Paramount Group, Inc.

Thank you for standing by. Welcome to the Paramount Group first quarter 2021 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, April 29th, 2021. I will now turn the call over to Sumit Sharma, Vice President of Business Development and Investor Relations. Please go ahead.

Thank you, Operator, and good morning. Before we begin, I'd like to point everyone to our first quarter 2021 earnings release and supplemental information, which were released yesterday. Both can be found under the heading Financial Information, Quarterly Results in the Investors section of the Paramount Group 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 identified by the use of the 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 compatible GAAP measure is available in our first quarter 2021 earnings release and our supplemental information. Hosting the call today, we have Mr. Albert Baylor, Chairman, Chief Executive Officer and President of the company, Wilbur Pace, Chief Operating Officer, Chief Financial Officer and Treasurer, and Peter Brindley, Executive Vice President and Head of Real Estate. Management will provide some opening remarks. and we will then open the call to questions. With that, I will turn the call over to Albert.

Thank you, Sumit, and thank you everyone for joining this morning. We hope that everyone is staying safe and healthy. We are cautiously optimistic that we are moving closer towards the end of this pandemic as vaccines are being distributed nationwide. I am very proud of how the Paramount team has performed during these unprecedented times. Yesterday, we reported core FFO for the first quarter of 23 cents per share. We are reaffirming our 2021 core FFO per share guidance between 82 to 88 cents per share. Wilbur will review our financial results in our 2021 guidance in greater detail. Since the onset of the pandemic, our results have demonstrated the strength of our assets as we have benefited from the high quality of our portfolio and blue-chip tenant roster with very limited exposure to retail. This manifested itself through our superior rent collections throughout 2020 and continues to do so, demonstrating our disciplined investment approach and the overall resiliency of our portfolio. We see early signs of a recovery as the vaccination rate continues to climb driven by government's aggressive public health and safety mandate. In New York, over 40% of the population has received their first vaccine dose, while about 30% have been fully vaccinated. That number is even higher in San Francisco, where about 60% of its population has received their first dose and about 40% have been fully vaccinated. These numbers continue to grow at an impressive rate, and we see this as a very positive sign for the impending return to the workplace and normalcy. With every passing day, we see more reasons for optimism in the markets where we operate. as companies begin to announce plans to return to the office. In speaking with our tenants, most of them are eager to come back to the offices they called home for so many years. As I highlighted last quarter, we continue to maintain an ongoing dialogue with our tenants regarding their plans to return to the office and offering our assistance if needed. Based on these discussions, We are convinced that the second half of 2021 will be the time when comfort levels return to normalcy and offices repopulate. It will most probably be post-Labor Day, however, when we see a meaningful uptick in physical occupancy. We look forward to welcoming our tenants back to the office and are ready to accommodate their evolving space needs. During the quarter, we leased a total of 188,000 square feet. The majority of this quarter's leasing activity was comprised of renewals, like most of last year. In New York, the activity was driven by the renewal of the Gershwin Theater, leased at 1633 Broadway. Although not a needle mover in terms of its contribution to Paramount's bottom line, this 20-year lease speaks to the conviction that tourism and Broadway will return to New York City with gusto. While Peter will go into greater detail on what we are seeing on the leasing front, let me spend a minute sharing my observations. We are finally beginning to see real activity, notwithstanding that the market is nowhere close to pre-pandemic levels of activity. Serious inquiries our plentiful and in-person tours have increased. Brokers are informing tenants that now is the time to act as landlords fight for every deal in the market. As you know, subsequent to the quarter end, we signed a 54,000 square foot lease with Bracewell LLP at 31 West 52nd. Bracewell is a leader in legal service and government affairs. This trophy asset, with its desirable location, efficient center core design, minimal columns, and newly renovated lobby appealed to them and lined up very well with their space needs. We look forward to welcoming Bracewell to 31 West and the Paramount portfolio. The execution of this lease underscores our ability to continue to transact at the highest level in the most difficult of times. It is that the same ability and focus that enables us to speak with confidence when it comes to leasing our remaining availabilities, specifically in our New York portfolio. Post the execution of the Bracewell lease, we have an additional 77,000 square feet of the former TD Bank space at 31 West that will become vacant next week. and the 498,000 square feet block at 1301 Avenue of the Americas. 1301 continues to be our primary focus for several reasons. Not only are we in the market to lease the asset, but we are also in the market to refinance it as the $850 million mortgage loan matures in November this year. The reception from lenders is stellar. and Wilbur will update you on the status. We also recently announced our plan to create a brand new amenity center at 1301, which will further add to the appeal of this asset. More to report on this in the coming quarters. Turning to the transaction market, overall transaction volumes remained low in this quarter. despite the small uptick in the fourth quarter of 2020 as bidder offer spreads remain wide. Core assets that are well leased with a blue chip tenant roster and longer weighted average lease terms continues to command superior pricing. We believe the market continues to be in a period of price discovery with opportunistic buyers unable to find the bargains they expect as sellers are maintaining their asking price. Looking ahead, our long-term strategy remains unchanged. To manage our portfolio to the highest standards and allocate shareholder capital in a prudent manner to achieve the highest risk-adjusted returns with an eye towards creating long-term value for our shareholders. Our priority remains the lease-up of our availabilities as well as the reintegration of our current tenants in a safe and healthy manner. As before, we continue to maintain sufficient liquidity, which amounted to $1.5 billion at the end of the quarter, and we remain well capitalized and positioned for the long term. With that, I will turn the call to Peter.