Paramount Group, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Paramount Group fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, February 11, 2021. I will now turn the call over to Rob Simone, Director of Business Development and Investor Relations.

Thank you, Operator, and good morning. By now, everyone should have access to our fourth quarter 2020 earnings release and the supplemental information. Both can be found under the heading Financial Information Quarterly Results in the Investors section of the Paramount website at www.paramount-group.com. Some of our comments will be forward-looking statements within the meaning of the federal securities laws. Forward-looking statements, which are usually defined by the use of words such as will, expect, should, or other similar phrases are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, including, without limitation, the negative impact of the coronavirus, COVID-19, on the U.S. regional and global economies and our tenants' financial condition and results of operation. Therefore, you should exercise caution in interpreting and relying on them. we refer you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. During the call, we will discuss our non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our fourth quarter 2020 earnings release and our supplemental information. Hosting the call today, we have Albert Baylor, Chairman, Chief Executive Officer and President of the company, Wilbur Pays, Chief Operating Officer, Chief Financial Officer and Treasurer, and Peter Brindley, Executive Vice President, Head of Real Estate. Management will provide some opening remarks, and we will then open the call to questions. With that, I'll turn the call over to Albert.

Thank you, Rob, and thank you, everyone, for joining this morning. We hope that everyone is staying safe and healthy. I am very proud of how the Paramount team has performed during these unprecedented times. Yesterday, we reported core FFO for the fourth quarter of 24 cents per share, resulting in core FFO of 96 cents per share for the full year. These results reflect the strengths of our assets and tenant base. Today, we are initiating 2021 Core FFO per share guidance between 82 cents to 88 cents per share. Wilbur will review our financial results and our 2021 guidance in greater detail. Looking back at 2020 as a whole, No one could have predicted the crisis that quickly unfolded and shocked the global economy. The world seemed to collectively hit the pause button. The US office market, both public and private, was no different. The robust leasing environment of the previous year effectively froze as companies waited to see what would happen before making any major decisions. Paramount, like most of our fellow office landlords, took a defensive stance, focusing on preserving liquidity and monitoring our tenants for risks to the portfolio. I am proud to say we fared better than most. Thanks to the hard work of everyone here has done over the years to secure a roster of blue-chip tenants that were carefully evaluated for the ability to withstand market downturns. We entered 2020 in a very strong position to a global market crisis. We benefited from years of strong leasing execution without compromising on our stance of always leasing for the long term. This has been evidenced by our strong rent collections, which were 96.7% for the entire portfolio during the fourth quarter, demonstrating our disciplined underwriting, and the overall resiliency of our portfolio. While our buildings have remained open throughout the pandemic, most of our tenants have and continue to work remotely. We remain in regular contact with our tenants, ensuring that those who have returned enjoy a safe and healthy working environment. While we look forward to welcoming all of our tenants back to the office, we do not anticipate a major shift in tenants returning to the workplace until the second half of 2021. Most business leaders want their employees back in the office, but that is unlikely to happen until a majority of the population is vaccinated and the rate of infection drops. The good news is that the government has an aggressive mandate to ensure the population is vaccinated and the two vaccines that have been approved by the FDA, have high efficacy rates, and a third vaccine is nearing approval. All this bodes well for a return to normalcy as businesses reopen and travel resumes, which will undoubtedly result in a period of strong economic recovery. On the leasing front, we remain laser-focused on our availabilities, namely the 500,000 square foot Barclays block, at 13016 Avenue and 130,000 square foot block at 31 West 52nd Street. Peter will provide additional details on what we are seeing in the market. Notwithstanding a difficult leasing environment, we managed to lease almost 700,000 square feet of space with an average cash mark to market of 18.5%. As I mentioned on our last call, One of the most important leases we signed this year was a 16-year lease with iconic luxury juror Harry Winston. This was a highly unique transaction that was executed by us internally, resulting in the up 3% of the available retail space at 712 5th Avenue for essentially over 80% of the previous fully escalated rent of the prior tenant. The deal represents a powerful example of the attractiveness of the asset and its location, as well as our approach towards long-term value creation, even in a recessionary environment. Turning to the transaction market, while there was an uptick in activity in the fourth quarter, overall transaction volume remains low. Core assets that are well-leased with a blue-chip tenant roster and longer-weighted average lease terms are commanding superior pricing. An example of this was our 10% sale of 1633 Broadway, the largest asset in our portfolio, both in terms of size and from a valuation perspective. The transaction which we announced and completed during the second quarter raised over $110 million in net proceeds and valued the property at $2.4 billion, or $960 per square foot. This deal demonstrated the underlying long-term value of our real estate in the markets where we operate. Currently, there are very limited distressed opportunities in the market due to lower interest rates and ample liquidity. We do anticipate, however, that these opportunities will increase over the next 12 to 18 months, and we will be ready to take advantage of these opportunities through our joint venture relationships. During the quarter, we also completed the sale of 1899 Pennsylvania Avenue for $103 million. This completes our strategic exit from the Washington DC market. We believe the discount at close was reasonable given current market conditions, and we are pleased that the transaction closed on time during the quarter. As we look back to the year that was, and look forward to the year that will be, we remain optimistic and focused. Optimistic that the pandemic will soon be behind us. Optimistic that people are tired of being isolated and look forward to returning to their normal lives. Optimistic that this economy will roar back to life as restaurants and movie theaters reopen and travel resumes. And we remain focused, focused on the health and well-being of our tenants and employees, focused on leasing our available space, and focused on creating value for our shareholders. With that, I will turn the call to Peter.