Veris Residential (VRE) 6 May 182018 Q1 Earnings call transcript

Company Profile

Participants

Michael DeMarco	Chief Executive Officer
Nick Hilton	EVP of Leasing
David Smetana	Chief Financial Officer
Marshall Tycher	Chairman of Roseland
Manny Korchman	Citi
Jed Reagan with	Street Advisors
Steve Sakwa	Evercore ISI
Jamie Feldman	Bank of America, Merrill Lynch
Michael Lewis	SunTrust
Tom Catherwood	BTIG
Michael Bilerman	Citi

Call transcript

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Operator

Good day, everyone, and welcome to the Mack-Cali Realty Corporation First Quarter 2018 earnings conference call. Today's call is being recorded. At this time, I'd like to turn the call over to Michael J. DeMarco, Chief Executive Officer. Please go ahead, sir.

Michael DeMarco

operator. you, Thank and Mack-Cali everyone, for us joining Good quarter thank XXXX the first earnings at morning, you call. This is Mack-Cali. Mike DeMarco, CEO of is beautiful a truly, the It today. waterfront day on truly is weather The superb. David Marshall today joined of multi-family and Leasing. EVP by Hilton, partners, Smetana, I'm Tycher, CFO; our my Roseland, Chairman our our of Nick operation; meaning in may constitute forward-looking a I remind must call On federal everyone that law. within this the of legal note, certain the securities information discussed statements

we'll any statements anticipated we based NOI this ongoing the referring night reflect achieved. We'll will company. partner believe reports reflected be our for combined in the for give press week. contact the Although further assumptions, filed please and reasonable that revamped We our the to David SEC the next cannot We quarterly the pages risk supplemental results are filed our we quarter, with my portfolio annual suggestions. investor to composition. estimates These any on be Mack-Cali's releasing supplemental and deck factors our last release, during in call, presentations with and key impact be transformation in refer that assurance you and will could

results, to going markets going we'll discuss forward, the opening will comments, we're then close our take the then multi-family I of our and will and before, operating operations, view Marshall into our I'll our and Nick office David done make we've recap call down into will break provide sections. As and following some leasings questions. our insight performance will

laid we XXXX XXXX delivered had the another we early operating the positive really and beyond. groundwork for results of for last as quarter, remainder and disclosed night, As successful

long in our has of release, and and which are, significantly been has our disposition as earnings completion our composition. improved strategy, quality an effort portfolio We nearing stated press

XXXX, we beginning in quarter. areas. dispositions XX in the sold four of deals at One, of really $XXX we're the stated by we third finishing our the million quarter As XXXX, first focused on

two We XXXX deals, small have approximately at on in down, locked really our deals. really lease then starts. segment, all XX or in last are and which delivering Two, issues multi-family opinion. concerns No $XXX million remaining, completing this in XX% in

partner, in in shape so over detail, focus my of areas. will key Marshall, waterfront Three, ours As a go are is excellent we far. of the lease-up

before, can engaging of renewals, all currently going those in which to excellent, XXXX in talked deal been sales. waterfront concessions renewals to There's we outline is that accepted we've than exposure rates zero. are in XXXX doing. To for will that to the Four, seeing XXXX. started have be this forward we're We come obviously, date, we increase did no we're interest a as and been so Nick down. and This reduce would in easily that rental and our the and deals activity. we going great far with suburbs our believe leverage almost the quarter's more

over up set David repayment, which We balance have easy detail. our will for go in sheet

I'll we early in the - the be expect be in to proper to have We at leverage overview Leasing. now to expect over window XXXX. an for to at Nick call turn

Nick Hilton

Mike. you, Thank

approximately feet flex of signed just at transactions, first our we XXX,XXX timeframe, in Of look rolled on were QX and leases. segments, capture transactions. leasing quarter, core deals XX.X% our square also basis. We up Across XX,XXX rents those were a over and of feet we our a new cash basis XXX,XXX GAAP on XX.X% results leased, As that square the waterfront X.X% ended renewals. in-place and to feet on all in able over portfolio square

Additionally, costs. leasing on line to we continue hold the

the in of below well per transactions, for committed square quarter's the we square foot term, foot year-of-lease XXXX. quarter this $X.XX fourth $X.XX For per

Turning the GAAP submarket, for mid-$XX and companies square submarket. true office organic rates in in-place around currently in we that tenants the the of financial Class said, A we're comprising by of the seeing the our expanding services signs With net feet of million office same rents XXX,XXX market, in XX% of growth absorption space This approximately renewing, the two of have seeing and for hovering marketplace, market expansion XX amounted portfolio, of growth. coming range. healthy over see cash to we organic within to signs are the feet we're feet which the within market, positive the off approximately Newport waterfront space rollups. waterfront negotiations the recent vacancy XXX,XXX and of square square and average all from asking Currently, evidenced own

this will decrease square combined of X% Harborside availability the in made XX feet submarkets. between square context, represent For million the and XXX,XXX a up Newport feet

Moving improve we available suburban have in to flow. of example, translate deal By in capital invested our portfolio, steady the out Parsippany have to assets necessary our and portfolio, options over we amenity rents grow buildings our within the seen make by improvements we've into efforts seen way the XX%.

projects Seasons of With and ability in the and for access environment to right for and within portfolio their cafes, tenants existing options like buildings, conference enhanced upgraded tenants. attract our our centers, to our are options, leases and to holistic is our realizing Capital existing Grille large these new has greatly capital to retail gyms across with This the people. prior new expirations. a have the lease view recent these XX, to approach retain like paying phase and new and Overall, addition improvements

we pure over our which the square occupiers. expect we transactions, expansions both of Accordingly, net for include Specifically, suburban feet to XXX,XXX and new negotiations from portfolio A have new XX% approximately finish currently leased. absorption Class are in year

this we our feet start future on to specifically transaction for available QX As Metropark with XX square have lease XXX,XXX talk signed waterfront our We'll At more just I'd in about in new at point, a prospects, years, the side rents a like note, portfolio. information call. quick over for in that $XX.XX. this

year through As we first quarter proposals the and tours the seeing previous seen of number. on a a are board, enquiries, the stated increase in ago. dramatic we compared the this activity in year I to Across have call, increase

Specifically, transactions, in feet we net the pure feet tenant with encouraging they to other of in sectors. which, are fire if in square more tenants fields square in with industry Moreover, close, is XXX,XXX what over diversity, of XXX,XXX than than were negotiations these active is the would result over half absorption.

to over waterfront to confidence and I'd stability to lead David. the We have that continue assets the rental we turn to call will are With long-term that, our like making in investments growth.

David Smetana

We to would The it Thank core share is a mainly I over to on Marshall update year-over-year our highlights quarter like the for financial you, touch the waterfront. for few of multi-family per prior due Nick. versus of decrease operations. before on on to tenants $X.XX, year. move $X.XX the FFO reported handing outs in an

As highlighted in that to two the items added FFO. release, had nonrecurring we core we back

first $X.X to well as of the million relating charge force. senior reduction a was departure a in The two broader executives, as

a the requirements. reduce represented $XX.X mortgages next repayment months. three related mortgages the of expense blended to prepayments The carried interest maturities an high their disadvantageous with to charge of and million XX rate X.X%, in opportunity second interest escrow coupon These was and a early avoid

discussed from ventures. our income will a believe and equity release guidance issued next falling Urby represents in highlighted for of of continue earnings cash nine the million to Same-store XX% the years. outs This the we NOI in joint minus original our the range we over previously. annually earlier our we in income year, see income income NOI qualified credit this to first cash in at still NOI X.X% receive off project of minus quarter, same-store included in move also known This quarter. XX% unconsolidated to our this $X.X by we primarily the was tax of the We share was due from contemplated for the and We year. in credit have

XXX large XX,XXX out at moved third on square feet bottoming approximately on as everyone see April XXth River that office feet in XXX,XXX and AIG XXth, leasing move XXX of year new of this the These further our the second outs the with quarters EBITDA remind metric starts. fourth pressure me same-store moved Wiley commensurately square will of in Let well. and rising out and at April quarter. Hudson We

transactions we of Mike approximately in continue down expect on As sold mentioned, quarters, the for $XXX another weighted for and our remaining fourth and be the gross line the XX will towards first sales used will credit. million, balances $XXX the pay to quarter corporate be The proceeds to properties proceeds year. of and remainder of third million of

flexibility as options the account. we evaluate unsecured until debt very alternatives. our As debt good liquidity feel deleveraging about when and no into great today, stack corporate we we have extension taking at XXXX At additional level, have maturities look we

Our million time a term at be $XXX and before repaid penalty. carry any maturity loans can $XXX blended without X.X% of interest million and rate

our Our our XX which discussions $XXX XX fit months. nicely facility, of issuance begin the next bonds in XXXX and on of the $XXX credit XXXX million our of million of next maturity to should issuance we inside bonds corporate will

due million X XXXX, before mortgages the until due no residential $XX with XXXX. office no have mortgage in and of We due of multi-family XXXX mortgages exception small permanent

slightly that values, combination NAV feed of lease-up update through consistently detailed leasing along gross we with approximate to worked model decrease Lastly, slower The year-end. an from flat Roseland higher capital resulted X% in remained while requirements our and NAV assumptions and assumptions essentially our way its our budget into calculation. our asset

to provide core multi-family to now Finally, FFO update over of operations. of our on turn reaffirming it $X.XX guidance I'd to Marshall $X.XX to we are per our share. an like

Marshall Tycher

percentage XX growth impacted operating Northeast-based GAAP by from a building Roseland's unit we removal February in in delivery our community That XXXX the will excellent Most Morris compared community, apartment leasing represents highlighted just newly apartments. snow scheduled significantly, commenced apartments, deliveries Portside older our market Signature stabilized has Massachusetts. down properties At revitalization experienced age These phase delivered community basis, XX% results, an lease-up. with same-store now XXXX, into We brings of to its XX.X% dispositions assets. low, the XXX X This rate which the metric X.X% opening costs recently XXX East delivery believe This extraordinarily nine Roseland preleased as we pending in leasing a II. portfolio X has is effort article is Roseland negatively having since last which higher in of delivered is as what portfolio include is XXX with with of the X,XXX potential open. playing Plains, of than currently date, industry of the Front quarter. at role Roseland's Street, In of portfolio. or geographies. XXX-unit was beginning having of our average prior Place, success had core end, apartments downtown leasing XXX under an David. coupled a In instrumental currently expected recent press leased in the to on rents quarter efforts. years, Boston leased where had select first our NOI lease that opening. trend repurposing Thanks, XX.X%, continued days. pro-forma to units, on part in XX activities above waterfront an XX.X% efforts stabilized had XX.X% to house Phase a our Worcester,

of a leased. sit Hudson hotel Morristown, Port full-service Residence weekend. terminal, spectacular we units. lock The which Imperial collection; apartments, lastly, Waterway The XXX-unit Metropolitan RiverHouse in XXX a this Marriott deliveries with in autograph hotels Port at commence the XXX with an amenity the The with is XXX the cornerstone York skyline. excellent Inn. in community. for will offering remainder Yard, access apartment service Through Worcester, property hotels New Hudson fourth Phase the growing II, views of the Manhattan XX% XXXX, will of anticipate community house Imperial Street, additional a including across New on Imperial; And, and will Ferry Port directly to Front dual-flag a waterfront a XX, Lofts, is XXX-key currently leases XX-unit

prioritized our Roseland's of XXX deliveries of XXX million. we service apartments $XX.X deliveries X,XXX share adjoining These apartments Roseland to development in waterfront, generate an XXXX. debt locations, projected projected NOI our preparing approximately existing are operations and select hotel sites, of next Hudson the improved we portfolio. projects predominantly Christopher associated following of after of adjacent based keys, submarket, land Importantly, site premium $XX.X and FFO, returns. million. estimated we criteria, based fourth the building capital comprised should Currently, be XX round to are minimal on on optimize allocation, X,XXX from order strong starts the In long-term the existing for is with for which our on construction exceptional knowledge we projects, prioritizing of additional and produce quarter acquired along risk the of luxury NOI, to X,XXX Columbus, stabilized of apartments include construction to demand

activities We and in predevelopment are City, finalizing Port Harborside on at near-term also Imperial Overlook Ridge. Jersey starts

the operation, Group. source we page construction the availability, now million the commitment as unit supplemental, current capital $XXX include As under the projects and of excess platform a of X,XXX XX is capital self-funding detailed remaining including on sources Rockpoint priority have our construction our portfolio. These Roseland from

$XX.XX operating the or call participation, outstanding Roseland share NAV in assets key $X.X of now turn we submarkets. Mack-Cali's would Roseland for Mike to share. current Finally, estimated and over or Mack-Cali approximately construction approximately Boston for waterfront primarily accounting This After is concentrated billion, value Hudson Rockpoint's NAV be in and of the remarks. per $X.XX closing along geographically I'll residential billion.

Michael DeMarco

Marshall. expect what's are and to and already we as to lease as deleverage Thanks, occurred, we're and up In planned. from XXXX better if closing, up have XXXX able a a we good renew set

Nick are about talked out, capital demand tenant and at clearly have improvements this pointed is length. and very Marshall growing, received. well As our I being

for results, the on future. office and is yielding the good excellent prospect focus results waterfront of with multi-family Our in near the

We some late in the significant announce expect to summer. news

located are York that, calls, City or With very moves. in We and City it well-positioned I'd to opinion. As York to City, colleagues their to companies questions. close over West by more commented New New to believe operator, my and be on in our looking East like for New we York turn to on are East more West for

Operator

our with from [Operator Manny And we'll take Korchman you. first Instructions] Thank question Citi.

Manny Korchman

a about us remarks are and aren't give looking that to demand good increasing footprints, a that talking to that prepared their you lot in about where time into type markets some that they talking everyone. little the morning and tenants expansions coming spent be is? Nick, less ready Hey, color you probably of to tenants might tenants are of from bit types your market as how of grow Could active and there. those the

Michael DeMarco

I'll the area demand Manny, instances, the in is that I'll a coming over operations commitments, and that a it to minute. from marketing moving The We've turn off, large looking three we're to or seeing over are across companies entire companies do of in now, start feet. part almost headquarters. of then Nick XXX,XXX technology spectrum their in pharmaceutical for seen looking the consumer square relatively product number

then some I'm up? coming You else. people business services out to you have anything been to of the same arena, pick in the a want there's in in them financial also to Nick, range, and XXX,XXX think the mix of of firms - then do XX,XXX some and retailing trying

Nick Hilton

which well, portion the will seeing. we're of fire that tenants our as make Then have industry we also a also up

Michael DeMarco

is at, and we map. tours did Manny, one thing lately the the when Nick So looked

ask map young where the the That's that Lower So - New comes, employee is we Weehawken the is base the five they in portions where be really is demand. millennial Hoboken, find getting of base to and and will their tenant Jersey you'll Manhattan, Brooklyn which market them which is York. City, happening they employee drawn and every feel people to we're shows West have, from where the tenant being abundancy, in think about next map where that or years, what's now their

same year way to map - they up because that last tenants is Newark question had then had - the and to in and up all wound who up didn't Now, we come just finish the want the comes east.

I seeing people we're you I where Now really saying, more think what, be. need and know more this to is

Manny Korchman

whether highlighted to unsure it Thanks might Are aware Street you or expected as it. the for of sort wasn't guidance. tax and Got included contemplating None were guidance in get it to like Dave, you. be haven't going there or sounded that not of us sort of other so you in like It that were of? one any you're that the credit. not, that items

David Smetana

like are other items I'll guidance no start backwards. that. There

very the venture that receiving that important With in that We remind we first credit, knew at received it our lead takes tax Urby had it's late quarter. that. year not likely of until is everyone joint was to that. the point the this very in partner were some but to get we XXX%, confirmation It

it it of not out Thanks. original if explicitly not guidance, did everyone. apologies break and did contemplated but So was gave confirmation we for we we in when it, have it our

Manny Korchman

Thanks.

Operator

our Street And from question Advisors. take Green next with Jed we'll Reagan

Jed Reagan

good Hey, heard to wanted make it sure morning just guys. correctly. I I

So feet it for gather? expansions what, be you be in what sounds deals of the waterfront, the for those could to hopper that And then the bit. potential and I timing maybe If just little expand of, would some square XXX,XXX like there of potential these is a would of hit? renewals, kind part XXXX on

Michael DeMarco

again Jed. back do and passing forth, the We'll

what did out. the XXXXs we have already is So moved done. That's

tenants and about and have you in the at We moved market two 'XX, up We've has 'XX talked three looked The years lot or 'XX back price. that. early. expirations, come a to of significantly 'XX,

much at mid-XXs as do thousand market are my total, it and each to several some predecessor. or in feet done Some XX%, a XX%. small for That some is, as us some can back to We're have XX%, and to square you low-XXs coming of is looking the them but discount in deals that you were involves three years hundred of saying, expansion, early. a and now these back enjoying going people them where are rent old by renew

a over I'll deals, Nick? - give dozen it probably It's half to now. it's Nick or turn take, So

Nick Hilton

Correct. deals. would in portfolio of a timing based in-place these it's to are probably active referencing half was on it the question. year, number tenants Yeah, our answer Generally we're feet square absorption of about place speaking, The - be the that the for. - dozen was your negotiations were end within XXX,XXX the growing I and in towards of

Jed Reagan

I reasonable That's or call kind be you square betting feel leasing maybe for the of that and per could quarter like so mentioned Mike, a reasonable Does on of then line perfect. a XXX,XXX feet Okay, think, still helpful XXXX. expectation? last

Michael DeMarco

Well, that our like about XXX,XXX, to One for One XXX,XXX. so a change. two XXX,XXX used we're on be and quarter, we I than deals little signature have and expanding. should know is projection is sign. a XXX,XXX and this is tenant so I coming desk today X,XXX,XXX, less Jed, XX,XXX it have to a that, my building it's the example, of another because out for that's we

That The a that's other next is building coming hopefully, will, one a tenant we that into pop back portfolio. sold quarter. our from

I in could haven't for if think first the the deals of XXX,XXX, finished number We probably very in the are out in that that that, we so out XXX,XXX that could higher. as month. be should some guidance his only quarter comfortable there Nick better. to comments, range better, should feel significantly next second we pointed I'm be, have actually we But to with, hit, yet. and do honest, do but We're - I quarter hopefully be we there

are. that's we where So

Jed Reagan

me, maybe in one from just And jump then one I'll the great. queue. last and Okay, back

in internal broader you're this your or asking across City, NAV rents a the decline Have cut market? you rents market seeing part estimate. is of and Jersey You lowered just specifically, your

Michael DeMarco

or have paper high and pass we at I least an think can four transactions, us is Nick which and five the two people is we I In have looked rents we've owned on which building, the as - $XX that years and No, at square the all-time out three forth. in foot. may a back at principle tenant know, handle, for Wiley, Hoboken,

Wiley space the that's $XX, not beach. get from getting at back from So if day a you're you bad rents $XX at

the a deals, to I spin is I'm model the it 'XX getting took on do and people months because make the 'XX, deals between probably the we would in we've I XXs. commented changed get be the high of actually. downtime basically slight it comes haircut to do - doing 'XX, me a some wait my actual base some but look City, going little our of show that We're where be to Those take thought. it the hasn't expirations out? it's we penny, to a of you number, would the fact, NAV been the on of my nine We In took than because stability, in, more looking effect and bit discount a rent and at bit slight Jersey said people. just all about the So a the six okay, to show that. willing with and I'm in early at to on a hard and how the to rent same, NAV, year, to nine it, I'm In blend downtime looked deals reflect - honest. honest, We into and And and probably to but how items, little or the said, number look gives space what months 'XX longer have X six it basically will the rid you basing longer. effective that and I'm haircut,

Jed Reagan

The higher, hearing. concession bit a is I'm little

Michael DeMarco

them I there I get are have are the the action, months right? ago, concessions results is we I I've working deals want, We're is are but maybe that the the about that three aggressiveness, fact same. that expected. what bias learned I would I or It's always into longer closing doesn't self-teaching to done than coming company X think taking myself anniversary the that a months The as No, a person. thing table. of Look, Tenants towards It's three-year out. - translate with month, just deals through just thought that and that is ago. next I we're my the thought two

could reflected done that bias, our to of opposed be looked we it as expectation numbers an sooner. and So

Jed Reagan

Great, thank you.

Michael DeMarco

Thank you.

Operator

from Evercore we'll And Sakwa our take next question with ISI. Steve

Steve Sakwa

morning. into I you hoping the is Thanks, of spend just Marshall through capital just the of was sort know developments, multi-family Just lot the what what we two of I pull developments three that together kind think maybe maybe spend and, of as is years? good kind so 'XX 'XX? are need - could a dollars over of visibility, went about say, there's Mack-Cali/Roseland 'XX, kind to next, if to on the

Michael DeMarco

we've done, we turn Steve the So say, number just in the have, over - we it and - over I'll spend what we same to It's we've of is remainder last the the only whatever yet. starts, expirations deal taking a of our have, slightly absorb Marshall fact quarter. the supplemental on was because amount $XX commented in minute delivering new haven't the outlined a which for 'XX we're really is we in the started right? We've We on to C, pause that of been lease EBITDA building left units in that waterfront. have down that reflected a basically also the

we is left $XXX plan Our for million capital. Rockpoint's have

five we it then in We need City that the much is in The ventures that to also in haven't all or turn to West which or ourselves conclusion we is And sites I'll question sell to level? Those do? portion the at a with. big things latter four of Jersey second question we deleveraging identified. the two the Overlook over come York are do own to or we've to do up. the as part Ridge, is right land of of finish New we Roseland my Weehawken joint how Marshall or partner means 'XX another

Marshall Tycher

that the done construction as in-process million. about up, $XX mentioned, we're capitalization follow in to Just Mike with and remaining

projecting, starts For down. still we're as discussed, we Rockpoint's take to money the new have

out as - to a capital construction Roseland, of projects have we we've have that additional capital we and capital, construction mentioned, inside We mortgages generate well, cover so the with don't requirements generating and coming dispositions put will next we'll couple share do JVs. on in Mike out our cover third-party whatever permanent we the generate few those as of for with Roseland, lion's of projects,

Michael DeMarco

$XXX,XXX And, been cost reference, for already for own, in building, we've and XXX Steve, is you let's Jersey of say, The so a if give number, land typical about we million you or maybe to is say, component, bank the $XXX unit, of really units have project that just $XXX to on land, the take project. ones will the out which $XXX City, inclusive us, take, a lend a construction $XXX,XXX million. $XXX,XXX, million you

You from have and assume $XX towers, two we tower. million left have can that two have five just $XX about per maybe million is effectively, to we you about about Rockpoint really outlined. projects towers, we've The money that

So I the the or five do do about being we're is your five, as all all do hope? cautious question you but next far question, how allocation. move very do you as capital answer Does that

Steve Sakwa

me. for it That's thanks. Yes,

Operator

Feldman with Merrill our from Bank And of take Lynch. Jamie America, next we'll question

Jamie Feldman

you. thank Great,

I just to Nick, you some made. comments want So clarify

net another that square sounds the absorption say square of XXX,XXX like suburbs, have also or at then potential it So I waterfront. expansions XXX,XXX feet wrong? And you from there's did did of tenants hear the in you feet

Nick Hilton

distinction in-place correctly. deals. The it's the that on the was, mixture heard expansions of XXX,XXX The a feet you tenants and was waterfront new referenced I suburbs, No, expanding. in specifically square for

Jamie Feldman

Okay and those, the one big each specifically can something just then done the I you sticking for interest amount little get more guess each, like with a to timing and that? like maybe prospects or talk the spaces, of waterfront, about on

Michael DeMarco

catch. play we'll Jamie,

or from quarter, do back give north and south. Hoboken, Wiley, Hoboken, In we we it four to two another floors take? on - So, we'll Nick, have and from back have a we about have

Nick Hilton

Correct.

Michael DeMarco

have we paper out of about that? And on quarters three

Nick Hilton

Yeah.

Michael DeMarco

little a higher, higher. Even

Nick Hilton

XX%.

Michael DeMarco

that think willing and the the so tenants building we do way XX%, we by end be God of Almost think. could actually XXXX, commit full

TD down, is is you take. Place is the If being you X, renovation. or give for area, almost the undergoing into That's space, which X go emptied. all have Plaza The paper roll X Plaza building Ameritrade, Exchange XA, we Jamie, and out full. Nick,

Nick Hilton

tenants in-place square for square yes, take, Give XX,XXX feet, close or expansion. XX,XXX feet being it to of

Michael DeMarco

so Right, and with will into building we're that. low that the up XXs finished when we wind - get

Nick Hilton

Correct.

Michael DeMarco

there, vacancies that space. Alright, for we the portion back have two of tenant floors? about which we And a then is biggest XXX AIG turn have some take Jamie, got going to the then We're Hudson, and we demand an two into amenity floor. just it

Nick Hilton

it's correct, the plan insulation renovate and about we - to starting two are capital floors, the our there. gut now, just to Right existing

Michael DeMarco

would if we that into high and XXs, Right the maybe the floors. that take did building XX% two

Nick Hilton

but than close to. that, Slightly lower

Michael DeMarco

Jamie, to Allergen to. we the the back Then finish XXX,XXX may space, at the or square come. the negotiation getting stage. end that tenant back the prospective may a the X, proposal/lease Close have which building, in last Then We're ICap not and up for got of feet year. Plaza space we're we is the dialogue,

Nick Hilton

XXX,XXX another feet behind And square it.

Michael DeMarco

it, answer could of probability were that just the building as That's outside question, to actually lucky. Does filled, more, a your behind little if bit opposed we get let's say, Right hope? that the probable. more on I

Jamie Feldman

last time quarter? help it's comments saying release of you just the just mixed kind you and having, gauge where longer versus but it was through you it, you sounds And you and your this leasing versus your this in the outlook mentioned thought. better taking like to that your Yeah, down conversations - because feel guess in kinds last took stand great. just the read Can Thank about optimism tied quarter, in even than of to I'm then messages I you. you NAV, you're trying press us those

Michael DeMarco

we the child put down this to abused syndrome. can think I Yes,

And problem things to to had complete year happen leasing, a in which a get XXX,XXX substantially situation was reduced. last of So basically got probabilistically We we was us we assured a year, every right? we it didn't industry, which square be time on that good We expected confident in - right? feet a expected Last nothing. people have deal got bust, were on, we brokers would close the thought happen. we

So to more thoughtful. there's become ambiguity bit I've little less that I've present become items I've a tried more on. cautious,

it a I'll mixed sending message, up. I'm if So to clear try

buildings to more, and did plans. seem much today I call be seems getting had last three the our the than we The Tenants market to think months is we're better receptivity to very much before. reacting ago. we capital well than like

changed things point our the as a it's last the reason of money buildings have of pumped would year a announced. into and we lot over that I is One

announced tenants wowed they have do with been $XX what put are suburbs. we by about into before, has somewhat million we As tours done. we today, When the

We want submarkets have to very our buildings are in locality, certain best the Jersey submarkets. be The really clearly people and of dependent upon, New localities. obviously, in

want to given On coming for us the so redid is want I've our ago that to the we them, to today. waterfront, Manhattan years They the lobbies. were of wait that out amenities the two don't reacted comments tenants

added We restaurants. new lobbies have two We downstairs.

have few feels see restaurants we We just before other a coming. better. We've ferry service. It can about it. added the Tenants talked

maybe - that ask if comments? Jamie, we're to word this you but away that help but go the Does use my clear it me, - front tomorrow will more of up today, optimistic, Now, hope statement. I cautiously doesn't going to in I'm

Jamie Feldman

should you with the we chair? we initiatives for haven't quick there one you a definitely see been too any then and anything David, see? investor know but Yeah, in I from expect to should to the side long, plan just

David Smetana

Jamie. Thanks,

want to attention teams on the spend. capital the and our the our away margins investor with over. the So side, communications working don't every on I'm cost reduction margin. try to restart is at to We and here chip management turn other supplement and continue and so everybody my time really changes, asset the has in our quarter some tracking of better cost on we driving one properties any improve wholesale better just And finally getting capital to

Jamie Feldman

everyone. you. Thank great. Okay, Thanks

Operator

Michael our from And take Lewis next we'll SunTrust. with question

Michael Lewis

heard net that negotiation negotiation that the and had then you absorption. Thank Nick's feet some repeat I square thousand I that you large up? you maybe many maybe blocks up there of Are in that, bulk Could how maybe but how several thought it? there tenants much first make is just is said make hundred of incorrectly, about you. in for a question and and comments, My leases lot

Nick Hilton

I No about waterfront. and portfolio, the try I I'll because suburban spoke did, problem out, I also break about and it the and spoke

asking you waterfront specifically and absorption are the So those about numbers?

Michael DeMarco

yeah. waterfront, The

Nick Hilton

Okay.

currently I that negotiations, square marketplace and XXX,XXX It's and are in. So portfolio in-place within growth referenced from seeing the approximately right? our tenants. two square referenced that So XXX,XXX we're feet net active negotiations was absorption within own of these of organic I we factors, feet

the first right? tenants towards taking I of this new spoke account we're that I so statement, in, XXX,XXX about the and at then figure, is So this was the spoke Okay, - negotiations my as overall into earlier, end inclusive of well. but about

resulting square about would net square footage about be feet, XXX,XXX and the total So feet. XXX,XXX would be absorption or square total footprint

This signed, to Now, idea year. this the juxtapose negotiation. this to of of year last not kind are again, talking about is was these in but

Michael Lewis

I to Okay, the numbers just thanks. I Those thought confirm. are I heard. wanted

Nick Hilton

Yeah.

Michael Lewis

here? they case, back this maybe that of weather. staying like seems but for into at looking lot about My and or people AllianceBernstein as tenants is - would've I space just any cities and in to stuff lower looking rent, in not some cost-conscious thought of the second are that other instead, York, you that between and option Because you maybe Manhattan, housing tenants living functions less they Are to this looking for I the shift to and looking seeing of in question type a cost. They're kind New the move should lot cost in reason of of made guys, kind actually that a maybe the at were in expensive were and is past. Manhattan, City office cost-conscious of captured are they're because saw the your Jersey Nashville, sense, have opposed have they're in leaving when would but of

Michael DeMarco

DeMarco. entire we They Michael, some don't lot or the AllianceBernstein, conversations with, That's of so see in relatively because showed moving interested. processing they're school. Americas, about were processing had anymore. out shareholder, We old Nashville. extensive the of a They and them came here Jersey which actually, conferences. tour into is an back-office tech. City expensive back, XXXX at a one. with get operations actually its space. a the of we've had Avenue Mike a We really them all space, their We them It's We get computer

City. at at have street, network, the the been told, back would the Sumitomo, Deutsche, office, look have finding. look I've country but the DTC, America. has what of wires Newport, couple all their trading and Sach's Bank [indiscernible], in which buildings in in of you if other you In JPMorgan, Goldman So a best you're Jersey operations - - That's you the you the UBS.

because the they hook. number who market City and you off wealth she with mean, of that it's workers, map, the concentrated of says tech Jersey just the the a JPMorgan, I is in America when last I extensively number. thing in attract they on Jersey are the did that it's same the can did Hudson. at recruit, years, us retain. worker, tech in City and expansion third about four time they to three for when expanded which the Bank the huge runs sit run the So division board woman a then XXX the of ago and years actually management of

and ocean. the network of the in we isn't in way from as to York its them, tech The up Amazon, New that at label It that get. you turnpike. all New it it because part and sense are best wires, runs it's wire runs the be institutions, the to want Township these the know City, of financial they it crucial data in networks comes dropped. to the Jersey the the tech tech the which run but office the through Wall in on where back really needs and the So comes of is be and world It's tech really in that's that

Michael Lewis

about It's Great, thanks. one And just more. Roseland.

another you year. it deciding if late want in maybe mentioned piece sell of You the to

the stock over do makes is at $XX you've talked your at - some sense you about point, from end As value do you can? about is. it of of harvest Roseland, think How on we play just on want right, and the there and mean, you more look Maybe it, of cycle $XX. pure a give that, I think there, and value that's a game office? about where trading you how with what to little your do the getting at thinking are kind it kind probably monetize the you value to what the NAV from - you your could How in most you

Michael DeMarco

getting $X. negative We've investors, nothing. a a one we value in now to or time, Roseland dinner from value of Bilerman of worth, and Roseland to from was $X maybe $XX. looking now I a years close which $X three of questions from of virtually that what and Michael a positive at argued month that of front hosted be the had a at It'll grown the opening and is $X we're it went bunch

of some there we've done job there, and still we creating things So a to NAV good go. think are

size, and it Mack-Cali board capitalize move we that And another We repurpose probably is large the hasn't the pricing with have that which then think now there's the whether their asked money. given to Mack-Cali. and have a NAV that it's proven which get increase table the shareholders company is can on long-term look that the but is prognosis basically laid path fact through my filled going I'm or or spectacular platform rise, on portfolio. and to for should next so Roseland, question NAV changed, a achieve a harvest we basically out, Marshall meeting, we've within at? table, was accept always which, out exist that attract is always clear to That that investors function honestly, rents find sell do, capital, go can of out Jersey, having the very development very capital the asset, at we basically too and The job the as how we're good of cleaned which about it older each to then I've New actually pipeline, I a think the a that to market to this made either get a we're I've to starting way have that to up, trim to is some on clarity. at

Michael Lewis

Thank you.

Operator

Catherwood next Instructions] Tom question with BTIG. [Operator We'll our take from

Tom Catherwood

swath than it press about you've on quarter process is back taking to taking then talked Manhattan than about your Brooklyn, comments due leasing, call of Jersey your this of What do? just Excellent, leases that companies release the and Lower to longer Mike, they the Grow looking wider approvals? creating a there Jersey, reasons are these Is and last with leasing about in before. New and over longer challenges going Are are thank you. this? kind usually this New or other

Michael DeMarco

processes. been retain New jobs Grow New City retaining I exactly ambiguity, but that's jobs, but Murphy they a think favor recruit of not of think up jobs, anti does attracting pay pay which to The which been cleaned what has it's York been of It a jobs, is that. in to little against nicely in will the Jersey couple I new understand just and Governor bit state. was think probably clear because does, - pretty and people I isn't

think I'm little just a going I decision to them take more. longer speak tenants because the very candidly. matters to

was HR close what was good today. attract decision direct by involves XX run He just and over want XX and or to make at says, the level, is the next run they're have self-entitlement being chief to you today spending years was it that the years, it talent department that because to moving. what if me, we need a decision before, me. longer I That to make think, a usually executive ability for like that didn't

and They've That's coming is - they're Jersey isn't ICap, is they're so we've talent they're working more enjoy New some types demands. really idea I go and company headquarters was on being take trading for that looks it basically Route York, had in in data now out love of then of going they're Marshall is and problem us, recruiting guys and and to so I'm mass and getting make those attract done went saying, the because forth. think about flux. right? transit The next also some as We move to one to next decision we I that Park so of just to the Catherwood the we longer and is their those which city really What we the we attracting and downsized. with feels And them. of today. parking in that expanding. to to a Allergen and and They an more peril a felt next want other who have City working them. were which stay. was a companies that one be lost been lost to business/voice in consolidating them. needs the becoming Morristown, for with We're as I What talking cars XXX out level. data, We can Deutsche of It's because want was building lot for into myself, amenity much, lost is talent, on retention people probably is flat and it, they babies. people employee just taking the happy they on, the for this great. City up haven't So Jersey that platforms, we're which people, and that probably it things us new left. moved My want a enlivened, and feel today. about flux, Hamilton about We that in better says, pharmaceuticals. pool campus, will AIG, reason won't in to need Tom

patient. we're We'll just takes longer, So and it a little get there.

Tom Catherwood

had we to into was quarter, that an complete. Where wanted spending far properties just I amenitization at that million like, Then to of it with $XX you clarify on one additional as put right now? then you mentioned and suburban other that I already quarter plans fair kind this mentioned as are thought amenities. item. sounded last Very process

Michael DeMarco

is Bank since done Monday, the Guinee the you yell two half to done. takes predecessor the by, about get something market. came done in just seeing minor to and which conference this meeting invest going about right, we gyms what scream That rest from we're it to out, we probably Red it market. restaurants, all We've of XX% time completed But achieve, to putting better market, Harborside we about that. ago few centers, a date, market, $XX things. dropped beginning of had the my own a was of next being We've hadn't which So decent XX% Metropark new process up payment, in to XX if of a that, money we're that good is it construction in commented which seating. That XX% XX%, The we want done John around, from we've on In Hills every to to being do some getting or relatively couple That's lobbies has million out, we cafes needed the the over assets, involved done Nick and comment come is maybe that I substantially because calls basically announced entire items go - been days. to rents what all completed. as a we've to done. and we're at velocity. more pointed the already the used Short Parsippany, last that and new

the We have modernize that MEP it, of on the can round two did off new next retail do first the we lobbies. package floor so of segment. We to

a the which of You negotiating one number that have restaurant we're tours have it bring thing, to to do marketplace. we into with actually in in

Tom Catherwood

spending, planned and $XX outside that? of, amenitization then, the kind those than that aside other Harborside, what's set of - for costs for TI the than left, all other million So was buildings, obviously,

Michael DeMarco

XXX,XXX be the elevators, for sits foot the in It skin, new Well, really and bring we'll view square building modern bathrooms, as foot clear be to referenced project it'll The probably so now us. and MEP, out, going everything it building. do widths, new odd more is other and be the of was a it parts complex. tenants $XX building X, relatively a of which a was standards. point from works best marketplace at actually to the is million We're path. where the reskin have It'll some getting going basically package, new heights to good but an with our curating column moving the remainder a the concrete. and up that. emptying to built amenities Harborside basically That's able been building right? so it, we We're substantially space. That the that for That's good well back, we're and into new we've of

buying last market, couple say a of and now to X% been liquor around we've we I'm the So the of proud number just tenants. of have up licenses we years. own for

to restaurant, but $X then probably million million per of have the forth, money that a Harborside, Urby, new have we in or looking be we're We the so $X an about put $X.X million and million of about deals but five to other four do, sometimes in and as restaurant really we are that's spends, low bottom bottom to those to honest, in, average, three these assuming that's as goes going where and and some really have retailing, and on to the of $X $X million, as and so it.

Tom Catherwood

million $XX assume that rough fair than finish to we less of kind clean-up, number? a if So that is

Michael DeMarco

I would or a number. be that right say the that's less $XX generous little too. million very number. It than would could be a Maybe less

Tom Catherwood

Alright, thanks, guys.

Michael DeMarco

much done an that That - would just as would that way. XX-month work be I'd the as it by get and because like done be period, way done, doesn't things over to tomorrow,

by my do everything Marshall built hand. has the is we business partner me, As construction taught in

Tom Catherwood

got it. Thanks,

Operator

from our we'll question take Reagan Green Jed Street And with Advisors. next

Jed Reagan

follow-ups. Hey may guys, This a question couple for or Dave be Marshall.

quarter. about growth this NOI was X% Roseland think I

And the last drove a year of metric, don't it just X% to that X% was time. run know what like think I'm for you think the rate of but is wondering I I reasonable guidance deceleration. for more for rest that Roseland? give about specific kind

Marshall Tycher

are - somewhat. mean, I think out certainly the flattening rents I

just the last of quarter rent see don't you submarkets the a You're had the Northeast to as the would've I was - markets is submarkets We better so can't much NOI, anticipated and in rent to X,XXX past, growth, massive a what continue rate growth a of we four manage same which so to for we've quarter we time is greater rents. was, quarter as units expenses, the of growth supply. NOI in we're own, example, growing better it quantify XX.X% property amount running fully leased continue except quite lot you not growth of we're every able the continue at we seeing of products that continue had dollar-per-dollar Most be so in properties most on ding should It might - same in Boston part and XX%, City, hit market, had, most and deliveries. we trying but have the of snowstorms, rents. grow new expense essentially in pace. significant. because so to leased, of corridor, have not the our slightly we last Jersey on over consolidate be the year, actually, to expenses as to in than growth we're the stabilize side the the And same

Jed Reagan

sort organic overall? in that In you of portfolio what rent seeing growth, are

Marshall Tycher

going organic at on to it's still a think growing continuing around I vary, demand but of think empty great it right submarket traffic, and see seeing X%, submarket, we're I so nesters. now growth also to We're varies it's and is deliveries. mostly to

lease-ups good rent in old. for some but a makes definitely slower so new the tenants years half these all are properties, new That's growth. slightly coming the very that in of over markets, XX Some we're having, lease-up over for

Jed Reagan

to year? next I move tracking outs ahead updated or expirations, outs can you're thoughts on potential looking for And on XXXX your move potential get office any

Michael DeMarco

think I retained, way, be XXX% the move outs. we'll no by

as up on As a tenants it and stands them. conversations good two had, really the make It's not today, both we've who with you had number, really of but bulk, know, stay. big conversations XXX% we've the only based that's

Jed Reagan

portfolio, including That's 'burbs? the looking the the office, XX% the across I'm office so across expiring at

Michael DeMarco

which doing take from we'll it Well, you what back the and ratio XX%, the is suburbs, was same I been on. the there. 'burbs retention out in about probably focused the That's have we're we've can And - waterfront. having,

Jed Reagan

And similar in flex?

Michael DeMarco

been in Flex Flex XX% has higher. probably is range. the usually

Jed Reagan

larger last a the believe don't And helpful. one, then the of or Okay, I that's waterfront, in just coworking firms. of other WeWork any is kind

deal sideways the you WeWork with coworking maybe over pipeline, maybe just I interest firms the I'm just expanding from that recently. of for curious, on of part in Is think was or sometime expanding thoughts their went appetite waterfront? are kind the in seeing that a there? there

Michael DeMarco

they a for other operations already. building. I in and We've had, most a people tours. them lot have seen the and think in had Regus to have has from Lower that we at City. of out community. are have as come They coming with New world people the look Jersey space So the - going are two that a them, locations They're of conversation in WeWork Jersey at their the waterfront Hoboken, competitor's Manhattan in also

on or other accordingly. over So That's they the going it or or and their all conversation. or whether to or Chelsea Weehawken want New not want Canal York grow you business to or own Street the West locations they The Hoboken if City go ferry to a live cannibalize or is the Jersey have. you're question you to in or path WeWork, and getting you're

come is a you the of it's rent tenant that capital that look waterfront. time. we here the like use. other would over question, And usually see a see on nonexistent, known, and pop. lot is who We also receive, that in people that's a in think so as that They We the We we and think the startups out at good well envision amount also Regus with always a We good of the put get we that. that the might actually Regus. space worked out, big other you space as fact in, you've guarantor

Jed Reagan

with operators? some those deals smaller do you Would of

Michael DeMarco

big We're well how to have market helps in learn if the to WeWork X,XXX who business scenario. we're to in, a not you, of in that very do The XX. at right? the it that goes The doesn't how who case-by-case or have City, envelope have want you my come putting to is, put you the following business or a in a and whatever, careful them to It's X,XXX Jersey very XX guys about Buildings us are small-tenant you're go tenants basis, is goes you or feet, sudden then right? not They in thing it - be all a big. their problem the square are colleagues in Workshare in big; them then inside of to so it be formula attracting works.

WeWork Sometimes they want to big a like spent of. Regus I the the time do concept. I a a revenue in share, which concept, I'm places, But their fan I've not as mean, and

how saw even used them utilizing they and marketplace. like corporations I needed something It are was that Apple get think friends a or mine them, out there it about square startups, and in for of sense that now piece they make have recently And they world WeWork in has was the for a do talked quick Regus have might the XX,XXX tenancy become and place. efficient a them, started, they quickly, feet. to have in I because

see and it's basis. answer to you case-by-case open is we're So might but us, a the something them, from very

Jed Reagan

for okay. Got taking all questions. it, my Thanks

Operator

And from Korchman Citi. Manny we'll a question take with

Michael Bilerman

these of dispositions, page the basis? cap And Hey, rates GAAP NOI on cap the forward what the most What sort the Dave, What commensurate you would both quarter. transaction rate would Bilerman. it's NOI. XXX on based the sold were actually is in-place and quote - cap, in be these of Michael a the cash activity, be? on XX,

David Smetana

Mike. Thanks,

almost the top is forward earlier. left onto here to or GAAP like sales cash sales, rate. cash us $X proceeds land NOI. so it help of That non-operating annual those is less and X%. cap in-place is batch everyone, debt also skewed on this down the rather properties, very of we a basis NOI cap office, an really those to to our properties I'd about XX than million And yeah, cap much. towards I'd to on So, holding remaining of is The in XXX not because pay heavily on have going the just is for close X.X%, rate rate highlight have

So I'd just note that for everybody.

Michael Bilerman

that's So left and annualized, $X million million to sell? $XXX

David Smetana

Yeah.

Michael Bilerman

any million, clear? as is free all then $XXX it is you associated of that about and with it, And debt or think there

David Smetana

No, and until any Like mortgages before, we XXXX. clear. have said due I all office don't free

Michael Bilerman

memory million, totality sales of be going And that then I the on executed. serves, the to first half were if $XXX thought the majority of office

of your enhancing Is you is under obviously, there timing about much earnings is million took guess being that down remaining line, think contract? just as Because, sort you dramatically disposed? are what to $XXX I basically the able of And stuff it's As million, be to LOI? is the marketed? you under How up. $XXX which stuff there pay

Michael DeMarco

So, Michael, it's Mike DeMarco.

might signed, two this through piece and the which diligence. the guarantees. the the in pieces and which million the that close road, We XXX deal guy from about due can is which affiliations pretty before, It quarter. say, the in remaining his probably individual biggest and with so million that, have $XXX portfolio, of the about, first comfortable third have no is we into we a feel to sold We've the that early going we Bergen slip in $XXX assets is quarter, - XX% County So make remaining - should fourth. is

Marshall Those The that's at - which million, million could the We deal still county deals that diligence $XX have it, get end for, has they're a in say, needs in negotiation it's one $XX.X given in to not to other that's site million done. the with Pearson much various going if to relatively as very five the minor, all $XX people, of last last are about million are piece, pretty the month, number. Toll I plus River, $XX that we're on do. that very - colleague baked, but deal Upper largest that deals early contract under stages some It's it - It and feel could Brothers. make two one, to comfortable, much as it signed and another should my fully. due The hard, is contract, close is which hard that next process, some how would like majority this going the approvals, and of over certain full local a years $XX close very in we've basically accomplished very, close XX in and deals up That's or close. or it's is get due is it's diligence. infamous months, then number, Saddle some of this to million

Michael Bilerman

in And for of accretion the timing? in guess, this I $XXX now for guidance, million the what's terms embedded

Michael DeMarco

It's already. - This new this in also built there's the nothing into numbers number. is no

Michael Bilerman

at Because going accretion, $XXX it's NOI which Well, can no you're I your credit, to million, capital yield, year. and didn't how these a just the for X% invest I get executed, up. all so or debt, earning XXX immediately if what more you any that not running FFO there's has and embedded be was go of line you're least the in to timing know right? as you the get should got on much,

David Smetana

the the the the In selling $X.XX than the had to between. because the and falls towards we're Mike, of more point our rest of producing it'll $X.XX $X.XX upfront. just expense $X.XX in roll-forward schedule. I'd and the from guidance, be still income dispositions, you year-over-year skewed We between dilution interest

Michael Bilerman

Perfect, alright, thanks guys.

Operator

questions to It closing back conference for remarks. to additional the at you any like Mr. DeMarco, there I'd are turn no appears or time. this further

Michael DeMarco

joining know We valuable. thank we We Have everyone it. always, As day. great a appreciate is for time us.

Operator

for your This Thank participation. concludes today's call. you

disconnect. now may You

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