SL Green Realty Corp

Thank you everyone for joining us and welcome to SL Green Realty Corp's first quarter 2025 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 predictors 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 risks, uncertainties, and other factors that could cause such differences to appear or 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 first quarter 2025 earnings and in our supplemental information included in our current report on Form 8K, relating to our first quarter 2025 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.

Thank you. Good afternoon, everyone, and thank you very much for joining us today. Given all that's transpired in the global markets since our last call, I was especially happy with our first quarter's earnings that we announced yesterday. In particular, and as a result of the hard work of the entire SL Green team, the company's earnings for the quarter exceeded the street's expectations and our own internal projections by a significant margin. Our NOI was on top of our forecasts, our leasing results were well ahead, and our profits generated by our debt-related businesses were very strong. This should come as no surprise to anyone given my commentary in December at our investor conference, which focused on an opportunity-rich commercial debt market. I highlighted that new originations, secondary market purchases, distressed opportunities, the new debt fund, and our special servicing business was going to take center stage in 2025, and Q1 performance in this area is certainly an affirmation of that belief with much, much more to come. We laid out our thesis in this point in the cycle for making equity-like returns in credit investments, something that has been our stock in trade for over a quarter of a century. No one has made more subordinate investments on Manhattan office buildings over that period of time than we have. Particularly in the early years of a recovery, our realized returns are typically far higher than the average returns we normally experience. And we expect 2025 and 2026 to be no different. The recent volatility in the credit markets benefits this business and our new debt fund and substantial liquidity gives us the ability to selectively identify investments with attractive returns and protect the downsides. In just the past nine months, we've closed on nearly $200 million worth of DPE investments, with the more recent one slated for the fund, and we are actively negotiating on a pipeline of over $1.2 billion of new debt investments. To categorize our debt-related earnings as either non-recurring, one-off, noisy or confusing is, in my opinion, to miss the point. Our debt platform is a meaningful component of who we are, Our expertise and track record in this area is well established. Given the opportunities set in front of us, I do expect that our debt-related businesses will account for increasing profits to our shareholders, and I expect we are already at the higher end of our guidance range, a range we will reassess next quarter with an upward bias if we are successful in closing all of the business now in front of us. And that's not to say we aren't also concentrating on growing our equity portfolio. In the first quarter, we closed on the acquisition of 500 Park. And weeks later, we signed a lease, bringing the building to 100% occupancy. Now we are designing an improvement program with elevated finishes and amenities to materially move the rents up as tenants renew and roll. Also in the first quarter, we bought out our partner in 100 Park. acquiring a 50% position on attractive terms in a building that is now 97% leased. We've owned 100 Park for approximately 25 years, and it continues to be a solid performer for the company. Finally, Summit One Vanderbilt was the number one attended experience of its type in the first quarter, according to a recently published report. In just over three years, The summit has become one of the most sought-after experiential attractions in New York City. I know there was a question raised regarding the impact that reduced international tourism might have on summits' attendance, and I would simply note that last week we set a ticket presale record with over a half a million dollars of advanced ticket revenues sold in one day. In closing, I'd just like to say, in uncertain times, SL Green shines. Thank you.

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. In the interest of time, we ask that you please limit your questions to two per person. Please stand by while we compile the Q&A roster. And our first question comes from Alexander Goldfarb of Piper Sandler.