Financial Data and Key Metrics Changes - Revenue increased by 2.7% compared to Q1 2024 [15] - FFO decreased to $0.40 per share, and AFFO decreased to $62.3 million [15] - Same property cash NOI was essentially flat [15] Business Line Data and Key Metrics Changes - The company signed just under 800,000 square feet in total portfolio, including over 300,000 square feet of new leases [13] - New leasing to tenants over 10,000 square feet was well above historical averages [6] - The residential portfolio remained essentially fully leased at 99.1% occupancy [14] Market Data and Key Metrics Changes - The Class A office portfolio maintained stable in-place and asking rental rates despite a higher vacancy market [7] - Multifamily portfolio enjoyed robust revenue growth due to high demand in coastal submarkets [8] Company Strategy and Development Direction - The company is focused on four avenues to restore and exceed pre-pandemic FFO: leasing existing office portfolio, redeveloping Barrington Plaza, converting Studio Plaza to multi-tenant use, and acquiring additional properties [9] - The company is optimistic about below-average office expirations in 2025 and 2026 [7] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about potential economic slowdowns and their impact on office leasing [10] - The operating platform is designed to withstand economic turbulence, supported by a conservative financing strategy and a diversified tenant base [10] Other Important Information - The company closed a non-recourse interest-only loan of $127.2 million at a fixed rate of 4.99% [12] - The company refinanced a $335 million secured office loan at an effective fixed interest rate of 4.57% [12] Q&A Session Summary Question: Can you provide more detail on leasing and larger tenants? - Management noted strong demand across various industries, with positive absorption contributing to improved leasing performance [20][22] Question: Can you discuss pricing trends in multifamily? - Management clarified that asking rents have not changed since before the fire, but occupancy remains high, contributing to revenue growth [23][24] Question: What are the expectations for debt refinancing? - Management indicated that securing favorable rates for refinancing is challenging, but they are optimistic about future debt management [30][32] Question: How is the absorption rate in the in-service portfolio? - Management acknowledged that while the in-service portfolio showed slight declines, overall positive absorption was noted due to new leasing activity [34][36] Question: What is the outlook for acquisitions? - Management emphasized a focus on high-quality office buildings for acquisition, with interest from partners in potential deals [74][79] Question: How is the recovery in LA post-fires? - Management noted that while there is significant investment in the market, the expected surge in office leasing has not yet materialized [68] Question: What is the status of Studio Plaza leasing? - Management reported that leasing demand and speed of signing leases at Studio Plaza have exceeded expectations [58][60]

Financial Data and Key Metrics Changes - Revenue increased by 2.7% compared to Q1 2024 [14] - FFO decreased to $0.40 per share, and AFFO decreased to $62.3 million [14] - Same property cash NOI was essentially flat [14] Business Line Data and Key Metrics Changes - The company signed over 300,000 square feet of new leases, with total leasing reaching just under 800,000 square feet [5][12] - New leasing to tenants over 10,000 square feet was well above historical averages [5] - The residential portfolio maintained a high occupancy rate of 99.1% with strong demand [13] Market Data and Key Metrics Changes - The Class A office portfolio maintained stable in-place and asking rental rates despite a higher vacancy market [6] - The multifamily portfolio experienced robust revenue growth, reflecting the appeal of high-end residential communities [6] Company Strategy and Development Direction - The company is focused on four avenues to restore and exceed pre-pandemic FFO: leasing existing office portfolio, redeveloping Barrington Plaza, converting Studio Plaza to multi-tenant use, and acquiring additional properties [7] - The company is optimistic about below-average office expirations in 2025 and 2026 [6] - A conservative financing strategy and a diversified tenant base are emphasized to manage through economic turbulence [8] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about potential economic slowdowns and the impact of higher interest rates on income [7][8] - The operating platform is built to withstand economic challenges, with a focus on quality buildings in supply-constrained markets [8] - Management remains cautious but optimistic about leasing activity and demand in the multifamily sector [6][35] Other Important Information - The company closed a non-recourse interest-only loan of $127.2 million at a fixed rate of 4.99% [11] - A $335 million secured office loan was refinanced at an effective fixed interest rate of 4.57% [11] Q&A Session Summary Question: Can you provide more detail on leasing and larger tenants? - Management noted strong demand across various industries, with positive absorption contributing to improved leasing metrics [19][20] Question: What are the pricing trends in multifamily? - Management clarified that asking rents have not changed since before the fire, but occupancy remains high, contributing to revenue growth [21][22] Question: Can you discuss the debt refinancing and rates? - Management indicated that securing loans has been challenging, but they are optimistic about achieving favorable rates for upcoming refinancings [28][30] Question: How is the absorption rate in the in-service portfolio? - Management acknowledged that while the overall portfolio shows positive absorption, the in-service portfolio's occupancy has slightly decreased [32][34] Question: Have you seen tenant fallout from macroeconomic uncertainties? - Management reported no significant impact on tenants from current economic conditions, but they are monitoring the situation closely [38][39] Question: What is the status of the Studio Plaza leasing? - Management confirmed that leasing demand and speed have exceeded expectations, with ongoing efforts to achieve reasonable occupancy levels [56][58] Question: What is the outlook for acquisitions? - Management expressed a focus on high-quality office buildings for future acquisitions, indicating a preference for the office market over multifamily at this time [70] Question: Can you comment on capital allocation for acquisitions versus share buybacks? - Management stated that while they have engaged in share buybacks, they prioritize direct acquisitions and include partners in opportunities to maintain relationships [74][75]

Financial Data and Key Metrics Changes - Comparable FFO for the first quarter was $0.63 per share, an increase of $0.08 compared to $0.55 per share in the same quarter last year, primarily due to the positive ground rent reset at PENN1 and higher NOI from rent commencements [19][27] - Overall GAAP same store NOI increased by 3.5% [19] - The company expects 2025 comparable FFO to be essentially flat compared to last year, with significant earnings growth anticipated by 2027 [27][28] Business Line Data and Key Metrics Changes - The company leased a total of 1,039,000 square feet, with 709,000 square feet in New York office space at starting rents of $95 per square foot [19][30] - A major lease of 337,000 square feet was completed with Universal Music Group at PENN2, contributing to the overall leasing activity [19][30] - The occupancy rate in New York decreased to 84.4% from 88.8% due to PENN2 being placed fully into service, but is expected to rise to the low 90s over the next year [28][62] Market Data and Key Metrics Changes - The New York office leasing market maintained strong momentum, with the strongest quarterly volume since Q4 2019 [28] - Availability in the best ISA market continues to shrink, with only 500,000 square feet of new construction set to deliver in the coming years [29] - The company anticipates strong rental rate growth due to a tightening market and a significant shortage of quality office space [29] Company Strategy and Development Direction - The Penn District is viewed as a growth engine for the company, with expectations of significant incremental NOI from leasing activities [22] - The company plans to develop a grand 1,800,000 square foot headquarters tower at 350 Park Avenue, indicating a focus on high-quality developments [23][80] - The company is also exploring opportunities in apartment developments within the Penn District, although it remains primarily an office company [84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market despite current volatility, noting that demand for quality office space remains strong [28][29] - The company is optimistic about the future, with expectations of rising rents and decreasing concessions as the market tightens [98][102] - Management highlighted the importance of maintaining financial strength to capitalize on future opportunities [80] Other Important Information - The company has reduced its debt by $915 million and increased cash balances to $1.4 billion, providing significant liquidity [18] - The company completed a master lease with NYU for 1,100,000 square feet, which will be treated as a sale for GAAP purposes, resulting in an estimated gain of approximately $800 million [15][16] Q&A Session Summary Question: Breakdown of the 2,000,000 square foot negotiation between PENN1, PENN2, and the balance of the portfolio - Approximately 50% of the pipeline is from PENN1 and PENN2, with strong activity expected at PENN2 [39] Question: Confidence level around reaching 80% occupancy at PENN2 by year-end - Management remains confident in reaching the target, with significant rent increases expected [41] Question: Plans for cash on the balance sheet - Cash will be used for new investments, debt repayment, and maintaining a buffer for volatility [48][49] Question: Owner-occupier trends in the market - There is a growing trend of retailers and companies wanting to own their real estate in prime locations, which is beneficial for the market [91][92] Question: Real estate valuations and potential sales - The company is not willing to sell high-quality assets at distressed prices and expects values to recover to pre-COVID levels [59][60] Question: Changes in tenant behavior regarding concessions and renewals - There is a reduction in free rent packages, and tenants are coming to the company earlier for renewals due to rising rents [97]

Financial Data and Key Metrics Changes - First quarter comparable FFO was $0.63 per share, an increase of $0.08 compared to last year's first quarter, primarily due to the positive ground rent reset at PENN1 and higher signage NOI [26][18] - Overall GAAP same store NOI increased by 3.5% [18] - Cash balances increased to $1,400 million, with total liquidity of $3,000 million including undrawn credit lines [17] Business Line Data and Key Metrics Changes - Leased 1,039,000 square feet overall, with 709,000 square feet in New York office at starting rents of $95 per square foot [18] - Significant leasing activity included a 337,000 square foot lease with Universal Music Group at PENN2 and 163,000 square feet at PENN1 [29][18] - Completed leases totaling 222,000 square feet at 555 California Road Office Tower in San Francisco at starting rents of $120 per square foot [19] Market Data and Key Metrics Changes - New York office occupancy decreased to 84.4% from 88.8% due to PENN2 being placed fully into service, but is expected to rise to the low 90s over the next year [27] - The New York office leasing market maintained strong momentum with the strongest quarterly volume since Q4 2019 [27] - Availability in the best ISA market continues to shrink, with only 500,000 square feet of new construction set to deliver in the next several years [28] Company Strategy and Development Direction - The company is focused on the Penn District as a growth engine, with expectations of significant earnings growth by 2027 from the lease-up of PENN1 and PENN2 [27][21] - Plans to develop a grand 1,800,000 square foot headquarters tower at 350 Park Avenue, with a focus on high-quality assets [22][78] - The company aims to maintain a robust development program while managing debt and cash reserves effectively [47][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market despite current volatility, noting that demand for quality office space remains strong [28][27] - The company anticipates that as occupancy rises, earnings will significantly increase [63] - Management highlighted the importance of maintaining cash reserves for potential new investments and debt management [46][47] Other Important Information - The company has reduced its debt by $915 million and increased cash by $500 million through recent transactions [17] - The PENN1 ground lease rent reset arbitration resulted in a favorable ruling, reversing previously over-accrued rent expense [12][13] - The company has achieved 100% certification across its entire portfolio of in-service buildings for sustainability [23] Q&A Session Summary Question: Breakdown of the 2,000,000 square foot negotiation between PENN1, PENN2, and the balance of the portfolio - Approximately 50% of the 2,000,000 square foot pipeline is from PENN1 and PENN2, with strong activity expected [38] Question: Confidence level around reaching 80% leased at PENN2 by year-end - Management remains confident in reaching leasing targets, with significant rent increases expected [40] Question: Plans for cash on the balance sheet - Cash will be used for debt management, maintaining liquidity, and funding new development opportunities [46][47] Question: Insights on owner-occupiers in the market - There is a trend of retailers and companies wanting to own their spaces in prime locations, driven by long-term strategic interests [90][91] Question: Changes in tenant behavior regarding concessions and renewals - There is a reduction in free rent packages, and tenants are approaching early renewals due to rising rents [96]

Financial Data and Key Metrics Changes - Comparable FFO for the first quarter was $0.63 per share, an increase of $0.08 compared to last year's first quarter, primarily due to the positive ground rent reset at PENN1 and higher NOI from rent commencements [24][16] - Overall GAAP same store NOI increased by 3.5% [16] - The company expects 2025 comparable FFO to be essentially flat compared to last year, with significant earnings growth anticipated by 2027 [25][24] Business Line Data and Key Metrics Changes - The company leased a total of 1,039,000 square feet, with 709,000 square feet in New York office space at starting rents of $95 per square foot and positive mark-to-market of 6.5% [16][27] - A major lease of 337,000 square feet was completed with Universal Music Group at PENN2, contributing to the overall leasing activity [28][16] - At 555 California Street, 222,000 square feet were leased at starting rents of $120 per square foot, demonstrating strong performance in a historically soft market [18][16] Market Data and Key Metrics Changes - New York office occupancy decreased to 84.4% from 88.8% due to PENN2 being placed fully into service, but is expected to rise to the low 90s over the next year [25][16] - The New York office leasing market maintained strong momentum, with the strongest quarterly volume since Q4 2019 [25][27] - Availability in the best ISA market continues to shrink, with only 500,000 square feet of new construction set to deliver in the coming years [26] Company Strategy and Development Direction - The company is focused on the Penn District as a growth engine, with expectations of significant rental rate increases as supply tightens [20][19] - Plans include a robust development program at 350 Park Avenue and the Penn District, with a small apartment project also in the works [45][105] - The company aims to maintain a strong financial position, leveraging cash reserves for new investments and debt management [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market despite current volatility, noting that demand for quality office space remains strong [27][25] - The company anticipates that as occupancy rises, earnings will significantly increase, with a target of reaching around 94% occupancy in the next couple of years [60][61] - Management highlighted the importance of high-quality buildings in driving demand and rental growth [98][97] Other Important Information - The company has reduced its debt by $915 million and increased cash balances to $1.4 billion, providing immediate liquidity of $3 billion [15][16] - A favorable ruling on the PENN1 ground lease rent reset will increase GAAP earnings by approximately $36 million [11][15] - The company has achieved 100% sustainability certification across its portfolio, reflecting its commitment to environmental responsibility [22] Q&A Session Summary Question: Can you break down the 2,000,000 square foot negotiation between PENN1, PENN2, and the balance of the portfolio? - Approximately 50% of the 2,000,000 square foot pipeline is from PENN1 and PENN2, with strong activity at PENN2 and continued leasing at PENN1 [37][38] Question: What is the confidence level around reaching 80% occupancy at PENN2 by the end of the year? - Management remains confident in reaching the target, emphasizing that timing is less critical than achieving the desired rental rates [39][40] Question: What are the plans for the cash on the balance sheet? - The cash will be used for debt management, maintaining liquidity, and funding new development opportunities [44][45] Question: Can you comment on the trend of owner-occupiers in the market? - There is a notable trend of retailers and companies wanting to own their spaces in prime locations, driven by the desire for long-term control and stability [90][89] Question: How do you view the current real estate valuations? - The company believes that great assets will command great prices, and they are not willing to sell high-quality assets at distressed prices [55][53]

Financial Data and Key Metrics Changes - Normalized FFO per share for the quarter was $0.39, aligning with expectations and marking a solid start to the year [20] - Same store cash NOI growth was 2.3%, impacted by higher operating expenses and weather volatility, with expectations for acceleration in growth for the remainder of the year [20][21] - The company ended the quarter with a net debt to adjusted EBITDA ratio of 6.4 times, unchanged from the end of 2024, with expectations to decrease this to a range of 6 to 6.25 times throughout the year [22] Business Line Data and Key Metrics Changes - The same store occupancy rate was reported at 89.3%, with expectations for sequential growth throughout 2025 [11][19] - The company commenced nearly 1,500,000 square feet of new and renewal leases during the quarter, with a solid signed non-occupied pipeline of over 630,000 square feet [16] - Tenant retention improved by over 300 basis points to almost 85%, contributing to a slight uptick in occupancy [18] Market Data and Key Metrics Changes - Demand for outpatient medical space remains robust, with health systems experiencing improving revenue and margin trends, driving further growth and space needs [18] - The company’s on-campus portfolio received the highest average score in a recent industry research piece, indicating a resilient outpatient portfolio compared to peers [18] Company Strategy and Development Direction - The company aims to optimize its portfolio by exiting markets with limited scale and focusing on selling assets rather than contributing them to joint ventures [12][30] - Key strategic focuses include improving leasing, optimizing the portfolio, enhancing the balance sheet, increasing efficiency, and instilling financial discipline [14] - The company plans to maintain its dividend at $0.31 per share while discussing its future based on earnings clarity and efficiency gains [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong fundamentals of outpatient medical real estate, with muted new supply and steadily increasing demand [9] - The company anticipates sequential occupancy growth and a strong leasing pipeline, with expectations for NOI growth throughout the year [19] - Management is focused on creating a more stable platform and improved earnings growth profile, aiming for a better stock price [14] Other Important Information - The company sold four buildings for $28 million in the first quarter, which required significant capital for repositioning [21] - The company has $1.4 billion of capacity on its revolving line of credit and has accessed this liquidity to pay off maturing notes [23] Q&A Session Summary Question: Did the areas of focus listed by the new CEO indicate priority? - The new CEO indicated that while not in perfect order of priority, portfolio optimization and deleveraging are immediate focuses, while leasing will take longer to stabilize [27][28] Question: How does the company view the joint venture model? - The CEO expressed a preference for maintaining existing joint ventures but emphasized selling assets rather than contributing more to those ventures [29][30] Question: Is the current guidance for 2025 confirmed? - The CEO reaffirmed the guidance for 2025 after reviewing the forecast with the team, indicating a good start to the year [35] Question: How will dispositions impact earnings? - The CEO acknowledged that while there may be a negative impact from deleveraging, the company is focused on offsetting that through efficiencies and leasing upside [102][104] Question: What is the strategy for retained cash flow? - The CEO emphasized prioritizing redevelopment opportunities for retained cash flow, as they yield higher returns [116]

Financial Data and Key Metrics Changes - Normalized FFO per share for Q1 2025 was $0.39, aligning with expectations and marking a strong start to the year [22] - Same store cash NOI growth was 2.3%, impacted by higher operating expenses and weather volatility, with expectations for acceleration in growth for the remainder of the year [22][23] - Net debt to adjusted EBITDA remained unchanged at 6.4 times, with expectations to decrease to a range of 6 to 6.25 times as the year progresses [24] Business Line Data and Key Metrics Changes - Same store occupancy at the end of Q1 was 89.3%, with expectations for sequential growth throughout 2025 [11] - The company commenced nearly 1,500,000 square feet of new and renewal leases during the quarter, with a solid signed non-occupied pipeline of over 630,000 square feet [17][20] - Tenant retention improved by over 300 basis points to almost 85%, contributing to the slight uptick in occupancy [20] Market Data and Key Metrics Changes - The demand for outpatient medical space remains robust, with health systems experiencing improving revenue and margin trends, driving further growth and space needs [20] - The company’s on-campus portfolio received an A+ score in a recent industry research piece, indicating a resilient outpatient portfolio compared to peers [20] Company Strategy and Development Direction - The new CEO emphasized a focus on leasing, portfolio optimization, balance sheet improvement, organizational efficiency, and financial discipline as initial strategic priorities [11][14] - The company plans to exit markets with limited scale and focus on selling assets rather than contributing them to joint ventures [13][31] - The dividend will be an output of the strategic plan, with discussions ongoing at the Board level regarding its future [16][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong fundamentals of outpatient medical real estate, with muted new supply and steadily increasing demand [7] - The company anticipates occupancy growth throughout 2025, with a target of 75 to 125 basis points of absorption by year-end [21] - Management is cautious about potential federal healthcare budget cuts but noted that outpatient medical assets may benefit indirectly from such changes [45] Other Important Information - The company maintained its dividend at $0.31 per share for the quarter, with discussions ongoing regarding its future based on earnings clarity [16] - The company sold four buildings for $28 million in Q1, with plans for further dispositions as part of its strategy [23] Q&A Session Summary Question: Did the areas of focus listed by the new CEO represent a priority order? - The CEO indicated that while not in perfect order of priority, portfolio optimization and deleveraging are immediate focuses, while leasing improvements may take two to three years [30] Question: How does the company view the joint venture model? - The CEO expressed a preference for maintaining existing joint ventures but emphasized the need to sell assets rather than contribute more to these ventures [31] Question: Is the current guidance for 2025 confirmed? - The CEO reaffirmed the guidance after reviewing the 2025 forecast, indicating comfort with the numbers presented [35] Question: How will dispositions impact earnings and dividend coverage? - The CEO acknowledged that while there may be a negative impact from asset sales, efforts are being made to offset dilution through efficiencies and leasing upside [104][105] Question: What is the outlook for rent collection from tenants? - The CFO reported full rent collection from a key tenant for February, March, and April, indicating stability despite ongoing bankruptcy processes [62] Question: How does the company plan to utilize retained cash flow? - The CEO highlighted redevelopment opportunities as a priority for retained cash flow, aiming for higher returns on reinvested capital [115]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported core FFO of $0.19 per diluted share, with same store property cash NOI up 0.4% excluding nonrecurring revenue items from Q1 2024 [27] - Expenses increased approximately 5% year over year, driven by real estate taxes, payroll costs, and repair and maintenance costs, partially offset by higher tenant reimbursement income and growth in rental revenue [27][28] - The company maintains its guidance for core FFO of $0.86 to $0.89 for 2025, with unchanged NOI guidance for the Observatory at $97 million to $102 million [28][29] Business Line Data and Key Metrics Changes - The commercial portfolio leased a total of 231,000 square feet in Q1 2025, including significant renewals and expansions with notable tenants [13][14] - The Manhattan office portfolio is 93% leased, with a slight decrease from 94.2% in the previous quarter, but the company expects occupancy gains by year-end 2025 [13][19] - The multifamily portfolio achieved 99% occupancy with 8% year-over-year rent growth in Q1 2025 [16] Market Data and Key Metrics Changes - The leasing environment in New York City remains active, particularly for modernized buildings near mass transit, with the company achieving its fifteenth consecutive year of positive mark to market rent spreads [9][16] - The Observatory generated NOI of approximately $15 million, with visitation down 0.6% year over year, attributed to weather conditions and the timing of the Easter holiday [9][28] - Approximately 50% of Observatory visitors are domestic, with no single region contributing more than 10% of total visitation, indicating a broad international exposure [11] Company Strategy and Development Direction - The company focuses on five priorities: leasing space, selling tickets to the Observatory, managing the balance sheet, identifying growth opportunities, and achieving sustainability goals [12][72] - The company is well-positioned to navigate economic uncertainties due to its diversified income streams and strong balance sheet, allowing for flexibility in leasing and maintenance [7][22] - The company actively underwrites deals across retail, multifamily, and office sectors, with a focus on New York City, and is prepared to act on opportunities to enhance growth [25][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledges potential macroeconomic risks but remains optimistic about the company's strong position due to long-term leases and a diverse tenant base [6][7] - The company is focused on maintaining operational excellence and controlling costs while monitoring external factors that could impact tourism and economic growth [21][22] - Management emphasizes the importance of transparency and adaptability in the current uncertain environment, particularly regarding tourism and consumer behavior [21][22] Other Important Information - The company repaid $100 million in Series A unsecured notes and $120 million in revolving credit facility balance during the quarter, maintaining a proactive approach to managing its balance sheet [23] - The company has the lowest leverage among New York City-focused REITs at 5.2 times net debt to EBITDA as of quarter-end [23] Q&A Session Summary Question: How are leasing conversations unfolding with different tenant categories? - Management noted no change in lease negotiations across various tenant categories in the last sixty days, indicating strong activity and interest [33][34] Question: What is the expected trend for CapEx in the coming years? - Management provided insights on CapEx, indicating a reduction in leasing commissions and building improvements as the portfolio stabilizes, with a good run rate expected moving forward [35][38] Question: How is the Williamsburg leasing progressing? - Management reported strong activity in Williamsburg, with high interest from recognizable brand names and a 94% lease rate across the retail portfolio [40][43] Question: How does the company prioritize capital allocation opportunities? - Management emphasized a balanced approach to capital allocation, focusing on operating runway and potential investment opportunities while being measured in share buybacks [44][45] Question: What is the company's perspective on tourism and potential impacts from geopolitical tensions? - Management has not detected significant shifts in demand and remains focused on operational discipline and marketing strategies to mitigate any potential declines in tourism [56][57]

Financial Data and Key Metrics Changes - The company reported funds from operations (FFO) of approximately $2.7 million or $0.03 per share for Q1 2025 [5] - A GAAP net loss of about $21.4 million or $0.21 per share was recorded for the same period [6] Business Line Data and Key Metrics Changes - The directly owned portfolio was approximately 69.2% leased at the end of Q1 2025, down from 70.3% at the end of Q4 2024 [9] - Economic occupancy for the directly owned portfolio was approximately 67.7% at the end of Q1 2025, compared to 68.6% at the end of 2024 [9] Market Data and Key Metrics Changes - The company has tracked approximately 800,000 square feet of prospective new tenants, with about 300,000 square feet of prospects identifying FSP assets on their shortlist [11] - Scheduled lease expirations for the remainder of 2025 total approximately 246,000 square feet, representing about 5.1% of FSP's directly owned portfolio [12] Company Strategy and Development Direction - The company remains focused on advancing leasing of space in its existing property portfolio and pursuing property dispositions to repay debt [7] - The company is actively considering operational adjustments and strategic transactions to enhance shareholder value [9] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic uncertainties affecting deal-making within the office asset class, including recent tariff headlines [8] - The company remains confident in its direction but is open to various strategies to maximize shareholder value [9] Other Important Information - Since initiating its current disposition strategy in late 2020, the company has completed approximately $1.1 billion in property sales, reducing corporate indebtedness by nearly 75% [13] - National office transaction volumes rose by 22% in 2024 and accelerated in Q1 2025, finishing 31% higher year over year [16] Q&A Session Summary Question: Insight on why leasing was solely executed for renewals during Q1 - Management indicated that new leases stalled but they are pursuing renewal transactions and expect positive results in Q2 and Q3 [18][19] Question: Which geographies currently depict greater strength in the portfolio? - Management highlighted strong demand in Texas, particularly Houston, with improving conditions in Dallas, Denver, and Minneapolis, though suburban areas in Texas are performing better [20][21]

Financial Data and Key Metrics Changes - For the first quarter of 2025, the company reported core FFO of $0.19 per diluted share, with same store property cash NOI up 0.4% excluding nonrecurring revenue items from the previous year [26][27] - Expenses increased approximately 5% year over year, driven by real estate taxes, payroll costs, and repair and maintenance costs, partially offset by higher tenant reimbursement income and growth in rental revenue [27][28] Business Line Data and Key Metrics Changes - The Manhattan office portfolio is 93% leased, with a slight decrease from 94.2% in the previous quarter, and the company expects leasing and occupancy gains for the full year [12][19] - The Observatory generated NOI of approximately $15 million, with a 7% year-over-year change attributed to the shift of the Easter holiday to the second quarter and adverse weather conditions [28] - The multifamily portfolio achieved 99% occupancy and 8% year-over-year rent growth in the first quarter [15][16] Market Data and Key Metrics Changes - The leasing environment in New York City remains active, particularly for modernized buildings with good amenities, as evidenced by the company leasing approximately 230,000 square feet in the first quarter [6][12] - The company has seen a healthy pipeline of leasing activity, with 160,000 square feet of leases in negotiation and several proposals exchanged with tenant prospects across various industries [13][14] Company Strategy and Development Direction - The company focuses on five priorities: leasing space, selling tickets to the Observatory, managing the balance sheet, identifying growth opportunities, and achieving sustainability goals [11][24] - The company aims to maintain a strong balance sheet with no floating rate debt exposure and a well-laddered debt maturity schedule, positioning itself to weather economic uncertainties [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges potential macroeconomic risks but emphasizes the company's strong position due to long-term leases, high lease percentages, and diverse income streams [5][6] - The company remains optimistic about its leasing and occupancy gains, with expectations for core FFO guidance of $0.86 to $0.89 for 2025 [28][29] Other Important Information - The company repaid $100 million in Series A unsecured notes and $120 million in revolving credit facility balance during the quarter, and it has been actively repurchasing shares [24] - The company is prepared to act on investment opportunities across retail, multifamily, and office sectors, focusing on New York City [25] Q&A Session Summary Question: How are leasing conversations unfolding with different tenant categories amid current economic conditions? - Management reported no changes in lease negotiations over the last sixty days, with strong activity across various industries [32][33] Question: What is the expected trend for CapEx in the coming years? - Management indicated a reduction in CapEx is expected as the portfolio stabilizes, with a good run rate established in the first quarter [35][39] Question: How is leasing activity in Williamsburg progressing? - Management noted strong activity in Williamsburg, with recognizable brand names showing interest in available spaces [41][43] Question: How does the company prioritize capital allocation opportunities? - The company balances capital allocation between maintaining operating runway, potential buybacks, and investment opportunities as they arise [44][46] Question: What is the company's perspective on tourism and potential impacts from geopolitical tensions? - Management has not detected significant shifts in demand and remains focused on operational discipline and marketing strategies to mitigate any potential downturns [56][58]