Paramount Group, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Paramount Group first quarter 2023 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 is being recorded today, May 4, 2023. I will now turn the call over to Tom Hennessy 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 2023 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 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 use caution in interpreting and relying on them. We refer you to our SEC filings for a more detailed discussion of the risk 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 as in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our first quarter 2023 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. It hasn't been long since we last spoke, but we are excited to share our progress as we are off to a good start so far in 2023. We have seen strong year-to-date execution by our leasing team. Before I dive into our overall results, let me touch upon the ongoing situation with First Republic, which currently occupies approximately 460,000 square feet at one front street in San Francisco. On May 1st, the FDIC took control of First Republic and JPMorgan Chase subsequently acquired the majority of the assets. Many of the details regarding the transaction remain unknown. To date, First Republic remains current on its rent payments and its offices remain open, but we are watching this closely, as I'm sure all of you are. Wilber will review the financial impact of First Republic in greater detail. Yesterday, we reported core FFO for the first quarter of 26 cents per share, 3 cents ahead of the street consensus. In the first quarter, we leased over 195,000 square feet, which is in line with our first quarter leasing from prior years. We also reported year-over-year same-store growth of 7.1% on a gap basis, and 0.1% on a cash basis. As a result of our strong first quarter earnings, we are raising the low end of our full year 2023 core FFO guidance to be one cent higher at the midpoint, which is now 92 cents per share compared to the previous midpoint of 91 cents per share. Virgo will also review our financial results and guidance in greater detail. The larger leases, which we mentioned on our last couple of calls, were taking longer to execute, have started to come through, as illustrated in our first quarter results. We were happy to announce the 119,000 square foot lease we signed at 31 West 52nd Street and with Wilson Sonsini, an international law firm. This lease meaningfully de-risked our largest 2024 role by approximately 30% and was the largest new lease signed in Manhattan during the quarter. Our New York portfolio continues to perform well, a strong indication of the steady return to the workplace, which we highlighted on our last call. The significant lease we signed during the quarter is a testament to the strength of our Class A assets and how high-quality, well-located buildings can outperform in a challenging environment. While we are seeing a lot of touring activity and we continue to take more than our fair share of leasing, the environment remains challenging. However, there are some signs for optimism as the Metro North recently announced that they are recording peak pandemic era ridership and 74% of the pre-pandemic average. This positive trend is a good sign that the commuters are slowly returning to the city for work. While the San Francisco portfolio continues to lag New York City, the activity on the streets of San Francisco has become more vibrant now than it was three, six, or 12 months ago. And our San Francisco office utilization figures have been consistently rising. Our centrally located San Francisco portfolio continues to attract high-quality tenants. During the quarter, we signed a 77,000-square-foot lease at Market Center in San Francisco with Waymoff, a subsidiary of Alphabet. We believe this transaction demonstrates the quality of the asset and the ability of our team to meet the objectives of the most discerning clients. Similar to the previously mentioned lease with Wilson Tansini in New York, our lease with Waymo was the largest new lease signed in San Francisco during the first quarter. Clearly, both portfolios continue to benefit from a key advantage in each market, namely the flight to quality. In addition to well-located Class A assets, part of the appeal to the highest quality tenants includes our market leading efforts with ESG. We were proud to announce that we achieved the 2023 Energy Star Partner of the Year Award from the EPA and Department of Energy. For the second consecutive year, we were recognized among a network of thousands of participants as a leader in sustainability space with performance within the top 25% for energy efficiency. This achievement is on top of the one we recognized in 2022 as we achieved Energy Star labels across 100% of our office portfolio. Participation in the Energy Star program is not only integral to our mission as a responsible owner, but also to our tenants who partner with us in initiatives that reduce both our carbon footprint and operating expenses. ESG matters to us and our tenants, and it will remain a key focus for us. Turning to the transaction market, activity remains muted. Rising interest rates, availability of debt capital, and volatile equity markets continue to keep buyers at bay. and sellers evaluating when conditions will improve. There have not been many quality assets that have come to the market, and for those that have, the bid-ask spread remains wide. That said, there are significant debt maturities on the horizon, which will certainly present opportunities for well-capitalized firms like Paramount. We will be strategic and disciplined. in allocating capital, as we always have. Let me conclude by saying we approach our business with a long-term mindset. Our Class A buildings and the coastal gateway markets in which we operate are resilient. They have constantly evolved and grown over decades and over many economic cycles. With that, I will turn the call to Peter.