Alexander's, Inc.

Good morning and welcome to the Vornado Realty Trust third quarter of 2025 earnings call. My name is Joe and I'll be your operator on today's call. This call is being recorded for replay purposes and all lines are in a listen only mode. Our speakers will address your questions at the end of the presentation during the question and answer session. At that time, please press star then one on your touch tone phone. I will now turn the call over to Mr. Steve Borenstein, Executive Vice President and Corporation Counsel. Please go ahead.

Welcome to Bernardo Realty Trust Third Quarter Earnings Call. Yesterday afternoon, we issued our third quarter earnings release and filed our quarterly report on Form 10-Q with the Securities and Exchange Commission. These documents, as well as our supplemental financial information package, are available on our website, www.bno.com, under the Investor Relations section. In these documents and during today's call, we will discuss certain non-GAAP financial measures. Reconciliations of these measures for the most directly comparable gap measures are included in our earnings relief, Form 10-Q, and financial settlements. Please be aware that statements made during this call may be deemed forward-looking statements and actual results may differ materially from these statements due to a variety of risks, uncertainties, and other factors. Please refer to our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2024, for more information regarding these risks and uncertainties. The call may include time-sensitive information that may be accurate only as of today's date. The company does not undertake a duty to update any forward-looking statements. On the call today from management for our opening comments are Stephen Roth, Chairman and Chief Executive Officer, and Michael Henkel, President and Chief Financial Officer. Our senior team is also present and available for questions. I will now turn this call over to Stephen Roth.

Thank you, Steve, and good morning, everyone. Today is Election Day in America. The spectacle of our entire population all voting on a single day, the first Tuesday in November, has been somewhat diluted by early voting and voting by mail. Nonetheless, today is Election Day, a critical symbol of our great American democracy. And we all know elections matter. The election in New York City, with the prospect of a Democrat socialist mayor has attracted enormous attention. We all must admit that affordability has become a critical issue and even a lightning rod, as is the cost and availability of housing. I'm an optimist and believe that everything will work out for the best. Importantly, with respect to the prospects of a Bondani mayoralty, we have not seen any pullback or hesitancy in space demand from our customers. In fact, the opposite. nor have we seen any canary in the coal mine indication from the stock market. Enough said, now to business. Here at Renato, our business is good, really good, and growing stronger. Our performance continues to lead both the National Office PAC and our New York peers. The market seems to have recognized this as our stock has doubled in the past two years. Why? One, we are in New York. Two, our leasing stats and our mark-to-market stats lead the industry. Three, as does our balance sheet stats. Our net debt to EBITDA ratio is down to 7.3 times, and our immediate liquidity is $2.6 billion. Four, we are focused. We are a stick-to-our-knitting company. Five, we have our Penn District, our city within a city. Six, We have the 350 Park Avenue development, and it is in full swing. Seven, we have a couple of hundred million dollars in the bag annual growth coming over the next few years. And finally, eight, we have a great portfolio of plant and office and retail assets. We had another excellent quarter. Michael will cover our earnings shortly, and Glenn is here to answer questions on our leasing activities. Now let me cover what we're seeing on the ground along with some of our recent activity and accomplishments. As the noted journalist Peter Grant recently wrote, quote, New York City's office market is enjoying its biggest boom in nearly two decades, leaving the rest of the US in the dust, end quote. The rotation from a tenant's market to a landlord's market in the 180 million square foot Class A better building sub-market in which we compete that we've been predicting is now happening and has even become accepted by our doubting Thomas analysts and the critical press. Hot off the press, CRB reports that Midtown Corp. Better buildings vacancy is now down to 6.2%. As I said in the past, we are a 90% prime pitch Manhattan-centric company. Tenant demand is robust. Companies are expanding. Demand is broad-based across all industries. and available space in the better buildings continues to evaporate quickly. Manhattan office leasing activity is on pace to exceed 40 million square feet for the year, for the first time since 2019. Office demand is filling out to all sub-markets, sublet availability is shrinking rapidly, and we are in the foothills of strong, maybe even surging rent growth. By foothills, I'm saying all the good stuff is just in the third inning, And the best stuff is yet to come. Obviously, deal activity and values will follow. Here is our industry-leading leasing scorecard. We expect our 2025 leasing volume for Manhattan office to be our highest in over a decade and our second highest year on record. Please take a look at our leasing and mark-the-market statistics. Our performance continues to be industry-leading. During the first nine months of 2025, Bernardo leased 3.7 million square feet overall, of which 2.8 million square feet was Manhattan office, leading the marketplace in not only leasing volume during that period, but also with the highest average starting rents in the city and with impressive mark-to-market. Excluding the 1.1 million square foot master lease with NYU at 770 Broadway, the remaining 1.7 million square feet of leasing during the first nine months was at $99 per square foot average starting rents, with mark-to-markets of plus 11.9% gap and plus 8.3% cash. This includes over 1 million square feet of leasing in Pen 1 and in Pen 2. During the third quarter, we executed 21 New York office deals totaling 594,000 square feet at robust starting rent of $103 per square foot. The markets for the quarter were plus 15.7% gap and 10.4% cash, and the average lease term was more than 12 years. Michael and Glenn will cover specific tenants and deals in a few moments. In the Penn District, at Penn II, our leasing this quarter included 325,000 square feet, an average starting rent of $112 per foot. In October, after quarter end, and not included in those leasing statistics, we completed two more large leases, totaling 188,000 square feet. We have now leased over 1.3 million square feet at Penn II since project inception, putting us now at 78% occupancy, and easily on track to hit and exceed our year-end guidance of 80%. Based on signed leases and activity that we are seeing for the remaining space, we plan to increase our published projected incremental cash yield of 10.2% at year-end. At Pendant 1, we leased 37,000 square feet during the quarter at an average starting rent of $100 a foot. Since the start of physical redevelopment of Penn 1, we have leased 1.6 million square feet there at average starting rents of $94. At Penn, we are handily exceeding both of our initial underwriting and our increased underwriting. It's clear that the tipping point for the Penn District, our three-block-long city within a city, is now behind us. Tenants and brokers are wowed by our transformation, which is reflected in our leasing activity. We sit on top of the nexus of Pennsylvania Station and the New York City subway system adjacent to our good neighbors to the west, Manhattan West and Hudson Yards. The three of us combined represent the new booming west side of Manhattan. As I said before, the Penn District will be a growth engine for our company for years to come with rising rents and future development projects. At our Penn 15 site, we are now responding to requests for proposals for substantial blocks of space. We are now well along in the planning process for a 475-unit rental residential building on our own 34th Street site, catachorded to Moynihan Train Hall. We plan to begin construction next year. It is time, and we will now transform the tired, old, may I even say junky, retail on both sides of 7th Avenue and along 34th Street. that we inherited into attractive, modern, and exciting retail offerings. This is the gateway to our Penn District, and a transformation here will have a big impact. We also continue to add to our already impressive food offerings in the district with our newest restaurant, Avra, at the 33rd Street and 9th Avenue corner of the Farley Building, which recently opened to crowds and great reviews. The space is spectacular. sits right in the heart of the new West Side and really ties us all together. Our New York City office leasing pipeline remains strong with more than 1.1 million square feet of leases in negotiation and various stages of proposals. We are growing in Manhattan and growing smartly. In September, we added to our prime pitch portfolio with the acquisition of six 23-5th This building originally built to the highest standards by Swiss Bank Corporation sits on top of Saks Fifth Avenue's flagship store, sort of like a trophy on top of a podium. So our lowest floor is the 11th, 175 feet off the ground, with 25 column-free, 15,000-square-foot floors above. The location is pretty amazing, being merely a block west of both J.P. Morgan Chase's new heroic headquarters and our 280 Park Avenue. Our 623 5th Avenue has unique light and air and views, being set back from 5th Avenue on the east side of the Sachs Landmark, with the Cathedral to the north and the Channel Gardens and the skating rink of Rockefeller Center to the west. The best and unique part of this deal is that the building is 75% vacant, with the few remaining tenants on relatively short leases. Ironically, the vacant building is a big plus. Let me explain. We will not be penalized by a gaggle of low-rent, longer-term, obsolete old leases. We will not have to wait five to seven to ten years for them to roll off. We will redevelop this building into the very best elite boutique office building, sort of the 220 Central Park South of office. We will begin to deliver space by year-end 2027. So in two years, well less than half the time it would take for a new build. and importantly, at half the cost. Here's the math. We acquired the building for $218 million, so $570 per foot. We will invest another, say, $600 a foot in the development, so call it $1,200 a foot for the finished project, which will be every bit as good as the new build at half the cost. The team is budgeting 9% yield on cost for this project. I am pushing to crack double digits. There is high demand for and a shortage of this product. We couldn't be more excited. Our 1.8 million square foot 350 Park Avenue new build, with Citadel as our anchor tenant and Ken Griffin as our 60% partner, continues right on schedule. The City Council unanimously approved the final new level, and I did say unanimously. We will commence demolition in March 2026. Very excited about the prospects for this new Forster and Partners-designed, best-in-class 1.8 million square foot tower, as is the brokerage and tenant communities. We are already getting incomings for spec space from clients seeking the very best and for whom our delivery date fits their needs. The Manhattan retail market also continues to show growing strength. and the best spaces are in high demand again. Tenants are recognizing that rents are moving up and availability is declining on the best streets and are beginning to approach landlords for early renewals to lock up their spaces. Importantly, we are achieving rents consistent with historical highs at our Times Square properties. We are the largest owner of signage in New York City with our unique cluster of premier signs in Times Square and in the Penn District. and that business continues to grow. Signage revenue for 2025 is predicted to be our highest year ever. You should know that all of our signs are attached to buildings which we own, which gives us perpetual control, a unique competitive advantage, and the highest margins in the business. There was some news a couple of weeks ago regarding the loan on 650 Madison Avenue going into default, which I should comment on. We were a 20% of a group of institutional investors who purchased the 600,000-square-foot building in 2013 with an $800 million non-recourse mortgage. The primary play was to capitalize on the below-market retail rents and upgrade the retail tenancy. What was the retail apocalypse? The fear that e-commerce would obliterate all physical retail. And the pandemic, this didn't work out. Three years ago, in 2022, we recognized this asset impairment and wrote the asset off entirely to zero. Bad stuff happens every once in a while, even to us. Three days ago, the court came down with a ruling vacating the arbitration panel's 10-1 ground lease rent reset. We were surprised and disappointed. We are optimistic that this will be reversed on appeal. Lastly, turning to San Francisco. At our 555 California complex, arguably the best building in town, we continue to lead the market. During the quarter, we signed 224,000 square feet of leases at triple-digit average rents and 15% mark-to-markets. This includes a lease with UPenn's Wharton School for the Cube. We said two or three years ago that San Francisco would recover, given that it is the capital city of the world's greatest tech and innovation centers, and that is what's happening. Thank you all. Now, over to Michael.