Thank you, everybody, for joining us and welcome to the SL Green Realty Corp’s Third Quarter 2017 Earnings Results Conference Call. This conference call is being recorded. At this time, the company would like to remind listeners that during the call management may make forward-looking statements. Actual results may differ from the forward-looking statements management may make today. Additional information regarding factors that could cause such differences appear in the MD&A section of the company’s Form 10-K and other reports filed by the company with the Securities and Exchange Commission. Also during today’s conference call, the company may discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed in the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measures can be found on the company’s website at www.slgreen.com, by selecting the press release regarding the company’s third quarter 2017 earnings. Before turning the call over to Marc Holliday, Chief Executive Officer of SL Green Realty Corp., I ask that those of you participating in the Q&A portion of the call, please limit your questions to two per person. Thank you. I will now turn the call over to Marc Holliday. Please go ahead, Marc.

Okay. Good afternoon, everyone, and thank you for joining us today. The results for the third quarter were very consistent with our prior guidance and commentary throughout the year. The results are reflective of a healthy market, one in which a new supply has been met with increasing demand associated with private sector job growth that is already exceeded last year’s totals. The level of uninterrupted job growth is record-setting in New York City and is a major contributor to the tick up in the third quarter leasing activity that is keeping overall vacancy between 9% and 10%. Leasing market conditions strengthened in the third quarter as Midtown experienced its highest amount of quarterly leasing activity in the past two years. The October leasing reports, which are just coming out show that the quarterly net absorption registered about 1.5 million square feet of net absorption on total leasing activity of approximately 5 million square feet in Midtown, that’s reflective of a 19% increase in the trailing five-year quarterly averages, primarily this activity was driven by financial services leasing activity, and we see that within our own portfolio. Total citywide year-to-date leasing activity has topped 21 million square feet and the pipeline for big lease transaction in the fourth quarter looks sizable. So taking that down a level two within our own portfolio, we’ve been able to sign year-to-date nearly 1.2 million square feet of commercial office leases in the Manhattan office portfolio, 489,000 square feet of which was done in Q3 alone. And our same-store net operating income increase of 1.9% trended up from the prior two quarters of the year and we expect that trend to continue. Our leasing pipeline remains strong at 840,000 square feet, of which leases out for signature and a negotiation account for over 350,000…

Thanks, Marc. And we do want to get to your questions, so rather than click through all of the income statement line items, I’m just going to hit the high points. Last night, we reported FFO per share of $1.49, which as Marc said, was below the street estimates, but is actually ahead of our internal estimates for the quarter by about $0.02 a share. Obviously, we don’t provide quarterly guidance and we don’t have any plans to, so one would think there must have been something off from street’s numbers. Important to note that these results are net of a $0.04 write-off of unamortized deferred financing costs related to the refinancing of 280 Park at the non-recurring item. In NOI, from a GAAP perspective, our properties continue to perform on plan for the first nine months of the year. Looking specifically at the third quarter, we saw a reduction in rental revenues of about $5 million relative to the second quarter, primarily from $1.9 million of percentage rent at 1515 Broadway, which is recognized only in the second quarter of the year, when it is received as per the lease. We also recognized about $2 million of FAS 141 income at 187 Broadway in the second quarter upon the commencement of our redevelopment. We also sold Sanford Towers, which closed in the third quarter. That reduced rental revenues by about $2 million versus last quarter. This telegraphed reduction in rental revenue quarter-over-quarter was coupled with the normal increase in operating expenses that we see in the third quarter of every year, as real estate taxes reset on July 1, and there is the customary seasonality of utility expenses, which tend to be the highest in the third quarter and increased by $5 million over the second quarter of this…

[Operator Instructions] Our first question comes from Craig Mailman with KeyBanc.

Hey, guys. Just curious if you could give us an update maybe on the status of the 1515 Broadway sale, or any other deals you may have out in the market?

Sure, it’s Andrew. 1515, it continues to be in negotiation as we indicated on last call, sale of JV interests are a lot more complex than the sale of real estate. So I think you saw us close 16 Court Street and several suburban sales in the quarter, 1515 still on track, but taking its time based on the complexity of the transaction we’re doing that.

That’s helpful. And then, Marc, of the 350,000 square feet out for signature, I mean, is that what you guys are kind of anticipating could close by quarter-end at this point?

Well, I mean, in addition to that, there’s about a 0.5 million square feet in term sheet and some of that term sheet will migrate to close deals also. So our goal is typically to always hope to close just about all that’s negotiating lease documents out for signature plus some portion of that term sheet. So that’ll put us right around the 1.6, we could be 50 high, 50 low. But at least as it sits provided everything in that in the lease out category makes and traditionally that’s got a pretty high percentage attached to it. It would be 350 plus some portion of the $0.5 million of term sheet deals so far in third quarter.

And could you comment if any of that includes One Vanderbilt?

No, I can’t really go into any detail on the composition of deals that we’re kind of negotiating and chasing whether it’s One Vanderbilt or any other building. I mean, that’s this is a competitive market. We sign 250 leases a year. I think, we like to keep sort of illumination around any of those deals with regards to any of the buildings under wraps until – and when and until leases are finalized.

Great. Thanks.

[Operator Instructions] And our next question comes from John Kim with BMO Capital Markets.

Good afternoon. I was wondering on the 4% cash re-leasing spread achieved this quarter, it’s below what you indicated as far as mark-to-market for the rest of the year. But I was curious what the vintage was of the leases that were expiring this quarter that led to be relatively low re-lease spreads this quarter?

I think, we have to look, as I’m not sure, if you’re talking about vintage like when were the leases signed relative to now that we’re being replaced. I mean, our average lease term is 10 years, but that’s not sufficient to say, well, they’re probably 10-year deals. We have to, I guess, take a look. We don’t necessarily look at it in that context, but we certainly can. But I’d say, in general, they’re probably 10-year plus deals, but that are rolling off. In some cases, maybe five to seven, in other cases, maybe longer. But we have to pull that together, Matt. Do we have anything close to that?

Not, not on my fingertips. I just want to make clear, I mean, the one quarter that’s – it’s all based on the leasing activity in any one quarter. So we had said early in the year, we’re well exceeding our expectations, but as the pipeline had mark-to-market that was lower. And we had maintained for the full-year our 11% to 14% mark-to-market objective. And we said at 11% through nine months and Marc highlighted that the fourth quarter deals that we expect to sign are in the 11s as well. So we’re sticking to that a 11% to 14% for the full-year when focused too much on a 4% quarter.

Let me just to add to it to give you a little bit of color on it. It was – if you look at all the deals that we’ve signed across the portfolio the majority of the buildings had a mark-to-market that was in line or better than what our guidance was. And the weighted average was really skewed by just two buildings. So if you look whole portfolio, the mark-to-market was well above 4% well in line of where our 11 plus guidance was. If not for those two buildings where we had a couple of high rent deals that had burned off.

Okay, that’s helpful. And then also on One Vanderbilt, can you just discuss the leasing achieved this quarter with the German banks and whether or not that fell into your underwriting range of 130 to 150 per square foot?

Stephen?

It was safely within our underwrite assumptions.

I think it exceeded it.

It did exceed it.

I think it exceeded. It’s slightly exceeded underwriting. It was – certainly, within all the parameters, it was early. So I mean, in that respect, we didn’t expect to sign anything in 2017, but the opportunity rose and there were a terrific institution and banking organization with whom we’re happy welcome to One Vanderbilt, and we welcome them ahead of our schedule and so we have underwrite.

When you say exceeded, I mean, above that range or just exceeded relative to where the floors were – floors that was leased at?

So, obviously, we have underwrite rents for different portions of the building. And we’ve been at weighted average for the entire building. And for the floor that was leased, that lease exceeded the underwriting.

Got it. Okay. Thank you.

Our next question comes from Alexander Goldfarb with Sandler O’Neill.

Hi, good afternoon. The first question is on Worldwide Plaza, can you guys just sort of walk us through how you think about that investment from a return of yield perspective, if Cravath renews and if they don’t, if they – meaning that, you have to go out and relet that space?

Well, I’ll start David here you can sort of chime in. I mean, I think the going in cap rate in the deal was upwards of 4.7% – 4.75% obviously got some very efficient financing that we put in place, so those yields are increased, it’s lease now – the overall, because Nomura is way below market. The average rent overall for the building is well below market, but long dated. We think Cravath is a terrific tenant and they occupy some of the primaries of that building and there will be opportunities down the road with those tenants and others to – we think be able to tap into the embedded rent opportunity to create a value, which will be evidenced with some kind of value creation maybe recapitalize event three to five years down the road. Leverage return should be certainly in the position we’re in, because we only took 25% of the deal and our returns are fee enhanced double-digit returns. I don’t know, David, you want anything to add or.

I think, it’s a high cash on cash going in yield. I think, Cravath has seven years of term left. Nomura has more. As Marc said, it’s a below market transactions, so I think there’s a lot of upside and we have a lot of time to kind of work with the tenants and optimize the deal.

But I mean, David, if you have to go and if they don’t – if they choose to go elsewhere, presumably they’re going to give you a few years ahead in advance. So just curious what your yields would be if you have to go backfill that space, just curious the impact from your underwriting on the transaction?

I think we’re comfortable with the rents that are in place and the market, so they’re consistent.

Okay. And the next question is for Matt. Matt, on the – sorry to bug you on guidance, but it sort of of imply sort of like a 1.61 on the fourth quarter. Are there any particular areas where we’re going to see, whether it’s increase in either seasonal income or maybe any sort of one-time items or operating expense or something that’s going to drive this sort of $0.12 increase from where we are at – in the third quarter?

Sure. Two big things. First, there was a $0.04 charge in the third quarter, so you just add that right back. And then seasonality is another probably $5 million to $6 million just at the property level, and then you have another couple million dollars or so of leases kicking in at various properties. So it’s primarily property-driven and then the $0.04 charge non-recurring that we took in the quarter, third quarter.

Okay. Thank you.

Sure.

The next question comes from Manny Korchman with Citi.

It’s Michael Bilerman here with Manny. Marc, I’m curious how you think about the cadence you’ll have going forward either on the acquisition front of either buildings or of your stock relative to disposition volumes and bringing those in line? And I recognize, you’re still negotiating 1515 and 600 Lexington is on the market, I’m sure some other things that you have teed up. But how should investors think about when those decisions would be announced to the market to when you have the confidence to go out and put additional capital to work before those are done?

Well, Michael, we’ve been doing this for a long time. So I don’t think there’s any shift here in cadence or otherwise in terms of how we approach the business, which is typically harvesting gains and reinvesting in high-quality opportunities. I think, that’s what we’ve done. I think that’s what we’ll continue to do. We sold 16 Court closed on that deal, regenerated those proceeds into Worldwide Plaza. We think it’s an uptick in returns and in asset quality, 16 Court is a very good building. And hopefully, the guys will do well with the building, but it’s always for us about trying to lift same-store NOI CAGR, trying to lift portfolio value, trying to lift total returns. And the way we do – have done it historically, I think, we’ll continue to do that is through a very measured, balanced approach of selling assets and using those proceeds generally tax efficiently to make new acquisitions and, of late, also looking at our stock, as you know, one additional, but attractive opportunity, which also would get a lot of attention for use of investment proceeds. So I think, you’ll see, as I said on the last call, when the question was asked, we’d be doing stock buybacks and asset acquisitions, when we think the opportunities sort of check all the boxes from our standpoint with compelling returns being a big component of that.

Should we expect sales in the fourth quarter at this point in terms of proceeds generated?

Well, I think, Andrew just answered that question, one or two questions ago about somebody. I mean, if you’re calling a sale, a partial interest sale, I thought Andrew said, we’re on track to try and complete 1515 by year-end. So, if that’s the case and I have to say, yes, that we would expect to close more in this quarter.

Okay. And then just a comment, I would agree providing same-store NOI without and with lease term fees, or just breakout lease term fees would be something that, I think would be very good. And then I know you won’t provide quarterly guidance. But I do think providing any one-time items, clearly the entire analytical community was significantly higher than what you reported. So calling out any one-timers that may impact the quarter, I think will help not get some of these negative reactions when the numbers come out?

Yes. I’m not sure, I would agree with the characterization of lease term fees as one-timers. We probably have 20 years of history where the lease terminations fees were fairly well projectable and recurring to the extent that I think to refer to them as one-timers is – could be misleading as…

I wasn’t referring to…

I don’t want to debate it. It’s under. It’s under review, we’ll take a look at it, whether we put it in, take it out, instead of 8 million, it’s 4 million, we’ll talk about that in December. But I think, when you look at our track record year-after-year-after-year of projecting guidance and meeting that guidance, it’s as good as – well, I’m going to say, it’s better than almost anybody on the street in terms of meeting our goals. And in many years, we are able to move up, in many years, we’re within, very few, if any, years that we’re down. so I think we do a very good job there. But thank you.

Our next question comes from Michael Lewis with SunTrust.

Thanks. I just wanted to come back to Worldwide Plaza. There’s a pretty sizable capital reserve there and New York REIT apparently thinks that, that building could be much more valuable, call it, two years when they intend to sell the other half of it. Given that it’s well leased on long-term leases. I mean, do you see the same kind of opportunity? And what kind of is that capital spend going to be, or what are you going to spend it on?

You know what, I don’t want to – it’s really – NYRT’s approach to the asset, I think, you really have to ask them about it. We believe it’s a great asset with a great return profile, with embedded rents that are below market, great tenant roster. And we think we’ll be able to create value, because that’s what we do, us and along with Scott, I think, we both have a track record of figuring out ways even when the assets been sort of well cared for in prior hands. It’s our job to step into the situation, improve the asset maybe physically, maybe in other ways, maybe through some strategic leasing objectives that we’re going to develop together and roll out over the years. I can’t – I wouldn’t want to sit here right now and sort of get into their business plan, their whole period whether it’s achievable or not. I mean, we just spent $108 million to close the transaction yesterday that we think will have significant upside. And I think, generally, we’ve proven that to be true. So, generally are always, I’m going to say in terms of assets that we’ve come full circle on and those that we hold in portfolio. So we’re very excited to be working with Scott and with NYRT. We will certainly move heaven and earth to try and – in the near-term, they view it as two. I referenced earlier three to five. I think, that’s semantics. The point is in the near-term, let’s create some value and then let’s try and capitalize on the value.

Okay, great. My second question is about the debt and preferred equity book. It was a little less active this quarter. And I was wondering if that was just a function of the opportunities you just had in the quarter, which is a small time period, or it looks like also maybe the size of that book has gotten up maybe towards your upper limit as you’d like to see that as a percentage of asset. So just curious there if the activity is due to either of those two things?

It’s Dave. Now, look, as we’ve said, it’s a scalable business, I think, we’ve said we’re going to keep it to certain levels and we’re at those levels right now. We actually have a large pipeline, there are some assets we sold in the last quarter. But it’s not for lack of a pipeline, we have a large pipeline for the fourth quarter. But obviously, without growing the book significantly either we have to syndicate a lot of it or either sell other positions or have payoffs, or you’re going to see lower origination volumes, or at least growth in asset.

Okay. Thank you.

The next question comes from Nick Yulico with UBS.

Thanks. I think there has been two focal points of negativity on the New York City office market of late. First, talk – the net effective rents are down by some amount over the past year because of higher concessions? And secondly, the investment sales market is down meaningfully year-over-year. So somehow, I think the question is, does this mean that the New York City office market is just not as attractive as it was in recent years? I’d love to hear your thoughts on that?

Well, let’s say – there’s two questions there. One has to deal with leasing concessions, one investment sales. Why don’t we hit investment sales first. Andrew?

I should go first. I think the volumes, obviously, are down year-over-year. I think a lot of that is reflective of the attractiveness of financing markets. And I also think you’ve seen a lot of velocity in the very recent past with our trade of 16 Court, the trade of 685 Third on Third Avenue, which was a very positive trade for the market with a Japanese buyer, and the trades, which were announced at the NYRT assets, the Twitter and Red Bull buildings and the 36 and 38 Street buildings, the West Side collection, all of which were done at very strong pricing. So I think the pricing has not been impacted. The velocity has been impacted, because of the attractiveness of that financing market and obviously the volumes do reflect it. But there is there’s a healthy amount of transaction activity in the market. So I think you’re missing some of the very large [indiscernible] like or other bellwether trades of some of the last couple of years, but there’s still a healthy amount of velocity out there.

, :

And then Steve on net effect, so a net effect is, I think is a real concession [Multiple Speakers]

So we measure net effect is obviously relative to our budget so specific to our portfolio. And how the net effect is returning to the rest of the market, I don’t think is as important commentary. But I can tell you that the net effect is on the 1.15 million square feet on year-to-date are actually up over budgets. Yes, concessions are higher than originally budget, but offset by higher rents. So, and I think that’s further evidenced to what we keep trying to reemphasize the people that the market is better than some people sentiment.

Yes, and I would just – you shouldn’t look at TIs much differently than other forms of expenses or even revenues. They will rise over time generally just due to the natural results of cost of construction. I mean, that’s ultimately what you’re getting at is what is a cost to build out space to a level that’s acceptable for a level of rent. Over the years, that those construction costs are rising, hence the TIs rise, hence we budget for that. We’re probably right on budget in terms of our TIs. You guys see the numbers, they were – they’re pretty much in line with the prior quarter and really the entire year. So if the answer – if the question is, are they higher? Yes, materially no. Is it in line with our budget? yes, or maybe, we’ll do a little better. And is it offset by higher rents, which we are also achieving? Yes, and net effect as I guess on portfolio-wide they’re up for us. So it’s in very hot markets, you can drive those concessions down, and in bad markets, you may have to – you see them spike. But in general markets like we have now, which are relatively balanced, it’s typically in amount required to deliver a certain level of finish that is acceptable and customary for the kinds of tenants that are renting at these levels.

Okay. It’s helpful. Just one of the question, you talked about the mark-to-market on a lease signings. If I look at the mark-to-market on commenced leases of 2% in the quarter number seemed low since you’ve been over double-digit in the past year. So I’m just wondering if there was some – single lease that that drove that commenced number well? Thanks.

Joe, it’s Matt. It’s all a matter of timing. So, yes, there’s probably something in there that drove the lower and then there will be something in the future quarter that drives it back to a normalized level, but it’s all timing.

It’s still the same pool of leases. [Multiple Speakers]

Yes, it’s a matter of when...

[Multiple Speakers] is just leasing commenced, but…

Yes we know…

That will – the commenced leases were previously announced signed leases and today signed leases will be showing up as commenced next year. So I don’t know that there’s any – shouldn’t be any real difference. I mean it’s the same pool of leases eventually.

Okay. Well….

Next question on.

Our next question comes from James Feldman with Bank of America.

Great, thank you. I know you talked about earlier a good pipeline of large financial leasing activity is scheduled for the fourth quarter. I guess, Steve, can you just give more color on kind of just the tone and sentiment in the leasing market coming out of the summer and now that we’re squarely into fall and looking ahead to fourth quarter and into next year, what seems like you might be changing or is it more of the same?

Well, I think if you look at many of the brokerage reports who are just hitting the street now, what you’re seeing is, third quarter was a very strong year, we’re on track for market wise to have a very strong year through third quarter of 2017 there’s been 24.5 million square feet of leases signed, by comparison to 2016 where there was just under 30 million signed for the entire year. You could sort of extrapolate that and say, okay we’re going to have a very good year by historical terms. A lot of our leasing that we’ve seen in the portfolio in third quarter were dominated by financial services, legal and TAMI. And in the deals that we’re negotiating now, it’s primarily financial and legal less TAMI and that’s not a function of less TAMI demand, it’s more a function of the product that we have available right now. So we’ve got a wide diversity of tenant demand across the portfolio. And I don’t think there’s been any real change from what we said about the overall depth of the market either in price point or product cost, it’s more of the same from what we’ve been saying all year other than where we think that we’re in a safe place to meet our targets.

Okay thanks. And then can you guys talk about just foreign capital any shifts there? Who – which country seem to be stepping up, who is pulling back and what that means for that transaction that might be on the market?

I think European and Japanese stepping up, China clearly pausing pending some of the outcomes of the meeting they’re having now. And still a lot of interest on the debt side from Korean capital, they’re fueling a lot of the deals out there and steady interest from Canadians.

And any change in underwriting assumptions?

No, no, I think people are still that both the debt submissions we’re getting and the indications we’re getting from the brokers as the people are pretty static in terms of underwriting assumptions still underwriting similar growth et cetera.

Okay. Thank you.

Our next question comes from Nick Stelzner with Morgan Stanley.

Taking the questions, on same-store NOI growth you said that you expect to hit the 2% to 3% range if you exclude termination income. You got 1.9% today, so just curious what the big ticket items are there – that will get you there through the end of the year?

Well, I mean to get the 2% you kind of just need to maintain the 1.9 we achieved for the quarter, although we do expect to be slightly better in the fourth due in part to some of things I highlighted earlier, the property portfolio, seasonality that happens in the third quarter, so fourth quarter is definitionally better. And you will have some leases kick in in the fourth quarter and then we expect that trajectory to continue beyond the fourth quarter.

Okay, great. And then just one other one on One Vanderbilt, how you characterize the tenant activity there? Also I know it’s early and you discussed the lease systems on already, but in your conversation with tenants at One Vanderbilt, how do the rents and lease terms compare to what you originally expected?

We’re seeing we’re doing a lot of tenant presentations and we are seeing a good strong enthusiasm from both the brokerage and the tenants that we’re presenting to. So that’s why we think we’re right on plan as far as expectations and the dialogue that we’re having with prospective tenants.

Thank you.

Our next question comes from Steve Sakwa with Evercore ISI.

Thanks, I know you guys are going to be hosting in Investor Day in a month or so, so I don’t want to jump too far ahead to 2018. But when I look at page 46 and I look at the lease expiration schedule, it looks like I’m assuming that your current sort of average asking rent per foot is an updated kind of thought process on where the market is today. You’ve got almost a 20% uplift on the consolidated and a slightly larger roll down on the unconsolidated or JV asset. Can you just maybe talk about what’s going on in both of those buckets?

Yes Steve it’s Matt, so important to think about that’s schedule and it includes retail. So it’s not just office there. I think on the consolidated side the 20% up is probably influenced by retail. On the JV side, I think we have a couple of leases similar to what we saw in the third quarter here, where you have some maybe older-vintage leases with escalations that have pumped up the in-place rents. But nothing – we’ll obviously give you much more guidance when we come out on December 4 with a view of 2018, but – and we’ll do a lot more leasing beyond what you see expiring in that schedule. But that’s the gist of what’s going on in those numbers at this point.

Okay. And then I guess, Marc, just going back to kind of capital deployment. I mean, I can appreciate you trying to sort of play in all thee buckets: Acquisitions, the DPE business and share buybacks. Just when you think about kind of the returns, how do they sort of stack up to one another? And, I mean, is there a spread or a difference that you want in sort of an acquisition versus the hare buyback versus the DPE? I’m just sort of thinking about how you guys sort of look at it mechanically?

Well, the answer is, there is, but their risk-adjusted returns, obviously, is not just line up the returns.

There’s also tax considerations.

And tax considerations as well, and there’s also platform considerations. A purchase of a building might incrementally at a moment in time be, let’s call it, a lower IRR than a stock buyback. But the ability to scale up the platform, control more tenants, have more options to do the creative deals we do, which are sometimes multi-tenant deals, in order to unlock embedded rent growth or other ways we use our presence and scale in the city and relationship with these tenants to our overall portfolio advantage. It’s not just – you won’t get that with a stock buyback. That stock buyback is literally more of a financial exercise, if you will, if something is trading cheap enough and you own it, you want to own more of it. And that’s pretty compelling, it’s also pretty – not risky, because you already own the asset. There’s a lot of economic and strategic reasons why we will look to increase our asset portfolio particularly in parts of the market, where we may be underrepresented and want to be – have a great representation. And on the DPE, it’s kind of a funny situation. Some people look at that as a risky form of business. We look at it as the only form of the – the only one of those three buckets that had significant equity subordination. So with DPE, you’re not left without a risk. We typically have approximately a 30% equity cushion on average, because we’re 70% less dollar and yet we’re still making 9%, 9.5%, in that range, sometimes 10%. So on a risk-adjusted basis, you could argue, that’s one of the champions for the three buckets because of that equity subordination. However, it also doesn’t necessarily provide the scale and presence in an equity sense unless you’re able to consensually use that DPE bucket to create pipeline, which obviously, we’ve done successfully in the past. So there are qualitative reasons. There are quantitative reasons, all of them are kind of double-digit exercises. So, I mean, that goes without saying. But among the three buckets, we usually pick opportunities as they relate to themselves, which are the best equity deals? And when do we feel is the best time to buy stock? And I think right now, we are deploying into those three buckets on a very rational basis. Thanks.

[Operator Instructions] Our next question comes from Jed Reagan with Green Street Advisors.

Good morning, guys. I think you guys had put an acquisition target of $650 million or more for the year. I’m just curious if you expect to reach that number. And then I was just interested on the comment you made about other parts of the market, where you feel like, you might be underrepresented. So just curious if you can talk a little bit about what those areas might be and why you like them?

Well, on the $650 million, that’s always a gross target, that’s not net equity never has been. So my instinct is, we’re somewhere between very close or in excess, as we said, I guess, 25% Worldwide, so that would.

Of course. Yes.

It doesn’t mean we don’t have more in pipeline. So we’re working on some active pipeline right now. And whether those deals are fourth quarter deals or beginning of 2018, that seems a little too early to tell right now. But we’re pretty much where we want to be on the acquisition front and on the disposition front. As it relates to other parts of the market, we are obviously very invested in and have a major presence in the East Midtown market in particular. And one of the areas, as an example, that we think has great supply and demand metrics, low availability, almost nonexistent to big lots is Midtown South. So I’d say that’s one of our real preferred areas of acquisition. Our last big acquisition prior to Worldwide was the One Madison in that area. We own One Madison. We own 304 Park Avenue South and two buildings on on Sixth Ave. And we’re constantly scouring for more in that area, because we think the demand profile there, the types of tenants and the types of opportunities, which are somewhat limited given the inventory down there are particularly appealing. So we’ll try and do deals like that, even extrapolating that a little further downtown to 110 Greene, which we did about year-and-a-half ago. Those kinds of deals, which that has a significant office component at 110 Greene Street is our attempt to gain exposure in high-quality buildings in those submarkets, where we think there’s relatively good demand.

Okay, I appreciate that. And then just curious what you guys are seeing on the ground in terms of the street retail environment, fundamentals-wise and cap rate trends, any changes there? And do you kind of given that, do you feel comfortable with your current positioning in that space?

I think we feel comfortable with our current position, because we’re generally very well leased across our portfolio. There is definitely submarkets, where there’s quite a bit of vacancy right now given sort of a lack of tenant demand, some combination of lack of tenant demand and slowness to adjust to asking price on rents. So there are definitely some markets with vacancy that are sort of shaking out. We’ve seen that type of shakeout before in various markets, Upper Madison, specifically Other submarkets come to mind. We’re somewhat insulated from that, again, because we’re generally pretty well leased on the retail side and we have good remaining term on our leases. And I think we feel comfortable with our positioning in the submarkets we’re in.

And do you have a view on where kind of where cap rates are today for sort of stabilized street retail product?

It’s tough to tell, because it’s so asset specific. You have in-place rents below market, at market, above market, remaining lease term short, long, medium. So there haven’t been a lot of retail trades this year that give a lot of visibility into where cap rates are. So I’d hesitate to – I think there’s an asset on the market now in SoHo that is now a major lease, which is fairly long in term, be curious to see where that trade prints. 522 Fifth was on the market. That asset hasn’t cleared, but that would be another sort of an indicative trade. So it’s sort of tough to peg exactly where cap rates are right now on the retail side.

Okay, fair enough. Thanks for the color.

Thank you.

And I’m not showing any further question at this time. I would like to turn the call back over to our host.

Okay, great. Thank you for the questions today. We look forward to seeing everyone about a month-and-a-half on December 4 for the investor meeting, which is going to be starting at 9:00 AM as we did last year. We promise it will be informative, as it always is, but also lively spirited. And hopefully, we’ll have a lot of good things to talk about for the upcoming year and beyond. So we look forward to seeing everybody. Thanks.

Ladies and gentlemen, this dose conclude today’s presentation. You may now disconnect and have a wonderful day.