Good day, everyone and welcome to today’s Mack-Cali Realty Corporation Fourth Quarter 2015 Earnings Conference Call. Just as a reminder, today's call is being recorded. At this time, I would like to turn the call 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 fourth quarter earnings call. This is Mike DeMarco, the President of Mack-Cali. 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, annual and quarterly reports filed with the SEC for risk factors that could impact the company. As disclosed last night, our results show we had another excellent quarter. Our initial hard work is taking root as we move quickly and effectively on announced transformation. While this is a long process, we have made significant progress over the last few months and will continue to make meaningful changes in the near future. As always, we look forward today to an open dialogue on our results and plans going forward. We filed expanded disclosure about operations in two supplementals, one for Mack-Cali office portfolio and one for Roseland Residential Trust, our residential subsidiary. We will be referring to key pages on those supplementals during this call and always we’ll continue to provide the best disclosure of our operations, strategy and results. We're going to break the call down to following sections. Tony will recap our operating results for the quarter and year. Mitch will then discuss our office leasing results and our views of the market. Then Marshall will provide an overview of our multifamily operations. I will then provide an overview of our capital market…

Thanks Mike. With respect to earnings, as indicated on Page 8 of the supplemental, FFO for the quarter was $46.9 million or $0.47 per share as compared to $34.1 million or $0.34 per share for the quarter ended December 31, 2014. For the year ended December 31, 2015, FFO equaled $188.1 million or $1.88 per share as compared to $162.7 million or $1.63 per share for 2014. For the current quarter compared to last year, the increase in FFO per share resulted primarily from severance cost of $0.13 in 2014. I would like to take this moment to go over 2015 activity. As we mentioned in the past, Pearson Prentice-Hall lease ended in the first quarter of ’15 and we disposed of a number of assets through the remainder of the year. Even with the loss of revenue from the lease and sale of assets, we ended the quarter with core FFO of $0.47 per share, flat to the same quarter last year and we are well positioned for improved results in 2016. We reported a net loss for the quarter of $31.7 million or $0.35 per share as compared to net loss of $9.2 million or $0.10 per share for the quarter ended December 31, 2014. For the year ended December 31, 2015, net loss equaled $125.8 million or $1.41 per share as compared to net income to $28.6 million or $0.32 per share for 2014. The net loss for the year was caused by a $197.9 million of impairment charges on properties currently being considered for sale, which are part of a recently announced strategic initiative. Same-store NOI was up 5.9% on a GAAP basis and 3% on a cash basis for the quarter ahead of our expectations and due to both better leasing results and expense savings.…

Tony, thanks. Our lease base at December 31 2015 increased 82.2%, up from 85.8%. The 40 basis point increase was driven primarily through positive leasing absorption with the 10 basis point contribution from acquisition activity. Let's now turn to the leasing results for the quarter as indicated on Page 11 of the supplemental. We signed 88 deals totaling almost 900,000 square feet, 180,000 square feet of the leasing coming from new leases and the balance of 720,000 square feet from renewals. For the full year, as indicated on Page 9, we completed 443 leases totaling just under 4 million square feet of which 1 million square feet were new and 3 million square feet were renewals. This represents the highest annual leasing activity in this portfolio in the last 10 years. Topping the list of the quarter’s significant transactions was a 350,000 square foot renewal with Vonage America for their corporate headquarters in Holmdel, New Jersey. The lease which would otherwise have expired in 2017 was extended to late 2023. Other notable deals included new leases with the Ascensia Diabetes Care for 44,000 square feet and a 54,000 square foot renewal expansion with Corey Public Relations both in Parsippany. Lease rate roll for all fourth-quarter transactions as show on Page 12 of the supplemental was a negative 0.5% on a cash basis but a positive 8.3% on a GAAP basis. Lease spreads for renewals were down 0.1 on a cash basis and up 9% on a GAAP basis. Based on our analysis of initiatives we feel that we can continue to improve our occupancy over the next four quarters by aggressively marketing space in our existing buildings, selling buildings that are under-performing and selectively adding buildings that have superior occupancy such as we've done with 333 Thornall and Metropark. We…

Thanks, Mitch. I’d like give you a brief overview of Roseland, our multifamily division. As Mike mentioned, we filed an expanded supplemental this quarter to help promote a better understanding of our residential business. To further facilitate disclosure transparency and capital flexibility, we also formed Roseland Residential Trust on December 31, 2015, a distinct subsidiary of Mack-Cali. Roseland Residential Trust execute all of Mack-Cali’s residential activities, including the buildout of Roseland’s current residential land portfolio, repurposing and conversion of non-strategic Mack-Cali office assets and the luxury apartment communities and the sourcing of the new marketplace development and acquisition opportunities. Roseland has grown from initial Mack-Cali investment in October 2012 of $115 million to a current NAV of approximately $1.1 billion, 90% comprised the a consolidated or joint venture interest and almost 75% concentrated in New Jersey waterfront and greater Boston regions. Our platform which is owned asset by asset by us and our various JV partners has a gross value of approximately $4.5 billion. As reflected on Page 8 of the supplemental, we have achieved growth across key financial metrics over the last three years and envision continued growth over the next three years. As highlighted on Page 10 of the supplemental, we’ve made progress on turning our substantial 19,500 unit apartment portfolio into operating assets. As of December 31, 2015 this portfolio was comprised of 5640 operating apartments, 2570 apartments under construction, 1900 apartments’ scheduled 2016 starts and the future land development portfolio of 9380 units. I’d like to share additional activities that we undertook during and after quarter end. We purchased from our partner UBS their senior 57% interest in Chase I, a 371 unit recently stabilized apartment community at Overlook Ridge, Roseland masterplan community 5 miles north of Boston in Malden. The subordinated interest that we carried…

Thanks, Marshall. Moving on to guidance we expect full year 2016 FFO to be in the range of approximately $2 to $2.10 per share. We’re not changing our guidance at this time and expect first quarter to be approximately $0.45 to $0.49 of FFO per share. As indicated on Pages 15, 16 and 17, we gave you some updates to our 2016 assumptions which I went through as follows. One, the percentage of lease is increasing to a range of between 88% to 90%. Our leasing activity is increasing, as Mitch commented, the waterfront and several other markets are strengthening each quarter. Two, same-store NOI is increasing to 2.5% on a cash basis and 6% on a GAAP basis. We’re driving rents on all assets, we’ve achieved this [ph] in the past quarters as indicated on Page 20 the supplemental. Three, non-core sales of $750 million which is the midpoint, we have 450 predicted for the first half of the year, we’re in the process of signing definitive sales contracts, approximately 400 million to 440 million as of today, with a cap rate of approximately 5%. In addition, we have about $300 million slated for the back half of the year at an estimated cap rate of 8.5. The blended rate on the entire 750 is approximately 6.5%. Development expenditures are assumed to start the seven multifamily projects in 2016, the projected cost of these starts estimated to be $633 million, with our capital requirement in 167. In addition, there are 8 projects currently under construction, including three starts in the third quarter and two starts in the fourth quarter. Estimated remaining capital for these projects is $81 million. On average, we expect our construction [ph] projects to be financed 65% debt to equity, with some JV partner equity. As…

[Operator Instructions] We’ll go first to Manny Korchman of Citi.

Good morning guys. And thanks for the increased disclosure. Just if we could focus on your comments and the relationship between NYC and New Jersey, and maybe tie it into your expectations for ‘17 renewals at waterfront, where are those tenants coming from and are they -- in your conversations with them, is it the New Jersey incentives that are throwing them there, is it something else? And so can you sort of give us some flavor of – at least the type of tenant you’re talking to in New Jersey?

Manny, I am going to do first and Mitch will do the second, because we both deal with this all the time. What you’re seeing is we talk about it every day, tenants from 15 years ago who are rolling off, so they did a deal in 2002, 2001, maybe we had a 12 year deal, rolling out to a totally different environment in New York City today. So people comment about cooling down, you really have to look up the one-up at rates, corporate tenant experience, but the number of talents and of course all the industry is kind of the mix now is much wider than what we’ve seen in the past. We’re used to just see the back office and banks. We don’t see that anymore. Mitch, do you want to comment?

Yes, you’re also seeing, in addition to what Mike indicated, Manny, expansion because the expansion alternatives in New York are similarly so expensive. And when you look at the Grow New Jersey program in addition to our all RAMs without the program being anywhere from $20 to 40 less square foot, you add that program, it could add another if 20 million to $25 million to that. So they’re really compelled to look at that both front office and operations.

Manny, last one, as people may have noticed The New York Times ran a very nice article about Jersey city. It’s not just a place to put people who work, it’s a coming up place that people want to live and actually conduct their activities after work. So we find that’s another thing. So you really get the pickup in activity when people feel they can attract and retain talent by putting people in an office environment that they want to be in, which is what their city has become.

And then if we think about your disposition plans, has the market volatility changed your expectation expectations or you’re finding get assets out there, sooner it seems like you’ve accelerated the process, just a little bit?

Now we had the same proposal that we conducted on our investor day, we told you we’d move quickly, people doubt that we move that quickly, I guess, because of past experience but we have lived with our expectations. We started the process after the investor day, we contracted with six different firms, the first books we put out 2100 of the leased agreement management, so we could get the highest value price and take the least market risk because everyone knows – commercial mortgage delivered in one deal in DC, we have another building in DC and we have one in New York, we’re going to contract relatively soon. After that we’re now engaged with conversations with a number of other parties without the other assets that we have on the market. We wanted to get through that as quickly as process and then look at second round of parcel dispositions around apartment year. One thing is as we made this comment on a road, of expense reduction and our asset discipline wasn’t a shot deal for us, it’s ongoing, monthly, quarterly process, so you’re going to expect us to constantly look at what we own to see it’s the right thing and constantly look at our expense structure in relationship to what we own.

I mean my last one for Marshall, if we think about Roseland RRT, in the future, are the deals going to lean towards – lean more wholly owned or still within JVs.

We’re definitely heading more towards wholly owned assets and even we do JV, we’re doing them on a heads-up basis, so we’re no longer – we’ve entered into any subordinated joint ventures since we began the discussion at investor day. So for the most part we’re trying to be smart about use of capital whether we do it is a heads up joint venture or wholly-owned, we will only be doing what we have, nobody in front of us on cash flow, so we’re going to maximize the yield for our capital investment. Clearly with the going out of this deal secured to raise new equity capital at an entity level, it’s our anticipation that we will be almost exclusively wholly-owned once we recapitalize the trust with new investors.

We’ll go next to John Guinee of Stifel.

I am also looking at Page 18 which I think is where you guys finished. If I look at 180 million of FFO, 180 to 200 net of dividend and that's about a 120 million to 140 million and then I look at all the CapEx, you’ve got to spend based only in CapEx. Non-incremental and increment leasing costs just about 140 to 165 million. So essentially core FFO is not covering all those costs. Do you think I can cover those costs next year.

John, it’s a one-time event for us. When you lease up from a low level that we were at, John, the 82%, 83, you have to spend money in order to get to the new level. So this year, it’s kind of a win situation, the winning is we’re going to occupied, the losing is reference, we have to spend some capital expenditures out there. But we have the resources, is one reason why we commented on investor day, we cut off expenses down in order to create the cash, so we wouldn’t have this problem. And that money gets phased-in over the course of the year, but at the end, we wind up with a – we were predicted when we took over the team to have earnings of $1.60 to $1.65 and we think it will be a $2.05 to $0.06. That $0.40 came through the extra leasing and leasing has some cost to it. But the leases we’re signing or longer in term than what we’ve done previously, so we believe this is be a million rated over time.

And then sort of a second question, it makes all the sense in the world to monetize or to recapitalize Roseland as a separate subsidiary and then the uses associated with that. One thing that I'm struggling with, and maybe you could help us a little bit is with 700 million to 800 million of office sale proceeds which it still feels like a better time to be a buyer than a buyer, and 5,00,000 to 600,000 office acquisitions in 335 to 355 all other reduction of debt being the obvious why isn't it more like a couple hundred million of office acquisitions in much greater reduction of debt?

The problem we have, and we’ve talked about this internally, we would love to reduce debt more significantly, we think it will be the next wave of things that we do. At just today [ph], we now have a planned sale and tails having focused on waterfront? It’s – passed up on opportunity on the waterfront as they come out and not fulfil that plan. But what we are not going to do and I made it very clear, we’re not going to Stanford, we’re not going to Philadelphia, we’re not going to Dredge [ph], we’re not going to any market that we haven’t already expressed an active interest in and have to have a certain threshold, more to absorb that for us. So that the acquisitions today are a holding place and we will reduce debt. Also, our debt isn’t that pay down, we have a lot of longer term bonds with some heavy penalties on them. So we're looking at it at the latter part of the year, we’ve got prolonged six handle [ph] which has six hand to put but love to get rid of that. That one – we have some other things next year but you will see us over time reduce debt and have more flexibility. My coverage problem doesn’t exist, I cover out debt and we will cover it better as the quarter goes on, because we’re getting increased operations, we’re getting low-cost coupons because we will be paying. What people have a problem with is the net debt to EBITDA which we also have an issue with. That is effectively influenced by how much CIP we have. But we have to make our developments in Roseland which then pay off we think handsomely at the end but in the interim we carry a slightly higher debt level which we now plan to basically reduce as we laid out through a series of steps. But your point is absolutely in the range of conversations we have with the board. We look at what we manage from earnings, look at what we get from growth, the opportunities it has to create a company at the end that will get the highest value, and that’s what we balance.

Jamie Feldman with Bank of America Merrill Lynch has our next question.

Hey, thank you. I guess, sticking with John's question on CapEx, what do you think CapEx for the portfolio would look like in a normalized year, call at ‘17 or ‘18?

We'll have a much smaller portfolio of assets. We believe the buildings that we currently will have at that time will have lower CapEx requirements. We suffer as and we've been very honest about it by inheriting a portfolio, the team that had somewhat benign neglect, maybe not even benign, are just to neglect. So therefore, we've been spending money in order to bring those assets up to speed, we would expect the CapEx requirements will ameliorate down with base building might be $20 million to $25 million. And one thing that Mitch and I didn't mention today so far is that, our concession package is going down. One of the rates, if we've been able to raise rents is one way and the second is the concession both on free rent and then also what we've been spending at the tenant has also come in.

Jamie, it's Mitch. One other – this is the expenditure but the promise of the expenditure of CapEx, that’s been on deferred maintenance, we’re seeing activity which we will be likely announcing at the next call, and not before, on space that’s been sitting vacant five and six years. So there was that huge opportunity costs all those years of not expending it.

That makes sense. On RRT, what are your thoughts here and eventual spinoff of the entity?

So we've always been about options, so everything is on the table with us, we said that. There is a process upon which you go through which is to create the value in order to maximize it, so you can have the option you want. I have a quote that I use all the time, objectives stay the same, options change every morning, so spinoff is one thing. There is a number of other things that we could do in addition to that in order to get the value, but it’s on the table. And we ran it out, so we can showcase it, raise financing on it, raise equity at that level to allow us to basically realize what we think is the inherent NAV. As Marshall mentioned in his comments, we started this process at $115 million acquisition three years ago just a few months ago, and we've actually grown this business to a real platform. And Roseland today, if you look at it on a gross basis controls a portfolio that has about $4 billion of assets and when we grow this thing up into its fully matured state, it can be one of the best multifamily platforms in the Northeast by far.

Okay. And then I guess internally to RRT, are there any other personnel changes or if they can have a standalone board, any other changes we should expect here?

We have some governance issues we will have to deal with raising a partner, we don’t think it will be substantially different than we run our business today. We will still be the 80% owner, so therefore we will be actively in control but we’d have a partner, and we will fulfil partner responsibilities.

And then we heard Forest City yesterday talk about starting a new project in Jersey City on the residential side. Maybe just some thoughts on the supply side in Jersey City?

I think I will this over to Marshall but the space gets quickly absorbed, I mean it is a market that is raising in rate and deliveries are being well absorbed. Marshall?

There certainly are a number of starts in Jersey City, it is the most active submarket in the state and it’s done quite well based on, with all things continued growth in the office market and the continued unaffordability of Manhattan. Jersey City actually now is the destination that the New York young populaces are willing to live in, it used to be, they just want go to Brooklyn but now Jersey City's experiencing that same type of the immigration and migration of new residents. The last couple of buildings that have opened and leased at 5060 units a month, fantastic pace. So we haven't seen demand slow, it is a lot of units we will have to see if it has that kind of velocity of lease of each time a building opens but up to now leasing velocity has been spectacular and the rent growth has continue to persist. So I think as long as the overall economy stays as it’s been relatively consistently as it’s been and in New York state is unaffordable as it’s been, you will continue to see a submarket like Jersey City thrive.

Jamie, also if you look at AvalonBay’s less supplemental they bought building in Hoboken recently, at just around $600,000 a unit and then we happen to know because we look at that through the brokers that we deal with, the sub-form has caved [ph]. I don’t think they would purchase that if they feel that the absorption in the market wasn’t veered off [ph] what they currently vision them.

And then last question for me, so you talked about incentives helping Jersey City, but maybe if you could talk about Parsippany and Metro Centre, like just some of the other Jersey sub-markets and what you’re seeing in terms of demand and what your thoughts would be if we -- if you do see a slowdown in New York, how those might be impacted?

Let me deal with the last part, which is the implication that there is a slowdown in New York and that may extend into New Jersey. First of all, we are the largest owner in the state of commercial properties. So we’ve got a pretty good take. We have unprecedented activity and we have people who have been involved with the leasing of our portfolio for over 15 years here. I have mentioned it’s related to the waterfront 1.5 million square feet, I could have easily said almost 2 but that's on the incremental 0.5 million square feet, we didn’t have the same degree of confidence. We are seeing activity at high levels across our entire portfolio and so that’s -- as it relates to us. As it relates to the market, the brokerage firms don't always agree on everything but if you read the reports of each one of the major firms in the state, each one is optimistic and start talking about being poised for continued growth but they anticipate ‘16 to be a good year. And then lastly going to our position about what’s happening in New York, when you look more closely at some of the statements that have been made, every person has said that activity is strong going into this year. There have been questions about the latter part but in terms of the activities that are being seen in terms of both the ownership side and the brokerage firms, they are all quite busy right now.

Jamie, one comment on Metropark in particular, we bought a building recently, I think when those, we closed in the fourth quarter, we had prescribed $32 rents, or signing deals at $35 in the two buildings that we have now. So we have seen a pickup in activity, we’ve seen a pickup in rents. We actually will probably be a 100% occupied in the two buildings that we currently have and we see the same activity of pickup in places like Parsippany and obviously Short Hills and Princeton and Monmouth all that we do business in, so we’ve seen actually good underlining foundings. The big thing to remember is when we shift the non-core out and we reposition other assets during the course of the year to Marshall’s business, the buildings that will last as indicated in the supplemental have high degree of occupancy and the leverage therefore goes to us as opposed to the tenant. When there is 90% or 88% or 89% occupied, you will be strengthened than you do at 82, 78 or 77.

So I guess how much of the demand you're seeing is, if you've got a new approach to managing these assets, and running these assets as opposed to actually tenant growth, job growth?

It's a combination of two things. We're open for business and we're being more selective about what deals we do. And then also before you start the change they said, we've dropped the bottom out either through sales or repositionings. So the core that's left is the asset that we can work with. We're actually delineating our problems as opposed to creating them.

Jamie, it’s Mitch. On an earlier call, I had indicated sort of a bad news, good news scenario that – when we aggregated, we sufficiently were underperforming the markets we are, as we’ve gotten selective. And as you look to 26 and 27 of the supplemental, in our core markets, we are 600 basis points over what the market is. So when you – and we have the benefit of what I indicated earlier, of size and people wanting to do business with a large credible institutional owner.

Cowen Group’s James Sullivan has our next question.

I wonder – this question is directed to Marshall. Marshall, we have been hearing this quarter in some of the calls some cautionary comments from some of the apartment REITs about the outlook in Northern Jersey for 2016. And of course there was an earlier question about the supply numbers, that you guys answered. I am just curious if you can tell us kind of year over year, as you assess the outlook for the different markets, Boston, New Jersey, DC, what your expectations are for revenue growth, expense growth and the resulting same property NOI growth for the year?

I think those concerns are certainly legitimate. I mean there has been more starts in the Northeast in the last couple of years than there have been in prior years and certainly we’ve had a nice run on the economic side as far as job growth and apartments certainly tracked to some extent. So to the extent the same store rental rates and occupancy have grown each year, I guess the outlook of levelling off is fairly realistic. A lot of the properties both in our portfolio and in others have been suffering the cash flow flight of tax appeals with the various jurisdictions there in. So some of these properties actually are showing – I know Avalon as well on flat income and part of it is subject to tax appeals they have been filing. All these municipalities have been aggressively reassessing and owners have been aggressively fighting back but it takes time, so those have been an impact on cash flows as well. So I think it’s going to stay strong as it’s been in the last few years, I don’t think anybody thinks it’s going to continue at the exact same mind in the last three or four years, just because of the number of starts and slight slowing in the economy. But I don’t think anybody is seeing dropping off the cliff, maybe rents are going to flatten out, occupancy might lower a point or two. I think New York had a big burst of starts because of 421A, so that is also immune to the market, otherwise it wouldn’t have been there but I think it will be relatively short term for most of these submarkets.

But maybe just to be clear are you projecting same property NOI growth in each of your major apartment markets or are you projecting a flat same property NOI growth for this year?

We are expecting a slightly growth this year.

And maybe if you could clarify something, in the prepared comments when you talked about the Short Hills project, I think you had phrased, you had the approvals in hand, and I understand that, that’s variance free project or proposal. But if you could clarify there have been some continued hearings in the township I guess over that project. If you could talk about what conditionality if any there is on your 2017 target start date? And just a broader topic of repurposing the project in Saddle River where you could have sensitivities in the town for this kind of project. How confident are you guys if you are going to be able to do both of those projects?

As I mentioned before over Short Hills, my comment was the zoning is secured and the land use process in New Jersey and most of the states we work in of course, you have a masterplan, then a zoning plan and a site plan approval, all municipality levels as well as other state and county permits. In Short Hills, we did change the masterplan in Short Hills and rezoned the site, both of those approvals are complete, so we are now in the site plan application process. As you mentioned it is variance free, so ultimately the municipality will grant us the site plan approval. It is controversial, we do have a residents with concerns most likely so, and we’re responding to those concerns in the site plan approval process. We ultimately will secure an approval, it will have conditions and we will meet those conditions that we can get a start. We’re very confident in our Short Hills schedule. Repurposing is an interesting business, it does involve the public, it is a land use process. As you’ve noticed in our earnings calls and in our reporting and investor day we never tell you about a repurposing until we have something to tell you about, because it's a moving target on timing and public process. So Upper Saddle River we’ve been negotiating a settlement with the town of Upper Saddle River, we’re very close, we’re actually papering that now. So we do believe that we will be able to settle that with the Upper Saddle River and complete an approval. Short Hills, as you mentioned as well, as you’ve seen we’ve just completed a preliminary site plan approval in Bala Cynwyd, which is part of repurposing project there. We've got five other active repurposing cases going right now. We’re not going to report on those yet because we don’t want to tell you anything that we can't deliver. But it is a process, it does have a lot of ins and outs and we’re pretty – we’re very comfortable that the project we’ve embarked on at some point will get approvals. It's hard quarter to quarter topic to guess.

John Bejjani of Green Street Advisors, your line is open.

Morning, guys. For the $300 million of additional sales that you formally added to guidance, how does the 8.5% cap that you've suggested – is that any different from what you might have expected a few months ago?

It’s about 30 assets, John, so you’re going to have pluses and minuses, we get some surprises occasionally, we get some disappointments occasionally also and they tend to bounce out. The 8.5 cap is – it’s going to be a mixed bag because you have buildings that have not great occupancy, so the 8.5 you could have a cap rate lower than that, you could have a cap rate slightly higher than that, that blend to 8.5. But we still feel pretty good about it, we went out and get brokers the thing of value before we start the process which enables us to have some view. We are monitoring it now. On the next call we will give you more an update as we get further into the sales process.

So it sounds like you anticipate selling most of this $300 million on a piecemeal basis as opposed to a portfolio sale?

Yes, it’s on a piecemeal, we don’t talk at the highest price property.

And then, so just looking at your guidance, your operating guidance, you expect 2016 year end occupancy and same store NOI growth to pick up notably, relative to your last issuance of guidance, understood that most of this is due to solid leasing pipeline, but how much of that is due to just the new planned asset sales and a changing of the pool?

Two things, when you get rid of the bottom, you can increase the averages that you get on the top because of just better performing averages. So by facing the facts and selling the assets that we don’t want to own, the ones that we own, the reason why we do want to keep them is because they perform better. So the answer of your question is lot of that reason. The second is we get better performance on our individual leasing activity and as we get back into the latter part of the year we believe will get more and more occupied on buildings and we are experiencing some rental growth in some key markets.

Okay, and then just lastly, so the increased planned equity raise at Roseland is this -- like what drove this, is this a desire to sell more of a stake, is this just better investor interest than you thought or why the change at this time?

Actually we are aiming for 20% and we contributed more equity to Roseland during the course of this period and that just equalled up to the number that we came back to. We always said 20%, if you look at what some of the conversations we made including Chase I, that we did in the first quarter and some other starts, we put more money in, so that’s just given out to the same percentage.

We’ll go to Jenny Suzanne of JP Morgan.

Hey guys, the net debt to EBITDA projection, does that include CapEx on development and leasing?

The projection that we presented on that page has the base building CapEx and the leasing CapEx.

Manny Korchman of Citi has a follow up question.

So, I have a question on guidance. I guess you kept the guidance same, but you have a business at a ramping in higher acquisitions, can you give us a couple of just goalposts in terms of how much dilution there is in the ‘16 numbers from the disposition plan right on an annualized basis. You're talking about almost $0.50, and then how much accretion there is from the acquisitions, because that too an annualized GAAP FFO basis approaches $0.50, but clearly the timing of when you buy versus when you sell would have a dramatic effect on ultimately the range and where you head into ‘17. So can you sort of put some parameters around that for us?

If you look at our overall select as you went into this process, we should be thinking about increasing guidance if we were in a steady state portfolio because it is Mitch pointed out, Marshall pointed it out, and Tony commented about reducing of even interest expenses and underlying leasing, you would say, wow, these guys can make the numbers, because in the transformational process, as you pointed out have things going in and out, which then lead to what’s the net effect. So we looked and said, do we feel comfortable that we will be between $2 and $2.10, we spent a long time coming to the conclusion, in a static yes. Then we looked and said, what’s the negative of when things are sold, we viewed the market being somewhat tumultuous as everyone has, so we want to get our sales done first. If we can find anything to buy then we will pay down debt or cash in the interim. We think there are some things that we might want to purchase and might come our way, therefore we will have the ability to do something that will be accretive to our strategic numbers and also accretive to our strategy. So the comments again, as you pointed out yes, the sales are dilutive that we take them all down, we have to pay down debt, correspondingly we balance the acquisitions back in, some of it’s – I can put into Marshall’s business, some of it is deals we already did, for example, URL and Chase I, were both fairly accretive that we did last quarter. So we have a goal of basically walking a tight line on basic selling things as quickly as we can and prudently put the capital where it makes sense to us to get to that range of $2 and $2.10. We believe today that we have that ability to do so.

Maybe we can attack it from a different angle, where would you -- let's assuming you sold all the assets and you bought all the assets you did. What’s sort of the run rate heading into ‘17 putting aside the operational benefits and interest expense savings. You talked about, just so that we understand a little bit about where those numbers shake out. And then if you can't buy, or you don't want to buy.

They should be flat with what we sell at a blend of 6.5 of what we buy could be essentially about the same. Well you then get benefit obviously to do lease-up in the quarters which come in throughout and we have a lot of progress in that net number. So our fourth quarter run rate, when you look at it gives us a very high number going into ‘17. We realize what we have to, if we want to do, what we really need to do. We'll be taking these types of same situations, taking leasing up, taking some of the profit and using it to basically pay for the things that we need to get rid of in order to get to a portfolio, that gets the right valuation. If you look at our numbers in the way on the valuation basis, if you back out the sales that we've committed to the number 750, then you put in what you still think the Marshall's platform or platform's worth, which is a $11 to $12 a share, you probably six cap to Jersey City in our flex business, which is really where it should be. The core suburban, it’s also a 29% cap rate. So, the things we need to do in order to get our valuation correct and walking through

And I would assume just from an earnings perspective if you decided that you don’t want to put $600 million to work in acquisitions, or you didn’t find the deals that you want, you pay down debt, and sort of the 4 to 5 range, you delever the more at quicker pace and earnings are just modestly lower and you have the capacity at some point to go out but clearly there would be a little bit of earnings drag at least in the interim.

We laid an option, so let’s say if we are unsuccessful on raising equity which we don’t think it will be, we could use the sales in order to fund the Roseland platform. As I said earlier in the call objectives stay the same, options change every morning. Conversely if we raised the equity, now we look and say, okay, do we pay down debt, or full debt, some other piece of debt that we think we can get rid of it, they all have high coupons to them, which it was actually, net net they are basically neutral, it’s the latter part of the sales that back in, the last 300 million that I would take dilution on if I didn’t use it to do something, we’d probably be housing cash.

And if we just look at the core operations, like put all the transaction activity aside, because sometimes people don’t see through, effectively at the same store guidance range, if the same store pool stays the same that you had the last time, you’re talking about a 250 basis point increase, that’s like 7.5 million, $0.07 to $0.08 a share and then given the attractive financing you did in January, you are saving another $0.03, so all else being equal, would have guidance gone up $0.10 if you weren’t aggressively at selling assets, sooner and at a better prices than you originally thought?

If we had done the sales last year, we’ll be up $0.10 on a same store basis. So your number is correct, maybe even more than that. Every 1% of occupancy is about $7 million to us or $0.07, it gets better in Jersey City as you get rents at $39 or $40, the number actually goes to $0.085 to $0.09. As we lease up, and we talked about it, we could actually be full in Jersey City on some scenarios by the end of third quarter, which would be synergistically and obviously more than we expected.

Stifel’s John Guinee has a follow up question.

Mike, you can call me Michael Bilerman if you want. Have a question on page 42 you've got us some -- that looks like it's about to go back, the assets are about to go back to the lenders, 6 Becker, 85 Livingston, 75 Livingston, 20 Waterview and then 4 Becker. Are you including those assets in your asset held for sale numbers or in your disposition numbers?

We’re still working out something with the lender, maybe favourable, can’t comment on it now, like the first quarter, I think we view it positively as it is current. End Of Q&A

And it appears we have no further questions at this time. I would like to turn the conference back over to Mr. DeMarco for closing remarks.

Thank you everyone for joining us this morning. We appreciate your support. Looking forward to talking to you in another three months. Bye-bye.

And again that does conclude today's conference. We thank you all for joining.