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. [Operator Instructions] I will now turn the call over to Ms. Cathy Creswell, Director of Investor Relations.

Thank you. Welcome to Vornado Realty Trust 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, D.C. 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 San Francisco; the 3.7 million 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 is our New York office and our dominant New York street retail business. And that business having -- has industry-leading asset quality, is performing at very high levels and is growing like crazy. The road here is organic, the 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's the math. Over the past 2 years, we did 7.1 million square feet at share of leasing in New York, at theMART and at 555 California Street, which is 2.3 million square feet higher than our 2-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, all from signed leases, which have not yet commenced paying cash rent. The…

Thank you, Steve. Steve covered our financial results, so I will limit my comments to a couple of items. I want to highlight 2 items that will affect the quarterly comparison of our New York business growth in comparable EBITDA and FFO for the remainder of 2016. First, in the second, third and fourth quarters of 2015, we recognized $27 million of noncash nonrecurring 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 Madison. Second, during the remainder of 2016, we will write-off straight-line rent receivable balances totaling $9.7 million triggered by our early termination of leases with J.Crew and Rocket Fuel, which enabled us to sign new replacement leases for that space with mark-to-markets of 20-plus percent 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 2 non-cash adjustments to recapture and relet 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 to 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 a 55% interest. The 5-year loan is interest-only at LIBOR plus 1.75%. We realized net proceeds of approximately $45 million. The property…

Steve, thank you, and good morning to all. On our year-end call just 10 weeks ago, we took a deep dive into the 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 tenancies. 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, "Companies flock to cities with top talent, and New York continues to be a top magnet for top talent." I will repeat what I said last quarter, business has been and remains very good. Let me now turn to our own 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…

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 D.C. where we own approximately 3.2 million square feet of office space in 11 buildings that 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 have largely re-leased the 600,000 square foot landmark currently to 88% to a great roster of high-quality tenants that include Baker Botts,…

[Operator Instructions] And we have our first question from Manny Korchman with Citigroup.

Steve, appreciate the color on the $1.1 billion of NOI in 2017. But you seem to have overlooked D.C. when you were giving those numbers. Are we reading too much into it that D.C. will be out of Vornado by then? Or were you just waiting to talk about it later in 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, separating Washington. So while we are not announcing that and it may or may not happen, you could read into that whatever you care to.

Right. 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're about to head to a place where there's just too much supply?

Manny, 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 4-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 million 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 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 the -- that space. Steve, you want to add anything else to that or?

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 so -- and they're very, very nice, very, obviously, competent and a very, very well-capitalized family. So we know what they paid for the building. We know what the downtime TI leasing commission, sit 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 1- and 2-floor elite kinds of companies. So there's that. There's a couple of -- there's 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. The -- I care more about the Hudson Yards competition, which is in the mid-80s and -- dollars a foot, and that competes with the general marketplace. And so I think that's finite. That will be gone, and then everything will be fine. So I relish competition that comes on 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 in a -- 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.

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

So can you help us think about -- you just submitted your bid for Moynihan Station. You talked about 8 million square feet plus of potential development in D.C. I know that'll 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 D.C. platform and the New York platform in the next couple of years?

The -- our plans are not specific enough in Penn Plaza to be able to do that, Jamie, and 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 D.C. side?

In the D.C. side, as we -- once again, as we start up projects, we will publish the budgets and the expected yields. Just like we did with The Bartlett, for example.

Our next question comes from Ross Nussbaum with UBS.

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 and 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 balances, does that happen all in the second quarter? Or is that spread through the rest of the year?

Yes. Nick, the 141 acceleration that was recorded in the prior year was concentrated in the second half of the year. It was the heaviest in the third and -- or the third and fourth quarters of last year. It is nonrecurring in its nature. So on a relative basis or -- you won't recur in 2016. As it relates to the straight-line write-offs, there was $5.1 million in the first quarter and then there'll be another $9.7 million as we go through this year. 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 balances related to the early terminated leases is accelerated over the shortened remaining lease term for those tenants. And so it's causing us -- you have to immediately write off those straight-line balances, but there'll be another $9.7 million. The heaviest slug of that will be in the second quarter of this year. Is that the information you were looking for?

Yes, that's helpful. And then David, can you just talk a little bit more about the leases that you had that are sort of in documentation or under negotiation today? How much of that is renewals? I think you may have had a law firm tenant you were 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, of 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 '17 and then, as I mentioned, the law firm who actually comes up in 2018. Is that helpful?

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

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 in, 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 there's $53 million in '16 and how much?

$31 million in '17.

And $31 million in '17, okay?

We rounded that out. It's really $84 million.

Okay, okay. But -- and then what should we be thinking about as far as lease move-out 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 be 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, for 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, in steady state, we have $200 million of additive cash NOI that will feed in over -- as I mentioned, so much this year, so much '17 and a little bit -- a little tail in '18.

Okay, that's helpful, Steve. And then the second is as far as the potential D.C. spin-out, if you could just comment. It sounds like you're 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 going to do it in -- as we did with Urban Edge. By the way, we have a history in doing this. We have done it before so we're sort of experienced hands at this. So we will do it in -- with measured speed. So that's step one. Step two is that as we did with Urban Edge, it was properly capitalized. It had fine assets. It had enough money -- it had enough capital and credit on its -- in its entity 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 a 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.

Our next question comes from Steve Sakwa with Evercore ISI.

I guess Steve, to follow up on that question. I understand the Urban Edge spinout and the rationale behind it. It was kind of the -- a small part of the portfolio that didn't get a lot of attention, but the D.C. portfolio is pretty large. And I'm -- I guess I'm just trying to understand maybe what opportunities are not being taken fully advantaged of down in D.C. 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 if we do separate Washington, it will be for the reasons that we have already enunciated, okay? 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 report card, namely, its own stock price, and basically be -- have its own board and be able to make its own decisions. So we're capitalists. 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 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 will be. Now there's 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 keep both of them in the current structure.

Okay. And then I guess a follow-up on this $200 million, just to try and 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're trying to look at the upside from leasing, this income is effectively there but not part of that schedule. Are you sort of looking at different disclosures going forward on how we sort of monitor these figures? Because they're obviously going to be sort of a constantly changing set of numbers, and it seems like there's income but it's kind of missing and it's not part of the rollover schedule, unless I'm mistaken on that point.

Well, hang on. You said this is already done. Well, 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 hit our financials because either they're 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 just is a matter of timing and delivery and pre-rent burn-off, et cetera. And it's huge. One of the -- I mean, what we -- it's huge when you think about it. So it comes on top of the $900 million base, and so that's that. In terms of disclosure, I mean, I don't know -- I really don't know. We would have to sit down and figure out what more, if anything, than we have just said today and in what format we will increase our disclosure. We think our disclosure is not bad, but -- so I really -- I can't answer that question right now. I'm stuttering. I can't answer it right now.

Our next question comes from Michael Lewis with SunTrust.

So I appreciate the enhanced development disclosure in the supplemental. I just have a question about how it's working, right? So if I use -- on Page 30, if I look at 512 West 52nd (sic) [ West 22nd ], for example, I believe that's a $235 million development. And so I see the CIP is $8 million, the incremental budget's $72 million. How do I get those numbers to kind of add up? And should I assume that this is all at your share on this page as well?

Okay, all right. I now have that schedule in front of me. What...

I'm using 512 West 52nd (sic) [ West 22nd ] as an example. But -- right. Because I think that project -- last quarter or 2 quarters ago, you said that was a $235 million project. And right here, you're showing $8 million of CIP, $72 million of incremental budget. I'm just wondering how all the costs are accounted for here.

Well, what we're trying to show is and the numbers here as far as the budget and the amounts that are in construction in progress and land costs, those are at our share. So these are all our share numbers.

Okay. So that gets me closer.

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

They're our share. That's correct.

Okay. So that gets me closer to the number.

And this excludes land.

Yes.

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's you, what are the next steps and kind of how quickly do you move on something.

We really can't answer that question. We are in the government's hands. 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. And really, until I know more, I don't think it's wise to speculate.

It sounds about right for the government.

That -- I didn't say that. You did. I'm in full suck-up mode.

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

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

Jed, our enthusiasm for 220 Central Park South and the quality of the project, the market reception of the product has not diminished at all. There was a low in the market over the end of last year and the first couple of months of this year, I guess, in response to general fatigue, too many other projects coming onboard, extreme worldwide global financial volatility and I think the most interesting of which is we're not delivering for 2.5 years. So the project is off to a roaring start. The marketplace accepts it as being the Class A+ project, and so we -- 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 2 very important deals. The pricing of the project will -- we have no expectation that the pricing of the project will diminish more than a smidge. By the way, it could go up from the in-place contracts that have already been signed. In terms of timing, since we basically have our costs out of the project and we have 2.5 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. And just to clear, the budget for that project is still in line with last quarter?

Yes.

Okay. 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, the -- our CIO will answer that, and then I'll -- and I'll 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’s down. I don't think pricing has changed. I think Steve highlighted 2 premium-quality assets. And I think as he said on 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. So the value-added assets, there have not been many examples yet, although I think the Watchtower trade is an example. It's not closed yet, but it's under contract. And I think that pricing was very full, not really reflecting a capital market's impact. So I think pricing for office, retail generally continues to be strong even when there's value-add components.

So 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 a -- 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, the -- if anything, the demand looks like it's increasing. In terms of lower quality, we don't focus there so I'm not that concerned about it. But I can tell you that a lot of that is debt-driven stuff with entrepreneurial sponsors and buyers and sellers. And the debt markets that drive that kind of speculation is getting very skittish. So the availability of wild and wooly debt to finance that kind of stuff is withdrawing a little bit or maybe even a lot, so that obviously affected 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, if anything, I see an increase in demand and no diminution in pricing.

Our next question comes from John Guinee with Steeple.

One of the things that we like about Empire is we can back in, and we figured out Empire State Realty Trust, we think, is valued about $660 a square foot for the Manhattan office. With 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, say, the D.C. office or the High Street in 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's -- I have my concept of values and you do yours.

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, our colleagues in New York. So what we do is we basically are an NAV-focused management. We believe that NAV is the road map of value and that it's the most accurate predictor of what the value of the companies are. NAV is based upon what the private market values at a cap rate. And so we do our work and you do yours and all the folks on the phone do theirs. So we think that the NAV is the road map, and we have been very clear in saying, and 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 punchline 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's Vornado and so $25 a share is $5 billion of incremental increased 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 NAV as you do yours, and we think the lessons are that the stock sells for much less than the NAV. So our case, very substantially less. Now as I've said before and I think I said this in the letter, I'm a lifelong public company executive. So I may -- I worship for the god of the stock market, and the stock market says -- 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 cost?

I think taking out land cost, and assuming you're talking about an office development, and obviously, you could do residential, you could do resi and hotel, but it's -- on an office basis, I think all-in, including hard cost, soft cost, 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 that again?

The number I said, Steve, was well north of $1,000 a foot, probably could be $1,200 of -- even $1,300 or $1,400 a foot as you're looking at developing a 2.5-plus million square foot tower.

I agree.

Our next question comes from Brad Burke with Goldman Sachs.

Just a 2-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'd be back-end 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, of 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've 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 next year.

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

We're done.

Okay. So I think -- unless everybody 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 at [indiscernible], I guess, in June in New York. And thank you all very much.

Ladies and gentlemen, this concludes today's conference. We thank you for your participation, and you may now disconnect.