SL Green Realty Corp

Thank you, everybody, for joining us, and welcome to SL Green Realty Corp's 4th Quarter 2020 Earnings Results Conference Call. This conference call is being recorded. At this time, the company would like to remind listeners that during the call, management may make forward-looking statements. Actual results may differ from any forward-looking statements that management may make today. Additional information regarding the risks, uncertainties, and other factors that could cause such differences appear in the Risk Factors and M&A section of the company's latest Form 10-K, and other subsequent reports filed by the company with the Securities and Exchange Commission. Also during today's conference call, the company may discuss non-GAAP financial measures as defined by Regulation G under the Securities Act. The GAAP financial measure most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at www.slgreen.com. by selecting the press release regarding the company's fourth quarter 2020 earnings and on our supplemental information filed with our current report on Form 8K relating to our fourth quarter 2020 earnings. Before turning the call over to Marc Holliday, Chairman and Chief Executive Officer of SL Green Realty Corp., I ask that those of you participating in the Q&A portion of the call please limit your questions to two per person. Thank you. I will now turn the call over to Marc Holliday. Please go ahead, Marc.

Thank you for joining us. as we move across the street into our extraordinary newly completed building that we will soon call home and we could not be more excited about it. For us, the move begins a new chapter for the company that coincides with a period of reconstruction in New York City marked by the rollout of the COVID vaccine, the easing of COVID-related restrictions, the promise of federal stimulus for cities and states, and a gradual return of the workforce to offices and other places of business. and there are many more reasons for optimism as we begin the return to normalcy this year. The financial and tech sectors in New York City which account for over half of the office space demand are doing extremely well and added 5,000 office using jobs in December alone. The city is forecasting a significant amount of new office jobs in 2021 such that we would return to pre-pandemic office employment levels by the fourth quarter of this year. recouping all of the 165,000 office jobs lost at the outset of the pandemic. The credit markets remain quite strong, with commercial mortgage interest rate levels in and around the 2.5% level, and new construction activity has substantially declined, which combined with job growth will enable supply to come back into balance with tenant demand. And on the topic of demand, SL Green had a very productive seven weeks, Since our investor conference on December 7th, where we held a live, in-person event at One Vanderbilt. During that seven-week period, we signed 200,000 square feet of Manhattan office leases, while adding 240,000 square feet of new pipeline, thus increasing our current pipelines. We sit here today to 700,000 square feet, higher than on December 7th. With the leases we expect to sign over the next 60 days, we anticipate being on schedule for our total projected volume for the year of 1.3 million square feet, one of the 18 or so goals and objectives we laid out for everybody in the investor conference. Of particular note are the lease transactions we announced yesterday, starting with the Beam Suntory deal for 100,000 square feet at 11 Madison Avenue, filling a space which had been vacant since April of 2019. Suntory is relocating its headquarters from Chicago to New York City to better align its global brand building efforts with all that New York offers. The Suntory deal and the 92,000 square foot Freshly deal at 63 Madison Avenue also recently announced affirms the development strategy that is the underpinning of our One Madison Avenue Thank you for joining us. Our pipeline at One Vanderbilt includes three more leases in negotiation and four term sheets that are in advanced stages of discussion. So we are currently 73% leases as we sit now, and at this pace we are on a trajectory to meet or exceed our year-end estimate of 85%. Furthermore, our net effective rents that we're achieving on these deals during the pandemic for all signed and pending leases remain within our underwriting assumptions. There is no other building in Manhattan enjoying this kind of success and it's very, very gratifying to see businesses respond in such a positive way to what we've constructed. In keeping with our custom for abbreviated opening remarks on the January earnings call that follows the deep dive we take in our December investor meetings, we will open up the line now for questions. Thanks.

Ladies and gentlemen, if you'd like to ask a question at this time, Please press the star, then the number one key on your touchtone telephone. To withdraw your question, press the pound key. Our first question comes from the line of Michael Lewis with Truist Securities.