Alexander's, Inc.

Good morning and welcome to the Vornado Realty Trust first quarter 2026 earnings call. My name is Rocco and I will be your operator for today's call. This call is being recorded for replay purposes. All lines are in a listen only mode. Our speakers will address your questions at the end of the presentation during the question and answer session. At that time, please press star then one on your touch tone phone. I will now turn the call over to Mr. Steve Bornstein, Executive Vice President and Corporation Counsel. Please go ahead.

Welcome to Bernardo Realty Trust First Quarter Earnings Call. Yesterday afternoon, we issued our first 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 to the most directly comparable GAAP measures are included in our earnings release, Form 10-Q, and financial supplement. Please be aware that statements made during this call may be 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, 2025, 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 remarks are Stephen Roth, Chairman and Chief Executive Officer, and Michael Franco, President and Chief Financial Officer. Our senior team is also present and available for questions. I will now turn the call over to Stephen Roth.

Thank you, Stephen. Good morning, everyone. Business at Renato continues to be excellent, and it's getting better and better. We are riding the wave of a strengthening, long-lasting landlord's market. and New York is by far and away the strongest real estate market in the country. Michael will get into the details shortly, but today I have different fish to fry, and I will ask the first question. Question, what do you make of the spat between Mayor Mondami and Ken Griffin, and how will it affect your 350 Park Avenue development? Answer, let me begin by saying that I do not and cannot speak for Ken, but I do unambiguously stand with him. And notwithstanding the mistakes and bad form of the recent video that went viral, we are pulling for Mayor Mondami to succeed. Let me establish my credential. Renato is a New York company, and I am a New Yorker, born in Brooklyn and attended DeWitt Clinton Public High School in the Bronx. Both Renato and I are lucky to be New Yorkers. My daughter and three granddaughters live in the Bronx, and my son and his family live in Brooklyn. My wife of 56 years and I live and work in Manhattan. We follow the rules, and we pay our fair share. Renato will pay $560 million in real estate taxes this year, and I'm pretty sure that's in the top three. And that doesn't begin to count the personal income taxes that I and our Renato population pay to the city and state of New York. We work our asses off, and we are not boastful. We are very proud of our lifetime of achievements. We are the company that is investing billions to transform the Penn District. New York is a union town and we are a union shop employing thousands of hardworking New Yorkers in our buildings and on our construction sites. The ugly, unnecessary video stunt is personal to Ken and sort of personal to me too. You see, Renato and I are the developers of both 220 Central Park South Presidential Building and the 350 Park Avenue Citadel Tower. We are all that our young mayor would pull this stunt in front of Kent's home and single them out for ridicule. This was both irresponsible and dangerous. As I said, Renato is the owner of the 65-year-old building on the Park Avenue block front that will be raised to make way for the Citadel New York Equator's Tower, which will employ thousands, further cementing New York as the financial capital of the world, and pay significant taxes, and on and on. This building is being designed by the same Forster and Partners architectural team that designed JPMorgan Chase's new headquarters down the block. This is now the If We Move Forward project. Now, a project of this scale takes years, and we have already worked with two prior city administrations, both of whom have recognized the benefits and have been enthusiastically welcoming and supporting them. as evidenced by the rare, unanimous ULIP approval for this project. Demolition began literally days ago, and we at Renato are ready to go. I must say that I consider the phrase, quote, tax the rich, when spit out with anger and contempt by politicians both here and across the country, to be just as hateful as some disgusting racial slurs and even the phrase, from the river to the sea. What these polls seem to be saying is that the rich are evil, or the enemy, or the targets, or maybe even just suckers. But the rich whom the politicians are targeting, started with nothing, are the epitome of the American dream. They are our largest employers and largest philanthropists. And it is the 1% that pays 50% of New York's income taxes. They are at the top of the great American economic pyramid for a reason. They should be praised and thanked. Ken, our partner and friend, is the best of the best. So where are we now? As we discussed last quarter, Ken exercised his option to enter our development joint venture and build a new 1.9 million square foot tower with Citadel as the anchor tenant. We have until the middle of July to decide whether to participate with Ken in the venture or to sell to him. It's a good bet that we will go all in. This fence cannot be mended by a short, terse, insincere private apology. What I beg my mayor to do is to begin every day being business welcoming and business friendly as his first priority. That's the only way to get the growth and financial wherewithal to accomplish his programs, some of which I must say are interesting and valid. Public safety, schools, child care, clean streets, housing, affordability, homeless programs, et cetera. The election is over and now is the time for hard work and management, not show voting. New York is an enormous enterprise with a city budget of $120 billion and a state budget of $250 billion. If there is a $5 or $10 billion budget shortfall, surely that money can be found by managing rather than by taxing. It is interesting to note that high tax New York spends more than double per capita, double per capita, than low-tax or no-tax Florida or Texas. There is a lesson here. Maybe something good can come out of this blunder. Maybe we can draft Ken to become active and lead an effort to educate New York voters and to elect right-minded candidates. Ken can do it. He's the one who could galvanize the entire business community. Here's an interesting fact to it. Members of the Partnership for New York City alone employ one million voters. Hundreds of our business leaders would line up to support Ken. I would be first in that line. I was taught, and I believe in an America where after an election, all sides get behind us and support the winning candidate for the greater good. Our mayor is young, smart, and energetic. With a little tweak here and a little tweak there, his leadership could make this great city even greater. He will learn over time that growing a tax base is a winner and raising taxes is a loser. I will say it again. He will learn over time that a growing tax base is a winner and raising taxes is a loser. And that's a hardworking 1% are allies, not enemies. Let's learn from this mistake and move upward. Turning to Renato. We now have a lineup of assets and in-process projects which I am confident will deliver the highest growth in our entire Executing on all this is now our singular focus. In this year, 2026, we will complete the heavy lifting of leasing at Pen 1 and Pen 2. As Michael and Tom have already been saying, quarter after quarter, our published numbers will reflect all this by the end of 2026 and going into 2027. As part of our focus on enhancing our portfolio and making great deals, we announced last week the acquisition of a 49% interest in Park Avenue Plaza, a 1.2 million square foot Class A office building along the prime stretch of Park Avenue. This asset is directly across the street from our 350 Park Avenue project. The building is 99% occupied by blue-chip tenants with an 11-year weighted average lease term, and rents that are 40% to 50% below market. Prime Park Avenue AAA assets rarely trade, and we believe we made an excellent purchase. We're buying the asset at $950 per square foot, which is 65% to 70% discount to replacement costs. And we are inheriting a fixed rate sub-3% loan through 2031 to leverage off an enhanced return. We expect the transaction to be approximately $0.10 accretive on a full year basis in the first year. We're happy to be partnering with the Fisher family who own the other 51% of the asset. We have a long relationship with the Fisher family. They are a first-class operator who think much like we do. With Parkey Avenue Plaza, our recent acquisition of 623 Fifth Avenue and the pending development of 350 Parkey Avenue, we will be adding call it 2 million square feet at share of the very highest quality prime assets to our portfolio at very accretive economics. Speaking of 623 Fifth Avenue, our 383,000 square foot assets, which we are redeveloping to be the premier boutique office building in Manhattan. We are far along in our design and planning. We are receiving outstanding reactions from the market and already have active tenant interest at or above our address. Demand for our retail assets is robust and accelerated. We have a handful of assets for sale in the market. I covered share buybacks in my recently posted shareholders letter. To date, Under our $200 million share buyback program, we have repurchased 7 million common shares at an average of $25.80 per share, totaling $180 million. Last week, our board authorized an additional $300 million buyback program.