Paramount Group, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Paramount Group's first quarter 2022 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 28, 2022. I will now turn the call over to Tom Hennessey, Vice President of Business Development and Investor Relations.

Thank you, Operator, and good morning, everyone. Before we begin, I would like to point everyone to our first quarter 2022 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.pgre.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 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. Therefore, you should exercise caution in interpreting and relying upon 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 first quarter 2022 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 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 will turn the call over to Albert.

Thank you, Tom. And thank you, everyone, for joining us this morning. Yesterday, we reported our core FFO for the first quarter of 25 cents per share with same store cash NOI growing 3.9% year over year. As a result of our strong first quarter earnings, we are raising our full year 2022 core FFO guidance. Wilbur will review our financial results and guidance in greater detail. During the quarter, we leased approximately 203,000 square feet, which was in line with our expectations and about 7.5% more than the leasing we accomplished in last year's first quarter. As you may recall, we leased over a million square feet last year. And as we had outlined in our guidance, we once again expect to lease over 1 million square feet this year. Of the 203,000 square feet leased in the quarter, over 175,000 were leased in New York. The current quarter's leasing was highlighted by two important deals. First, an 87,500 square foot renewal with Hilton at 1325 Sixth Avenue for an 11 plus year term. And second, our previously announced 15 year new lease with Din Tai Fung covering over 26,000 square feet of retail space at the base of the glass cube at 1633 Broadway. As I've said before, our approach to leasing up the glass cube at 1633 Broadway was deliberate and admittedly took longer than we would have liked. But we couldn't be happier with the outcome. This world-renowned restaurant will serve as a great amenity for the 2.5 million square feet of tenants working above and the additional nearly 3.5 million square feet in the vicinity. In all, our roughly 6 million square feet campus between Broadway and Sixth Avenue will now be surrounded with curated and desirable amenities like Equinox that promote health and wellness, a variety of food and beverage options, including Din Tai Fung, Pogo de Chao, Ocean Prime, and La Grande Boucherie. All this will be stitched together by our soon-to-be-developed world-class amenity center at 13016 Avenue, which will provide for state-of-the-art conference room spaces, grab-and-go food options, and lounge areas for tenants to socialize and work. We look forward to updating you on our plans for the amenity hub in the upcoming quarters. Now let me spend a few minutes on what we are seeing in our markets. While over the past year, tenants have taken a measured approach when assessing return to office timelines, we are beginning to hear more firms' plans for returning to the office during the month ahead. When you compare our two markets, New York and San Francisco, not surprisingly, the environment in San Francisco seems to be lagging behind New York. We see that in utilization, and we see that in leasing activity. As you may recall, San Francisco had stricter pandemic-related lockdowns than New York, and it was also one of the last cities to remove mask mandates. So naturally, their return to office plans moved much slower compared to New York. While these restrictions have served as a near-term headwind for the San Francisco office market, We are not worried about the market's medium and long-term prospects, as job growth is robust and VC funding continues at a record pace. Looking at our own portfolio, our reported results reinforce the current dynamics we are seeing in our markets. Our positive results this quarter were driven by our New York portfolio, and it represents about 70 percent of our overall business. 86% of this quarter's leasing was in New York. While our portfolio same-store cash NOI was up 3.9%, New York was up a remarkable 6.6%. And while portfolio leased occupancy was down 10 basis points, New York was up 40 basis points. One theme, however, that is consistent in both our markets is a notable shift towards a flight to quality. Brand-new buildings and buildings that have been invested in are performing considerably better than Class B products. This bodes extremely well for landlords such as Paramount, who own and manage Class A and Trophy assets. We expect to continue to benefit from this phenomenon as tenants in the market are seeking well-operated, well-located, well-amortized, and environmentally conscious buildings for their employees. Turning to the transaction market. We are beginning to see an uptick in activity in New York. The first quarter saw roughly 5 billion of transaction volume in New York, although it was driven by a few large assets in the market. Pricing for Class A and Trophy assets continues to be strong, highlighting the importance of high-quality Class A office assets in desirable CBD markets. The rising appetite of investors to pull the trigger on office acquisitions is a strong indicator that sentiment on the future of office real estate is returning to historical norms. For our part, we have always maintained a disciplined approach with our capital and continue to monitor the markets carefully. We have always been opportunistic and we continued with that approach during the quarter as we completed the previously announced acquisition of 1600 Broadway, a 26,000 square foot retail condominium in the heart of Times Square. The property is 100% leased to Mars as a flagship location for M&M's World and was recently extended for 15 years, including a significant commitment by Mars to improve the space. We see this commitment by Mars as a testament to the long-term value of this iconic Times Square attraction and resilience of the New York market in general. The purchase price was $191.5 million, and the joint venture closed on a $98 million mortgage loan simultaneously with the acquisition. Our joint venture partner here, who is an existing partner in another San Francisco asset, will own 91% of the asset. and we will own the remaining 9% and serve as the manager. During the quarter, we also advanced our sustainability initiatives. Our sustainability initiatives are embedded into our business plan and are critical to our leasing program, especially in the current environment as tenants are increasingly looking to partner with owners that share their values. As you will recall, We have achieved 2021 energy star labels across our entire office portfolio, signifying that our assets perform within the top 25% in terms of energy efficiency nationwide as certified by the EPA. We now have a portfolio that is 100% LEED platinum or gold with energy labels and FITREL certifications. Our commitment to sustainability is undeniable and we continue to push to improve. In April, we announced that 111 Sutter Street, a LEED Gold-certified building, earned LEED Platinum status and was recognized as San Francisco's highest scoring LEED project in 2021, a proud achievement. As has been the case since the pandemic began, we continue to maintain sufficient liquidity which amounts to about 1.3 billion at the end of the quarter. With our portfolio of stable trophy assets and our proven ability to allocate capital, we remain well positioned for the long term. Let me wrap up by saying our operating goals continue to be clear. Our primary focus is on the lease up of our available space and the reintegration of our tenants in a safe and healthy manner. With that, I will turn the call to Peter.