Good day, everyone and welcome to the Mack-Cali Realty Corporation Second Quarter 2015 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the conference over to Michael J. DeMarco, President and Chief Operating Officer. Please go ahead, sir.

Thank you, Operator. Good morning everyone and thank you for joining the Mack-Cali 2015 earnings call. This is Mike DeMarco, President and COO. I am joined today by my partners Mitchell Rudin, CEO, Tony Krug, CFO and Marshall Tycher, President of our Roseland Subsidiary. On a legal note, I must remind everyone that certain information discussed on this call, may constitute forward-looking statements, within the meaning of the Federal Securities law. Although we believe the estimates reflected in these statements, are based on reasonable assumptions, we cannot give assurances that the anticipated results will be achieved. We refer you to our press release and our annual and quarterly reports filed with the SEC for risk factors that could impact the Company. This is our first call as a team and we are really looking forward to an open dialogue with our results and plans going forward. As many of you are aware seven weeks ago today, Mitch and I announced premarket. Today we are announcing our earnings for the second quarter. We've hit the ground running for the last seven weeks and we're still adding our assets and operations. Based on what we've seen thus far we have both very encouraged by the opportunity to create value in the current portfolio. We also know that while we would like to accomplish everything in the matter of date and months, it will take time and persistence to execute on these opportunities effectively. And it is unlikely there will be any shortcuts. We're culturally aligned with you in every way and our focus not only on creating value for all of our shareholders but also on improving our outreach, our disclosure and transparencies that we can measure our progress together. So let’s get started. Today we are going to break our call down into following sections. Tony will recap our operating results. Mitch will discuss our office leasing and our initial views of the markets. And then Marshal will provide an overview of our multifamily operations. I would now like to turn the call over to Tony who will go over the quarter results.

Thanks, Mike. We reported our second quarter results this morning prior to this call. We also included a more detailed supplemental package for Mack-Cali and our first draft of a separate supplemental for our Roseland subsidiary both of which we will continue to enhance over time. We promise that we will improve our disclosure each quarter especially as it pertains to Roseland. With respect to earnings FFO for this quarter was $0.46 per diluted share and for the six months year-to-date FFO was $0.89 per diluted share representing a decrease of 8% and 9.8% respectively from the prior year periods largely due to us being a net seller of assets over the last year. Results for the quarter were primarily driven by our same-store results for our office portfolio and by the receipt of approximately $0.02 per diluted share of net real-estate tax appeal proceeds. Same-store NOI was down 2.4% on a GAAP basis, excluding real estate tax proceeds, same-store NOI was down 4.9% which was better than we expected due to better leasing results. Turning to our balance sheet, our total indebtedness at quarter end was $2 billion, with a net-debt-to EBITDA ratio of 6.95x. We have a debt service coverage ratio of 2.6x for the quarter and interest coverage of 2.7x. In the quarter we sold two properties, 14 Sylvan Way in Parsippany, New Jersey, and our joint venture interest in the Highlands at Morristown Station, in Morristown, New Jersey, for net proceeds totaling $87 million. We used the proceeds to pay down our credit line with zero outstanding at quarter end. The line has capacity of $600 million, which we will draw on to fund some of the opportunities Mike spoke about earlier. G&A currently stands at 1.1% of total assets, or 15.1% of NOI. As part of our aforementioned corporate evaluation process, we are analyzing ways to drive down those ratios comparable to industry averages, and as Mike mentioned earlier, as with our other initiatives this will be a process that will take time, although we should start to see results by the end of the year. I will now turn the call over to Mitch. Mitch?

Thanks, Tony. I would like to take the next few minutes to review our leasing results for the quarter and discuss some of the initiatives that we have undertaken thus far to improve tenant and broker relations. We expect that these activities should both enhance our leasing efforts and our tenant retention over time. First, let's turn to the leasing results for the quarter. We leased almost 1.4 million square feet, which is the largest quarterly volume we've seen in almost nine years. 16% of the leasing came from new leases and 84% from renewals. New leases included the 74,000 square foot lease with Valley Hospital, at Mack-Cali Centre III in Paramus. And renewals included 33,000 square feet, with PricewaterhouseCoopers, at 101 Hudson Street, in Jersey City. Our space lease nonetheless dropped to 82.3% from 84.3%, and it is our intention over the coming quarters to drive that number higher. The vacancy at One Lake Street and Upper Saddle River, hit our statistics this quarter, but will benefit us next quarter by 1.7% as we take that asset and reposition it over to Roseland. Roll up for all transactions was 0.4% cash and 4.6% GAAP. Lease spreads for renewals were up 0.7% on a cash basis, and 5.1% on a GAAP basis. Overall, the pace and velocity for leasing is improving relative to prior quarters as the various markets that we're in are starting to recover or at worse have bottomed out. We have newer expansion leases with several firms in New Jersey, representing over 150,000 square feet of absorption and just the other night we signed a lease with [Brown Brothers] [ph] for almost about two-thirds of that. And we're pursuing retention of our existing tenant base throughout the portfolio. With respect to our continuing diligence, at this point,…

Thanks Mitch. I'd like to give a brief overview of Roseland, our multi-family division. As Tony, mentioned we filed a separate supplemental this quarter as a first attempt to properly describe our business. Next quarter the supplemental will include a more complete balance sheet and income statement as we fine tune this process. While some of you maybe more familiar than others, Roseland has been known by Mack-Cali since 2012 and is considered one of the industry leading multi-family developers, operators, and managers, in the Northeast region. We have approximately 6900 units that are wholly owned or owned with institutional joint venture partners. These are comprised of approximately 4700 operating units, a thousand units under lease up and 1,200 apartments currently under construction. Further, we have a pipeline of approximately 9,000 apartments of plan development which includes select repurpose Mack-Cali office holdings, the first of which is included in our scheduled 2015 starts. We also managed an additional 3,600 apartments with third parties, most of which we built over the years and sold by retaining property management. At quarter end, our 4,700 operating apartments were 97.5% leased, and absorption of 1,000 new units being delivered from construction in the second quarter, averaged to 111 units per month, resulting in quarter end, lease percentage of lease up communities of 62.5%. Our current construction program has 1,200 units in production and will begin delivery of new product in the fourth quarter of this year. Form our 9,000 apartment land inventory, all of which is owned or controlled, projected starts of approximately 1,860 units in 2015, and approximately 1,700 apartments in 2016. As previously discussed, we are expecting to make Roseland a subsidiary of Mack-Cali, and raise capital potentially in that subsidiary as a standalone entity. We intend to present that plan in September as part of our strategic program for capitalizing our pipeline for 2015 and 2016. We have a strong history of delivering our projects on time and budget, and we find reception to our product from the marketplace to be superb. I'll turn the call back over to Mike for some closing remarks.

Thanks, Marshall. As we move ahead, we plan to complete our analysis operation, identify and begin to implement expense reductions and align our resources and usage of capital going forward as quickly as possible. With that brief overview, we'd now like to turn over the call for questions. Operator, we're ready for the first question.

[Operator Instructions] And we'll take our first question from John Guinee with Stifel.

Thank you. I've got about three years worth of questions here. First, Mitch, last time I was on the call, I asked the following question, which was never answered, and that's, if you run through the significant tenant list, can you walk through how comfortably you are with the buildings and the tenancy on your 2015 to 2017 lease expirations?

John, good to hear from you. I hope you'll just give us about a year's worth of question though if you could. In 2015 we have about 650,000 square feet rolling over. We anticipate renewing half and in that 650,000, is one large transaction and I would just say we're feeling very good about that one. ‘16 fairly typical year, it’s about 1.8 million square feet, it's mostly smaller leases between 20,000 to 45,000 square feet, and so far we've only identified 17% of that portfolio, that's unlikely to renew. As you know, 2017 is our big year. Fortunately most of those tenants, with the exception of one, have lease expirations in the second half of the year. So while we had very preliminary conversations which come back from every one of them is that it's going to be the later part of the year, the beginning of '16 before there are ready to seriously engage. And as I indicated in my call, we got a nice present this week, we're getting [Brown Brothers] [ph] done [indiscernible].

Okay, great. Mike, when we met about five weeks ago, I thought you did a wonderful job articulating the NAV and let me just sort of refresh what you told me and then maybe see if you've come off these numbers at all. You basically said you thought on - you thought your apartment portfolio at Roseland was about $700 million all in. You talked about Jersey City and Lower Manhattan as a $500 of foot times 5 million square feet or about $2.5 billion, and then on a very broad brush basis the other $20 million square feet at about a $100 of foot or, $2 billion. How comfortable you feel about those numbers and feel free to adjust them?

Thank you, John. Right direction may be not the right block or house so let's go through each component of the three of them. So the business that Marshall runs so ably, we probably think today we look at some of the assets that we're transferring over for repositioning and some of the value there is created through the construction and repurposing of some of our parking lots into buildings probably net amount of value we seen that may have an eight in front of it, maybe even get close to 9 with the right assumptions. So it’s moved up a little bit net some of its, some things that we’ve found that we transferred over and also just the fact that value continues to be created in our business at a fairly good clip. When you look at the Harbor side and Lower Manhattan portfolio, what I mentioned to you in our conversation was there were a couple of elements. We own two development parcels. We own half of the Hyatt, which doles out like $8 million of cash flow, $7 million to $8 million, both interesting assets. We own the bottom part of 125 Broad Street which is not a strategic asset to us but very valuable, it’s 530,000 plus square feet. And we have $4.4 million square feet of Jersey City office assets which runs from Harbor side which is we call super [wide] [ph] building, and then we have three excellent modern office buildings in that market; we are dominant landlord by far. When you look at all of those combined I gave you a range of between $2 billion to $2.5 billion and said between $400 to $500, if you look it as a package when you blend it everything together and you have to then obviously back out the Hyatt and the land which obviously is a increment to that. What I then said to you is when you looked at the way the market was valuing was with the remainder we own 25 million square in the suburbs. We have assets in our portfolio similar to the ones we sold recently which is the Wyndham headquarters buildings that sell at $40 per square foot and have a low six cap rate. We have other buildings that are obviously vacant, that sell at a much lower number. If you just assume $100 which we are very, very comfortable at, you wind up at a value of $2.5 billion for the suburbs, $2 billion for Jersey City and then $800 million net for the multifamily division.

Okay, fair, okay. Tony can you - and if you don’t feel comfortable with this that's fine. If you look at your debt detail page you have a series of footnotes that is about a mile long and essentially it appears that a number of assets will sooner if then later convey back to the lenders which is effectively an asset sale. If you feel comfortable can you talk about any of those upcoming conveyances?

Yes, John. There are a couple that we actually did in the quarter so that they’ve been given back to the lenders by the end of June and I think there is only one, two, three more, three loans. One of which is going to go back here imminently that’s the one for - 210 Clay as a matter of fact, I’m sorry, it actually went back, yesterday afternoon. So that one is back. We have another 5 Becker Farm Road, it’s in the process and will go back here shortly. And then the last one is the four buildings [are crossed] [ph] and we are having more meaningful discussions with those lenders about that lender I should say, about those assets. We’d like to hold on to those assets if we could so we’re having more meaningful discussions with the lender.

How about the $144 million with Prudential, cross collateralized I think by -

That's maturity in the early part of '17, those are just seven properties - $150 million loan principle base amount and we fully expect to repay that loan, it's not a troubled loan at all.

Great. Well, thank you and good luck.

John, let's hope it's not three years again till we hear from you.

Okay.

Operator, next question please.

We'll go next to Jamie Feldman with Bank of America Merrill Lynch.

Great, thank you. Good morning. I was hoping you could talk about some of the changes to guidance. I think on the last call the team talked about same-store NOI down in the back half of the year. Can you just give us some of the updates on the basic assumptions behind, how you’re thinking about the back half of the year?

Back half of the year, still in work in progress Jamie. Obviously we raised a range last night to reflect the fact that we outperformed in the second quarter. We’re still taking a wait and see approach but we would say, Mitch and I would both agree that things look better than we thought when we took over the jobs seven weeks ago. So it’s still little early to tell as to how the third quarter will turn out but in no way do think will be at the bottom part of the range; we probably think we are toward the mid to the top and may even exceed the ranges it continue to have good results. That answers your question?

I guess to be clear. So you haven’t really changed the assumptions, it’s more just the second quarter came in $0.03 ahead so you bumped up the midpoint $0.03 ahead?

Yes, I think if you look at it, we had a very wide range previous management had said that we would be unlikely to do in the future, we’ll actually try to be much tighter and more precise and when we looked at the first six months results we dropped the bottom, raised it, put it on to the top and what I’m trying to convey is we believe today that we should have stronger versus weaker future than what previously thought.

Okay. And do you know what leasing spreads were during the quarter?

It's the second.

Jamie, it’s Mitch, it was flat on cash and 4.6% on GAAP.

Positive or negative?

Positive

GAAP, positive, okay. All right good. And then I guess now that you've been there for a while any thoughts on growing the team or other kind of internal changes we may see?

Well, we would say, we’ve only been here about nine days longer than Moses came down with the tablets. So I don't know if we have been that long to answer that question. I think that we're still evaluating both our people in operations and it will be a while before we even come to that conclusion.

Okay, all right. Thank you.

Thank you, Jamie.

We'll go next to Emmanuel Korchman with Citi.

It's Michael Bilerman with Manny. Mitch or DeMarco if you want to take this one, as you think about other changes potentially that you would want to do at the board level, is there anything that you guys feel that you need as you think back to the prior management team there was an Executive committee of the board that went through a strategic planning process last year and the result was stayed of course. So, I guess how do you feel in terms of being able to execute with the same executive committee in the same board that’s fair.

So we have been asked this question in different format, in different ways, probably Mitch and I looking now across the table 60, 70 times is actually indicating little higher actually. And obviously if you want previously it's hard to us to answer that. We think we come to conclusion which I think will make this come to an end as far as the question. [Indiscernible] that both of us. He is a very talented gentlemen, he is a truly brilliant individual and it's been criticized that he didn’t react as quickly enough to what happened to Mack-Cali. We can’t really comment on that because we won’t him. I do know that he had a great sense of loyalty toward our predecessor which probably enforces decision making. I don’t think he has a loyalty toward us, which means he will be much quicker to make the decision the second time around. I had to summarize for him and I’m taking the liberty, I would say other than the love for his family, he loves his reputation second, way before as well. And his reputation has been somewhat damaged here because people have view this has not being as fine at this moment, he has no intention to correcting that, I have no intention to making the same mistake going forward. So to answer that, I think the board is talented, we've got well within great, we have an order committee yesterday, it's really a place that we think we can add value and change things and we have no hindrance whatsoever in front of us.

And have you balanced the capital plan in terms of the capital needs or there to finish out the development effectively have the capital to grow the asset base, as well as the de-lever at the same time. How do you sort of balance that with a stock that well up since you came on if your math on the asset values are correct, you’re looking at the $30 NAV with the $20 stock price, assuming you have no desire to issue the stock getting were below at NAV and destroy value, so how do you sort of balance those things out over a period of time, where you’re not going to sell assets immediately as you’re still evaluating. Thanks.

The one question Michael but I’m here is I think we can answer the following parts today and obviously over the next six, seven weeks until we get to the point where we can lose to plan fully, hope we give you all your answers. We don’t think we have a leverage problem today, we realize that were slightly over leverage. We think we have an earnings problem – first one direct earnings Mitch was, he didn’t focused solely on leasing, he has been looked at improved results the Brown Brothers deal last night was a good win for us, 100,000 plus square feet in the Jersey City it’s a nice thing to happen on the summer debut. Secondly we did look at expenses kind of somewhat hold on – may be even – from both operating and employees cost. Third we didn’t look at what assets we can sell, we want to lay them out, in a somewhat [indiscernible] fashion and not leave money on the table right. We look at recycling capital, we think we have ability to what our balance sheet today would align on drawn to have enough capability to move forward. And as we said earlier with most of the business with enhanced disclosure us dropping it down to subsidiary, allowing us to have other options to raise capital to complete that plan, its little early, they tell you what all the sources is regional that will be spending primarily the month of August trying to formulate.

That’s helpful as you think about the just on the multifamily side and creaming up a lot of these joint venture and subordinate interests, a lot of those assets are effectively in the core markets if you want to be in along the Gold coast and New Jersey water front, how do you balance the desire to maintain that ownership position in those markets and a capital that would need to fluctuate a buying of those interests versus just selling that interest at some profit relative to what you pay.

Michael, this is Marshall Tycher. We’re going to have to approach each of these institutional partners with the different story and different outlook for each asset, clearly we want to change our subordinate position in this legacy assets and its going to be a combination hopefully a buying up into those partnerships where you think its strategically important such as the water front and may be somewhere we actually swap interest and create larger interest in certain assets and exit others. So it’s the process we are going to spend of month of August as Mike said analyzing all the capital requirements and all the assets one of the time and trying to come up with the formula they get us more ownership gets up and legacy assets and of course going forward on new assets as much ownerships you possibly can to increase our NOI.

Great, really appreciate the color. Thanks guys.

Thank you, Michael.

And we'll go next to John Bejjani with Green Street Advisors.

Good morning guys. Mike, I know you guys still have a broader strategic plan forth coming but can you help quantify some of your balance sheet goals as you see them today?

Well obviously the biggest goal in the short term is how to maintain in investment grade rating, right and we look at that very hard every day. We also look at the fact that our first responsibility that chief – is the close the gap between while we perceive by NAV to be and what our share prices and we look at do those steps as best we can which might indicate that might go up slightly in leverage. But we in no way manage to perform one of the limited options, so we carefully to monitor John exactly, how much cash and capability we have well our financing sources are and as Marshall just laid out, in order to carefully look at creating value for every dollar that we spend but in no way do we want to effectively go to true junk status but we may slightly go from leverage depending upon the next plan. We expect to be selling and recycling capital possibly as Marshall said recycling money in the multifamily business and then looking to invest in our core business also balance by the fact that the opportunity comes up in and make sense buyback stock or pay down debt we do whatever takes to make any via reality is suppose to possibility.

Thanks. That's helpful and on the operation side so management had previously expected to be around 81.5% lease by midyear instead you guys are almost a 100 basis points ahead of that and it looks like kind of retention has been better than it’s been the last couple years. I guess can you elaborate a little on what are you seeing as the out performers, the drivers of the outperformance first guidance and on a look forward do you see low hanging operational through that you can take advantage up to improve operations going forward.

Let me do the second one first, as we indicated Mike and I have told have the portfolio and what we’ve seen is questionable decisions about deployment of capital we have seen not maximization of amenities and we’ve also seen not maximization of the use of this organization. So as we start to look at it, as we make those changes in addition to our improved relations with the brokerage community that we are going to see the benefit of that. We’re also going to see what we anticipate will be a potential uptick in our pricing. So let me give you a example of something that we haven’t really discussed, there is a real when we looked at Harborside, we made the decision on the spot that our plan for that was inadequate. We put it on hold, we sent everyone back to the drawing board, they coming back to us with shortly and in the meantime although we haven’t finalized the decision I will tell you we are going to take that those properties off the market for the next 60 days because they are being leased based on what was not on what will be and we are going to bring it back in the market sometime in September so and with improved pricing.

Okay, thanks. And I guess one last question. You guys talked about potentially selectively looking at acquisition opportunities, what would that be is this multifamily, is it office what markets anything you can share on that front will be helpful.

It will be unlikely that it will be multifamily unless we found something that was particularly attractive was some type of deal that was maybe currency based. We think the multifamily platform obviously revolve lot on a - and a great pipeline and some great leadership will take us to right spot. With the office side of it, we have to figure out what we want to be when we grow up, we have to think about what the future is. So if there are opportunities in certain key markets that we felt was strong enough then we gave you enhanced disclosure and a supplemental about our markets it shows that not everything is exactly the same which is statement that we probably used too much in the past and chance is for us to redeploy capital we think is an underperforming market to something that we think is more stable or has ability to perform. One asset that we can add to another part of our portfolio that we can usually manage we are going to look at those, as we will we think we should only with the true goal though, only with the true goal to enhance NAV, to get our stock price to flat to everything an asset value should be.

All right. Great. Thanks guys. Welcome aboard.

Thank you. Have a great day. Next caller please.

We’ll go next to Vincent Chao with Deutsche Bank.

Good morning everyone. Just wanted to go back to the near term performance which has been lot stronger than it has been in the past, you talked about sort of the under utilization of amenities and under utilization of the people within the organizations or capital allocation decisions all of which should result in better performance going forward but I guess just in the very near term seems like those things were longer term in nature just curious if you think about sort of market conditions improving maybe broker relationship reach out program or maybe just very, very low bar being set, I mean what do you really attribute the more near term performance out performance to?

Let me give – let us talk about the brokerage community because that is something that we literally changed overnight. Mike and I both have very great relations in that community and we come with significant history. So we didn’t have to start over in addition just let me give you one anecdote, we one of the first things we did was we took a look at our brokerage agreement, we found out that it was not in keeping with practices in the community, we immediately changed it we made four changes to that agreement. We were fortunate we were signing a deal the week if those changes that week end an internal memo was circulated by the firm by the broker who completed the deal saying just want to advice all my colleagues Mack-Cali has made these four changes, Mack-Cali is back in business and that suppose very confidential memo was circulated to every other brokerage company in New Jersey and made its way back to us here. So that was certainly nice to hear. Fortunately also as part of our – and our time spent in various brokerage offices as you have read the statistics, there has been a noticeable uptick in velocity across a good part of the marketplaces and you can just sense that enthusiasm when we go in the room. It has been the last quarter one of the strongest, there has been a down tick in vacancy in Northern New Jersey and the increase in activity that we saw in our portfolio leading us as I said the best quarter we have had in nine years, that's a long time you are seeing that across - not everyone but we're seeing it in a number of ours. And that's short term, that's 15 activity.

Okay. Thanks for that. And just on the renewal spread or the total spread I think I heard plus 0.7%, and then I thought I heard flat cash, I don't know what difference there was, but clearly better than it's been as well and I guess that's something that you think is sustainable given some of the improvements you're seeing in the markets or was there couple of leases that really skew that number.

What we're looking at, we made the decision, again, as Mike and I told, we felt that, given the state of the number of the assets, I'm not going to repeat the Harbor side example, but that were priced on what was. So we're in the process of revisiting our mark-to-market information, we've seen it and we know a number of examples, and that will part of what we discuss in mid September.

Okay. Thank you.

We'll go next to Ross Nussbaum with UBS.

Hi guys, good morning. Couple questions. Can you guys definitively say, well, the CEO search process of the new management team is underway, was the Company being shocked with their offers being evaluated, or was that not even a process that was going on.

To our knowledge, there was no formal process. The best we can comment on that type of information, Ross.

Okay. I guess the second follow up would be based on the numbers you went through earlier in response to John Guinee's question, is to where you think the NAV might be. Why wouldn't the Board go out and see if anybody out there wants to pay that price at this juncture?

I think we believe that the process is one that you create the value first, because someone would have still really discounted that number, and we've done obviously a good job in the seven weeks that we've been together of realizing what value could be, setting the path on, and as we said earlier Ross, we've been told that no option has lost the table, and to your question, as firmly as we can. We believe that we can create that value and then the shareholders will get the benefit of it. And that's the best I can comment on that information today.

Okay. The third question is little bigger picture, you mentioned, there's an earnings problem, slightly too much -- we'll see where the occupancy number is in two years after this big 2017 rolls, I guess the question is, at the end of the day, while you might be trading at a pretty hefty discount to NAV, it would seem to me that there's still a very realistic scenario out there that the earnings of this Company may not be materially higher few years from now? I'm curious what you think about whether that's a realistic statement?

We don't think it's that. I think if you look back in our balance sheet, Ross, you'll find a lot tremendous amount of additional cash flow to that that have value, whether it's a building that has no occupancy, a building that basically just covering operating cost, land, obviously Marshall's business doesn't produce material cash flow today, but it will in the future, and an ability for us to develop apostles and judiciary over time. There's a number of ways that we can add significant value, but we do agree, and we've been open about it, that we have earnings problem today. We have an earnings problem because we have operated buildings probably at a rich number and have too higher expenses. We have an earnings problem because we probably have the wrong alignment of employees per asset that we manage and lease. There's a number of ways that we can enforce earnings. If we had to lease just for example, to where we think the markets are, where the markets are, just not beat them but equal them, we might have added $25 million for the bottom line, which is $0.25 a share. You do that, plus make some expense reductions, you really don't have much of an earnings problem left. So there's a lot of work for us to do. But the day's are long in summer, and we're happy to be here.

Okay. And lastly from me, Mitch, you mentioned the four changes you've made in terms of your relationships with brokers, can you specifically outline what those were, that have been so positively received by the brokers community?

Actually I talked about those four changes to the brokers agreement, and we had a forbearance clause in there, which particularly as the brokerage industry has moved to the public arena, creates contingencies that prevents them from booking it. We also had pay-out and coverage issues all of which we've addressed. In addition, we were paying by paper cheques, so we've moved into the 2,000's [ph] on that, and all of which been appreciated, but when you talked about more broadly changes to the industry, the biggest thing is our outreach and availability, we return calls immediately, we visit offices, and those things have significantly resonated and notwithstanding competitors, brokers talk amongst each others, and among shops, that message has gotten out quickly.

Appreciate it. Thanks for that.

And we'll go next to Gabriel Hilmoe with Evercore ISI.

Thanks, good morning. Mitchell or Mike, can you walk through some of the offices refurbishing opportunities that are in the portfolio, maybe similar to the old Pearson building, just how big that opportunity could be?

Refurbishing or repositioning?

Repositioning.

Take example, the Pearson building, Upper Saddle River, it was high 400, 490,000 square feet. The building was built in 1980 initially, had an addition put on, when Pearson moved in 20 year ago. That building will be torn down by us. It'll be transferred over to Mack-Cali - sorry, to Roseland, will be on their books, they will take it through the approval process, and turn that likely into maybe just slightly less than 500 units of multifamily sometime in the near future. The way we look at that though, if we get to define math is, that's an asset that we think is worth $50 million on its current state in Roseland. By the time Marshall, takes it through the process and turns it into a vibrant multi-family community, we'll probably make 2.1/4x money or 2x times the money in a four year span of time. So we think that asset on a capital redeployment goes from being worth $50 million to worth $100 million or $125 million within three to four year time frame. There's a number of institutes, we've gone through that and as pointed out in the supplemental, we've had some -- obviously billion ideas from Marshall and his team, about taking excess land and parking lots. So really just taking things that we have little to no value, and creating multifamily communities and [indiscernible], short hills - third one, I'm losing my mind, [Morris Plains] [ph], and each of those examples, and Roseland is another one, we're able to basically take sites, reposition them, turn them into something. Each time we do that, it's an average between 250 to 500 units, so we're adding to the pipeline, so the last quarter pipeline was 8,000 miles over just about 9,000 based on a repositioning effort.

Okay. I know you're coming out with a broader plan in September, but can you just give just kind of rod strokes on what kind of levels of asset sales we should maybe expect to see over the next year, year and half, given what you've seen so far in the portfolio.

You'll see nothing in the third quarter because obviously we took over just before the beginning of the third quarter, on June 3, we've been evaluating. But we would put out a couple of $100 million per quarter for the next several quarters going forward as we reposition our capital. And we'll give you a better plan for that. So we're having brokers now go through the list that Mitch and I have put together for the first quarter. So, what we do, just if you didn’t understand it, every week we spend two days in the field, sometimes more than that, reviewing markets, walking every building, looking at our competitors, coming back and then looking at asset management plans, and then making the determination on an initial cut whether we think that asset is something we could actively manage up, stabilize or we should actually think about removing from our portfolio. And from that we formulate a list and then talk to brokers about the process to sign those tests.

Okay. That's helpful. Thank you.

We'll go next to James Sullivan with Cowen Group.

Good morning. Two questions from me. First one for Mike DeMarco. Mike when you walk through the NAV building blocks, you came up with a number for the Roseland platform, and I'm just curious how you - what kind of math you did on the value creation in the pipeline which was kind of extensively outlined in the supplement. How did you factor that into the NAV?

The couple of ways to look at it, and we're not doing obviously doing a math, but we think about it, we invested $135 million in 2012, little less if you think about some of the earn outs, right, so that was $1 plus per share. If you look at the URL, what we had invested in net asset, which is obviously say, almost $100 million, plus the remaining value that you could create on the two of the towers not yet built, there's another couple - say another dollar or two, in value. Then we invested about $260 million, if my mind says me correct about acquisitions that we had bought. Right, then you wind up, we had bought other assets with joint ventures and then we have the pipeline. We added a lot Jim and it is obviously math can really be plus or minus depending on discounts, our pipeline is 9,000 units, if you think it was worth 10,000 a side which is incredibly low right. You wind up with a number, if it is 20,000 or 30,000 more likely 30,000 to 40,000 given the quality of multifamily which runs as you know 15% to 20% of construction cost with 30,000 to 40,000 per unit of 9,000 units, you have a couple of dollars just in the pipeline. If you add those components up, just count them back and you come to a range between $8 and $9 which we more than fully outlined in our plan coming in September but I just wanted to give a kind of a reference check to that.

Okay. And second question for Marshall and certainly appreciate the separate sub on the Roseland platform very helpful. Can you walk us through this two assets where they projected stabilized yield is lower than average certainly the DC asset on Second Street and then URL I think is a 61. If you can walk us through - when you project the revenues, are you projecting increases stable rents, how do you trend the rents in your development for projected yield purposes number one. And number two, are those two projects performing up to your expectations at the time you initially decided to go ahead with them or they better or how are they doing?

Sure. First of all on our projections we do not trend so that stabilized yield is based on the rents we projected going into the project, so if market rents grow those yields will grow. The two assets you referred to, if you look at their returns in relation to some of the other projects we are developing, those are both urban communities that historically have been built at a little bit of lower return going in but have also traded as much lower cap rates going out. The DC assets performing is at it should perform and new apartment communities inside the district are generally delivered in and around the 6% return between 575 and 61, 62 that's pretty typical similar to Manhattan and other markets that have very expensive cost going in. The yields are slightly less than some of the suburban communities or even semi urban communities but the returns on the exercise are always quite higher. URL similarly was priced, these are the rents we are projected for URL project we just conceived three years ago those numbers have not been trended or readjusted and rents in Jersey City have grown dramatically. So our internal reviews and we are not going to publish projection now because we don’t really want to guess what we think necessarily around the year and year and half from now but our internal projections for those numbers we not yet published or significantly better returns than what you see on the sheet, this just represents the yield that was put together as far as rents. So well over two years ago.

So is it fair to say Marshall that even though the yields on those two projects that I mentioned are little lower than average, the development margins as your exit cap rate here if you will, your stabilized cap rate is the average no reason to think that the margins on those two projects are any lower than the overall portfolio development?

That's correct. And you’re going to see most new production of apartment communities yields are low as 575 and up to the mid sixes and lot of that demand depends on where the located and type of product is being built but presumably exit cap rates are as low as 4% and as high as around 5%. So we generally most of our communities without trending rents are developing to 150 to 175 basis points spread to cost and that is 30% to 35% profit over the initial base cost of the project. And that has been typical for lot of years.

Okay. Great disclosure, very good.

We will go next to Jamie Feldman with Bank of America/Merrill Lynch. Mr. Feldman, please check your mute button.

Thank you. Can you talk a little bit more about operating conditions in the suburban markets, you sound a little bit more positive on operations since than what you have seen since you joined, but what specifically you seeing in the suburbs?

Jamie it is Mitch. Unfortunately as a company we have been defined by our worst performing markets. So as we have talked there are number of markets and property types that are actually performing quite well. So within our portfolio we have 4.5 million square feet of office flat space divided between New Jersey and Westchester County in New York. The occupancy there is 92%. We have a number of markets that we’re very upbeat about Monuments County, Princeton, Metro Park where we are currently located and of course, the Jersey Waterfront. If you look at the marketplaces that are somewhat transit-based, they are performing at almost 600 basis points better than non-transit-based markets. So, this is not to suggest that we have markets that aren't problematic but I think Mike and I were guilty of whatever everyone else was is that when we walked in the door, we similarly define the company. So, what we have found is a number of truly positive examples on an absolute basis and others where we have the opportunity to improve. The last thing I just want to tell you as we looked at this and this was a organizational performance and it sometimes hard to kind of align all this stuff up but if you say we are in roughly 27 sub-markets in New Jersey alone, the bad news is that we are underperforming in 44% of them. The good news is that we are underperforming in 44% of them because there is opportunity for significant improvement.

Okay. Thank you for the color.

And we’ll go next to Scott Frost of Bank of America Merrill Lynch.

You touched on investment grade ratings. One of your goals is to maintain IG. I wanted to ask how your conversations have gone with NRSROs in latter results, could you tell us - how would you characterize those talks?

We reached at each one of them, the first we got here. We’ve had several meetings. They have given us the drill about monetary results. We appreciate your openness, your disclosure. We’ve told them what our plans are, and more fact hopefully short term earnings so that results will be better. We acknowledge the fact that we carry a little bit too much leverage today and we’re going to work on a plan to hopefully reduce that over time. Whether our time frame fix their time frame is yet to be determined but every conversation we’ve had today is been supportive and productive.

Okay. Thank you for the color.

Have a great morning.

And with no further questions in the queue, I would like to turn the conference back for additional or closing remarks.

Want to thank everyone for coming this morning. We've had a little larger audience than normal. We appreciate the support. We look forward to speaking with each of you in the near future. As always, if any questions, feel free to contact us. Thank you so much.

Again, that concludes today's presentation. We thank you for your participation.