Good morning, and welcome to the Vornado Realty Trust Third Quarter 2023 Earnings Call. My name is Rocco, and I will be your operator for today's call. This call is being recorded for replay purposes. All lines are in a listen-only mode. [Operator Instructions]. Now I will turn the call over to Mr. Steve Bornstein, Senior Vice President and Corporation Counsel. Please go ahead.

Welcome to Vornado Realty Trust third quarter earnings call. Yesterday afternoon, we issued our third 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 annual report on Form 10-K for the year ended December 31, 2022, 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 and Chief Executive Officer; and Michael Franco, President and Chief Financial Officer. Our senior team is also present and available for questions. I will now turn the call over to Steven Roth.

Thank you, Steve, and good morning, everyone. I begin by joining with the citizens of the free world by saying that we are shocked and sad by the now 2 wars in Ukraine and Gaza. The loss of life and infrastructure is heartbreaking. But the importance of the outcome of these hostilities to our way of life cannot be overestimated. The President of the United States issued an elegant simple one word warning to potential combatants, “Don't”. Domestically, we support Macron in his fight to write the wrong at the University of Pennsylvania. A great many American college campuses have similar issues. The economy has held up better than expected in the face of the Federal Reserve's historic interest rate increases. But make no mistake, in the end, they will slow the economy and will win its battle against inflation. Real estate capital markets remain challenged, read, frozen, making it extremely difficult to finance or sell assets. Capital is scarce and back breakingly expensive. While these circumstances will cause pain in the short term, they lay the foundation for recovery in fundamentals and values in the future. The direct byproduct of the lack of availability and out of site high cost of financing is that we'll shut down almost all new building. If history is our guide, as demand recovers, the market will tighten, and Class A rents will -- and values will benefit enormously. We have seen this movie before. Despite the difficult markets, our business continues to perform well and on plan for the year. Michael will cover the math and give color in a moment. As we enter the fourth quarter, we are excited that the construction phase of PENN 2 is nearing completion. As expected, tenant interest is picking up in this unique development as we…

Thank you, Steve, and good morning, everyone. The financial results for the quarter were down from last year due to items that we previously forecasted. Our core office and retail businesses continue to remain resilient with long-term credit leases. Third quarter comparable FFO as adjusted was $0.66 per share compared to $0.81 for last year's third quarter, a decrease of $0.15. This decrease was driven primarily by the following items $0.06 from the onetime real estate tax accrual adjustment recorded at the March in Q3 2022, $0.04 from higher net interest experience from increased rates, $0.03 from additional stock compensation expense related to the compensation plan implemented in June 2023 and $0.02 of other items, primarily lower FFO from sold properties. We have provided a quarter-over-quarter bridge in our earnings release and in our financial supplement. Despite the challenging environment, our outlook for comparable FFO for 2023 hasn't changed since the beginning of the year, other than the additional G&A expense that we discussed on last quarter's earnings call related to the share-based awards granted in June. Our New York office same-store cash NOI for the quarter was up a healthy 3% and our New York business at all was up 2.1%. Now turning to the leasing markets. Manhattan continues to lead the charge nationally in the office sector. New York City private sector job growth outpaced the national average and Manhattan leasing volume was a healthy 6.5 million square feet this quarter, driven by large headquarters leases in Midtown and downtown, a sign of tenants committing long term to the city. The fire sector continues to lead the leasing volume accounting for 31% of third quarter activity with the government and professional services sectors close behind at 22% each. Leasing velocity continues to remain steady, concentrated in small- to…

[Operator Instructions]. Today's first question comes from Steve Sakwa with Evercore ISI. Please go ahead.

Michael or maybe Glen, could you just expound a little bit on the New York City leasing pipeline as it relates to both the existing portfolio? I know you've got a fair amount of square footage coming due in Q4 but also, as Steve talked about, PENN 2's nearing completion. And just how does the pie break out between the existing assets and the developments.

Hi, Steve, it's Glenn. So pipeline overall, we're squarely attacking the current vacancies focused on PENN 1, focused on the upcoming PENN 2, focus on integrations ‘24, ‘25 coming up. We have, as Michael mentioned in the script, the remarks, many of our leases are pinpointed on that expiring space coming up in the next 2 years. A good majority of it is in PENN. So if you think about the PENN story, we said 2.5 years ago, it's going to be a chapter by chapter lease-up program, which is exactly what's happening. So over that period of time, we've leased 2.5 million feet in the Penn District at starting rents of $94 a foot, which comprises mainly of Farley PENN11 and PENN1 and PENN 2 is next. Activity has strengthened markedly since our last call, projects opening up in about 30 days or so. We have proposals which we're working on as we sit here on this call, on the reception excellent. And I think the best part of the news for us is every tenant who's now touring is also touring all the new buildings to the rest of us. So our plan all along was to compete with those guys, and we certainly are at this point. And as these new FMB programs open as the public plaza opens, and the neighborhood begins to more and more floors for us, the action is only going to get better.

Maybe, Steve or Michael, could you just maybe touch on the dividend and the share repurchase program? It didn't seem like you were that active in the quarter. I'm not sure if the economic uncertainty and Fed tightening is keeping you on pause there. But just any thoughts as we're getting to the end of the year here on the taxable income, the dividend and share buybacks. Thank.

Steve, get a pencil. So here's where our projections are for the income and the dividend. We're expecting our FFO this year to come in about $2.55. We're expecting our recurring taxable income to coming at $0.68. Now that's reduced from -- reduced by accounting treatment of how we depreciate our assets from $1.13. So recurring taxable income is going to be about $1.13. And after the accounting treatment of how we depreciate our assets, it will be $0.68. We paid $0.375 in the first quarter in cash. So that would leave about $0.30 for the fourth quarter to true up the entire year. So we expect about to do somewhere between $0.10 to $0.20 and $0.30 probably in cash in the fourth quarter. That's the dividend. With respect to stock buybacks, everybody knows I'm fairly -- I'm fairly opportunistic. So we have a $200 million authorization. We bought how much, Tom?

$30 million.

We bought $30 million. We have $170 million to go. We will -- depending upon the price of the stock, et cetera, accomplish that in some time in the short future. Now remember one thing. In the buyback program, we are trying to benefit not the selling shareholder, but the remaining shareholders. So I trust that answers your question, Steve.

And just one more. Just, Michael, you sort of touched on the challenging debt markets. And just as you think about your expirations on the mortgage side for next year, I guess how far in front of those refinancings can you get with the banks? And is there any sense on where pricing is today for refinancing existing mortgages?

Steve, as I said, I think, on last quarter's call, the existing lender is the best lender, right? There's a maybe the only lender, right? There's a lack of capital for real estate generally and even more so for office right now the U.S. banks, particularly are under. So it's difficult, if not impossible, to refinance most assets the lenders recognize that the services recognize that. And so in every situation, depending on the maturity, right, we start discussions with our counterparties there. And I think the banks, the servicers start with, do I have the right sponsor, we have somebody who I think is going to either maintain or add value during this difficult time and get to the other side. And obviously, given our track record, that answer is an affirmative one always. So look, we've done a number of extensions over the last couple of quarters. We're working on the '24 maturities now, even some ones beyond '25, '26 and each one is bespoke, right? I think in general, we don't really want to have Band-Aid solutions. We want to have term. We'd like to get at least 3 to 5 years on each extension. We're prepared if the economic arrangement is fair and balanced. We're prepared to support the asset, whether that's through a paydown or investing capital to lease the building or maintain a leasing but it's really bespoke situation by situation. But you can rest assured that literally every loan that's maturing in the next couple of years, we have an active discussion with our lending counterparties. They appreciate that, and we'll generally work through those. But again, most of those are -- the lion's share are nonrecourse, and they recognize that as well. So we collectively have to work to an appropriate solution. And as we've done to date, I think we will in the vast majority.

And our next question today comes from Camille Bonnel with BOA. Please go ahead.

Just following up on the lines of questioning. Around the balance sheet. Can you update us on your latest thoughts around this interest rate environment? How do you think about your revolver now that spread -- it spreads are tighter than some of the longer-term that you can raise?

You add in terms of using our revolver?

Yes.

Yes. I mean, look, we're not interest-rate seers. If we were, we wouldn't be doing the jobs we're currently doing. I'm not sure anybody's interest rate here, by the way. But all we can do is, frankly, be respectful of the forward curve and budget our business based on that with some conservatism built in. So that's how our cash plan is modeled. And I think you know our company, we've always managed our business with a healthier cash balance than almost every other company, certainly in our sector. And I think that serves us well right now. It gives us flexibility to deal with our bonds or anything else that comes up. We're building plenty of cash, as you know. So the -- it appears like the Fed is done or close to done. It doesn't mean that rates are going to come down in the next year. Eventually, we think they will. But we have to continue to operate our business with rates staying at these levels. So we are fortunate we have the cash balance. You're right, we do have 2 revolvers which gives us flexibility in how we have kept things. And so that's clearly one of the tools that we can use. We will use to the extent we need to, whether it's dealing with the 2025 bonds although we've got 2 or 3 other options other than using the revolver there and in dealing with any other maturities that come up. In general, our plan is not to use a lot of our revolver capacity to deal with our secured financing. Those are dealt with one by one. We're going to deploy capital very judiciously on secured assets. And the revolver there, I would say, is more as a backstop for dealing with the unsecured bonds to the extent that there's not a better alternative that we see.

That's helpful color. And specifically around the swaps and caps you have expiring next year, will you be letting those role? And how should we think about the potential headwinds related to that?

Yes, yes. Look, I think we've done a pretty good job of hedging over the last couple of years. We weren't perfect, but I think we've done a good job. If you look at the fair value of our hedges right now, I think it's roughly $300 million. So that tells you we're quite a bit in the money. I guess, unfortunately. But that means we've done a good job of hedging. That being said, you can't hedge away maturity risk, right? And so the loans roll until we figure out what the plan for those assets are difficult to hedge, right? So if something is floating and we convert it to fix and therefore, we don't need to have roll that hedge, but you're exposed on what the interest rate is when you actually do roll it. So the answer is we have some exposure on some expiring or maturing loans where the caps or swaps are at lower rates than the in-place SOFR rate. And then we've got a couple of loans where the swaps 555, for example, we put in place another swap on that asset. That is at a higher level than the existing one. So we have some leakage, we think, in 2024 from those loans that are rolling over and a couple of those swaps that are all expiring, but we will replace this. We will continue to hedge our portfolio, but given rates have moved up when you move from one hedge to the next, there'll be some leakage on 3 or 4 assets.

Okay. And for my last question, switching gears a bit. Can you talk to the sublease activity you're seeing across the portfolio? How has it changed since a year ago? And how does it compare by region?

Hi, Camille, it's Glen. From New York portfolio, I'd say the color hasn't changed much since last year in terms of the spaces that are on the market in our portfolio from a sublease basis. As a matter of fact, some of it has been fully leased or taken off the market. For example, PwC at 90 Park that space is now called for. So I would say nothing really new to highlight over the 12-month period. In Chicago, I think there's more sublease space in the market in the market generally and if more specifically and in San Francisco, the only tenant to note is Microsoft has announced the sublease of their space 555 that has a very long-term nature left to it. So that's a general color. But I think if you look at the statistics in New York specifically, I think the numbers are generally on par with a year ago.

And our next question today comes from Michael Griffin with Citi.

Maybe just another question on leasing for Glen. Are you noticing office users taking longer in making decisions about whether or not the lease space and then if you could update us on kind of where TIs and free rents have been trending in the market. That would be great.

I think those concession TIs and free rents, that's all stabilized. And as Michael said in his remarks, we're even seeing rents go up in certain buildings like a 280 Park, 1290, or PENN 1. So the things stabilizes the answer around the concessions. So what was the other part of it [Indiscernible] longer I think generally the processes are longer in terms of deal making from first toward assigning a lease definitely longer than historic for sure, yes.

That's helpful. And then just on the dividend policy going forward in 2022, just given how it was handled in 2023. I'm curious if you can kind of update us on kind of any expectations for the go-forward year as it relates to the dividend.

Your question, Griffin, is about 2024, I think you said '22, but I think you meant 2024?

Yes.

At this point, we don't really have a comment. I gave you a pretty good outline of where we are in 2023. The environment is fluid, as we said earlier this year, we don't know how asset sales could impact what we have to do. I think the same goes for next year. So we'll deal with the 2024 dividend and try to give a little bit more color as we get into 2024.

I think it was more -- sorry about this, but I think it was more just the expectation to pay it quarterly or wait until the end of the year, if you can comment at all.

It's not impossible that we will wait until the end of the year next year as we did this year.

And our next question today comes from Alex Goldfarb with Piper Sandler. Please go ahead.

Good morning, Steve, and thanks for your comments at the start of the call. I appreciate it. So 2 questions here. The first is politics obviously has gotten, it's pretty animated these days, especially around real estate. One of your peers just made a government hire but when you think back to like the Robert Moses era and like Jackie Kennedy saving Grand Central, it seems like politics has always been pretty big in New York. So Steve, given some of the headlines recently, especially on the Penn District, would you say in your career, the current era of political involvement with regards to development, commercial development change of zoning. Would you say it's different now? Or this is really what New York has always been and it's just that we happen to be living in today versus had we been around in the 70s, 60s and before.

That's a hard to answer question. I think the times today are not very different at all from what the times have been over the last decade. The politics in the United States have always been interesting. The growth of the cities in the United States have always been fairly aggressive. And most cities want to grow. New York is in that category, by the way.

And then the second question is, a few years ago -- well, quite a few years ago, you guys announced an effort to trim G&A given the reduction in the size of the company with the different platform spin-offs, et cetera. As we look at FFO, it's about half the level that it was 8 or so years ago, but G&A is only down maybe 15%. So is there -- as you think about, to the prior question on the dividend for next year, as you think about increasing shareholder returns, what's your perspective on corporate overhead reduction as part of boosting earnings and growing the dividend.

Alex, it's Michael. I think we were maybe the only company in our sector and certainly in the industry, I guess it's almost 3 years ago now that a major reduction in the height of the pandemic. And that was a difficult reduction, but we did it. I think it was a responsible decision, and I think the company has performed fine and frankly, we elevated some young leaders that I think have done extraordinarily well, hungrier and quite capable. So I think we're pleased with what we did in retrospect. Look, we are constantly evaluating business both from a personnel standpoint, from a system standpoint, how do we do things more efficiently, et cetera. And we'll do that as we enter year-end here. But I don't see -- we made some major cuts personnel wise. And I think people have worked smarter, more efficiently, et cetera, so I wouldn't wait by your printer looking for significant cuts there. From an overall corporate G&A standpoint, Tom and I, in particular, we look at that all the time. And we're doing some things around the edges to help, and we'll continue to do it. But I don't think it's going to be dramatic. I think we're actually quite efficient. And yes, the earnings are down some for a variety of reasons. But I think the business is there's not a lot of fat here, Alex. I'll just add one other thing. The senior team has kept their comp flat for generally in the last 4 or 5 years. We obviously -- Joe and Dave are tied up, I think we've taken a lot of steps. And I think we're all major shareholders. It's a big part of our net worth and not the largest, and we act like owners. We run the business that way.

You know that overhead does not go down in proportion with a business which is reducing. So it's much more efficient to grow than it is to reduce. So we acknowledge that our G&A has not gone down the proportion to the top line of our business. We keep looking at it, but there are, we believe we have a fairly efficient operation, but you're correct about the ratios.

And our next question today comes from Dylan Burzinski with Green Street.

I guess, and I appreciate your comments on sort of the challenging capital markets environment, especially for office. But I guess just as you think about the portfolio and the capital allocation game plan moving forward, is it your sense that you'll continue to try and take advantage of potential disposition opportunities in the near future?

Morning, Dylan. The answer is yes. We are -- we've obviously sold some things over the course of the year. We're working on some other things right now. They're not, I would say, they're more bilateral than broadly marketed opportunities because I think that's a smarter way to try to execute in this environment. So we have a handful of things that we're working on. I'm not going to sit here and promise that any of them will get done, but there's a likelihood that a portion of those could get done. So the answer is we're going to be opportunistic in terms of either selling or recapitalizing some assets. We're going to do it if we think the pricing is accretive. I sort of come back to what I said a few moments ago, which is we're in a good position from a cash standpoint. We're sitting on over $1 billion. We don't have to do anything, but we'd like to do some things. And so our goal is to generate some meaningful proceeds both delevering to attack the stock and so we're working on some things, and we'll just have to see how it plays out.

And just to be on sort of there being a lack of overall debt financing for the sector today, is there any appetite to offer seller financing for a small portion of any future dispositions? Or I guess just how do you guys think about that?

Sure. I think if you followed our company, we like creativity. So if seller financing can help facilitate a transaction, and we think that the overall transaction makes sense, we absolutely consider that rate.

And our next question today comes from John Kim at BMO Capital Markets.

Can I ask about leasing activity. It was a little bit light compared to your 508,000 square feet in negotiations last quarter. I was wondering how much of that is timing related versus deals that fell apart?

John, it's Glen. It's all timing related. So as we said earlier, based on the timing of some leases at 11 to 4Q versus 3Q, we expect to be at 2 million feet by the end of the year based on the activity we have and based on where those leases are currently in documentation. So it was all timing related, you're correct.

Okay. Any more color you could provide on that 750,000 square feet of leases that you expect to close in the fourth quarter? I think you mentioned 280 Park and 1290 Ave of Americas, but -- is The Mart included in this as well? And any color on the types of tenants that you're signing?

The deals we spoke about are New York-related 280, 1290, 650 PENN 1 financial law fashion. At the Mart separately is another 100,000 feet in lease documentation, which we expect to get done this quarter as well. The more additive to the New York number we had given you.

At 280 Park, you do have mortgage debt due in about a year, based on your recent debt extension at 150 West 34th, which was extended but downsized, do you think that's a likelihood that, that mortgage gets reduced?

John, it's an active discussion right now. So I don't really want to comment on it. But I think in my general comments I made, I think, to Camille's question, stand for 280. And our expectation, as I said, we're in discussion with every [lendor] service. So that went happens to be a servicer for our '24 maturities. That's included there in as discussion and hopefully, we'll figure it out.

And our next question today comes from Anthony Paolone with JPMorgan.

Great. So Hotel Penn has been taken down. It looks like you put up some big signage there. It's a big site. I'm just curious if you have any opportunities to drive any meaningful cash flow from the location just while it sits and waiting for a longer-term plan.

The answer is we are studying that right now, Anthony. And the answer is we think so. We're pursuing a few ideas, too early to tell you which one or ones we're going to settle on. But you're exactly right. It's a great cycle in the center of the city. And whether it's fashion shows or other temporary uses, we think there will be opportunities to generate some cash flow until the site is ready for development.

Okay. And then I think last I recall, there was still some back and forth on ground lease at Penn. Any update or final resolution to that?

That's in process.

And then if I can add one final one. Just on the Mart always find it a little tricky to adjust for taxes and some ins and outs there. Any way to give us a sense as to where sort of like run rate EBITDA per year is at that asset right now?

Yes. I think, Andy, it's probably in the low 60 or $60 million neighborhood right now, given the decline in occupancy. And over time, as we build that back up, we think that number will get back to $90 million to $100 million.

And our next question today comes from Julien Blouin with Goldman Sachs.

Glen, you mentioned the Microsoft sublease space at 555 California. Can you talk about your upcoming expirations at 555 Cal, looks like there's over 50% ABR rolling through '26, including 274,000 square in '25. I guess just any sense you have on what those tenants are being, whether these tenants might downsize or give back space?

So as it relates to the rollover, the BofA lease, we have extended by 10 years. So that now goes to 35%. So I'm not sure if you're counting that enough what you're looking at. But otherwise, I would expect we are in formal negotiation with every tenant expiring between now and '26 in paper. And I would expect success in our renewal program, as we've had historically with tenants.

And then I guess, given the comments around the bilateral as you're looking at I guess, is your current plan to execute on your 350 Park put option given the accretiveness of redeployment in debt repayments in this higher interest rate environment?

It's premature to take that question -- the transaction that we have on for gives us various options and optionality as it gives the counterparty various options and optionality. So those decisions are in the future.

And our next question today comes from Vikram Malhotra with Mizuho.

Just I wanted to clarify, maybe I misheard, did you give us sort of an update on the FFO kind of run rate or the full year FFO expectation? And just given all the moving pieces we've just talked about, do you mind just sort of giving us any larger moving buckets we should think about, whether it's big expirations or other pieces as we model it to '24?

As you know, we don't give guidance. And I think your question goes to guidance. So basically, that's not a question that we're going to be able to handle, sorry.

And then I guess just -- you talked a lot about New York being back. And I just wanted to see if we can square that with you sort of -- in prior cycles, you've always made money kind of at the bottom of the cycle, finding those interesting assets. And I'm just wondering given New York is back, debt markets are challenged, but where are we in sort of that time line or what milestones are you looking for in terms of finally putting capital to the work?

The -- my comment about New York is back was basically about the traffic, the tourism the activity level in the buildings and in the streets. With respect to opportunities to buy assets, that's totally influenced buyback that interest rates have gone from, say, pick a number 4% to the number 8%. So if interest rates have doubled, then it's pretty easy to predict that most assets, which have financing on them have probably had in value. So the action will be in the debt as it almost always is, which we're looking at very carefully.

And our next question today comes from Nick Yulico with Scotiabank.

I was just hoping to get a feel for how capital interest burn off is going to work, the timing of that for PENN 1 and PENN 2 over the next 2 years?

Nick, I'll give you a general comment, are. But I think if we want to deal with specific probably better to put it offline. I think we've got the number will stay fairly constant this year. This year, I think it's about a little over $40 million, probably goes down a little bit next year. And then I think it's $25 million. The PENN 2 is done, a number of decline civically in 2025.

And then secondly, I just wanted to ask about the dividend and -- it kind of sounds like your strategy right now at the Board's strategy is to match the dividend to taxable income. And I guess I'm just wondering when you suspended the dividend earlier this year. I kind of feel like you have some potential asset sales in the work and maybe there could be a special dividend that was affecting the decision making. But I'm just trying to understand like going forward, how we should think about this? Why only pay a dividend that is matching taxable income?

The policy of the company in this environment is to retain as much cash as we can. We think that that's the preservation of our balance sheet is the number one priority. So basically, what we're after is to pay a reasonable but may I use the word low dividend to preserve cash.

And our next question today comes from Ron Kamden with Morgan Stanley.

Just starting with the cash flow statement. I just saw $62 million of cash from operations this quarter, which sort of surprised us. Maybe can you comment, is there sort of any one-timers with working capital or -- just trying to figure out why sort of that cash conversion maybe dipped this quarter a little bit.

Ron, we'll have to come back to you on that. I don't have the statement in front of me offhand, but there's nothing in particular that jumps out from that, but we'll come back to you on that.

Great. Helpful. And then switching gears back to 1290 Avenue of the Americas, I think last quarter, you sort of mentioned that there was some activity. I think there was even a tenant interest, and it was close. Just wondering what was the update there? How is that progressing conversations going forward, pausing just on 1290 specifically?

So we've signed the lease with Selendy Gay, which we have mentioned for 100,000 feet. We have another very sizable lease out in documentation right now, which is in our fourth quarter projection of losing activity. Otherwise, tour volume is very, very strong. The building is, if not the best, certainly one of the best assets in Midtown and it's showing just how good it is right now. And this comes off the renovation we did some 10 years ago. And now with the new amenity program, we're bringing in there. So action has been very good at 1290, and we expect more to come next year as we get the spaces back from equitable and others.

And I would just add to what Glen said, we talked about this demand trend, tenants wanting to be in the better buildings, west sub markets basically being at equilibrium. And I think 1290 reflects that. And so if you look at where we're signing deals versus where we thought we'd be earlier in the year, rents are definitely up. I think tenants recognize the quality of the building and our leasing track record there has historically always been good. So I think our activity level of where we're at is we're quite encouraged by both what we signed and what's in the queue. I want to come back to your first question. I would just look quickly on the side. You are correct in terms of the $62 million being lower. The big driver of why that was down was we did a significant in the money cap premium for 1290 actually last quarter of about $60 million. And so that's what the delta was or the main driver.

And our final question today is a follow-up from Steve Sakwa at Evercore ISI.

Steve, I was just wondering if you could sort of provide any updates on the casino license, maybe that Vornado was potentially pursuing? And any thoughts just kind of on where the state is in that whole process?

It's highly likely that we will not pursue the casino license.

Thank you. And ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to the management team for any closing remarks.

Thank you all for joining us. We will look forward to talking to you on our next call, Tuesday, February 13. Hope everybody has a happy Halloween and gets lots of good candy. Take care.

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.