SL Green Realty Corp

Thank you everybody for joining us and welcome to SL Green Realty Corporation fourth quarter 2022 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 take forward looking statements. You should not rely on forward looking statements as predictions of future events as actual results and events may differ from any forward looking statements that management may make today. All forward-looking statements made by management on this call are based on their assumptions and beliefs as of today. Additional information regarding the risk uncertainties and other factors that could cause such differences to appear are set forth in the risk factors and MD&A sections 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 both the company's website at www.slgreen.com by selecting the press release regarding the company's fourth quarter 2022 earnings and in our supplemental information included in our current report on Form 8K relating to our company's fourth quarter 2022 earnings. Before turning the call over to Mark 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 to please limit your questions to two per person. Thank you. I will now turn the call over to Mark Holliday. Please go ahead, Mark.

Okay, thank you, and good afternoon, everyone. We appreciate you joining us today. Normally, our January earnings calls are brief, coming only seven weeks after our annual investor conference, which we held back on December 5th. We had a great conference on that day with attendance at capacity at one Vanderbilt, and we received a lot of positive feedback after the presentation. Not surprisingly, during the conference, we set out for ourselves a a characteristically robust agenda for 2023, which included business plan aspirational goals. I think there were 18 or 20, some of which included 1.7 million square feet of leasing, over $2 billion of asset sales and joint ventures, significant debt reduction, and completion of several important development projects that we expect to deliver timely and on or under budget this year. Notable among them is One Madison Avenue, which we actually topped out ahead of schedule in just one week after our investor conference. So it was a pretty amazing day. There were over 700 people gathered to witness the event of the laying of the last piece of steel on this truly great project in the Midtown South sub-market, marking a turning point for the project where we now see completion in sight and the timing of that topping out was truly perfect as it gave us the ability to stand on that 18,000 square foot penthouse floor with 18 foot slab heights and unobstructed views of midtown and downtown and standing there you can truly understand why our new tenant that has just joined the roster of tenants to the one Madison Avenue rent roll is 777 partners they were attracted to the opportunity and we were able to lease it up over one year ahead of our underwriter just you know stressing the importance of not only hitting underwritten economics but also exceeding the timing has a big positive effect on the project and we hope there's more to come this lease along with the others we announced last night Underscores the early leasing achievements we had in January, which is typically a slow month But for us turned out to be you know a pretty good month and a good start to the year Hopefully it portends of increased activity to come in 2023 After a long holiday break followed by the MLK holiday weekend. We've seen a noticeable pickup in tour activity over the last 10 days and we received around a fresh new proposal, so We're optimistic, we're getting stuff done, and we're on plan, most importantly. So on the heels of signing over 370,000 square feet of office leases since our investor conference at the beginning of December, we managed to assemble a pipeline of leases totaling 700,000 square feet where it stands today, 100,000 square feet of which we hope to sign over the next 60 days. you know, we'll be moving and hustling to try and get that done. We're currently negotiating leases at 450 Park Avenue, 919 3rd, 485 Lex, 1350 Avenue of the Americas, and another lease at 1 Madison. In addition, we are just beginning to market our redevelopment project for 245 Park Avenue. We spent quite a bit of time showing off that amazing redevelopment plan that we have for 245 Park and we are beginning to execute this year. And the early read from the tenant broker community is that this exciting and I think very elegant plan that we have for the asset is going to be very well received by the tenant market. And there seems to be much interest already that we're generating as we're beginning to take these meetings. And we're also generating interest among foreign investors for JV Investments. Recall that identifying one or more JV partners for 245 Park is one of the several capital markets goals we have for the year. And for a little bit more color on that, I'm going to turn it over to Andrew Mathias.

Thanks, Mark. There's still a standoff between buyers and sellers in the market, but we definitely see as financing hopefully returns and as five- and ten-year fixed-rate financing returns, the CMBS market reopens, which we and all the rest of our market participants here are anxiously awaiting. We think we'll see that standoff thaw a bit. We've been actively in discussions with investors from around the world. We were in the Middle East several months ago. We have a trip planned to Asia in March. The team was present at the CREFSE conference in Miami. earlier this month talking about the financing trends. And we think there's still a lot of interest in prime New York City assets, particularly Park Avenue, which is no secret that it's the best sub-market in New York City. And we think we'll have a lot of willing conversations this year from all different types of investors from around the world talking about 245 and the other aggressive capital goals that we set out for us at the investor conference.