SL Green Realty Corp

Thank you everybody for joining us and welcome to the SL Green Realty Corp's third quarter 2024 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. 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 four 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 report discuss non-GAAP financial measures as defined by Regulation G under the Securities Act. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed and a 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.sogreen.com by selecting the press release regarding the company's third quarter 2024 earnings and in our supplemental information included in our current report on Form 8K relating to our third quarter 2024 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, good afternoon, and thank you for joining us at SL Green's third quarter earnings call. By now, you will have seen the exciting news that we put out last night, which was the culmination of another great quarter of activity since we last spoke. We called the pivot in the market about one year ago, and since then, we've seen four consecutive quarters of of positive market momentum that reinforces our belief that New York City has turned the corner and we are now meeting or exceeding many of our goals. Since we were last together, and that was just three short months ago, a lot has happened. Last month, IBM cut the ribbon and took occupancy of their incredible new space at 1 Madison Avenue, effectively christening the building that rightly takes its place alongside 1 Vanderbilt as a shining example of the new model for modern and innovative office buildings. One Madison, now fully complete, has come alive as other tenants are moving in, such as the Franklin Templeton Companies, the opening of Chelsea Piers, the activation of the fabulous rooftop, which is already hosting many, many special events, and proof positive that the city is thriving for demand of space for this kind and punctuated by Danielle Balloud's new steakhouse, La Tete d'Or, designed by David Rockwell, completed construction this month and will open to the public in November. Be sure to get your reservations and be among the first to be there over the holidays. Special place and a great new addition to the Flatiron area and just another great step in the right direction for New York City. On Monday... We will celebrate the third anniversary of Summit One Vanderbilt. We are now closing in on six million guests. I think in November we will host our six millionth guest through the turnstiles at Summit. And I think that just really speaks volume to what an enormous attraction Summit has turned out to be. Many days sellouts, most days sellouts. It has been named, you know, accolades as a special bucket list destination for New York City, and everyone comes out of there with a smile. We're very proud of it, and we're even more excited to begin the global expansion as we bring the unique summit experience to other cities around the world, with Paris being first up in the queue. Expect an announcement with further details on our Paris initiative sometime later this quarter. Also, earlier this week, many of you may have seen the press yesterday and this morning, Mr. Giorgio Armani made a rare trip to New York to celebrate the opening of his new boutique and residences on Madison Avenue developed in conjunction with S.L. Green. As you know, the residences are completely sold out, and Armani's flagship store has anchored a complete revival of luxury retailing and elevated experiences on Madison Avenue in as many of the world's prominent luxury retailers have relocated or recommitted to Madison Avenue after the announcement of the Armani project. If you're in the area, please be sure to come by, check it out, pick out something special with the profits those of you have made on SL Greenstock. After nearly a four-year hiatus, we are now fully back in the DPE business, lending on and investing in mortgage and MES loans and debt securities. This quarter, we invested nearly $110 million in various debt and debt-like investments, and that's on top of the other DPE investment activity we did earlier this year. This marks the return to an extremely profitable business where we typically have achieved outsized market share and market returns. The debt investments we've closed thus far, combined with our extensive pipeline that we've been building throughout the year, will serve to seed our debt fund that we anticipate having an initial closing on in the fourth quarter. The fund will provide additional capital resources, enabling us to reestablish ourselves as the dominant provider of subordinate capital for New York City commercial assets. And I guess the highlight of highlights was something we announced after business closed yesterday. Further evidence of what I would say is really incredible leasing momentum, some of the best I can recall seeing in my 26 years here at the company. We achieved a 925,000 square foot renewal and expansion of Bloomberg over at 919 3rd. This was not really within the expectations at the beginning of this year, so it was a very pleasant surprise and I'd say It was even more telling about the strength of this market, Bloomberg being one of the great worldwide media companies, not only renewing upwards of 725, 750,000 feet, but they expanded by almost 25% within 919 for a total of 925,000 square foot footprint. which speaks volumes, I think, to the amazing partnership we have with Bloomberg, who started out as a relatively small tenant in the building some years ago, Steve, you recall? 200,000 foot tenant, how long ago? 2015, less than 10 years later, now closing in on a million square feet. So I think it's a great story about you know, partnership about, you know, complimentary businesses, us being able to serve Bloomberg's growth needs and Bloomberg, you know, being there to help us fill the space in the building. And it's, I think, further proof positive about the radiation of demand away from what we have traditionally referred to as the Park Avenue spine. You know, the story goes that the demand is limited to trophy buildings on Park Avenue. You've heard us say it's just not the case, particularly not this year when we have consummated 2.8 million square feet of leasing year to date. And this being example, as well as other examples in the portfolio of that demand, you know, not being so much geographically focused as it is generally within East Midtown in renovated Class A buildings. with strong sponsorship, and that's where we're having our success, such that we now expect to have leasing achievement this year eclipsing 3 million feet and achieving a projected occupancy at year end in same store Manhattan of 92.5%. So those are some pretty good stats. We're proud of them. Great job by the team. Again, That's a good three months in my book. I think it illustrates what we've been saying now for a while, that business is back in New York. The worst is, without question, behind us. This is now, in our eyes, a market for being affirmative and offensive, and our portfolio is well-positioned to capitalize on that market as there is a scarcity of well-located and amenitized Class A assets in the East Midtown market, which is where we call home. So with that, I'd like to open it up for some questions on the quarter.

Thank you. And at this time, we'll conduct the question and answer session. To ask a question, you need to press star 1-1 on your telephone and wait for your name to be announced. To draw your question, please press star 1-1 again. Again, please submit yourself to two questions. Please sign by. We compile the Q&A roster. One moment for our first question. Our first question will come from John Kim from BMO Capital Markets. Your line is open.