Good morning and welcome to the Vornado Realty Trust First Quarter 2016 Earnings Call. My name is Vanessa, and I'll be your operator for today's call. This call is being recorded for replay purposes. All lines are in a listen-only mode. Our speakers will address your questions at the end of the presentation during the question-and-answer session. [Operator Instructions] I will now turn the call over to Ms. Cathy Creswell, Director of Investor Relations.

Thank you. Welcome to Vornado Realty Trust's first quarter earnings call. Yesterday afternoon, we issued our first quarter earnings release and filed our quarterly report on Form 10-Q with the Securities and Exchange Commission. These documents, as well as our supplemental financial information package, are available on our website, www.vno.com, under the Investor Relations section. In these documents, and during today's call, we will discuss certain non-GAAP financial measures. Reconciliations of these measures to the most directly-comparable GAAP measures are included in our earnings release, Form 10-Q and financial supplement. Please be aware that statements made during this call may be deemed forward-looking statements, and actual results may differ materially from these statements due to a variety of risks, uncertainties and other factors. Please refer to our filings with the Securities and Exchange Commission, including our Form 10-K, for more information regarding these risks and uncertainties. The call may include time-sensitive information that may be accurate only as of today's date. The company does not undertake a duty to update any forward-looking statements. On the call today from management for our opening comments are Steven Roth, Chairman of the Board and Chief Executive Officer; David Greenbaum, President of the New York Division; Mitchell Schear, President of the Washington DC Division; and Stephen Theriot, Chief Financial Officer. Also in the room are Michael Franco, Executive Vice President and Chief Investment Officer and Joseph Macnow, Executive Vice President and Chief Administrative Officer. I will now turn the call over to Steven Roth.

Thank you, Cathy. Good morning, everyone. Welcome to Vornado's first quarter call. At Vornado, we have a treasure trove of great assets such as the Bank of America Tower in Francisco, the 3.7 billion square foot Mart in Chicago, all of our office, residential and development properties in Washington, a couple of billion dollars of cash and much more. But the main event here at Vornado was our New York office and our dominant New York street retail business, and that business has industry-leading asset quality, is performing at very high levels and is growing like crazy. The growth here is organic and most profitable kind, coming from our existing assets where taxes and operating expenses are already baked in, so that substantially all of each dollar of incremental revenue falls right to the bottom line. And this growth requires us to spend only TIs and leasing commissions of say $100 per square foot, which is a small fraction of the capital required to buy or build in New York, which might cost $1,000 or $1,500 or even $2,000 per square foot. And none of this growth is yet transparent to the market. So here is the math. Over the past two years we did 7.1 million square feet at share of leasing in New York at the Mart and at 555 California Street, which is 2.3 million square feet higher than our two-year average. As of today from this leasing, we have $200 million plus of incremental additive cash NOI on deck, not yet in our numbers, which will be recognized between now and 2018 as follows; $41 million in the remainder of this year, $120 million in 2017 and another $39 million in 2018 or from signed leases, which have not yet commenced paying cash rent. The breakdown…

Thank you, Steve. Steve covered our financial results, so I will limit my comments to a couple of times. I want to highlight two items that will affect the quarterly comparison of our New York business growth and comparable FFO for the remainder of 2016. First; in the second, third and fourth quarters of 2015, we recognized $27 million of non-cash, non-recurring income from the acceleration of FAS 141 below market leases related to our early termination of the leases at the St. Regis retail property and the Crate & Barrel lease at 650 Maddison. Second; during the remainder of 2016, we will write-off straight-line rent receivable balances totaling $9.7 million, triggered by early termination of leases with J. Crew in Rockefeller, which enabled us to sign new replacement leases for that space with mark to markets of plus 20% GAAP and cash. While the write off of straight-line rent receivable balances will reduce EBITDA in 2016, the new replacement leases are accretive from an economic perspective increasing future EBITDA. Together, these two non-cash adjustments to recapture and re-let space at much higher rents will negatively affect the quarterly comparison of our growth in our New York businesses comparable EBITDA and FFO in the second quarter of 2016 by $11.3 million, the third quarter by $12.5 million and the fourth quarter by $12.9 million. We reaffirm our guidance the comparable EBITDA from our Washington business for the full year 2016 will be $7 million to $11 million lower than 2015. Now turning to capital markets; in March, we completed a $300 million refinancing of One Park Avenue, a 947,000 square foot Manhattan office building in which we own 55% interest. The five your loan is interest only at LIBOR plus 1.75%, we realized net proceeds of approximately $45 million. The…

Steve, thank you and good morning to all. On our year-end call just 10 weeks ago, we took a deep dive into Manhattan leasing environment and focused on private sector employment, as well as office using employment, both of which ended 2015 at all-time record highs. In the first quarter, the Manhattan leasing market continued to perform well as the city’s highly diversified economy continues to create tenant demand across all industries and submarkets. Despite global volatility, the overall leasing market remains resilient with first quarter leasing volume of better than $8 million square feet, which included 10 large block transactions comprised of a balanced mix of financial services, TAMI and professional business services tendencies. Asking rents in Midtown continue to increase quarter-over-quarter having now eclipsed the $80 per square foot mark. The overall availability rate continues to hover around 10%, importantly which includes sublet availability, which is now down to a nominal 1.5%, representing the lowest rate since the first quarter of 2008. New York City’s job growth continues to be solid in the first quarter of 2016 with total private sector employment growth of 24,200 jobs including 7,100 office using jobs both on par with the strong job creation we realized in 2015. And by the way these are actual reported job growth numbers, not seasonally adjusted. As the Wall Street Journal recently reported, company's flock to cities with top talent and New York continues to be a top magnet for top talent. I'll repeat what I said last quarter, business has been and remains very good. Let me now turn to our office portfolio. During the first quarter, we completed 737,000 square feet of leasing activity in 36 transactions. This quarter’s average starting rents reached $84.32 per square foot with very strong positive mark to markets of…

Thank you David, and good morning everybody. In Washington the story continues to be about recovery. In 2015, Washington added 68,000 jobs and the projection is about the same for this year. We seem to be on track thus far with 25,000 jobs added in the first quarter. The region's economy has diversified with job growth focused in professional services, IT, associations and advocacy groups, security tech, and cyber and biotech. We should see this job growth translate into more robust office demand as the market continues to recover. The above average job growth is pushing the unemployment rate down to extremely low levels now at 4.1% for the region. We believe that Washington our nation's capital is a forever market that will continue to strengthen. In the first quarter of 2016, we completed 579,000 square feet of office and retail leases in 43 transactions. Office leases signed in the first quarter were flattish, generating a GAAP mark to market of negative 3.9% and a cash mark to market of negative 2.5%. Our first quarter TIs and leasing commissions were 7.8% of initial rents or $3.01 per square foot per annum, down from Q4, which was 11.5% or $5.06 per square foot per annum. Our overall occupancy was flat at 84.8%, our office only occupancy excluding Skyline increased by 60 basis points to 90.6%, Skyline declined to 47.4%, our residential occupancy increased by 70 basis points to 96.8%. In downtown Washington DC, where we own approximately 3.2 million square feet of office space in 11 buildings, there are now 96.8% leased, there are several highlights. At the Warner Building, where we own 55% in a joint venture, we are finalizing our refinancing. We’ve largely re-leased, the 600,000 square foot landmark currently to 88% to a great roster of high-quality tenants…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And we have our first question from Manny Korchman with Citigroup.

Good morning everyone. Steve, appreciate the color on the $1.1 billion of NOI in 2017. But you seem to have overlooked DC when you were giving those numbers. Are we reading too much into it that DC will be out of Vornado my then, or were you just waiting to talk about it later on your scripts?

I wouldn’t read anything into it, we were focusing on our New York segment, which is clearly the dominant segment in our business, notwithstanding that we have said repeatedly and hinted that we are studying, analyzing, and separating Washington. So while we are not announcing that and it may or may not happen, you can read into that whatever you care to.

Great. And then David, how do you think about the new supply coming on in New York, especially with Sony coming back in that sort of nearer-term than people expected? Do you think we are about to head to a place where there is just too much supply?

Manny, good morning. I guess the first thing I would say is New York is a big city. So as you think of the supply coming into the marketplace, 15 million, 18 million square feet on an absolute number sounds like a very large number, but as a percentage of the overall stock, what we're looking at is increasing the stock by in the 3%, 4% kind of range, which is going to be coming online over the next really four-ish plus years. So as we look at historical absorption in the New York City marketplace, in a good year, we certainly can absorb 4 million, 5 square feet and in some great years we can absorb 8 million and 10 million square feet. I think the math is basically and we've actually done some work here with some econometric types, that provided the job growth stays relatively positive, and when I say relatively positive the job growth has been somewhere in the, kind of 2.5% to 3% growth range for office sector jobs. If that number moderates to the 1.5% to 2% range, I think we’re going to be just fine as it relates to the absorption of that space. Steve, do you want to add anything else to that?

Well, clearly a lot of it has to do with the state of the economy at the time, clearly a lot of it has to do with the price points in question, and also the geography. So Sony building is coming back, we know what they pay for the building, we know – by the way we know the buyer and they’re very nice, obviously competent and very, very well capitalized family. So we know what they pay to the building, we know what the downtime TI leasing commission fit up, et cetera will be, so they are obviously, and we know the quality of the building, they are obviously going to be targeting a very, very high rental market where they will be catering to one and two floor elite kinds of companies, so there is that. There is a couple of – there is a new building on Park Avenue, which is famously going after the very, very, very highest rents. There's another building kicking around in the Grand Central area, which is also going to go, compete for – at very, very high rents. So those are in – that's all fine. I care more about the Hudson Yards Cup competition, which is in the mid-80s and of dollars a foot, and so that competes with the general marketplace. And so I think that's fine, that will be gone and then everything will be fine. So I relish competition that comes at $150 a foot because that gives us a tremendous opportunity to compete at much lower prices and be extremely successful. And so that's my comment. The other thing is that each building competes for its tenants in a different geography, and each building has a different culture. So there you have it. Obviously we will get through this, we will absorb it, we will thrive, and a lot of it has to do with what the world looks like as these buildings get a little bit closer.

Thanks so much guys.

Thank you. Our next question comes from Jamie Feldman with Bank of America.

Great. Thank you and good morning. So can you help us think about – you just submitted your bid for Moynihan Station. You talked about 8 million square feet plus a potential development in DC; I know that will take some time. You gave a lot of good color this quarter in the supplemental on the development pipeline. Can you help frame how people should think about the capital needs of both the DC platform and the New York platform in the next couple of years?

Our plans are not specific enough in Penn Plaza to be able to do that Jamie, and I don't want to go – I don't want to go from the hip on that because it’s important. Obviously we will be spending hundreds and hundreds of millions of dollars in Penn Plaza to accomplish our objectives there, but until we are prepared to make full disclosure of what our plans are in a very reasonable way, I'm not going to speculate.

Okay. And then what about on the DC side?

In the DC side, as we – once again, as we start our projects we will publish the budgets and the expected yields, just like we did with the Bartlett for example.

Okay, thank you.

Thank you.

Thank you. Our next question comes from Ross Nussbaum with UBS.

Thanks. It's Nick Yulico here with Ross. I just want to make sure I understood the commentary about the New York City, the impact from straight-line FAS 141. So a lot of this impact I guess happened in the first quarter because you booked income last year from FAS 141, so it went down in the first quarter. And then when you talked about the close to $10 million straight-line write-off balance, does that happen all in the second quarter or is that spread through the rest of the year?

Yeah, Nick. The 141 acceleration that was recorded in the prior year was concentrated in the second half of the year, was the heaviest in the third and the – or the third and fourth quarters of last year. It is non-recurring in its nature, so on a relative basis it won’t recur in 2016. As it relates to the straight-line write-offs, there was $5.1 million in the first quarter and that there will be another $9.7 million as we go through this year that the heaviest amount of that will be in the second quarter, but it will – the way that that accounting works is that the straight-line balance is related to the early terminated leases, is accelerated over the shortened remaining lease term for those tenants, and so it’s causing us to have to immediately write off the straight-line balances, but there will be another $9.7 million, the heaviest slog of that will be in the second quarter of this year.

Is that the kind of information you were looking for?

Yes, that's helpful. Thanks. And David, could you just talk a little bit more about the leases that you had that are in documentation or under negotiation today? How much of that is renewals? I think you may have had a law firm tenant you are working with in 90 Park. And how much is expansionary space like you just had with the PWC lease?

Of the 1.2 million square feet that we really have in our pipeline, and as I said off that about 0.5 million is actually in lease documentation with the balance another 700,000 square feet in the pipeline. In the aggregate it's probably about 50% renewal and 50% new deals. I think of the deals that we actually have in active lease documentation, which we fully expect to get closed in the second quarter, I think that's going to be probably a little bit more heavily weighted toward actual renewals where we’re working on a couple of renewals; one, some space that’s coming up in early 2017, and then as I mentioned a law firm who actually comes up in the 2018. Is that helpful?

Yeah, thanks David.

Thank you. Our next question comes from Alex Goldfarb with Sandler O'Neill.

Good morning. First, Steve, thank you for the NOI roadmap. Just as part of that, can you just talk about, one, I think you mentioned $83 million of GAAP, but can you just – how we should think about – if that $83 million was this year or was that something else? And then second is while you have the $200 million of NOI that you laid out, what should we think about as far as move-outs that would offset that amount over the next – this year and next?

With respect to the timing of how the $83 million of GAAP, that is yet to be recognized feeds it, I don’t have that. Steve, do you or Joe have it?

We do, we do. Alex, it’s Joe. That’s approximately $53 million this year and $31 million next year.

So it’s $53 million in 2016, and how much?

$31 million in 2017.

And $31 million in 2017, okay.

We round it down, Alex, it’s really $84 million.

Okay. And then what should we be thinking about as far as lease move-outs that would offset the $200 million?

Well, the answer to that is, none. Now, let me explain that to you. The $200 million of cash NOI that is yet to being recognized in our books okay is totally additive, so there is no move-outs that will offset that. However, that’s only for that segment of our portfolio, so we will have the balance of the portfolio normal move-outs, normal move-in and normal turnover, okay. So if the presentation that I made in my opening remarks is that all things being equal and steady-state, we have to $200 million of additive cash NOI that will feed as I mentioned so much this year, so much in 2017 – a little bit, and a little tail in 2018.

Okay, that's helpful, Steve. And then the second is as far as the potential DC spinout, if you could just comment, it sounds like you are not willing to give timing yet. But if you could just give a comment as far as if it were to occur, what you would see the balance sheet structure as far as leverage and then what the cash position of that entity would be. Obviously it sounds like there's still a lot of redevelopment going on both in Crystal City as well as the Rosslyn site you discussed.

That’s a great question. First of all, with respect to timing. As we – when we make our decision, we’re willing to do it in a – as we did with Urban Edge, and by the way we have a history in doing this, we have done it before. So we are sort of experienced hands at this. So we will do it with measured speed, so that’s step one. Step two is, is that as we did with Urban Edge it was properly capitalized, it had fine assets, it had enough money and enough capital and credit on it – in its, and the need to complete its mission, it had a well-defined mission, it had basically inherited our management team plus the addition of one very, very talented CEO that we recruited on the outside, and then he added CFO et cetera. So the business will be – if as and when we make that decision and launch, it will be set up for success; from a balance sheet point of view, from a capital plan point of view, from a team point of view.

Okay, great. Thank you.

Thank you. Our next question comes from Steve Sakwa with Evercore ISI.

Thanks. I guess, Steve, to follow-up on that question, I understand the Urban Edge spinout and the rationale behind it was kind of a small part of the portfolio that didn't get a lot of attention. But the DC portfolio is pretty large. And I guess I'm just trying to understand maybe what opportunities are not being taken fully advantage of down in DC with this division being part of the Company. And trying to just understand what it may do differently if it were a stand-alone entity.

The answer to that is, hi Steve how are you? If we do separate Washington, it will be for the reasons that we already enunciated? And that is to have a focused management team on a – with a very specific mission in Washington, which may or may not involve capital partners et cetera, and will have its own tray – its own report card, mainly its own stock price. And basically be able – have its own board and be able to make its own decisions. So we’re capitalist, we believe in, we believe in incentive, we believe in report cards et cetera. So we think that the Washington business, not that much unlike the Urban Edge business will benefit enormously from being its own, being its own man and woman, so to speak. We also believe that the New York business will benefit by being a focused New York business so that global investors can invest in the New York platform, the New York assets and our New York activities separately from Washington or shopping centers or whatever. So that's what our objectives would be, there was nothing, there are significant things that will be accomplished in our mind by investors being able to choose Washington or New York as opposed to having to take both of them in the current structure.

Okay. And then I guess a follow-up on this $200 million just to try make sure I understand. So Steve, all of this activity is already done and taken place, and therefore I'm assuming it's already out of the lease expiration schedules. And therefore, as we are trying to look at the upside from leasing, this income is effectively there but not part of that schedule. Are you looking at different disclosures going forward on how we monitor these figures? Because they are obviously going to be sort of a constantly changing set of numbers. And it seems like there's income, but it's missing and it's not part of the rollover schedule, unless I'm mistaken on that point.

Hang on, you said this is already done, well, so it is done and it isn’t done. The leases are signed, the income that will come from those leases is already baked, but they had not yet our financials because either they were in free rent period or they haven't been delivered or whatever. So that they are in the bag, I call them they’re in the on deck circle, all that income is absolutely legally bound, but it’s just – it’s a matter of timing and delivery and free rent burn off et cetera, and it’s huge, one of the – it’s huge when you about it. So it comes on top of a $900 million base. And so in terms of disclosure, I don't know – I really don't know, we will have to sit down and figure out what more if anything than we just said today and in what format we will increase our disclosure, we think our disclosure is not bad, so I can’t answer that question right now. I’m sputtering; I can’t answer it right now.

Okay. I’ll follow-up off-line. Thanks.

Okie, dokie. Thank you.

Thank you. Our next question comes from Michael Lewis with SunTrust.

Hi, thank you. So I appreciate the enhanced development disclosure in the supplemental. I just have a question about how it's working. So if I use – on page 30, if I look at 512 West 52nd, for example, I believe that's a $235 million development. And so I see the CIP is $8 million, the incremental budget is $72 million. How do I get those numbers to add up? And should I assume that this is all your share on this page as well?

Okay. I now have that schedule in front of me. What’s the…

I'm using 512 West 52nd as an example but – because I think that project last quarter of two quarters ago, you said that was a $235 million project. And right here you are showing $8 million of CIP, $72 million of incremental budget. I'm just wondering how all the costs are accounted for here.

What we’re trying to show is, and the numbers here, as far as the budget and the amounts that are construction progress and line costs, those are at our shares, so these are all our share numbers.

Okay. So that gets me closer.

The $235 million is a 100% for the development. That’s the full cost at 100%.The numbers here that show here are our share.

Our share, that’s correct.

So that gets closer.

And it excludes land.

Excludes land, okay. My second question is about – you guys noted how you got your proposal in for Penn Station and the post office. I think all the proposals were due last week, if I'm correct. And so I'm wondering if you know what the timetable is for a developer to be chosen. And then if it is you, what are the next steps and how quickly do you move on something?

We really can’t answer that question. We are in the government’s hand. So we have submitted our proposals on the due date and we do not know the process that the reviewers and selectors will adopt and what their timetable is. So we just don't know. Until I know more, I don't think it's wise to speculate.

Okay. Sounds about right for the government. Thanks.

I didn’t say that, you did. I am in full suck-up mode.

Thank you.

Thank you. Our next question comes from Jed Reagan with Green Street Advisors.

Good morning guys. In terms of 220 Central Park South, can you discuss your expectations for the amount of time and it might take to sell the remaining condos and at what kind of price point relative to units that have already been sold?

Morning, Jed. Our enthusiasm for 220 Central Park South and the quality of the project, the market reception of the product is not diminished at all. There was a low in the market over the end of last year in the first couple of months of this year, I guess in response to general fatigue, too many other projects coming on board extreme worldwide global financial volatility and I think the most interesting of which is we’re not delivering for two and half years. So, the project is off to a roaring start. The marketplace accepts it as being the Class A plus project and so that's the status now. In the recent weeks, we have had a significant uptick in traffic through our sales room as I said in my prepared remarks and we are now negotiating two very important deals. The pricing of the project will – we have no expectation that the pricing of the project will diminish more than – by the way I could go up from the in-place contract that have already been signed. In terms of timing, since we basically have our course of the project and we have two and a half years to go to delivery, we are optimistic that we will have either the entire project or almost the entire project totally sold before we deliver.

Okay. Thanks for that. And just to be clear that the budget for that project is still in line with last quarter?

Yeah.

Okay. Thank you. And in terms of the valuation environment, are you seeing signs of cap rates changing for lower quality or value-add assets either on the office or retail side of things? And are you seeing the mix or depth of bidding times changing?

I’ll let Michael Franco our CIO will answer that and then pipe in.

Okay. In general I would say the first quarter was less active than last year, but for our segments office retails, I think activity is down, I don’t think pricing has changed. I think Steve highlighted two premium quality assets and I think as we’ve said in the last call expectation was the capital environment for high-quality assets was going to remain very favorable and it does. Capital continues to be very interested in New York and the pricing for assets like that -- reflects that, but the value-added asset, they have not been a many examples yet although, I think the watch tower trade, as an example it’s not closed yet, but it's under contract and I think that pricing was very full, not reflecting a capital markets impact. So I think pricing for office and retail generally continues to be strong even when there is value add components.

Jed, from my point of view, I see a reduction in the pace of activity at all price points, which is not unusual, these things fluctuate. I see if anything a scarcity of highest quality product, a scarcity of highest quality product, I know the incomings that we get from global investors interested in partnering, buying et cetera at the highest quality is increasing rather than decreasing. And the incomings are now coming from very, very far and wide geographies including; Asia, the Middle East, Europe et cetera, and domestically by the way, and Canada obviously. So, I think in terms of the highest quality, if anything the demand looks like its increasing. In terms of lower quality, we don't focus there, so I am not that concerned about it, but I can tell you that a lot of that is debt driven stuff with the entrepreneurial sponsors and buyers and sellers, and the debt markets that drives that kind of speculation is getting very skittish. So the availability of wild and woolly debt to finance that kind of stuff is withdrawing a little bit or maybe even a lot, so that’s obviously affecting that activity level. So where I am is in New York and New York is in a class of its own by the way. In New York at the highest quality of anything I see an increase in demand and no diminution in pricing.

Got it. That’s very helpful. Thanks.

Thank you. Our next comes from John Guinee with Stifel.

Great. Thank you very much. One of the things that we like about Empire is we can back in, and we figure that Empire State Realty Trust, we think is valued at about $660 a square foot for the Manhattan office. We think SL Green is valued at about $760 a square foot for the Manhattan office. Do you have any sense for when you look at Vornado at the current share price, what you would ascribe to a per square foot value of the DC office or the High Street retail or the Manhattan office?

Do we have any idea, sure, I can tell you that it’s substantially higher than the numbers that you just mentioned, but we’re not in the business of speculating or that – I have my concept of values and you do yours.

Oaky. But you don't look at $100 a share and come up with the way it looks like people are valuing our Manhattan office at $500 versus $1,000 a foot right now?

Sure, John. I had a fairly long page in my annual shareholders’ letter this year which was titled I think public real estate is cheap. I think that was the title of that section if I remember and it was basically a discussion about NAV versus share prices for our company and the other New York folks and our colleagues in New York. So what we do is we basically are an NAV focused management, we believe that NAV is the roadmap of value and that is the most accurate predictor of what the value of the companies are. NAV is based upon what it’s in the private market values and a cap rate. And so we do our work and you do yours and all of the folks on the phone do their so we think that the NAV is the roadmap and we have been very clear in saying – any by the way, a lot of our colleagues in New York have been equally as clear in saying that we think that the NAVs are substantially above the stock prices. Now the punch line to my opening remarks today about the $200 million of cash NOI that is in the bag from signed leases that will flow into our financials over the next short period of time is that that creates $20 or $25 a share of NAV. Now Empire is a friend of mine, but Vornado is Vornado and so $25 a share is $5 billion of incremental increase value. Now a lot of the analysts who do this kind of math have some forward number, which is more than the number of $900 million that I mentioned today, but clearly the vast majority of that $20 to $25 a share is not yet in anybody's numbers. So, the long and the short of it is that we are NAV oriented. We do our NAVs, you do yours, and we think the lessons are that the stock sells were much less than the NAVs, in our case, very substantially less. Now, as I’ve said before and I think I said this in the letter, I am a lifelong public company executive. So I worship to the God of the stock market, and the stock market says, you know, the stock market is a weighing machine and that's my answer.

Great, great. And just a question for David. David, if you're looking at Hotel Pennsylvania as a parking lot, and if you were able to build today, do you have any sense, excluding land, what it would cost you to do a couple of million square foot office building? Is it $600 a foot or $1,000 a foot above the land costs?

I think taking out land cost and if assuming you're talking about in office development, and obviously you could do residential, you can do resi and hotel, but it’s on an office basis, I think all in including hard costs, soft costs, TIs leasing commissions, construction costs, that number is north of $1,000 a foot for a major $2.5 million square foot tower to develop today in New York.

Say it again?

The number I said Steve was well North of $1,000 a foot, probably could be $1200 or even $1300 or $1400 a foot as you're looking at developing a two and a half plus million square foot tower.

I agree.

Great. Thank you.

Thank you. Our next question comes from Brad Burke with Goldman Sachs.

Good morning, guys. Just a two part question on the New York same-store. Last quarter you indicated that you expect well over 5% same-store growth in New York, but it would be backend loaded. So first, is that a cash or a GAAP number? And second, does that still seem like a reasonable goal for same-store for the full year?

I think the cash number reflective of – again what Steve talked about as you cycle in both GAAP and cash, the cash number is going to be significantly higher than the GAAP number. The cash number I think what I said was we would expect by the end of this year to be approaching double-digit growth and that we would be looking at similar growth into 2017. I think the GAAP number that we had this quarter of about 6% is what we're going to be looking at the balance of this year and into a next year.

Brad, it’s Joe Macnow. Let me pick up on David's 6% GAAP and make sure that there is a little – less chance of confusion. So, if David's business is doing $250 million a quarter and you expect that a 6% GAAP same-store, you would expect the comparable quarter in '16 to be $15 million higher than a $250 million quarter in 2050. David stands by that. That is what is. What Steve Theriot told you was that 2016 third quarter or second quarter, let’s take the one coming up will have a negative comparison of $11.3 million from that $50 million caused by non-cash income in 2015's quarters and expense in 2016's quarter. So I know that earlier Nick asked that question and Steve Theriot answered it, I thought about giving an example than, but this is a better timing. So, is that clear to you Brad, and everybody else.

I can't speak for everyone else. It's clear to me.

You can speak for everyone else. Goldman Sachs is Goldman Sachs.

All right. Everyone is on the same page.

I can only tell you I prefer cash numbers, they’re much simpler. Next question?

We are done.

Okay. So I think unless anybody else cares to ask a question. I think the queue is empty now. Is that correct?

That is correct.

So we thank you very much. We appreciate your – this was a little bit less of a marathon than last quarter. We appreciate your joining our call. We appreciate your interest in our company. We’ll see everybody and I guess in June in New York. Thank you all very much.

Thank you. Ladies and gentlemen, this concludes today’s conference. We thank you for your participating. You may now disconnect.