Paramount Group, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Paramount Group second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. Our question and answer session will follow the formal presentation. Please note that this conference is being recorded today, July 27, 2022. I'll now turn the call over to Tom Hennessy, Vice President of Business Development and Investor Relations. Please go ahead, Seth.

Thank you, Operator, and good afternoon, everyone. Before we begin, I would like to point everyone to our second quarter 2022 earnings release and supplemental information, which were released yesterday. Both can be found under the heading Financial 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 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. 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 conditions. 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 second 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 afternoon. We've reported core FFO for the second quarter of $0.24 per share, with same-store cash NOI growing 5.6% year over year. As a result of our strong results, we are raising our full-year 2022 core FFO guidance by $0.02 at the midpoint. Wilbur will review our financial results and guidance in greater detail. During the quarter, we leased approximately 250,000 square feet, which was about 50,000 square feet more than our first quarter leasing and slightly above our second quarter 2021 leasing results, a very positive outcome in the current climate. Of the 250,000 square feet, 153,000 square feet was leased in our New York portfolio which led the way accounting for over 60% of this quarter's leasing at a solid weighted average lease term of 9.3 years. Our New York leasing was highlighted by the expansion of SVB securities at 1301 Avenue of the Americas, where they leased the entire fifth floor, comprising over 68,000 square feet. The building is now 88.1% leased. up 380 basis points compared to March 31st. We are now left with three desirable and contiguous base floors totaling about 200,000 square feet. The New York portfolio approximately 70% of our overall business continues to perform well. Not only did it account for over 60% of this quarter's leasing velocity, but it accounted for over 72% of our year-to-date leasing velocity. Job growth continues to be strong, particularly in New York, which is almost fully recovered to pre-COVID level results. Tourism is improving daily. That bodes well for all retail businesses and the city in general. The San Francisco portfolio, as expected, has lagged. But there is one trend in both markets that remains consistent, the flights to quality. And that benefits our portfolio in particular. At One Market Plaza, arguably one of the best buildings in San Francisco, we continue to execute deals with triple-digit starting rents. Of the 97,000 square feet leased in San Francisco this quarter, about 59,000 square feet, or over 60%, was leased at One Market Plaza at starting rents in excess of $118 per square foot. One Market Plaza continues to raise the bar in San Francisco. Notwithstanding the success we are seeing at One Market Plaza, the market in general remains challenged as tech tenants grapple with their return to office plans, keeping office utilization rates well below pre-pandemic levels and causing leasing activity to remain tepid. We believe our own leasing results demonstrate the prevalence of the flight to quality for office space in our markets as more tenants are returning to work or are planning to do so after the summer. We expect to continue to benefit from this phenomenon as tenants are seeking well-operated, well-located, well-amortized, and environmentally conscious buildings for the employees. Our assets deliver on every one of those fronts. On the ESG front, we are proud to note that Paramount achieved the 2022 Energy Star Partner of the Year Award from the US Environmental Protection Agency, EPA, and the US Department of Energy. Our assets were recognized as being in the 25th percent among thousands of energy star buildings nationwide, and recognized for demonstrating superior leadership, innovation, and commitment to sustainability. As we look to advance our mission to reduce the portfolio's environmental footprint, sustainability is an integral part of our business, and we capitalize on every opportunity to further embed responsible practices into our daily operations. Turning to the transaction market, activity was muted during the quarter. The second quarter saw roughly 1.3 billion of transaction volume in New York. Pricing for Class A and trophy assets continues to be strong and higher than the public markets imply. For our part, we have always maintained a disciplined approach with our capital and continue to monitor the markets carefully. To that end, we opportunistically repurchased 268,231 shares at a weighted average price of $6.96 per share, or $1.9 million in the aggregate. 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. We have maintained a defensive posture since the onset of the pandemic. 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. But we are also always looking for opportunities. With that, I will turn the call to Peter. Thanks, Albert, and good afternoon.