, aware no okay? that of company spending I'm

Operator

Our Michael go next with question comes Please from ahead. Griffin Citi.

Michael Griffin

not trading question used I the that right? stock the guess Maybe just bottom. the stock the calling Steve, piggybacking you you on Goldfarb's relative cheaply I'm buybacks. expectation, Thanks. there to your is just Great. confidence what about gives I the mean, phrase, so

We've known share recently, from but down have stock materially price is XXXX. the beginning price that times of the depressed office NAVs GFC to relative pretty been relative to XX%-plus your

analysis, Or this so thought there is an So, that it? kind really a have you done catching some falling be some to knife, behind there attempt of could a is to worry speak?

Michael Franco

said he's is going bottom. It's what I what think morning. Michael, in good answer Griff the The not Steve

to stay going We macro cycle, to know to I end of near-term. The rates the coming of think their for that period commentary relates be environment remain the to don't but choppy is appears Fed more a will likely higher extended tightening it's definitive. time. not whether

that But the case, asset I at Every look it even about has company and the media. right? on stress think we become discounted, in is price a we heavily evaluate the negativity we intrinsic as So, there's think pricing value throughout think the the day, we office irrational.

that on obviously sentiment. but think And continue. that's so whipping to warranted, today an that's has the of some And we and boy going for that's effect

our gotten is of it's as think still. that. and And valuation we reflection extreme, right? think significant we stress a a is margin so a we I action bit have, the there And And

Michael Griffin

there's out just any And that? one on, at for That's guess, have anything quarter do helpful. XXXX XXX,XXX I and feet then of And ex-Citadel think I the Broadway on move leasing. about potential AOA. guess, maybe I leasing at big driving you this Was square was then really there updates then Glenn. XXX expiration

I us think great. you that, just would on [ph] Ax Advisors, if it's with could that but be update

Glen Weiss

Yes, sure.

foot Plaza mark-to-market with substantially leased started feet outside XXX,XXX the that District Citadel then financial XX% rents on strong at was that cash PENNX buildings service $XX of and color our of some the a we deals So,

Difficulty] [Technical

Operator

a operator. is of interference. with proceed. Pardon It The me. your main proceed had seems Please your conference Please This line we connected. bit speaker is response.

Glen Weiss

known So, that to was quarter first activity. Citadel the

As for XXX, those strong it in expirations demand market, XXXX, XXXX, very we're properties. to and year and relates and seeing this obviously we're the other

the the in the assets of currently those the adding to about those particularly and buildings underwent have board amenity think you programs great it's If we life strongest being think up. work on portfolio, our redevelopments drawn past. We're city in the some

of So, parks, XXX the the a XXXX, XXXs, et pipeline at cetera. lot is our PENNX, the the

already paper some those assets and and tenants of there. those making the we're a space demand those spaces now. good So, feel We're and lot out coming terms the of on back right in of properties with about I or in in market matches in

Michael Franco

in the right, delivered, seen to significant for. spoken mentioned was just -- remarks. add in And I record Griff, What largely that's this space demand, market, the I opening think if what's has that new may look I and you which at trophy my rents, happened that,

I redeveloped activity. square wants Not a seeing quarter broadening well-located, think everybody pay foot about to the high we are And rents, transit is out talked near a assets hubs last demand. of $XXX $XXX, tenant what that

have where buildings starting we're up activity seeing move and et XXXXs, very in the are tenant we cetera, there, those to XXXs, the rents in So, the good holes them, assets.

is Concessions important, proximity assets think in that are I these such because there's And redeveloped right? well-located that's are starting assets up high, and the buildings these move new transit to but critical. a to other delta are rents between

Obviously, assets continuing trend we're is with seeing and the that that's a activity of of at building are But the important. with state our we're consistent pleased that a the number theme.

Michael Griffin

time. for That’s it for Thanks All the me. right.

Steven Roth

you. Thank

Operator

with Our next Please from Kim John BMO Capital. question comes go ahead.

John Kim

dividend I you to Two price the issue than the buying it pay scrip, that. or count share at a decide you're up to in And committed by circular at? the back where will it to you share reduced aspect year-end? do it only wanted time. two, on on at follow you when higher Good be One, whether not and of your are dividends you. questions anticipate suspending morning. the Thank this

Michael Franco

all that to anticipate I John, the marketplace think to on I the We're execution decide being think the monitor when share going execute count we to of buyback, right? execute. depends how -- it the and

So, today. your difficult I question it's first to answer think

get dividend paid the Obviously, until wouldn't year-end. out

share down So, and stock alluded up, of likelihood capital go the we dividend. is the similar, then back terms increased you in to

back evaluate and we the evaluate what's on things. cetera, much it everything cetera, those year-end are component scrip to and And into We'll again, when then et pay issuance, to all consideration. we will et to right Too bought based sales, mix? answer taken how time asset the versus cash that comes from generated you be decided and early how what

John Kim

Okay. It just seems like ahead. go -- if you're a at it back buying sorry,

Steven Roth

I'm So, equipment remote and my stinks.

So, The reason for give of mentioned. to is those evaluate dividend sorry, out the I us to cut that pause one Michael time the back. just in all things

John Kim

back going to doesn't back just was at at if a buy then XX%, or then impact. to makes cap But suppose, these I my issue at sense question implied it I XX% you levels, But say an second rate so. it really make it is--

Michael Franco

it John, own hold as right, if rata, -- John. for that's going pro route, you the the you you an If more company it, Steve does of all individual right? Hold holding, said, forward.

John Kim

Got it.

Okay. question leasing My the second on pipeline. is

think-- I

Steven Roth

as pro John, that's the room, our a is even but and room rata. spend our time on we in which argument, I circular a issuance deal in of said, council great board

pro same few to exactly whereas ownership the you the rata. penny, more it's want but you company of is same used You the percentage have ownership, opposite a of to, buyback the the the percentage shares, that

John Kim

Right.

on question pipeline. is leasing Okay. My your second

quarter. think, you the Michael, see last that negotiations compared versus to of square I mentioned I how wanted feet XXX,XXX currently.

million today those I square are little months where apples-to-apples, does it But I think a versus know pipeline was feet, X.X your last few compare you different. a time finalized. ago? terms being bit XXX,XXX, mentioned

Glen Weiss

would in Weiss, are on very Glenn forth proposals, feet to I house. with in so that the we and have feet talk John. XXX,XXX million those out, arrhythmic we're We've are responded about the when speaking and -- and we X.X and tenants, we additional The It's consistent back negotiated. the be the brokers leases have final proposals sheets to that negotiation, deal-making. lease where documents Hi. say term documents deals

to seeing demand last, tours we're say the it's consistent, the that So, been But activity financial is pipeline. the tenant consistent the and service firms deal-making for law think, that mainly call have the I the quarter-to-quarter, three quarters. what it, I'd two rhythm in board, across of

John Kim

And can out you geographically? break that

Glen Weiss

say attract Midtown, between the averaged and out between And tenants. the the would us buildings two in I well PENN would for Plaza submarkets. District Midtown mainly financial pretty service

John Kim

Very helpful. Thank you.

Operator

Please Camille next comes Our question Bonnel America. from go of with Bank ahead.

Camille Bonnel

We've banks, spread of month that reflection have a morning. but on touch Was regional issues we and notice slightly over lower. refi a the came the and surprise more since hearing higher completed or other spreads of market? financing Could around moved you Good the weeks this recent the in credit characteristics the of a on loan? Rosalind this Plaza been

Steven Roth

Michael?

Michael Franco

I think large is situation, job find to we bit. And the loan, not a so situation. it's asset our best in Yes. Camille It's individual an particular right? that every is a lenders -- for situation, it each de-levered

it execution. was So, good a

your first right matter, spreads challenging, and by widened again, out have but for are there there. it's a with robust capital out. asset-dependent right dependent agree sponsor is sponsors, not As measure, there there It's out assets. capital any I comment, is the the But general markets

loan-to-value the okay. a levels, of couple years good than with right the term albeit wider spreads are or still And ago

or where where much it's higher near have more volatility income you where levered term more assets are it's think there's in the stream I that challenging.

a high quality location. asset, So, execution I and think good was of reflective Rosalind small a

Steven Roth

on best is cycle take finance. hostile, this have the to time are extremely My not the refinance your to Camille, this, and markets is where or

little very we finance, have And huge at you're of to disadvantage. I that like you one things finance. is the we a our to that about strategy have If have

especially is which PENN hoard, cash financing -- our construction. our with So,

out is of and bid markets the hostile them. just really are So, the best stay

Camille Bonnel

got Steve, You your message. I but were bit, a of I think cutting out parts

opportunity then has that progressing how of is been office. wondering about And into just tracking converting interest specific April? So thank the business I market in how plan to talked so showroom and at you. the far the was Glenn switching, last space quarter,

Glen Weiss

[Indiscernible] that a office general, Chicago. for in the departed business casual in for the in pipeline And fourth quarter, we're now good space leasing. pretty So, preparing we have

Our to, to amenity summer, the this going to bring June. complete there the another out with be really program which will looking market. we're and be broker NeoCon out event by to We're program forward

pipeline if good the lot Chicago, huge a in not is at present. the not demand is There's of market and tough. So, a particularly a tenant demand large the tenant

showroom Our $XX perform. about XX,XXX We've feet to showroom business on quarter the continues rent at starting this leased business.

The office business, we've leased over the years. X.X million last feet of three office

expirations modest majors. solid out of have very a office. the three now getting running we're their We all market. the from move looking in headquarters to years. in to the next We're looks We're couple tenants the discussions with

to starting certainly, we better, sit Chicago conditions as in it's So, tough but here. feel

Operator

with Julian go comes Goldman next Sachs. from Our Please question ahead. [Indiscernible]

Unidentified Analyst

Thank able for you morning. foresee real sales was to for the the call, a wanted that I last comment XX potential sounds de-lever think good asset Hey, you back like the year. know the sales potential maybe now, I didn't go for for see asset this But the being question. to to taking I it sales. next on via asset months.

Has Just sort that? that even your can at and it of down maybe accretion you your now all? to repurchasing to share distressed curious really price changed get shares? the at on thinking sort thoughts of from get pricing, some thinking Is

Steven Roth

Michael?

Michael Franco

by on surprised had that assets think I said Yes, the don't next last months. a And you over Julian, was the seen about guess we no or comment I call. XX I the little note. I

difficult I sell in. think market it's we've more assets said a to

sell we But don't we assets. said weren't I going to try think, to

you what I think we're be be thoughtful targeted to and recognize about realistic said, we've to itself. going have that and

significantly. know don't our that outlook changed I that has So,

sell pricing continues to It office do as a salable been assets. I think or We think to not think comments we a your was your of as has that been has we and the assets the we market while strong it we assets sort leased difficult in. some think impacted market strong as end our I to sell, it's have mix and share they're be think impacted be which of about -- at more. want that may price

may price, that's assets do to So, our where like few years a right? pricing. of relative not We we price today right, exactly relative ago. to that the I some think they stock love But were

So, the we We execute going We're forced answer have to don't sales. targeted. can is, seller. a We some to we're not be sell anything. think

assets. We other some We're the to a year. thing things pursue earlier not of sales bit on dialogues couple on probably going have going in certain that little our a were in

And market, I'm to able going the to to we nor our sell given expectation that. the not it in is to be anything. of to execute be some forced guarantee But uncertainty going on and we're are going

the out, to sales. our we'll some it see but So, intent year of how is execute try the rest to on plays of those

Unidentified Analyst

Okay, great. Thank you.

Operator

go ahead. The next question Street. comes from Daniel Green Please Ismail with

Daniel Ismail

here. guys, Hi Daniel on

long you guys are. of could today? further of with these assets the market higher wall? on sort guess have profile detail color quality or properties And the Should if expect the sales. sort asset you of these anything some what I in of provide do the touching sort of be we to Just on

Michael Franco

not in generally on I'm we out. market is into get you specifics. The that is not have few a to This Daniel, discussions going blast answer things going assets.

got You on to willing focus capital to who has deploy.

I every as a of in I building to mentioned, leases, And retail percentage view And it's year. investors an are there's cases, New traditional in the terms it's cases, on this time rollover of mix York. duration both say in enter there more other certain of some who a a interesting as will number decent and office.

-- they're that realistic something to right we that announce. So, do think But until more executable specific going you're have the get said, investor I'm any and price. on as find you we not if to to if I you're

Daniel Ismail

remains And relative building Okay, then utilization just space? I was we're any you still low to have curious years levels. fairly the just regards tenants XXXX out three to have that's guys are pandemic, helpful. their the -- how with through seen office changes

Glen Weiss

spaces, you're hangout traditional like more I Generally, office areas. across Glenn. the is generally, if open it portfolio workplaces say with private spaces, call but collaborative some seeing This open collegial mix I the still would you look always

densification, I some say next. dense they mixed terms relate of to type you than bag. a wouldn't were. In It's seeing one really a industry are as some more layout types the of density any industry consistent

I generally, "hangout of what the a than collaborative much So, we've theme think than collegial new seen other don't previously environment". there's

at thing PENNX, you be what do where PENNX one I to really in improved mean believe at at have in is workplace the are the the buildings first we're enter the what we've focused terms going buildings done experience because want of tenants the on we've doing these in shortly that the we of the what asset. we XXXX at we done when we're what Mark, way to particularly

experience as to which into our extremely they that success. come, that's to we impact do they're created new we go they at working hotel eat, our in people whatever they're first look our in program. they most to how the comfortable, could could could a workplaces coming well concierge they're it portfolio gym these When out, been could like drink, relates think it the environment. So, has important going hang they And we've

Daniel Ismail

you. Thank color. the Appreciate Great.

Operator

ahead. Our Deutsche comes next from question go Bank. Johnston with Please Derek

Derek Johnston

another Yes. Seinfeld like world California Years investors. hosted you seems Street XXX ago for at which in XXXX,

so Jerry's at XX, me, you could with Francisco? stay I anywhere. So, be about, know I am was Why San bet me,

know Steve you. look, So, all -- we

but anywhere, here. You right could be you're

way a us this negative you which REIT You're out see narrative. out, of this to office sticking that means

take So, and to you envision, it get what's Vornado past for environment do to emerge the this question, how going stronger. I guess

Steven Roth

Well, I this me get to answer need help question. Jerry Seinfeld to

I think it's now. happening

is time friend our I think here.

be clear be that have want in managers office. to I people. the want They manage able their think it's to employers working to want very They people their able back together. the employees that to

struggling, been are a have that they so, is of that to office. And employees because back don't there the coming of cadre -- fighting sort

was out rather go think if will ago. you years, you think go you normal time, years look I five seven -- go I that or if what over back five back we considered if forward to

I is here. our time think friend

to it's People pretty to It's to just the cities. add pretty be -- want in that, quick.

the okay? full, full, restaurants evaporate, Time reluctance streets of in coming There are our actually full, on is the full. friend. are office, work are apartments demographic are is going to the part certain of So, the to starting That cities okay? the is the

Derek Johnston

for me Thanks it Steve. That’s guys.

Operator

question from next ahead. Mizuho. go Please Malhotra The Vikram comes with

Vikram Malhotra

questions. for Thanks the taking

$X.XX, changed clarify, I you the dividend the now. first down But couple nothing's adjusted rate $X.XX and at be what today, can appeared just more said $X.XX. the run sort just ago bridge then projecting, of help like it's you're So, run let's your a income income of call between you of looking to to dividend you taxable and had months projected when of, you rate taxable wanted it, and sort then just I'm now

outlined think, just I'm debt had various impacts but $X.XX a your due impact that now. you wondering outlined had you assuming FFO, baked you is I that I'm fixed and was in.

way expirations a just in change projection I'm driving from can two to numbers. just if be And has that includes the lower projection So, trying the may now that in bridge here? What renewed? changed you comment

Steven Roth

changed. nothing's As I said,

you'll We asset By comment left Properties' exactly made. way, room call, CFO's basically statement just sales. the have some read you see if the their same earnings in that Norton I the for

sales. saying I'm for room is left right-sized what we and the dividend So, asset that, we

Vikram Malhotra

Yes, sense. Okay, that ahead. makes go

Steven Roth

I'm sorry go ahead.

Vikram Malhotra

a asset or variety I California, -- a could of maybe vantage ago in say, just knowing, point, $XXX, I'm you York, $XXX probably your some But -- think foot. seen this different in few are from just would going we where pricing So, trades some to sales with handles not didn't New talked was we years that achieved. see a what about we've is be

but make sense say, values Some what the to a then, variety a you doesn't A, you are point sell? see which pricing? you -- is And there are get how identifying higher, do types? just across in you I'm I'm understand, given of assets buildings maybe trying to how sale just other office of a where sense shaking I to guess, trying are

Steven Roth

the We're familiar referring what to. you're -- with

We are not seller. a distressed

seller. weak We are a not

sellers, are focusing select few on ourselves if can be be proceeds extremely invested a selecting proceeds where we will assets we pool we will be execute, to accretively. assets, a because a very fact, In offensive the the of consider

a on count can couple things. you So, of

be very selective. will We

say the extremely to it we business. accretive. if the know not -- to no. wholesale how be by are do selling know we And we we how do We walk way, will away, will we -- in If execute,

Vikram Malhotra

you. Thank Okay.

Operator

with comes question next Paolone ahead. from go Our Please Anthony JPMorgan.

Anthony Paolone

Yes, you. thank

Just the on buildings -- there outside back you committed spend is the what now anything? if intend and way with I've couple doing that But right next crystallize if forth beyond the what's the comments. do to with your lost you're of a if what in to apologies, the stuff just and that PENN out sub. or the what underway or District, on do that's thread press and do But we what's years, of to to look you the intend

Steven Roth

haven't gotten We that. into

that. We haven't announced

gotten that -- quite far. haven't we We haven't

already of done Railway partnership. [Indiscernible] accomplishments. PENN in the heroic in District Long have Hall Island We the a Concourse. We did widening We the private-public the did

both in of sides the XXX-odd have concourse. We Farley. on square completed the deal We that foot retail [Indiscernible]

a rents very done we to $XX billion to renovation have foot from and are tenants value PENNX. a and middle our we of the delivered $XXX massive driven stunning in have the $X a PENNX $XX, We of and of successful side where the renovation of

actually public in what realm an we we're it. yet will with not together the infrastructure of with and to we excited breath. of and improvements a project. But middle -- to doing we we're doing that, take doing, that are we're likely ground-up prospect area-wide development, going announced We very start planning we're The have about the apartment

Anthony Paolone

then just And -- may me. question clarification one just Thanks. be Okay. for

given And price stock million any holders mean right? Class a units am a the redemption A Just a could so XX I $XX.X your those to seem think or exercise? share. about balance thought looking have the first there is where is, that that reminder, I of sheet at on like I

Steven Roth

to Michael that or me to one. Tom, help with you're going have

Michael Franco

us on you come one. back let that to Yes,

Anthony Paolone

you. Thank Okay.

Operator

ahead. with next go comes Scotiabank. Yulico from Our question Nick Please

Nick Yulico

you the and know JV on the I Thanks. provide the update retail any lenders. to I talking we're you still wanted see could there's -- to if loans there matured that

you that? think Is Just should to prepared are we situation how assets? the from away walk a about it where

year that plan your to which of company, what we And next the think that is specifically which that should loans XXXth one as one on well re-coursed about matures is specifically? the mortgage

Steven Roth

Michael?

Michael Franco

Yes. Good morning Nick.

Regis, last that St. which talked a we mutually lenders in On heading acceptable quarter, continues there. with the bit to first and the a be discussion asset resolution towards little we're think I

be in that hopefully, will the next XX So, done days.

that to the at gauge started work respect talk loans. to on with that's markets, existing XXX, start an something to financing bank next And May, now, matures which we

So, we'll have lender somebody obviously, discussions is that existing well. as continue to with

to is and a do that to asset there, too So, happen down or it the early it tell but obviously going exactly asset we refinanced. expectation at par little will get pay whether but bit, to what's the is intent that refinance

Nick I will one dynamic. think say I interesting

years That's that word, Sort four-letter is of two, office most retailer three, changing. in now it. a ago, touch people. is category nobody wanted four changing. for It's to Unfortunately,

But people for as lenders. more retail, markets it's The constructive as are capital us. well is flipped. view Retail, I investors worst think, the behind both

are they and I a constructive in above-market have think to rents general, retail on about yes, some But in capital think, more today understand cases. sort markets than have few the of years. to been they deal with so, And how in

Nick Yulico

Okay. Yes, thanks Michael.

to bearish going markets since mean decade. they the back the crisis the been as buyback. don't argument capital as back existed the the debt one way question in and great on a that lending financial now there's come is they've markets commentary bad Just past I seem other in a right a maybe office that potential for

a So, you to lending stock about think you're me the improve. that that seems it fund potential if the asset to talking buyback, markets there's implicitly view sales

Why have line I over you on a debt, that the maturities I credit, your you're next debt, of perhaps a I'm down paying that have or pay capital, with back guess And of than now better reward make of use balance wondering price would dealing buyback? why instead that call your mean isn't sell you and you stock year so. the so assets, more

Steven Roth

Michael why don't you try that?

Michael Franco

-- clear, think depending think asset we of said said as characterize I think think said first all, I mean be don't buybacks mean -- retained fairly largely said Nick buyback from don't said buyback, I out just modest. on we -- I to I and on Yes. think I Steve it from could -- we cash I we sales, dividend. the the earlier would as amount don't not funded right? that we And I be put

very that's just is to going use what at If But course, buyback. best we're we're I in that of yes, sales, towards the of and execute we've mindful. think on our terms asset sales, we don't about for anything proceeds the said and asset look

and course Our by can We is out in pushing sure number our making maturities going of toolbox. the one anything or that's priority strong. de-levering to paying remains tackle balance situations be sheet down,

sheet agree. a going going focus of to balance on for We're we to sales strong making So, asset things. are sure and the used is be variety

Nick Yulico

it. you. Appreciate Thank

Operator

Please Kamdem ahead. comes Morgan question with from next go Ronald Stanley. Our

Ronald Kamdem

a ones. quick just couple Hey, of

cash flow OpEx of happened you the looked flow was I through? about this I at But just the it to can looking elevated one, statement suspect the cash talk of So, flow what quarter, some in capital and operating $XX million and quarter. seasonality. at sort looking Obviously, working there's

was scrip just XQ the in nothing flow but know of this of And postponing dots to and doing said the the then two, flow? preserve dividend connecting thinking I changed, about dividend cash you sort a cash part about

Michael Franco

your second has again On mean I changed. definitely question, Ron, not. nothing

So, no.

OpEx the On

Steven Roth

and could Maybe there's work some your seasonality. at we a look Ron offline take model.

Michael Franco

think it's material. don't I

Steven Roth

think don't though. material I it's

Ronald Kamdem

And last the Great. the then one just refinancing. on just

we're as any which color is about. rates, are property, model, hit any You just Fifth I going already Thanks. thinking you about to that? comments XXX about Park general how ask on which potential well what But year? guys the the of when coming next on Avenue sort thinking was paydown, And

Michael Franco

lender. Ronald new say is is comment your your lender is best What I general the would Yes. existing

I for So, refinance to I future. and to be most it's appreciate think lenders going assets difficult large the -- most certainly foreseeable think that that

loans. on they these to work of see feel number they're and for going to which the are think borrowers, asset, we have these going you're stewards right situations, with I so So, a sponsors, extensions of clearly to I the think

might pay there there downs. be. cases, not other might be some in cases, In So,

on is larger for borrowers think So, how these the have answer they discussions near-term I there situations, near-term. together and we'll I lenders, fairly But tied the ensue. the think are started see

Ronald Kamdem

Thank you.

Operator

follow-up Goldfarb is go from with Piper Sandler. a question Please Our Alexander next ahead.

Alexander Goldfarb

Hey, taking XXX. talk the restructuring, servicer, you guys but you what did missed box, the And Montgomery the thank it, I debt San you for office Street, that? Francisco's two, leasing in about on market, with we One, about all the guys thinking the cetera? Maybe stories follow-up. hear just building, that what's the state the of et just going given about with are

Michael Franco

can on touch I'll XXX have Glenn is a just are was first, which It bit written, are Yes, I'll second, Alex. the something. frustrating not when was fact-based. the This things a there on be then a touch and that in workout or notion

right? five-year, out performing The building initial as outstanding with it well. took loan one-year no two ago a We of as with loan. is two-year right and answer There's a years was extensions, series, an the is, loan, a extraordinarily issue structured

a additional We're be have once to servicer. My loan the right? going do to as we're of and will send year, the going to it, term, So, you right? and the all letter that letter that, right, to extend want if a you in a send get you is

loan. It So, never this was with of there's structured threat been default. never been of loan, There's a way. a no issue threat that default. seven-year There's an

this nobody And there thing, did So, be on all other the way, may situations like articles the by homework. that. written their

understanding, loans which is, he what the on how bears it wrong. and it So, just wrote and the are everybody structured real that dead story got

again, lineup it the of service. talk be about just performing to In Francisco, of the financial building, terms in asset think But the best with let it. I premier I'll Glenn continues San

Glen Weiss

It's Alex. Glen. Hi,

Steven Roth

the swapped. is rate Michael

Michael Franco

right Yes. Steve. Yes. That's

Steven Roth

Alex.

lender seven-year five plus the was a one. which really structured It's two loan. to a combination loan, a it's all, of seven-year a as First as

anything -- And newspapers all wrong. so it the got

we know it we was that that something is and swapped a very years that. at a thing for don't like floater second rate favorable half and I or six swapped it, The a

about the and in you the of financial building? second best is, do want Glen, thing the to marketplace full. the comment -- building the services is So, quality

Glen Weiss

against all last perfectly period their been has you're KKR, everything during building lost the marketplace. tenants to three-year Microsoft, BofA, We've leases renewed speaks the insulated which zero that in Goldman Look asset. the to anything Sachs, reading about

market I need That's and size. [Indiscernible]. none finished redevelopment like in the couple with them We XX,XXX vacancy the in that's at obviously obviously the We're a to know of only the ago. really think of reduced feet. years

campus, the asset to this But three the perfectly that during buildings, it's the in has We the city. best it. continue and performed show it's clearly shown period

Alexander Goldfarb

comments. those appreciate I Okay,

you. thank So,

Steven Roth

if us Pardon we Okay. at get little a misinformation. bit annoyed the

Alexander Goldfarb

beauty the these of That's earnings calls.

Steven Roth

question please. Next

Operator

call the like Steven concludes back remarks. session. turn the I to would closing over question-and-answer Roth This to for any

Steven Roth

joining Well, thank for all very much us. you

excited doing we'll joining Thanks all with about months. we in very your a We're buyback support. actually are see for We appreciate and -- three is what the also you beginning we're understand program. logical and think we dividend extremely and

Operator

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

disconnect. now may You

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