SL Green Realty Corp. (SLG) Earnings Call Transcript & Summary

Please welcome Chairman and Chief Executive Officer, Marc Holliday.

Okay. Get my speaking notes up -- we're all going to be set. Good morning, and thank you for joining us for SL Green's 2023 Investor Conference. As always, we plan a full day of great informative presentations for you. And what you'll see today reflects a lot of the work that we've been doing over the past several months, but more importantly, it reflects 4 years of nonstop work on your behalf. While others were on the sidelines, we have been working tirelessly 5 days a week from our offices at One Vanderbilt for our shareholders. Since the start of the first pandemic year in 2020, we've sold $6 billion of real estate. We've entered into 7.7 million square feet of leases. We've sold $500 million values worth of debt and preferred equity positions, and we've paid out $1.25 billion of dividends, staggering numbers that no one can compete with in our space. This year was an inflection point with 2 quarters of occupancy growth for the first time since the pandemic and an uptick in our same-store cash NOI. We are turning the corner, and I'm incredibly proud of what this team has done under unprecedented circumstances. So I'm here today to make the case for SL Green. I truly believe in the substance of our company, our platform and our amazing compilation of assets. I'm an enormous believer in New York City. I just am and that comes from doing business here for 33 years. Things change. And of course, there are issues, but no place beats New York City. I know you have some concerns, and I want to hit them all today head on. You should not be worried about owning and investing in SL Green. There is embedded value in our assets. We are signing leases at a clip faster than anyone else in the city, and we're maintaining a dividend, and we're extending our debt maturities. By the end of this morning, hopefully, you all agree that now is the time to invest in New York, that Green is the portal to invest that make that investment through and that our focus over the past few years in improving how our portfolio and balance sheet is going to pay off in '24 as we see interest rates declining and New York rebounding. The best way to communicate this story is to drill down on our core assets. While in prior years, we focused a lot of time on high-profile projects, One Vanderbilt, One Madison, SUMMIT this year, we will go through almost our entire fortress portfolio asset by asset. Our new construction projects are enormous successes. One Vanderbilt is 99% leased at record rents, One Madison is complete and well on its way to achieving the successes at One Vanderbilt. SUMMIT is a massive achievement. It's a cultural phenomenon, and it's a revenue-generating machine. 760 Madison just started sales, and it's already half sold. But we have a great story, not just at the very high end. Rather, we have strength throughout the portfolio, a plan for every asset we own and significant embedded value in these assets that will become more apparent in '24 and in '25 as rates stabilize and vacant space is absorbed. The reason you invest with us is because we see these trends ahead of others in our market and what we see right now is very, very encouraging. The work that this team has done over the past 5 to 10 years to narrow our focus to the very best buildings in the best locations and then to invest in needed improvements and amenities has put us in a very enviable position as we enter into this new year. I was struck last week by an idea that one of our analysts made public, I won't name names, but it was to spin off a few of our high-performing assets on Park Avenue. It sounds appealing. However, the reality is that the vast majority of our portfolio falls into that high-performing bucket. So if we spun off all our best assets, there almost be nothing left. And the few investments we have that aren't contributing to earnings or net asset value present essentially no risk to the company because there is no recourse associated with those properties, and we'll also discuss that later today. So get ready for a deep dive into the greatest portfolio of Manhattan assets ever assembled. Before we get started, let's take a quick look at 2023 and the context in which we are making our plans for '24 and beyond. Despite challenges we did what we set out to do. We reduced our debt, we increased liquidity, we completed development projects, we made the market with key sales and we maintained a very strong dividend and positioned ourselves to take advantage of enormous opportunities in 2024. The bottom line is simple. We are turning the corner. We believe that the worst is behind us. There is still some choppy year to navigate in '24, but we're optimistic about the future and focused on a near-term plan that we believe will bring us back to the height of our fiscal performance. The belief is founded upon a resurgent New York City that has finally risen from its COVID-induced slumber to once again exemplify a city where people from around the world want to work, live, play and visit. There's no shortage of backward-looking news reports, cherry-picking snippets of data and attempt to portray New York in decline, but the cold hard facts prove otherwise. I received a 12-page report document with all of the metrics showing what a good year it was for New York City. I'm not going to go through the entirety of that report, but I do want to share a few of the highlights. First, the city's tourism numbers are the strongest since the pandemic with 62 million tourists flocking to New York City, and that represents 93% of 2019's record visitors, and we expect to eclipse that in '25. As a result, New York Hotel occupancy has increased, and we led the entire nation in ADR growth this year. Subway ridership is up again this year as anyone who rides the trains knows. New York City transit reached the $1 billion ride mark, 6 weeks ahead of schedule -- 6 weeks ahead of last year's pace and well ahead of schedule, and it's also reported an 8% increase from this time to the same time last year. New York continues to be very popular regional destination with rider trip on Amtrak's high-speed Acela up 38% over last year. All of these visitors are good for the city's retail market, which is proving extremely resilient with availability down in almost all high street retail submarkets, Madison Avenue and SoHo are at their lowest availability record rates that I've seen in recent memory, maybe record lows. Crime is down across the city with nonauto-related felonies, dropping 12% year-to-date with even greater improvement in Manhattan below 59th Street. And believe me, you can really feel it. Walking on the street now, which again feels safe in the way it did before pandemic. And those streets are also cleaner. Mayor Adams has advanced a series of plan aimed at reducing trash on the street as part of his Get Stuff Clean initiative. The results are already being felt as 311 calls and complaints have dropped 20% year-to-date. The housing market remains strong with rental vacancy rates at just 2.6% and median rents climbing 8% year-over-year, again to record levels. The condo market is equally strong with median sales price of a condo reaching nearly $2.5 million this year as inventory also dipped 8%. People simply want to live here and they want to be educated here because under graduate enrollment in New York City's top colleges are up nearly 10% over the last 5 years, further demonstrating the strong desire for top students around the world who want to be educated and live in New York City. And finally, in October, the city celebrate reaching an all-time high in private sector jobs. While that number has since dipped a bit in the -- in November, the accomplishment is still extraordinary and represents a complete comeback from the pandemic era loads. I could go on, but you get the point. This is clearly not a city in a downward spiral. This is clearly not a city in a doom loop. This is definitely the best city in the world to live work and visit period, my opinion. New York is a city under new leadership and in the midst of a resurgence. And that recognizes the early signs of recovery will be rewarded for their belief -- investors will be rewarded for their belief in the resiliency of New York City for those that see it early. All of the upswing statistics show people are in abandoning the New York, rather they're investing in New York. And I think the announcements today show that. They want to work in New York. They want to do business in New York. They want to hire New York's educated workforce and diverse workforce. And we're going to be a big beneficiary of incremental office space demand in 2024. So we feel confident about the trajectory of our company and our company's most important asset, and that is New York City. And we'll hear more about that a little bit later on from Deputy Mayor Maria Torres-Springer about the city's outlook for 2024. Beyond New York, the broader economic picture was dominated by stubbornly high interest rates this year. We'll talk more about the measures we have and are taking to protect ourselves from any future rate hikes and our optimism that rates will begin to moderate. We remain comfortable with our level of leverage, but there's no denying that capital cost much more than it did just a couple of years ago. So in response to those increasing cost of capital, we have remarkably kept our operating expenses very low, almost in check over the last few years, and we'll walk through that on the plus side. I think it's time we move past the return to work, conversation and calculations. Most major businesses in New York that I know feel that work from office is essential to a well-performing company. And the companies are working from office for the majority of the work weeks. It's not worth debating in my opinion, whether companies that are on a 3-, 4- or 5-day work week because most companies require close to the same square footage to operate their businesses where they're on a 5-day work week or 3.5-day work week. Well, I'm an unabashedly big believer in the benefits and merits of working collaboratively in person 5 days a week, every company will decide for itself what fits best. I believe companies whose employees are present and engaged will perform better in the long run, but that may evidence itself over a period of years. In the immediate term as it relates to space usage, we saw renewal tenants expand their footprint in the SL Green portfolio by nearly 400,000 square feet this year. There are still many companies growing their footprint out there, just look at the leases we announced this morning. Financial services is growing. They're picking up the slack for a tech sector that is taking a temporary pause after years and years of massive growth. So from my perspective, the focus is shifting away from the weekly card swipes and getting back to business. There is a new normal. We will work within that new normal to achieve the results that you all expect. Focusing on our performance in a year that wasn't easy, our extraordinary team once again delivered industry-leading results across all areas of business in 2023. We delivered our development projects on time and on budget. We announced the completion of One Madison in September, that was well ahead of schedule. We topped out 760 Madison this year, and we recapitalized 245 Park, our next major redevelopment project in a $2 billion-plus asset. And with the exception of 245, the entire portfolio is now basically redeveloped, allowing for significant savings in base building capital expenditures over the next couple of years, and you're going to see Bob DeWitt, Head of Construction talk about that as we go forward. On the leasing front, we saw our first occupancy increase in 16 quarters. We are on track to achieve 1.9 million square feet of leasing this year and our same-store occupancy is back above 90%. This is a moment in time where no uptick is a small increase. These were hard thought wins that are a testament to our leasing, our management and our development teams. Once that really jumps out at me, and that's of the nearly 1.7 million square feet of leasing we've done year-to-date. Nearly half of that is new leases and half of that is renewal leases, I think it's almost exactly half. And of the renewals, many had expansion components, like I mentioned, 391,000 square feet of growing tenants within the portfolio. So that sort of underpins our belief that we're headed back in the right direction. We made the investment market in 2023. Again, we achieved the two most significant trades of the year, illustrating continued demand for well-located Midtown Manhattan office buildings. At 245 Park, we brought in a JV partner to capitalize a $2 billion asset at a time when the rest of the market was quiet. And today, we announced the sale of 625 Madison Avenue for more than $630 million. We achieved an excess of $1,100 a square foot on both of those 2 transactions, something we had every confidence in, but the rest of the market maybe some in this room were a little skeptical about. But we know this market, and we're going to continue to transact. And we have a big agenda of recaps and monetizations and redeployment in 2024. We also made a significant debt in our debt load this year. A top priority in '23, we were able to reduce our combined indebtedness by over $1 billion. Matt will talk about that. We also successfully restructured a lot of our debt. which we'll discuss in greater detail later, proving our ability to manage our debt maturities. This is where reputation really matters with lenders working with us to get things done or to extend to allow for more time. Last but not least, we made real progress on our Caesars Palace Times Square Casino proposal. A year ago at this time, right here, we had just announced our proposal in partnership with Roc Nation and Caesars Palace, Caesars Entertainment. Over the course of the year, we had the opportunity to meet with dozens and dozens of stakeholders, grow our coalition and gain significant support for the project. While the process has not moved quite as quickly as we had hoped, we've used that time to strengthen our bid, and now we expect to submit our proposal in early 2024, and that will kick off the process in earnest. Looking ahead to 2024 and beyond. Today, we will walk you through what we feel is an exciting 4-year plan that we expect to get us back to the peak of our pre-pandemic performance. It all starts with leasing. We're very well positioned for success. Our portfolio is increasingly concentrated in the highest demand and most resilient parts of Manhattan, almost entirely within walking distance of the major transportation hubs. We have a pipeline, current existing leasing pipeline of 1.25 million square feet of leases pending and in negotiation. The largest year-end pipeline we've had at an investor conference in the last 5 years, and that pipeline already reflects the reduction for the leases announced this morning. As we are driving new leasing plan, we will also continue to focus on reducing our debt wherever possible. We will outline plans today that if successfully executed in '24, we'll address most of our major debt maturities over the next 4 years. All of these moves sets us up to take advantage of market opportunities which we intend to do by raising a $1 billion debt fund for deployment, something we haven't done before. I'm optimistic we can close on that amount within the next 5 to 6 months and then be opportunistic to jump on good deals as and when we see them. By doing this, we are capitalizing ourselves to feast upon opportunities coming out of this downturn by leveraging our debt and preferred equity and special servicing platforms, which I think really have very few peers in New York City just like we did at 245 Park and like we did at 625 Madison, both restructurings that we turned into wins. We will execute this plan with an experienced team that allows us to build on SL Green's tradition of promoting and supporting young leaders with Andrew Mathias transitioning out of his role at the end of this year, our team is stepping up across the board with the next generation of leaders already delivering and helping out, and you'll hear from them today. We've also recently welcomed our first Government Relations Vice President, Garrett Armwood, who joins us from the Office of Senate Majority Leader, Chuck Schumer and who will strengthen our ability to advocate for important policies that benefit the city and in turn, will benefit this company all of which we call home. And I would invite everyone to sit back, enjoy the show today. Thank you for your attention. The Deputy Mayor is delayed by about 10 minutes. So we're just going to go a little out of sequence before I introduce Deputy Mayor, Maria Torres-Springer, I'm going to first call up to the stage Laura Vulaj, our Head of Hospitality and SVP of SL Green, and she's going to take you through our Hospitality program and I'm going to come right back up, and hopefully, Maria will be ready at that moment. Thank you. Enjoy today.

Good morning, everyone. So today, as Marc mentioned, I'm here to cover our Hospitality and Restaurant program. Office buildings are evolving beyond physical workspaces, and SL Green is at the forefront of this shift. The lines separating work, leisure and entertainment are blurred. Tenants want a prime location with direct access to commuter hubs. They want meeting and event spaces, they want access to entertainment. And of course, they want premier food and beverage offerings. And our company's philosophy is to operate our hospitality division, no different than we do our office portfolio, but as a unique and distinct brands to elevate our buildings. So we created a very successful formula at One Vanderbilt, and we've only just begun. We knew that the only way to bring our vision to life was to partner with a renowned chef and restaurateur and who better than Chef Daniel Boulud, who spent the past 40 years, putting his mark on the New York City restaurant industry. He is a 4 Michelin Star chef who's been recognized by the most distinguished organizations in the culinary world. His food is impeccable. His attitude is energizing and his dedication really is inspiring. So we formed a strategic partnership with The Dinex Group at One Vanderbilt. And our goal was to leverage Dinex's brand recognition and operational excellence under the guidance of both Daniel Boulud and their CEO, Sebastien Silvestri with restaurants across New York, Miami, Montreal, Palm Beach, Singapore, Toronto, Dubai, the Bahamas and the open ocean with Celebrity Cruises, we knew we could make the impossible happen. So over the course of about 2 years, we opened 7 total restaurants in One Vanderbilt, 6 of which are operated by the Dinex Group. We created an exceedingly well performing business line and achieved what, in many cases, would be unattainable in such a short time frame. The first restaurant we opened was Lazarus, a tenant exclusive cafe located on the third floor, right at One Vanderbilt. Since opening 2021 -- in 2021, Lazarus has served an average of 300 patrons per day and that's over 240,000 transactions since opening. Tenants love the cafe and who wouldn't want to enjoy their lunch overlooking the iconic aside of Grand Central Terminal. Three months later, we opened Le Pavillon in the midst of COVID-19 and unprecedented restrictions on indoor dining. Le Pavillon really brought over surgeons to Midtown, driving the post-pandemic recovery of the city's restaurant industry. When it first opened, it was referred to as the most important new restaurant in New York City history. So it's no surprise that it was awarded a coveted Michelin Star after its first year. And the Michelin guide is really the symbol of undisputed excellence in the world of fine dining. Just for context, there are approximately 25,000 restaurants in New York City and only 71 are started on Michelin's 2023 guide. We also aim to provide exceptional offerings at all income levels. So we opened Epicerie Boulud, which is an eat-in and take-out market and cafe. Epicerie Boulud emphasizes seasonal and fresh ingredients and is a welcome addition to 42nd Street. And finally, the [ Epicerie's restaurant ] is Joji, a Japanese Omakase restaurant in the lower level of One Vanderbilt. With a limited 10-seat counter and 8-person private dining room, a meal at Joji really is a hot ticket. Led by Executive Chef George Ruan, Chef Xiao Lin, and Chef Wayne Cheng. Joji is the singular finest Omakase restaurant in New York City. Last month, Joji earned a coveted Michelin Star after only 12 months in operation, and it continues to earn critical acclaim. We then extended the experience of Joji beyond the restaurant at a more accessible price point with the opening of Joji Box. We added online ordering and delivery through third-party services a month later and Joji Box just celebrated its 1-year anniversary and has experienced a tremendous 284% year-over-year increase in gross sales. In October 2021, we opened SUMMIT One Vanderbilt. We knew we needed to differentiate our offering with creative and high-quality food and beverage options. So we partnered with Fannie Mae and Union Square events to open Après, which offers a seasonal cocktail menu and New York inspired food. SUMMIT has been visited by well over 3 million guests. And I just tallied the number of checks that operate since opening, and it's nearly 600,000, which is a remarkable capture rate. One Vanderbilt is also home to Centurion New York, an exclusive members-only restaurant created by American Express, which opened in March 2023 with Daniel Boulud as the Head of dining and menu strategy. where he's created best elegant, sophisticated and luxurious dining experience. Across all 6 Dinex operated locations, our financial performance in 2023 has been meaningful, and we're projecting to achieve $36 million in gross sales and $4.1 million in [ EBITDAre ]. And this is only the beginning. We're extending our brand excellence to One Madison with 3 innovative concepts. Starting with the rooftop, with 13,000 square foot space on the 28th floor will open in May. It was designed by the celebrated architect, David Rockwell and was inspired by the vibrant urban oasis of Madison Square Park. Guests are going to arrive in the Serene elevator lobby, they're greeted by beautiful stone concierge desk with glowing metal screens and custom sconces. There are -- the floor plan is expansive and it's divided into 4 primary zones that allow for working, dining, relaxation and conversation. On the Northwest elevation, there's a grab-and-go cafe counter and an adjacent liquor bar for use during special events. And the lounge seating dominates the space as it nears the tariffs with -- and it features built-in benches along the south side. The rooftop will be accessible by day for One Madison tenants and in evenings and on weekends, it will provide the perfect atmosphere for private events. Next is L'epicerie at One Madison, a 10,000 square foot tenant cafe in social space formerly referred to as [ commons ]. The design philosophy is tailored and sophisticated responding to the Downtown meets Uptown Nexus that is One Madison and tenants use a cascading stair that leads down to this open lounge by bay L'epiceri offers at cafe with a variety of seating arrangements, creating a very relaxing atmosphere. At night, it's a flexibly designed space, so it allows for multiple entertainment services. And finally, One Madison Signature steak restaurant will open in November. [ State ] will celebrate the heritage and theatricality of the open flame grill that showcases the mastery of Chef Daniel Boulud's techniques. Guests are greeted by a beautiful host stands in this grand space. Here's a view of the West dining room featuring Gold hinged mirror wall. The private dining room is perfect for a variety of intimate events, and open flame grill is the feature of the East dining room and the big highlights, check out this bar, I cannot wait to grab a Dirty Martini here, maybe not this early in the morning, but we'll do it at some point. And finally, the Omakase wagyu and [indiscernible] bar. These will be the most thought after seats in New York City fine dining. The menu will even feature a few options for the vegans, vegetarians and pescatarian, so you don't have to cross over to 11 Madison. Being part of the SL Green family means that tenants can expect a consistently world-class experience characterized by Michelin star dining and approachable food and beverage options. So what's on the horizon? You're going to hear about some of these a little bit later, but we are opening the Armani restaurant at 760, 2 new dining experiences at 245. And last but not least, Marc mentioned this Caesars Palace Times Square at 1515, which Brett is going to take you through in more detail later. So now I'll hand it back over to Marc.

Thank you, Laura. Well done. Okay. Now thank you for that Laura, by the way, a tremendous job on branding and making this company very proud of what we do in the area of hospitality and retail and in our restaurant programs. So now it's my pleasure to welcome Deputy Mayor, Maria Torres-Springer, who is joining us by video today. She's got a busy schedule, year-end, but she agreed to carve out some time to talk with all of you here about the game plan in the city for 2024. Just by way of background, is Deputy Mayor for housing, economic development and workforce. She oversees a huge and critical portfolio for Mayor Adams, she's charged with spearheading the administration's efforts to strengthen and diversify the economy, build 500,000 new homes for New Yorkers over the next decade. That's going to be -- it's an ambitious undertaking, preserve and improve nitro housing, bolster small business, connect New Yorkers to sustaining jobs and expand access to arts and culture. It's quite a portfolio. Deputy Mayor has a long and accomplished history in government previously leading the Department of Housing and Preservation and Development, the City's Economic Development Corporation and the Department of Small Business had the privilege of working with Maria on the New York plan, which developed actionable recommendations for rethink and improving the city's commercial business districts that have definitely restored a much better working relationship between the business community and the Mayor's administration. Deputy Mayor, thank you for making yourself available to us at this busy time of year, and hopefully, you can see us all in the room.

Yes, I can. Thank you, Marc.

Thank you. I'm going to turn it over to you now.

Great. Good morning, everyone. I am so thrilled to be joining all of you this morning. Thank you to Marc for that very generous introduction. I wish I were with you in person. One Vanderbilt has been a location that we've been to frequently as an administration, it stands in many ways as a symbol of the city's resilience and strength through the pandemic and then just thrilled to be able to spend some time with you this morning to talk about the state of our city, what we have on deck for next year. Some of our recent economic development wins. But really more importantly, what we're continuing to do to make sure that we're advancing an aggressive agenda that keeps our city moving forward. I think Marc mentioned earlier in the program that the city reached a pretty historic milestone just in October. . Just a few weeks ago, we celebrated the fact that the city had reached an all-time job high. The number of jobs that we've recovered since the height of the pandemic nearly 1 million really stands as a testament to not just the resilience of the city, but how different sectors across the city have really stepped up to make sure that we not only recover from the pandemic but really thrive in its wake. Since the start of the Adams administration, we have helped create close to 300,000 jobs. So that is more jobs than the populations of places like Buffalo, Tallahassee, even Salt Lake City, no fence to those places, but we've been squarely focused on making sure that our recovery from the pandemic is one that is accelerated. So we reached that number a year ahead of schedule. But importantly, that it is enduring. And that's what I wanted to speak with you about this morning. So the job recovery before I get into what the plan for 2024 looks like. The job recovery is seen in our traditional sectors, but also in the newer sectors of our economy. So in terms of new growth areas, for instance, the activity and robust job growth that we're seeing in tech continues. Just in 2022, for instance, over 400 new tech firms started in our city collectively employing more than 10,000 workers. It continues to be a bright spot, despite some volatility and some headwinds, we believe that it will continue to be a source of strength in terms of economic opportunity. As well, we have continued to double down on our efforts in the life sciences sector, really a sector where New York City has with its academic medical institutions, it's incredible talent, a real competitive advantage. And so a vote of confidence, for instance, was made just a few weeks ago when we announced together with Columbia University, Rockefeller University that the Chan Zuckerberg foundation is investing more than $0.25 billion to stand up a bio hub right here in New York. So this is a critical component of what is really a more than $1 billion investment that the city has made to make sure that we continue to grow in life sciences. Our traditional sectors of the economy also continue to show strength. And we had a lot of ground to make up as everyone might know, given that many of these sectors were decimated during the pandemic. This includes recent wins and good news for instance, in media, in film and TV, we're really happy that the labor, the work stoppage, in film and TV has itself come to an end because there are more than 185,000 New Yorkers, for instance, who really rely on the type of production that happens in New York. Importantly, we're seeing gains in tourism. We're seeing gains in leisure and hospitality. These are areas, again, really affected during the pandemic but we expect to see a full recovery in terms of tourism by 2025. And the recent job numbers, the recent months show continued gain in hospitality in leisure, even though we have some more ground to make up before we get to a full recovery in those sectors. And so why are we seeing this? One, because, as I mentioned earlier, the tremendous partnership of many sectors and economy, but two, because of the very intentional set of plans that we've been executing on since the beginning of the administration. Marc mentioned one of them just a few minutes ago. So about a year ago in December, we released the 40 different recommendations for instance, of the New York panel. Marc was one of the leaders on that panel, but we really gathered 60 leaders in the city, in academia, in business, in civil society and in government to help us think about not just a question of what should happen, what will be happening in the Manhattan central business districts. But what does that mean for the full recovery of our economy. So we've been diligently implementing those 40 different initiatives that really run the gamut from making sure that we are concentrating our efforts in our [ 3 Ps ] but that we're also making the types of long-term investments in housing, in mass transit, in culture that are necessary to keep the city dynamic and competitive. Now the Mayor talks often about the fact that we've been employing a triangle offense of sorts to ensure this recovery that I'm describing, they're really the 3 Ps in this triangle offense, a focus on public safety, a focus on working people and a focus on public spaces. And that remains the game plan for 2024, but we believe that there have been some significant strides in this type of offense in the first 2 years of this administration. I'm just going to cover them briefly, and then we'll focus, in particular, on additional efforts in Midtown, Manhattan. So first, in terms of public safety. Now we certainly understand that even as prime stats continue to trend in the right direction, and people are safer that they need to feel safer across the 5 boroughs. When you compare when we started at the beginning of 2022 to where we are today in 2023, we've made incredible progress in driving down crime and keeping our streets and our subway safe. We supported law enforcement officers. We have built neighborhood safety teams. We've expanded violence protection programs, we've been squarely focused on subway safety. And because of that, we've delivered double-digit decreases in murders, in shootings and other dangerous crimes. This year alone, we've removed more than 5,000 guns from our streets and 12,000 since the start of the admin. Shootings are down an incredible 27% through the first 9 months of this year. And overall, major crimes were down last month compared to September of 2022 by more than 5%. In fact, in that same month, September 2023, we witnessed a drop in 5 of the 7 index climb categories. I'm laying this out because it is easy in reading what might be on the cover of tabloids to believe that these arrows are going in a different direction, but they are not. Mayor Adams has been focused on public safety since day 1. It is the work not just of a brave men and women of the police department, but really across the administration. We've been locked in arms and making sure that we're doing the type of work in public safety, in quality of life so that New Yorkers are both safe and feel safe. The second part of this triangle offense that I mentioned are the investments that we're making in working people, which will certainly continue until -- over the course of the next several years because a lot more work to be done here. After we made the historic jobs announcement in October, we've been on a sort of a working people's tour to show all of the different levers that we have been pulling and will continue to pull to continue to see a recovery in our city. That included, for instance, groundbreakings at different film and TV studios, both in Manhattan and in Queens, an amazing new tech hub right in Union Square in Manhattan and also investments that we're making in job training programs, programs in nursing, again, that announcement happened in Kips Bay in Manhattan but they -- the investments in training are happening across different industries because we know that our work can't just be about growing or sustaining those industries. It has to be about connecting the incredible talent in the city into those various factors. I wanted to mention briefly that this work in terms of connecting people to jobs is robust and not just for long-standing New Yorkers but for our newest New Yorkers. I'm sure everyone has read about the humanitarian migrate crisis that we are managing here at the city. More than 130,000 migrants have come through our care and we take that responsibility very seriously. We have been hard at work. A lot of this is inspiring work, may not always be seen publicly, but it's worked to ensure that people have shelter. It's worked to ensure that we are connecting those who have work authorization to jobs, it is work ensuring that we are connecting them to legal services. And importantly, it's worked to ensure that we're advocating at the state level, at the federal level to help New York City solve what is clearly a national challenge. But we continue to do what we have to do in order to really honor New York City's history, a really proud one of welcoming people from across the globe. I also wanted to mention briefly because I know this is critical to central business districts in Manhattan that are work to support commercial corridors and small businesses, I think, has never been more robust. We started that work on day 3 of this administration when the Mayor signed an executive order to look at the top violations that small businesses face in an effort to ensure that we create a better path to resolving those violations in a better regulatory environment. It's included a whole suite of services to make sure that we are focused on education and compliance rather than enforcement. New capital access tools, in particular, for our smallest -- small businesses and [indiscernible] owned businesses and robust support in commercial corridors for business improvement districts, whether they are in established retail corridors or in more nascent ones across the 5 boroughs. Finally, I wanted to talk about before I turn to Midtown, our work to make sure we're making the types of investments in public spaces. So this has included the more traditional types of investments in the public realm, hundreds of millions of dollars in this administration committed to different CBDs across the city, but it also includes major new initiatives to really support quality of life, whether that is rapid progress on a citywide trash containerization program to enabling a more sustainable permanent outdoor dining program. But it has also meant that I know this is top of mind for many it's also meant enabling more mixed-use neighborhoods across our city to flourish. In order to do this, this means pulling lots of different levers, both at the city and the state level. At the city level, this work has been very feverish. So for example, we are moving forward with regulatory changes and zoning changes that are needed in order to enable the type of conversion from office to residential. We want to make sure that those who are trying to do that have real assistance from government. And so we launched an office conversion accelerator just a few months ago so that we can provide the type of technical assistance to teams that are looking to convert. And more broadly, this is part of a larger effort that we've called Get Stuff Built initiative of reform -- of implementing close to 111 different recommendations to streamline land-use environmental review and permitting in New York City because it has taken just way too long and cost too much in order to support that type of development and growth that our city clearly needs. And speaking of growth, I wanted to talk briefly about our work to make sure that we are becoming a City of Yes, a City of Yes that accommodates and really embraces the type of population and job growth that the city has seen. And so what this means in action are three Citywide Text Amendments that will enable this type of growth and really clear the barriers that exist in our zoning in order to facilitate this growth. Number one, the City of Yes for housing opportunity. This is a major new initiative to create a little bit more housing in every neighborhood of our city. It's critical because we have been in a relentless housing crisis for way too long. And our perspective is that every neighborhood really has to contribute in solving this problem. Marc mentioned the moonshot goal of 500,000 new homes over the course of the next decade. This City of Yes for housing opportunity initiative will really make a dent in that goal. But it doesn't stop there. We're also advancing major Citywide Text Amendments for carbon neutrality for instance. To ensure that we are achieving our greenhouse gas emission goals, and that's actually voted -- scheduled to be voted on by the City Council this week. And finally, important for CBDs across the city, the Citywide Text Amendment for economic opportunity. Here too, removing outdated restrictions where businesses can set up in different parts of our city, barriers in growing industries like life sciences that I mentioned really creating better rules, more consistent rules for more walkable and safe commercial streets and ensuring that our zoning code really enables the type of user friendly, consistent and kind of modern adaptation for corner stores, for instance. Each of these, it may sound really wonky. But what we've tried to do is be comprehensive for economic opportunity for housing opportunity for carbon neutrality and relieve all the types of barriers that will -- as market cycles come and go, these will really create a stronger foundation for growth. Just a couple of minutes specifically in our work in Midtown. Now everything that I mentioned our investments in public safety, in working people, in public spaces, we're making sure those land well and aggressively in our CBDs in Manhattan, in particular, in Midtown. But there are also very specific initiatives that we are focused on to make sure that we are seeing the types of gains given the centrality of Midtown, the concentration of jobs. That includes new tax incentive programs for instance, our Economic Development Corporation is administering a program called the Manhattan Commercial Revitalization Program or M-CORE which is providing financial assistance in the form of tax incentives to really support the type of transformative renovation of aging commercial office buildings located in Midtown South of 59th Street. We're also undertaking a neighborhood study or rezoning focused on the 42 blocks of Midtown South where housing is not permitted today under the half century old zoning rules to ensure there too, that we're enabling the type of adaptation that is necessary for those 42 blocks. When I talked about the New York plan, in that plan were specific initiatives really focused on the public realm and the commercial core. So here, we announced in June the completion of the new phase for instance of our Broadway Vision plan. It adds two new plaza shared streets, bike connections along Broadway from West 25th Street to West 32nd Street. In October, we announced that we're advancing the effort to permanently reimagine Fifth Avenue and the future of fifth partnership has selected a consultant team that will really work with us in the visioning for this stretch of Manhattan and our Open Street initiative in Midtown, which really made a Fifth Avenue vehicle fee for the first time in half a century was brought back in areas around Rockefeller Center had been a boon for businesses in 2022, and we know that, that will continue. So that's just a sampling of what we are focused on in Midtown, Manhattan as part of this larger effort that we are undertaking to ensure that we're making the right investments in public safety, in working people in public spaces. And I'll end here because we have many in the room right now who wear many hats in our city and it is really your partnership and your vote of confidence, not just in specific projects, but in New York that will spell the difference, I believe, whether we just can call out of the pandemic or we make a great leap forward as a city and we have certainly shown through the many different crises that we've had to confront as a city in our 400-year history that we have capacity to reinvent and reimagine ourselves and ensure that we are stronger for that crisis. And I personally believe, and I know that the mayor shares this that while we are at a real inflection point in our city, and there's no shortage of challenges that we have to overcome that it is really that same type of partnership of different sectors of our city building on the incredible resilience and strength of New Yorkers. And that's what is going to carry us through, not just in 2024, but over the course of the next several years and into the next chapter of growth and prosperity for New York. I appreciate everyone's patience and thank you for taking the time to allow me to share where we are in the city today. Thank you, Marc.

Tremendous. Deputy mayor, I think you could see out into the audience and hopefully me as well, I'm not sure, but I do want to thank you. I know that is just a fraction of what's on your plate, and it's extraordinary what you, the other deputy mayors, the mayor are doing to change the narrative of the interaction between the city, it's residents and the business community. It's a welcome change. It's a refreshing change, change is slow. I know you talk about all these different zoning initiatives and text changes they're so hard to accomplish each one, but you guys are doing them many at a time. And it's incredible. They'll get done and the benefits of that will be felt for years to come. But I think it's important for this group to realize this is a group that likes to focus on leasing. And -- but it all stems from the health of the city, the cutting the red tape, having New York City administration, people like Deputy Mayor Springer, who are committed 24/7 to working on our behalf to make a city, a more inviting and friendly and desirable place to live and to do business. And I know everybody here has felt the changes. We certainly have and we'll do everything we can to assist you and the administration in supporting your efforts going forward as best we can.

I know you've got a hard stop for 10:00. I'm going to ask you just one quick question. Just one question, and then we're going to -- unfortunately, won't be able to have questions out in the audience. What's it going to take to get a conversion bill done in Albany, are we going to get one? What's it going to look like 60 seconds?

I'm an internal optimist and so I believe, as mayor said this publicly, there's a deal that must get done that can get done in Albany because the stakes are too high. And so what we are advocating for in addition to a new rental production tax incentive and lifting of an artificial zoning cap that prevents the type of conversion, is a tax incentive for conversion that will allow us to get to the affordability that we so desire through these conversions. But as I mentioned earlier, because Albany is complicated, we know that we had to do everything within our own power to move the ball forward. And that's why the regulatory changes for conversions are happening through the City of Yes for housing opportunity. So we will continue to work with the City Council there, hopefully, to a positive outcome while continuing to advocate in Albany for the types of changes that are necessary to keep the city moving forward?

Thank you. Well, we look forward to that. Budget season starts in January. It's one of the most important initiatives in our mind. Congratulations on what you've accomplished with Life Sciences and for helping to pave the way with those regulatory changes for the conversion bill. Have a great day, and we appreciate you coming in.

Okay. Hope that was illuminating. I think she is one of the great professionals down there in New York City who have done a lot. And I'm going to switch gears now, as I mentioned, at the outset of today's discussion. The star of the show today is the SL Green portfolio focusing on the collection of over 30 core assets located almost exclusively in Midtown Manhattan that are extremely well positioned to outperform the market. And it's going to serve as our growth vehicles as New York City turns the quarter in '24. So today, we detail a new approach to presenting our core assets. That will break the portfolio down into kind of fine grain submarkets, Grand Central, the Third Avenue Corridor, Park Avenue Spine, Westside, Midtown South Downtown. That will allow us to present to you a deeper focus on leasing, capital, feature amenities on a building-by-building basis and detailing bespoke strategies for each. As we outlined plans for each property today, we'll also separate out for the first time, a small subset of assets at the end, which represent just a fraction of our total portfolio, but a grouping of assets that have made it more difficult to assess the overall portfolio and the remainder of the core assets. these alternative assets, as we call them, provide little to no contribution to earnings and net asset value. And in almost all cases, we have no obligation to fund additional capital on those assets. We think separating these alternative strategic assets into a new subsidiary will be more accurate way to view our balance sheet and judge our performance moving forward. So now I'd like to call up on stage the team that will take you through our core assets today over the next hour or so, these five phenomenal team members taking the stage here today, and we'll do a quick introduction, and then we'll kick off.

Great. Thanks, Marc. I'm Harrison Sitomer, Chief Investment Officer of SL Green. My job today is to take you through two components of each property. First, I'll take you through a high-level overview of each asset, along with key information on property ownership. Second, I will take you through a summary of the outstanding debt, if applicable, and our long-term strategy to manage any future debt maturities.

Good morning. I'm Steve Durels, Director of Leasing. I'll be speaking to you about profile tenants within each of the buildings in each property's placement within the market and our lease-up plans.

I'm Bob DeWitt, Senior Vice President of Construction. I'll be walking you through the capital budgets section of each asset today. Across the board, the base building capital requirements for every asset are fairly minimal and focus purely on code obligations, leasing support and revenue generation.

And I'm Laura Vulaj. Nice to see you all again. I'm Senior Vice President of Hospitality and Sustainability. I'll be walking you through building amenities, the surrounding area artwork, key components of our properties and then also ESG and environmental sustainability highlights of each property.

I'm Brett Herschenfeld, Executive Vice President, Head of Retail and opportunistic investments. I will take you through the retail tenancy of the properties, a little history, when applicable and the future to come.

All right. Let's kick things off by talking about our Grand Central assets, the submarket, which we originally planted our flag in 1997 with the acquisition of the Graybar building. And since then, we've never really looked back. Grand Central is one of the three submarkets, which makes up our 15 million square foot East Midtown portfolio. We've owned the 5 assets in the Grand Central market for between 11 and 25 years and over that period of time, the buildings have been repositioned and are in really great shape. They obviously benefit from a close proximity to Grand Central Terminal, which now is the busiest transit hub for local commutation, encompassing MTA rail service and subway. And in 2023, the number of unique tenants touring the Grand Central market was up 24% year-over-year, reflecting 147 distinct individual tenants that toured properties in this submarket in 2023.

So let's kick this marathon off with 461 Fifth. 461 Fifth is a boutique trophy asset across from the New York Public Library, and Bryant Park. We acquired the leasehold in the building in 2003 and consolidated our ownership into a fee simple position in 2021 when we acquired the fee interest pursuant to a significantly below-market fixed purchase option established back in 2003. There is no debt and 461 Fifth is one of many assets I will take you through today that support that unencumbered asset base.

This is a high-profile building which stays well leased due to its modern design and proximity across the street to Bryant Park. It primarily attracts financial service tenants. We typically prebuild every floor that becomes available leading to an accelerated lease-up. And as you can see on the plan behind me, there are no lease expirations in 2024 and expect the building to be close to 100% leased this time next year at rents between mid-70s to upper 80s per square foot.

The building recently received a much needed facelift when we completed lobby and plaza renovation. 96% of the base building capital is tied to future tenant leasing. The local 11 facade restoration is our first in over a decade and includes masonry repairs and painting of the building's trademark architectural steel elements. After this cycle, we don't expect another facade project for the next 10 years.

And on the amenity side, this is a high-end boutique building. So many of these really aren't expected here. Instead, we leverage off the amenities we've introduced at One Vanderbilt. Location is a key highlight. We've got direct proximity to Grand Central Terminal. And as Harry mentioned, 461 is also directly across the street from Bryant Park.

This is close to flagship retail as it gets south of 42nd Street, with adjacency to the public library and Bryant Park. We have two spaces available both with leases out and hope to make an announcement that an iconic Italian brand has signed a lease before year's end.

On the ESG side, 461 has lead Gold certification. You'll see this certification on a number of assets we cover today. Just for background, it's a very rigorous recertification process that happens every 3 to 5 years for the O&M designation, that's operations and maintenance. A quick highlight on this building back in 2020, we enhanced 461 CMS controls to allow for more controllability of building systems, which has really positively impacted our energy performance.

Next up is the daily news building, which is a long-standing holding of ours. We own it in a 50-50 JV with the Korean teachers Credit Union. They're great partners of ours. We have them in multiple deals, including 15 Beekman and One Madison. They joined us in this deal in 2021 and I would expect to see us do something more programmatic with them in the future. Given the building's proximity to the UN, the building caters to nonprofits and government agencies, it's nearly 90% leased with over 15 years of Vault. Including extensions, we have debt term through June 2025, but we're on it now. We're already negotiating with the lender for a longer-term extension. And I would expect to see this extension get done in the first half of next year.

[indiscernible] has always struggled to attract traditional tenants given its location being closer to Second Avenue rather than Third Avenue to overcome that challenge. We've structured the building so that each floor is an individual commercial condominium. This allows us to offer 30-year leasehold condos to UN and nonprofits tenants, which permits them in turn to receive a 100% real estate tax abatement. In fact, we've leased over 450,000 square feet to nonprofits, including VNS and YAI. There's only 8,500 square feet of roll in 2024 and less than 50,000 square feet overall over the next 4 years, which puts the building in a very secure position. And as you can see, the majority of vacancy is located on the upper floors.

We've meticulously maintained this 95-year-old landmark building over the years. Planned capital projects include a code required elevator mod and minor infrastructure upgrades. During our 2 decades of ownership, we've completed minor facade restorations to address localized repairs. Through the age, materiality -- and materiality of the building, a more significant restoration is required. We'll execute this project commencing in 2025. Even with the buildings age, SL Green's share of annual base building capital is less than $0.60 a square foot.

This is the fun one. So 220 is home to the world's largest indoor globe made famous by the original Superman television series and feature films. The news building was also designated a national historic landmark back in 1989.

There's a great amenity retail here. Club Champion Golf, the U.S. Premier Golf Club fitter with 75-plus locations nationally built out and opened its first NYC store in 2022. Anyone who buys 1,000 shares of SLG gets a free club fitting appointment. DiLiberto has got 100 steps already, still doesn't help.

And on the environmental side, 220 houses an ice plant, which is a thermal storage system that's used to manage our cooling loads in the building. We also recently completed window replacement. And these upgrades have had a positive impact to our ENERGY STAR score, which is currently at 87%.

420 Lexington is a special one for us at SL Green. This was our first acquisition as a public company and it was our headquarters for over 20 years. Connected to Grand Central, this asset is one of the workhorses of the portfolio with consistent demand across a wide variety of industries and over 7 years of our average remaining lease term. The debt is fixed at 3.99% through end of next year. And then we have extension rights built into the debt as of right through 2040, which gives us plenty of term to run.

It's hard to believe, but I've been involved with Graybar in my entire career. So it's very good. So we have a very good sense of what's placed within the market. Other than two long-term leases with the MTA and New York Life to building typically caters to small to midsized businesses, a combination of direct access to Grand Central Terminal, amenities and an ongoing capital upgrade program keeps the building popular. We have an unusually low lease rollover over the next 5 years with only 70,000 to 120,000 square feet of explorations each year, which is a very modest amount for a 1.5 million square foot building.

The Graybar building, our beloved former headquarters is a massive 96-year-old landmark with over 40 setbacks and roofs, constructed of brick, limestone and terracotta. It's been over 10 years since our last significant facade project. We have a major campaign in progress will be complete by 2026. Our capital plan also includes a new cooling tower and other minor infrastructure upgrades. 50% of the capital is to support this leasing plan. In 2020, we were honored to receive BOMA International Historic Building of the Year Award, a further testament to Megan and the property management team's commitment to maintaining our buildings.

And the amenity highlight here is our amazing conference center on the 19th floor, Graybar 19. I'm sure many of you have actually been there as it was our former headquarters. Over a decade ago, we made a very significant investment in this space, and we felt that the responsible thing to do was to reuse it. It's got a 36-seat boardroom. It's got meeting rooms, a full-service kitchen with catering by Daniel Boulud and a beautiful landscaped outdoor terrace.

And there's a great retailer here. It's always performed at the high end of the market, given its adjacency to the Lexington Avenue Grand Central entrance. We recently extended Verizon's term. We signed a new lease with Webster Bank and the office users in the neighborhood love our Equinox.

On the sustainability side, this building has a very complex submetering infrastructure, which allows us to track data for about 200 tenants. And even with a huge number of tenants, the building performs very efficiently.

485 Lexington is the sister building to 750 Third Avenue, but it benefits from its closer proximity to Grand Central. We bought up interest in this property starting in 2004 and we have $450 million of debt here, which is fixed through the maturity in Feb 2027 at 4.27%. Even though we have 3.5 years remaining debt term, we're already in discussions with the lender for both an extension as well as some additional future funding for leasing. We're on this one.

Leasing was debt slow in this building coming out of COVID. However, recently, we've seen a dramatic increase in velocity. A newly designed prebuild program has led to 5 pending leases covering 75,000 square feet with an additional 35,000 square feet of active proposals under negotiation. Affordable rents help, they're in the range of $55 to $65 a square foot.

We redeveloped this building in 2006 and the work is stood the test of time through proactive management of capital over the years, there's no future requirements other than to support leasing in 2026.

485 Lexington features on-site parking with EV charging. Just off the lobby, we also have a reside health, which is an on-site medical concierge, which is exclusive to tenants. And of course, there's the curated retail.

Yes. Great mix of coffee shop, food, daycare, a new lease signed for boutique fitness. It's very well foot traffic. And ever since we subdivided the large boxes. I've always found demand for retail space of 485.

And the building was recognized by BOMA with original Earth Award. This award buildings that excel environmentally, sound management, resource preservation. It's really a testament to our operations and our engineering team.

Our last asset in this subportfolio is 10 East 53rd Street. It's a boutique trophy building adjacent to the new Rolex development on Fifth Avenue. We own this asset with CPP and hold a 55% interest. The JV has benefited from a substantial renovation from 2012 to 2015. The building is nearly 100% leased with 6 years of Walt. The debt is in place through 2025, but as we're always proactive on these maturities, we are negotiating documents already to extend this debt out multiple years.

The Buildings Plaza area location in 9,000 square foot floors make it very popular with financial service tenants. As Harrison said, we're almost always 100% leased. In fact, the only current availability is based on storage space. Market rents are low 70s in the base up to $110 a square foot for the upper tower floors.

So one of my favorite projects we've ever completed. We took what was a dark and dismal public arcade and closed it to become an extension of our lobby. We completed a full plaza renovation, changed every window, completely upgraded the infrastructure and repositioned the retail and lower floors to pave the way for Equinox, ultimately winning renovated building of the year in 2022. The building also initiated SL Green's lobby art program. We've continued to expand our collection over the years. We now have over 25 pieces, including one installed just last week that you'll see later in the presentation. The only remaining capital is associated with new leasing.

And as Steve mentioned, the building has a 10,000 square foot public plaza and interior arcade. [indiscernible] is a great example of how we continue to activate public spaces throughout Midtown, which has reinvigorated the submarket.

And this has the Equinox at the Plaza District. It's amongst their highest-end build-outs in the country. The retail is fully leased otherwise.

Penn East is lead certified silver. Here, our recent focus has been on performing energy audits to identify high-intensity energy use tenants to come up with new efficiency recommendations.

Okay. So that is the Grand Central portfolio, 5 assets. At the end of each of these submarkets, we'll roll it up, aggregate the data, show it here on the screen. You see that we're showing Grand Central with respect to debt maturities, NOI generation, base building capital that Bob spoke about and expense control. So blue -- dark blue, our pro rata share, light blue gross aggregate and you can see on the debt maturity '24, we're clean of maturities in '25. Harry mentioned, we're already busy at work on 220 East and 10 East 52nd Street to get those extended then, again, Cleveland 26, and we have one asset in [indiscernible] which is 485 [indiscernible] . He also mentioned 3.5 years what we're working on. So at the end of this year, we would hope to be sitting here next year with a debt maturity schedule that looks like that. So we'll check back in 12 months and see. NOI contribution from this portfolio was above our portfolio average at 4.1% and which is aided in part by keeping expenses so tightly controlled. Look at the job Megan Gill does with her team and all the property managers on-site and portfolio managers in office. Less than 1% a year compounded annual growth in expenses. It's a tremendous job well done relative to 2019, a pre-pandemic year. And as Bob mentioned, the base building in this asset is only about $3 a square foot on average so that we run these very efficiently benefits from all the prior work we've done. On the leasing front, you can see an exploration schedule that's very manageable. Steve has a leasing goal next year of 260,000 feet and over half of that exists within pipeline for this submarket of assets, 146,000 square feet, deals in negotiation term sheets, leases out, et cetera. And therefore, we expect leased occupancy which was relatively flat, '23 to '22, will tick up in '24 and beyond as we march back towards stabilization in this portfolio. So now let's move to the next -- second component of our East Midtown portfolio, Third Avenue Corridor. This is where we own 4 assets along the stretch from 44th Street to 56th Street. The third avenue market, in my opinion, has been unfairly aligned and is an important and necessary provider of affordable Midtown office space within a reasonable walking distance from Grand Central Terminal. There will be over 1 million square feet of leasing in this submarket in 2023 and the availability rate has decreased materially due to the removal of our buildings at 750 Third Avenue, which we'll talk about a little bit later. It's a resi conversion project. And also due to the purchase of space by Memorial Sloan Kettering at the Lipstick Building. There have been significant amounts of money invested in upgrading buildings in the Third Avenue corridor like Durst 825-Third like teachers, 730-Third and our own investments in 885-Third and 919-Third, which will serve to attract more tenants to this corridor who are seeking high-performing and affordable space in a great location. So we're pretty bullish on the future of Third Avenue and we'll start with our first asset.

We're kicking this off with Seven-Eleven Third Avenue, which we own 100% of the leasehold interest and 50% of the fee interest. You will see behind me that we have provided an overview of both the fee and leasehold positions. The asset itself has been a workhorse for the company and continues to be an attractive offering for a wide array of industries as above 95% occupancy and 5 years of Walt. We have ground lease term until 2083, and we completed a ground rent reval process in 2021, which saw no increase whatsoever in the ground rent for the subsequent 10 years. and I would expect us to prevail on keeping that ground rent at that level beyond that period as well. Both physicians are entirely unencumbered.

Seven-Eleven is an undistinguished building, but has always outperformed the market due to its proximity to Grand Central Terminal. The majority of the upcoming role is a lease with McKinsey who recently paid us $2 million in connection with the buyout. Their space is highly improved, and I expect it will promptly relet. Other than McKinsey, there's only 5,000 square feet of role over the next 2 years. In Seven-Eleven, we will maintain its mid-90% occupancy as McKinsey is backfill.

Yet another example of a successful lobby redevelopment completed by our team. While not the lowest capital plan over the next few years, it's manageable and expected of a building of this age. Upcoming projects include the replacement of the building condenser water riser days over 3 years as well as the replacement of night floor setback roof in 2027. Local [indiscernible] Eleven is in progress and will be completed in 2024. It's the first project at the building in over 12 years and no additional repairs are expected in the next 5 to 10.

The building features an original Mosaic mural from Mosaic mural from Hans Hofmann, which was installed in the building was first constructed back in 1956. Hans Hofmann is a renowned German American artist, His work has been featured in the former Coop's Gallery, the Whitney the MoMA. So it's a really special custom installation to have in our building. And the buildings got to Duane Reade. So if you forget your anxiety medication at home, you can just pop right downstairs and pick it up on the fly. Sorry, Brett. I know it's still your retail line.

Well, no problem. Santander Bank rolls next year. but I'm in dialogue with another bank branch to take the space already. I think it's key to point out that bank branches continue their strong demand for space, and all of our bank branches are leased, mobile banking has not overtaken the physical branch as so many falsely predicted. To the contrary, people want to bank from bank, not bank from home.

And on the environmental side, the highlight is the building's energy performance with a score of 87, one of the highest in the portfolio. We completed BMS installations this year. We added controls on our pumps and our air handling units and this is all contributed to the energy savings.

Next up is an asset that is probably the least known office asset in this portfolio. You're going to find some hidden gems today as we walk through the portfolio and 800 Third is certainly one of them. We own this building with Joseph P. Day and we hold a 60% interest. This is the only interest in the portfolio where we don't manage our lease, but it has been a great partnership over the past 18 years. The asset has low leverage as evidenced by a 10% debt yield next year. The all-in cost of debt is capped at 3.48% through maturity in 2026 as a result of the hedge that we implemented in 2021.

This is an attractive modern glass of steel building with great views and one of the best floor plates on Third Avenue. No single tenant dominates the rent roll. However, current occupancy is unusually low right now at 83% due to 2 large base floors. As mentioned, our JV partner handles day-to-day leasing, but I can assure you, we're very vocal and not shy about interceding as necessary to close the deal.

From a capital perspective, the asset is in good shape. It's run by our partner, and they require minimal capital annually.

On the amenity side, we do feel that this building would benefit from a more robust amenity program. However, since we have a partner here, it really needs to be a collaborative process. So we're continuing to reinforce the importance of introducing tenant amenities.

We've got a [ staples ] at the base, and there's some empty retail here, but tour activity has picked up of late. Our partners are in dialogue with some F&B tenants to help curate the amenities at this podium.

And the building doesn't quite meet our sustainability standards. J. P. Day is on their own separate ESG program. So we're going to work more closely with them in 2024 to try to align the building's performance with our portfolio to get the kind of staff we feel the building can achieve.

Lipstick Building is a standout success story for this portfolio and one that I'm especially proud of. We took over this asset by force through our DPE business in a foreclosure. The asset had 70% of the tenants rolling at the time, our borrower at the time could not make a run of the building. So in 2020, we foreclosed and then immediately got to work on transforming the building into deep premier asset on Third Avenue. We presented our redevelopment plan to Memorial Sloan Kettering and they loved it. And they ended up buying almost all of the vacancy in the building, which was predominantly in the base. At the end of last year -- they bought at the end of last year at $725 per square foot, and we retained a 218,000 square foot condominium, which is predominantly leased. I would expect to see us sell off more of our condo over time as Memorial Sloan Kettering grows in the building. Our condo interest is, again, unencumbered and...

This is an architecturally distinctive building known by all as the Lipstick Building. You'll recall this is where Bernie Madoff had his office, which required a recent exorcism to remove the stench, now all is good and the building's new lobby is going to be a real game changer. Our 3 largest tenants occupy 30% of the building with 8 years of remaining term. As shown on the stack plan, all space in the dark gray is part of the MSK condo and all SLG floors are located on the upper part of the building. As Harry mentioned, MSK is likely to expand in the near term, and we expect the building to be 90% leased this time next year.

Lipstick Building is one of those iconic properties in New York City and as a construction guy, you hope someday you have the opportunity to work on. If you haven't been by the building recently, you got to go check it out. Working with Dan Shannon, we transformed the lobby in a very respectful way and paid homage to the historical building design while completely upgrading the infrastructure. The renovation is a complete game changer. Our execution of this plan is what got us MSK. The transformation is largely complete. We have a few projects continuing to '24 and '25. But after that, the building is put away.

And we originally had a full fitness and conferencing amenity program planned and designed in the lower level of the building. But when MSK came along, we decided not to execute this plan. Instead, we focused on the lobby level, which has the cafe with the indoor seating, beautifully designed floating cafe bar. The building has always been connected to great dining and now we're bringing in Chef Daniel Boulud to the lobby. It also has an incredibly rich history. Gerald, this is one of Gerald Hines' first project in New York City. It was designed by John Berge and Philip Johnson. It was one of Johnson's last major art projects in New York. There's also a beautiful artwork here that which just installed, I think last Thursday, so you have to stop by and check it out. The piece is called [indiscernible]. So again, please stop by and take a look.

And with an iconic office building always comes iconic culinary experiences. Many of you might remember John-Georges restaurant Wong at its base. And today, that same restaurant is occupied by Wolfgang, one of the premier steakhouses in New York City and a great amenity to the tower.

On the sustainability side, lots of improvements, which have been driven by capital, cooling tower, BMS upgrades, partial electrification, 885 also has a strong ENERGY STAR score, and we expect to see further improvement.

919 Third Avenue is the most impressive building on Third Avenue. We spent a lot of time at the building this year, getting the new $500 million financing done and I highly recommend checking out Bloomberg's nearly $1 billion investment in the building if you get an invitation and then get a P.J. Clarke's Burger. We own P.J. Clarke's, but that does not, for whatever reason, he may get a reservation. We own this asset with JPMorgan on behalf of NYSTRS, 80% leased to a mixed tenant profile with 8 years of Walt. We closed it earlier this year on that $500 million financing with an international lending group without injecting any equity whatsoever and fix the debt through 2026. Everyone said it couldn't be done except this guy right here. So we got it done. The debt runs through 2028, and [indiscernible]. There's really nothing to talk about on this debt for quite some time.

This is an institutional quality building just short of new construction standards. It's arguably the best building on Third Avenue, although admittedly located a bit north for some tenants preference. Bloomberg's 750,000 square foot lease Is part of their headquarter campus. Consequently, we have every expectation they'll remain in this building on a long-term basis. As you can see from the stack chart, our vacancies are all located in the penthouse level of the building. These are premier floors and some of the best law firm floor [ plans ] available in today's market. In fact, we're currently negotiating proposals with 6 prospective tenants.

The feedback on this major lobby renovation has been off the charts. Completed just last year -- we completed it just last year. Additionally, this institutional asset has been fully updated throughout our ownership. As part of the lobby, we recaptured a tenant message center and carved out space for a new Chef Daniel Boulud Cafe. The only remaining upgrades include the replacement of the building Class C system and code required garage repairs in '25.

The lobby cafe that Bob mentioned opened this past September. We're going to actually be introducing a new rotating food concept here to keep guests coming back. The lobby also features artwork that we commissioned some audio visor. We've really been working on introducing high-end art work throughout our portfolio. It's visually appealing and it adds cultural benefit to our buildings.

Yes. It's great to be the landlord of the iconic P.J. Clarke's tavern on the south side of our Plaza, no surprise, I can get the reservation, Harry, perk of the job. Rounding out the retail, once again, as I noted, our bank space is leased to Chase. And in a sad loss for Third Avenue, I replaced the [indiscernible] rug store with our third lease in the portfolio to One Medical. The tenants in all our buildings where we have One Medical love the concierge services at their fingertips.

Tenant engagement is a huge highlight here. Our team recently picked up dialogue with Bloomberg, so that we can jointly strategize on sustainability opportunities in the building to drive up that ENERGY STAR score above the threshold required for certification. Also, the building has a 5 out of 5 on Kingsley tenant satisfaction. So kudos to our property management and our leasing teams.

Okay. So that's the Third Avenue corridor. I think it's 4 properties that roll up as follows. We have a few unencumbered assets there. So you can see the debt maturity schedule. Nothing in '24 on a property level, nothing in '25 on a property level and in '26 that's 800 Third which is the only maturity within the next 4 years. And if you saw up on the screen that had like a 10% debt yield in place, it's fairly low levered. We feel pretty good about that. Non-CMBS indebtedness that we have there with our partner, J.P. Day. On the NOI, 6.5% CAGR. That's in part because [indiscernible] blew out. So we have some vacancy at 919, as we lease that up along with very modest assumptions we have for rental increases. I think it's less than 2.5% a year rental increase is what we projected. Hopefully, we exceed that. And along with keeping the expenses at or below 1.5 points per year of compounded annual growth, that results in a fairly strong NOI growth trajectory for SL Green at chair; and base building capital, I think, is averaging around $2.50 per square foot, $2.50 per square foot over that 4 building portfolio. And you can see on the next slide, where we have our leasing stats, not much in the way of '24 and '25 rollovers. There's a leasing goal of 185,000 feet for next year. 111,000 of that is sort of identified in pipeline at the moment. And after a significant -- I think it's 11-point drop when [indiscernible] rolled out in 919, you can see us getting back almost half of that vacancy in '24 and then marching our way towards stabilization in 2027. So now let's turn our attention to the beating heart of SL Green's high-performance portfolio of 6.5 million square feet of space along what we call the Park Avenue Spine. This 6-pack of buildings is the finest of any collection of office buildings along the highly popular and coveted Park Avenue. Park Avenue currently enjoys the lowest vacancy rate of any submarket in Manhattan with an overall availability of just under 10.5%. So that's equilibrium where landlords have pricing power along the spine. This is true whether the assets are brand new, like a One Vanderbilt or of an older vintage like a 280 Park, so long as the assets can meet the demands of today's sophisticated tenants that are looking for elevated experiences an easy commute we're going to be able to lease that space.

100 Park is a premier asset feet from Grand Central Terminal that serves a great price point in this submarket. We've owned this asset with Prudential since 2000. The asset is in a transition phase as we build occupancy, which Steve will take you through. With extension options, we have a final debt maturity in 2025, and we are currently negotiating a restructuring with the lender group to manage lease-up and I expect to close in January or February of next year. I'm extremely confident that's going to get done.

We performed a $150 million redevelopment of this building at the time of acquisition and then recently added a very popular square foot amenity lounge. Rents are a tale of two buildings. The base floors offer affordable rates in the low 60s per square foot, while the tower floors regularly achieved rents in the mid- to upper 80s per square foot. The building is in transition with the upcoming departure of BDO in Wells Fargo. However, we're trading proposals with 2 tenants covering 180,000 square feet, and I'm counting on landing both those tenants.

100 Park Avenue is very near and dear to my heart. In true [ at ] pick and itch fashion after a 6 a.m. job review, maybe to, he hired me and shortly thereafter I started my career with SL Green. The building was in the midst of $150 million redevelopment. At the time, it was SL Green's largest redevelopment by far. It's really amazing how far we've come in the last 16-plus years. The property has received many awards including the prestigious international renovated Building of the Year Award in 2009. The only projects left on deck are tied to new leasing, and our annual capital spend is less than $0.50 per year at SL Green share.

And as Steve mentioned, we have an incredible luxury amenity center here it's called Park House. It's got conference rooms, a studio, golf simulator, pool table, travel showers, it's been a real hit with the tenants. And we've actually had a record 1,300 golf stimulator bookings year-to-date, although 1,100 of them are from Matt, so I don't know if accounts, but Matt hopefully all that practice pays off on the course.

A bank a pharmacy, a salad shop, a pub and picking it praises me every day. Our Coffee Shop has the best iced matcha with low fat goat milk south of 57th Street. What more could you want in the retail package.

And 100 Park was 1 of the first buildings in New York City to achieve lease certification way back in 2007 and a year Bob started. It's a great example of how you can take a 1950s vintage building that can be maintained and improved over time so that it has a superior sustainability performance. Two fun highlights here as part of our biodiversity initiative, we have an urban farm and a beehive on the 21st for setback. If anyone wants a [Darphoney] track me down. Matt and Josh, I saw you back there, and I know I still owe you one.

125 Park is a fortress institutional asset. As a data point, we sold the far inferior sister building at 110 East 42nd Street at a stabilized 4.2% cap rate in December 2021. The building has 100% occupancy and 7 years of weighted average lease term. We acquired this asset in 2010 and wholly own it with no debt.

With direct access to Grand Central Terminal, the building almost always stays 100% leased. We have upcoming expirations covering only 1.5 floors, we're in active dialogue with half of our tenants I expect it will renew while the full floor lease doesn't expire until the end of next year. The building is part of TD Bank's neighborhood campus and TV has historically picked up every piece of available space that's come on the market. There's limited role with only 50,000 square feet of expiring leases over the next 2 years.

On the capital front, we're in the final year of a few key infrastructure improvements, including an elevator mod, Class system upgrades and BMS upgrades, all of which improve the efficiency of our operating equipment. Local 11 includes the completion of an extensive 2-year project to restore the Landmark Terracotta facade. We are stewards of many New York City landmarks and take great pride in our ability to restore and maintain them with Finesse and attention to detail. The project will be completed early next year. Additionally, you may notice that there's some ongoing work to replace the sidewalk, which is part of the city's project to revitalize Pershing Square and even better what they're paying for it.

125 Park has an Emerge 212, located on the top 2 floors of the building. It's got conference rooms, event spaces, hot desking and daily office rentals. There's also a convenient conference center right across 41st Street. The building also has direct underground connectivity to Grand Central and an adjacent parking garage that we control that can be made available to tenants.

This storefront across from Grand Central is 1 of the most important banking locations in the city. And to give you a sense and as further testament to the city's growing bank demand I alluded to earlier, we renewed TD Bank this year, notwithstanding they have another long-term lease at One Vanderbilt an Avenue away. There's major deposits here and it has always generated top-of-market rents.

And the building is currently undergoing a full BMS upgrade and major cooling tower upgrades. So we expect energy efficiency to improve once these projects are completed.

One Vanderbilt. Not much to say that has not been said already about One Vanderbilt. It is the most coveted commercial building in the world. We own this asset in a 70-30 JV with NPS and Hines. The cash flow is bulletproof with 15 years of Walt and 8 years of remaining debt term at 2.86% fixed IO. One of our main capital market objectives for 2024 is to finalize terms for an interest with one of the groups, we are in active term sheet negotiations with. In all instances, expect to see us maintain majority ownership and control of One Vanderbilt.

We have a pending lease with the final bit of vacancy. So my job will soon be done.

Yes. We'll see about that after this.

While I said 10 East was my favorite project, nothing can take the place of OVA. Our world-class development is complete. We identified a day 2 project to improve the operations of the building to help mitigate stack effect, all tall buildings deal with stack effect. And while the impact at OVA is minimal, we will add additional vestibules to a few locations to minimize any issues. In 2026, we have our first Local Law 11 inspection scheduled. We have the right guy for the job and I'll add Matt to the alternate list for my team of Spiderman in case Peter or Paul need any assistance.

And One Vanderbilt sets the absolute standard for world-class amenities. We have to give some credit to the industry, which was quick to adopt this level of premium concierge service. It adds tremendous value to our properties. The building has this amazing 30,000 square foot amenity floor where we are right now, it's got Summit, it's got Amex's first enteron members Club, which I mentioned earlier, the most amazing location, especially for Metro North and Long Island railroad commuters. And I know I'm stealing brett's thunder again, but 2 amenity highlights, it's got 2 new Michelin Star restaurant, [indiscernible] and Joji, which again I talked about earlier.

In addition to the Michelin restaurants, the greatest at [ P3 ] cafe in New York City, a state-of-the-art TD New York City flagship store. In the spring of 2024, Watches of Switzerland, will open a luxury watch and jewelry boutique on 43rd in Madison. That's an atypical luxury location. But they recognize the power of the building and the Summit tourist attraction above.

And One Vanderbilt is the only building in the world with 2 simultaneous lead core and shell designations. This is a onetime certification that you achieve as part of the building design and construction. One Vanderbilt is also 1 of only 9 buildings with well platinum certification in New York City. Two major infrastructure highlights here. The building has a 150,000-gallon rain water collection and treatment system. What this does is it reduces storm water runoff and the demand for city groundwater. It also has an on-site cogeneration system, which serves 2 purposes. It traps and reuses waste heat and it creates on-site power generation during peak electric demand periods when the city grid is strained and when electricity is the most expensive. So the system provides both environmental and resilience benefits.

Located Katy corner to JPMorgan's new headquarters at 245 Park is ideally situated in the heart of this Park Avenue spine. If you recall my presentation last year, I promised you that we would get a JV done at this asset. I walked you through how we closed in 2022 on the acquisition of this asset through a long thought bankruptcy process of the previous owner with the strategy to reposition the building. And in that presentation, I told you about those partners. And that's exactly what we did. We closed earlier this year on the sale of a 49% interest to Mori Trust, along with the sale of our previously held mezzanine level. We have debt term through 2027, which has fixed interest only at 4.3% and with a well-aligned partner holding the debt and enhanced rights for us as the manager I would expect to see this debt further extended in 2024 or 2025. And with our announcements this morning, we are also well underway on our repositioning plan that Steve and Bob will take you through.

As noted, the building is undergoing a transformative redevelopment. That's already led to 200,000 square feet of signed leases this year, including today's announced lease with Stone Peak Partners, covering 77,000 square feet. Park Avenue is a red hot market. In fact, we have 400,000 square feet of proposals under negotiation and expect to have some good news announcements early next year.

Our team has been fully engaged on this massive redevelopment since acquisition. We're wrapping up our construction documents in the next few weeks while working through our initial purchasing of critical trades. We will commence physical work early next year. On the facade, KPF has designed and overclad focused on Park Avenue, consisting of curve, [ indiscernible ] and textured metal panels to elevate the building's presence on Park. On the Plaza, PWP, our landscape architect as design enhancements, including extensive plantings with over 30 trees, increased lighting and seating, all with the common goal of activating the public realm. We are working through the approval process currently with the DCP. We've designed a lobby that is fresh, clean and Airy. Our internal design team, led by Marc played a big role in the final design, including hand-selecting block of stone that will be a focal point of the lobby. We may actually need another quarry visit next summer to ensure quality control.

I think so.

Key to note under the JV agreement, SL Green is a 100% beneficiary of a $45 million reserve held by the lenders. -- which will be -- which will offset SL Green's share of 2024 redevelopment costs. Stay tuned over the next year as this project takes shape.

On the amenity side, our plans at 245 are absolutely incredible. On the ground floor, we're adding nearly 20,000 square foot tenant club and wellness sensor. It's going to have a juice bar, fitness equipment, treatment rooms, locker rooms at Equinox at envy and a beautiful lounge. We're also keeping the golf theme going with 4 golf simulators. So now Matt has a new place to play, good news for 245 Park, bad news for 100 Park.

On the retail side, we are thrilled that Dos Caminos opened in 2023 on Lexington and 46th Street. It's great for the neighborhood, great for the Lexington Avenue corridor, great for office users to have a fun place for drinks and food after work. In the months to come, I can't wait to share with you what we're planning for the retail and Park and 47 Street, capitalizing on our great redevelopment and the opening of JPMorgan's new headquarters Catty-corner. But the PS resistance of 245 Park Avenue lies in a simple question. When is the last time you Sipped a martini, selected fresh Langostino from a raw bar and closed a merger transaction all on the roof of a skyscraper overlooking the epicenter of the financial universe. The answer is never until now. Have a look at our new rooftop bar and restaurant at 245 Park. It will be iconic and we're already in dialogue with some of the greatest operators in the world to run it.

Big highlight here is the adaptive reuse of an existing building, which is the true epitome of sustainability. The project focuses on material reuse. One example, we're retaining the existing elevator lobby stone. We're using that same type of domestically sourced stone for the remainder of the lobby renovation. And the readout plan has really important infrastructure upgrades, which will improve the building's energy performance.

Located on the north side of JPMorgan's new headquarters, we have 280 Park Avenue. We own this asset in a 50-50 JV with our crosstown rivals at Vornado. The JV is the beneficiary of $140 million revamp that we completed in 2016. To give you an important data point demonstrating the return to office in our portfolio, we are seeing 130% utilization versus 2019 levels at 280 Park on Tuesday through Thursday despite relatively the same percent lease north of 90%. The debt matures at the end of 2024, but we are finalizing negotiations of a long-term extension of this debt, and I'm extremely confident we're going to get this done in the next few months.

280 is one of the most popular buildings on Park Avenue as evidenced by this morning's announced renewal and expansion lease with PJT Partners covering 270,000 square feet. On top of that, we have an additional 200,000 square feet of active proposals, building rents are robust range of $90 to $145 a square foot.

Yet another example of a comprehensive and timeless redevelopment completed by our team. Like 100 Park, we received an international renovated Building of the Year Award in 2019. Future capital includes the addition of a modest building amenity that wasn't required at the time of the original redevelopment as well as code-mandated elevator mod and a few projects to support leasing. Remaining capital needs are split 50-50 with our JV partner.

The building has an 18,000 square foot public plaza, an amazing art work that's visible from the Street, including the BFS sculpture by cause, also known as the big thing there, prime selfie location. Bob also mentioned that we're adding a modest amenity program here. This is going to include a private training room and landscaping by the lobby pool.

We've got the impeccable Italian restaurant in Fasano at the base. How you doing? Fasano took over the buildout completed by the Four Seasons and really improved the front bar experience. The food is tremendous and a great addition to the SL Green Hospitality collection.

And this year, we introduced a pilot program at the building to capture system start-up and shutdown opportunities. Based on the results that we experienced in the first 3 months, we're projecting a 3% energy savings just from start-up and shutdown optimization alone. So we're going to lean into the system a little bit further, and we expect to see improvement in energy performance and scores.

450 Park Avenue sits on the corner of 57th Park Avenue, which is arguably one of the best corners in the country, halfway between Grand Central Terminal and the Upper East Side. This transaction is indicative of our asset management strategy and capital-light model for premier assets that we've been telling you about for years. We acquired the building with 2 institutional partners last year, at a big discount to the seller's basis and retained a 25% stake. The debt was put in place with Wells Fargo, and we have termed through June 2027 and future funding to cover a portion of the repositioning capital.

This is an upscale boutique building with very efficient 10,000 square foot floor plates popular with financial service tenants. Since taking over the building less than 18 months ago, we've raised occupancy from 77% to 93% and increased rents $15 a square foot. How're you doing? We have a new design high-end prebuild program and I expect occupancy will remain in the mid-90% range with rents continuing to rise.

Similar to 245, the budget represents the first generation redevelopment capital to elevate the buildings SL Green standard and align our business plan to help the leasing team attract and retain the highest caliber tenant roster. We will complete all major items in 2024, including infrastructure to support new leases, a sidewalk replacement and a modest renovation of the lobby. Amenity program was also designed by Fogarty finger.

So next year, we're opening a tenant fitness amenity, and we're adding something we haven't done before, two F1 CAR simulators. These were designed by 3-time Le Mans winner, an Aston Martin factory driver, Darren Turner. I know that picture is not there, and that's only Bob DeWitt, but it could have fooled me. We're also adding a golf simulator, specifically for Matt. And we're going to have a state-of-the-art fitness equipment, personal training, group fitness. So on the hospitality side, I think we got our hands full. We're going to have to figure out how we're going to manage the fleet list.

Aston Martin opened its showroom this year in the space formerly occupied by Philips Gallery. Aston continues the element of Glamour at the buildings frontdoor and were able to co-market the 450 office space off the Aston dealership.

We acquired 450 with the highest lead certification level of Platinum, and we're in the process of recertifying right now. It's a great building, and we're going to continue to identify further efficiency opportunities.

Okay. Like I said, the beating heart of the SL Green portfolio. That is quite a pressing collection of great assets along this Park Avenue Spine and these stats, I think bode fairly well as well. In '24, you see we have debt maturity, which is 280 Park, Harry told you where we are in that process. I don't think the announcement with PJT and the pending leasing we have there is going to hurt those negotiations as we try to close that out. And then '25, '26, relatively clean. And then we'll have some more refinancings to do in '27, most notably, among those 245 Park, but by then, that comes at the end of the redevelopment and hopefully full lease-up of the building. And so by the end of '24, we would hope for '24, '25, '26 to look relatively put away in terms of liability management. The NOI on this equivalent like AAA, treasury, real estate location, is 5.5% compounded annual growth, again, with less than 2.5% a year of rental inflation factored in, again, leveraging off of just over 1% compounded annual growth since 2019 in our operating expenses and base building capital given the newly redeveloped nature of most of the portfolio falls under $2 per square foot at share for SL Green. Then you look at the Park Avenue leasing statistics and you see that we've got a fair amount of work to do in 2024. That's mostly a result of what our expectations are for 245 Park and our lease of objectives there. But I note that of the 743,000 square feet, we tend to lease as a goal in '24, looks like, my God, over 80% of it is already specified which means we're going to have to go back right after this and reduce these stats because he's [indiscernible] back in again. It sounds like you do more there if [ 67 ] of it's already illuminated. What's that about?

How you're doing?

And with all that leasing, we would hope to see our occupancy climb rapidly into the mid-90s at the end of next year. So expect a lot of performance out of the 6 pack that I mentioned earlier. And now we're going to go leaves Midtown, all the way to the west side, we'll swing over there and take a look at the 5 core assets we own in this submarket. Without question, this is the toughest Midtown submarket that we experienced. And there is an availability rate in this submarket of close to 25%. And so it's just a challenge and it's against that backdrop that means we've got to work that much harder to execute. We're proud in that very high vacancy submarket that our Westside portfolio has a current occupancy of 90%, far in excess of the market. And we will simply work, as I said, harder, more creatively to continue that level of out performance in this part of town. Under these challenging conditions, we were actually able to sign 417,000 square feet of leases in 2023. And the tour activity is modestly up off a small base, but I think there's about 35 or 40 tenants touring this particular area right now, which is a favorable trend, and it's all about trend leading into next year.

We own 1515 Broadway in the center of the [ indiscernible ] in a joint venture with Allianz as Marc mentioned, what's great about 1515 is that it works perfectly as the greatest casino venue on Planet Earth. But I'll cover that later. The building is fully leased to our great partner, Paramount, occupying all of the offices through 2031. With its stable tenancy and low fixed rate loan, there is significant cash flow after debt service at the property. Looking forward, I am already in dialogue with the lender to extend the loan multiple years beyond the current maturity date. And for clarity, that extension would be independent of the casino license award. The retail at 1515 is leased to the likes of Swatch, Skechers and line friends. The Lion King is the highest grossing show in the history of Broadway. Can't take too much credit there because it's a truly amazing production, but the theater being at the 50-yard line of the [ indiscernible ] might play a role. We also have a second live performance theater in the building's lower level. It's a great retail offering, probably the best positioned in Times Square. But the retail is an interesting story because, although 1515 is well leased, the [indiscernible] today is not what it was. It really should be a premier retail real estate, entertainment MECA. The COVID Hurt Times Square submarket more than any other and it's had a hard time coming back. And we truly believe that it needs to spark like the casino to rally that retail submarket to come back to what it was and better than before.

This is an institutional quality headquarters building. We've had a great run with Viacom as they've notably expanded into 100% of the office building. It's hard to believe that they or any other tenant could find a similarly sized building at comparable rents anywhere in Midtown.

We completed a major redevelopment several years ago, including a lobby renovation, retail repositioning and several infrastructure upgrades and the addition of LED signs fronting Broadway in the heart of the [indiscernible]. We scheduled the replacement of the original LED billboards that are at the end of their useful life. Our plan is to replace them with the newest technology and expand them to 4x their current size. This is a good capital targeted to drive additional revenue. We expect the payback to be less than 24 months. There's also elevator upgrade scheduled for 26 and 27. And on local law 11 front, the project focuses on the restoration of the trademark, limestone fins and Crown. But to be honest, our real goal here is not to do any of this work. I'm going all in on Brett to get the casino done. How you're doing?

Location here is a showstopper. You've got direct access to Broadway and live performance theaters. And of course, there's no better place to be on near year's eve with a spectacular view of the ball drop in Times Square. Paramount on the sustainability side, Paramount is a high-intensity energy user, which is reflected in our lower ENERGY STAR score. Unfortunately, ENERGY STAR scoring isn't perfect. It does impact tenants with high-intensity uses like tech and media. But I will say that Paramount is extremely engaged in sustainability. We've had great dialogue with them, and we're jointly tackling energy efficiency.

1185 Sixth Avenue is right in the heart of the Sixth Avenue corridor. This asset continues to be a big free cash flow earner for the company. We have 20 years of remaining ground lease terms, and we expect this asset to continue to provide significant future free cash flow. Further, we are currently in early dialogue with the Fiona to extend the ground lease and also executing on strategies to extend leases without impacting the cash flow. Like the balance of the Westside portfolio, I would take you through, there's no debt whatsoever on this position.

1185 is one of the most affordable buildings on Sixth Avenue and Sixth Avenue is one of the strongest submarkets in Midtown. We're currently negotiating 7 active proposals and 2 new leases, most with law, insurance and financial firms. As you see, there are no 2024 expirations. Although King and Spalding and Hess do have near-term expirations, each has subleased substantial portions of their space, and we expect to retain most of those subtenants on long-term direct leases. Given the building's short-term ground lease, will need to be thoughtful going forward about our capital spend at the building.

We recently completed a massive transformation of the Buildings entrance and lobby greatly improving the street presence. There are a few minor infrastructure projects planned over the period as well as upgrades to support the lease-up of space in '26 and '27. It's a regular program at the building to address marble panel repinning the next expected cycle of facade restoration will occur in '25 and '26.

This building has an Emerge 212 facility with fully furnished hybrid offices, short-term rentals and meeting space. tenants love the convenience of in-building conference center options, and there's also convene conference center down the block. And of course, 1185 is one of the best locations to watch the Thanksgiving Day parade.

As of last week, the retail is now fully leased as we are bringing both Carnegie Diner and Naxos Greek restaurant to the corner of 47th and 6th. The deal was done as is and without any TI. Something Steve found, mind blowing.

So here, we have plans for a future chiller upgrade, which we expect to positively impact the building's energy performance.

810 Seven is yet another wholly owned and unencumbered asset that is well positioned for a wide array of industries. With our debt or partners, we have plenty of flexibility to get deals done and push leasing. The building is 82% leased with nearly 5 years of Walt. So there is some leasing to do, which Steve will take you through.

The building is home to a wide range of tenant types with no single tenant dominating the rent roll. A new custom-designed prebuild program is already proving very popular. In fact, we have 70,000 square feet of active proposals, which are likely to convert over to leases.

We acquired the building and immediately renovated lobby, elevator cabs, core restrooms and quarters. Renovations have held up well over the years. We completed significant infrastructure mechanical upgrades during our ownership and recently completed a full elevator mod, including the upgrade to destination dispatch technology. Other than local 11, which includes planned brick restoration in 2026, the only base building capital required to support these leasing.

And 810 has a brand-new state-of-the-art convene conference center. It's branded as ETC venues. It's 23,000 square feet across 2 floors. It's got breathtaking use of Times Square, Central Park. It's got a full-service kitchen and it's incredibly popular with tenants. The building also features the Hope Sculpture from Robert Indiana. He's famous for the iconic Love Sculpture that was first created in 1970. So is a true amenity for this building.

And once again, the fully leased retail to 2 bank branches is both the Chase and Bank of America coexisting at the base of the same building.

And we've done recent upgrades to improve thermal controllability and reduce energy and carbon impact. 810 was also previously a BOMA Grand Pinnacle Award winner for operating building of the year.

1350 Sixth Avenue is a gem on the avenue. This asset is on a prime corner in a very attractive offering. It's a wholly owned unencumbered asset supporting our corporate debt. This could serve as a JV candidate in the future given the inbounds that I receive about this asset. There's a story to be told on leasing, and Steve is going to take you through.

The Buildings Plaza area location offers amazing central park views on the upper floors. Where we achieved rents of $85 to $100 a square foot. Current vacancy is located in the base of the building following Amazon's recent consolidation into a new headquarters. We are prebuilding one of those large floors and offering build-to-suit options on the other floors. Based upon early feedback, we expect the building to come close to 90% leased by this time next year.

Yet another example of a transformative lobby and storefront renovation completed by our team with a classic and corporate design. The building has been maintained well over the years and has minimal required capital remaining. Future projects are focused on infrastructure upgrades and improve efficiency and reduce operating costs, including a chiller replacement in 2027 and some local law restoration in '26.

And Steve mentioned this already, but the key highlights here are the Plaza and the stunning views. The lobby also features a spiral wall sculpture that we commissioned specifically from Yanina shape.

The retail at 1350 has always been a strong performer given its proximity to the park, the tourist flow as well as the well populated office buildings. [ indiscernible ] is 1 of the better-known restaurants in New York City, especially for its alfresco dining.

And on the sustainability side, as Bob mentioned, we're planning a future killer replacement here, and we hope to get that ENERGY STAR score up. We've also seen really high participation here with the NYSERDA commercial tenant program, which offers free energy audits of tenant spaces. We love having [ activated ] tenants who are equally as committed to sustainability.

This has a special place at SL Green because it was Marc's first acquisition. Big reveal, look at that price. Doesn't that say at all, $62 a foot back in '98, Steve, do you remember that?

I do.

I never saw that again, but that was great. $62 a foot for BMW build. For the past 24 years, this building has been another workhorse for the company. In 2022, we signed a 10-year lease extension with BMW for 225,000 square feet. In 2023, Steve signed 263,000 square feet of leases, including CBS and GNYHA. It's a very sticky tenant roster with a lot of infrastructure at the building. Yet again, a wholly owned unencumbered asset continuing to bolster an unencumbered asset pool.

555 is a bit of an island unto itself given its Far West Side, 11th Avenue location. However, it's the best office building in this niche market and popular with health care and education tenants. CBS is tied to the building since they're supported by CBS' global production facility located directly across the street. And like at the news building, we've set up all floors as commercial condos to attract nonprofit tenants to take advantage of 100% real estate tax abatement in connection with 30-year leasehold condos.

The capital plan includes a full elevator mod phased over 4 years, including new cab interiors and the prep work to support lease roll in the building. In '25, we have planned repairs to the garage to hit the Local Law 126 filing deadline.

At location here it's great for anyone who's driving into the office. There's on-site parking and it's located right off the west side highway, although putting my sustainability and ESG hat on, I strongly encourage public transportation. But if you do drive a BMW, you can get your car serviced right on site, so that's great. And of course, being so far west, you get panoramic views and one hell of a sunset.

As Laura mentioned, we've got our long-standing partners at BMW with their dealership at the base. But it's interesting to note how much this area has improved with the inflow of surrounding residential tendency, the retail dynamic has changed significantly. And we just signed a lease with an experiential retail tenant that was unlikely to consider this location 5 to 10 years ago.

And we've got some work to do here on the sustainability side, but we did complete a steam pressure reduction project back in 2022, and we've made some HVAC control upgrades. We've already begun to see improvement in our energy performance and our engineers are focused on optimization.

Okay. So the Westside portfolio, as you saw, the vast majority of it is unencumbered. That's the good news. The primary debt we have to deal with where Greg talked about the status, we're already on it, $760 million of 1515 Broadway. We've got multiple options there as office or hopefully, casino, and that's what our intent is. In either event, the debt is well secured, and we would expect at this time next year in either event to have that debt modified out in time, that's part of our business plan. And even in this tougher submarket, we're projecting 2.5% growth in the bottom line. That's more related to clearly some lease-up we have right now at 1350, 1185 and 810. It's going to help lift that bottom line over '24 and '25, keeping our expenses at 1.5% annual compounded slightly more capital base building that much, but slightly more -- it's probably the most of any submarket. But one, it's -- 2025 is distorted by the LED screen capital, which has a revenue source and the payback. And also you saw some larger numbers at BMW, which we probably haven't invested much in since our original acquisition. So we'll time for that. But all in all, the portfolio is solid. And most importantly, we don't really have money in the way of debt concerns once we get past the negotiations on 1515. And on the lease expiry schedule, you see we have an uptick projected for '24 of almost over 200 basis points on account of those 3 buildings I mentioned leasing up. There's a slight dip in '26 because we have one larger than average rollout then, but nothing that we don't think we can manage. We've got a fair amount of leasing targeted for next year at 340,000 square feet over half of which is currently identified in pipeline. So now we will take this and wrap up the core office markets with Midtown South and our downtown asset. This will complete basically all of our core asset holdings. We have about 1 to 5 properties here, the average size in Midtown South for all buildings is under 250,000 square feet. So when you look at our 3-building campus, 1 Madison, 11 Madison, 304 Park South, there are 3 extraordinary properties at Flank Madison Square Park, and they're one of only a few alternatives for large tenants in the district looking for either a larger floor plate and/or new amenitized space. So we hold a really good competitive advantage in Midtown South. And as a result, we're having success leasing. Historically, this was among the tightest submarkets for much of the last decade, having benefited from significant investment in repositioning buildings and heavy tech demand, but now tech demand is paused. But I'm confident tech companies that are now firmly established in New York City and benefiting from that diverse and educated workforce I referred to earlier, that will once again resume cyclical job growth after they're necessary, I would say, expected rightsizing that's occurring now. And hopefully, there will be those kind of life science initiatives and other tech initiatives done part and parcel with the city. You heard about $1 billion investment that will get tech sort of up and running again and I'm sure over the next 3 to 5 years, there will be growth in that sector. So let's kick it off, Harry.

11 Madison is the furthest north of our Park Avenue South Campus adjacent to 1 Madison. It is a full block for Madison to Park Avenue and this fortress asset is 96% leased with 10 years of WALT. We have $1.4 billion of debt, which is well covered and matures in September 2025. We plan to kick off negotiations with the lender for an extension early next year on the heels of a few other refinancings that we expect to provide good comps for this loan refinancing.

This is an institutional landmark quality building. Sony and UBS' North American headquarters, anchor the building with lease expirations through 2031 and '37, respectively. The building has uniquely large floor plates in a submarket dominated by small buildings. However, the real potential for outperformance comes from the ability of 11 Madison and 1 Madison to create a one-of-a-kind campus for a large tenant who might otherwise find it a real challenge to find large spaces in this very popular submarket.

The biggest building in the SL Green portfolio, it has amazing infrastructure that's been meticulously maintained by our team and our tenants over the years. While exquisite, the art deco lobby is dark and in need of an upgrade to bring life and activity into the tremendous volume of space. We've designed a very tasteful renovation plan with architectural lighting and bespoke furniture of the time period that we'll be executing next year. On the Local Law 11 front, we've been working through an extensive restoration program to maintain the nearly 100-year-old facade since acquiring the building in 2015. After this next maintenance cycle, there'll be minimal required repairs within the next 10 years.

Here, the amenities that are within tenant spaces are a real spotlight. UBS has the subterranean fitness facility. That's the equivalent size of a commercial Equinox gym. It's got a conference center bigger than any convene conference center we've seen and an amazing cafeteria with something like 5 restaurants in 1. Sony has its own cafeteria and roof deck, and it's got this incredible Omakase-sushi bar. This is one of the big differences between midtown versus downtown tenants in this submarket add really creative uses to their spaces that are just really cool. Suntory on the 12th floor, another good example of how tenants amenitize their own spaces in nontraditional ways with the addition of bars, restaurants and modern conferencing.

We're proud of our great restaurant tenant 11 Madison Park, which once again received 3 Michelin stars in 2023. In an article in the New York Post this year commemorating 11 Madison's 25th anniversary, SL Green was recognized as having partnered with the restaurant during COVID, as we did with all of our restaurant tenants to keep its doors open and ensure that the great hospitality houses of New York remain in business.

Key feature here is our on-site ice plant, which is used for thermal storage. Again, we have one at 220. This is our second ice plant. It reduces our peak electric demand in the summer when electricity is the most expensive. The building also won the BOMA International Earth Award and the BOMA Grand Pinnacle in the same category back in 2021.

The trophy development of Midtown South, 1 Madison is located right on Madison Square Park and right in the heart of the Flatiron District. Capitalizing this deal over the past few years has taken multiple steps for the team at moments in time when the market thought it could not be done. First, we brought in NPS and Hines in the beginning of COVID when nobody was capitalizing anything. Then we put on a construction loan in November 2020 when nobody was financing anything. Then we capped that loan at an all-in cost of 3.59% in 2021 when nobody was hedging anything. Then in 2021, we sold another 25% stake to KTCU when the building has 0 leasing. This team does not take no for an answer. And the latest step in monetizing this asset, this past September, we announced our partners funded us the remaining $580 million commitment at TCO of the project, which we used to pay down corporate debt. Kudos to Bob and his team for getting that done on schedule -- actually, ahead of schedule. Steve is well underway in getting this asset leased, and we are excited to get the building stabilized shortly.

Well, Bob has his favorites, this without doubt is my favorite building. We'll discuss leasing in greater detail on today's property tour, which I hope all of you are joining. However, it is worth noting we've seen a recent uptick in tour activity now as the buildings construction is complete. And similar to what we experienced at One Vanderbilt, once the amenities start to come online, we expect proposal activity will soon increase as well. In fact, we're currently negotiating 3 proposals covering 150,000 square feet which I have every expectation will convert into leases.

I look forward to showing you firsthand this afternoon the tremendous work completed by our Dream team. SL Green, Heinz, Tishman, KPF, JB&B, and Severud, and many others who we took directly from OVA to OMA. The project is substantially complete. And due to [indiscernible] unmatchable tenacity, all lease spaces have been delivered to the tenants. All remaining capital is fully funded and associated with ongoing amenity fit-outs and leasing-related costs. There is no additional expected capital requirements for SL Green in the near term.

So this is one amenity program that rivals One Vanderbilt. I already walked you through this, but the food and beverage service is all managed by Daniel Boulud. We have the 13,000 square foot rooftop with an indoor pavilion and an outdoor terrace which is going to be a daytime amenity for tenants and then an amazing event space at night. And then we also have our 10,000 square foot tenant cafe in social space in the lower level of the building.

I'll be taking everyone on a tour of the retail later this afternoon as well. But what makes this retail great is the assets positioning in a true 24/7 neighborhood. Rarely is amenity retail able to draw consumers from all 3 categories. One Madison has all the office users of Midtown South, the great residential of the Flatiron and Gramercy Park neighborhoods and the tourist attractions of Eataly and Madison Square Park. In One Madison V1, the retail was underutilized, but this redevelopment will give it new life and the growth of the neighborhood will make us a very special retail collection.

We have an amazing sustainability story here. It's a great example of how you can extend the building's life cycle. We retained 950,000 square feet of existing building podium and that avoided 21,000 tons of carbon emissions through material reuse and avoided demolition. We're targeting LEED goals as well as Core goals. And on completion, One Madison will be one of the highest examples of sustainability and wellness in New York City.

The Rio 4 Park Avenue South is the southern anchor of our Midtown South campus right on the corner of 23rd Street. It's a wholly owned and unencumbered asset that supports that unencumbered asset base. It's 100% leased, and this asset will continue to get better as One Madison opens.

It is 100% leased with the exception of 1 floor occupied by the OMA construction team that becomes available next year. So my goal is to early renew and expand IMG onto that floor. Additionally, looking long term, the building is a solid prospect as a residential development site, given its location directly across the street from Madison Square Park.

I take back what I said about every building that was my favorite before this, 304 is actually my favorite with next to no capital remaining on term.

Here, the amenities are within IMG's control, but I will say that the proximity to Madison Square Park and the subway connections have huge appeal. 304 is also right across the street from One Madison, where we're bringing in this incredible food and beverage experience that's going to transform the area and turn vacant storefronts into dynamic 24/7 Hub.

The retail is fully leased here, it's no surprise given the location on 23rd Park with the key 6 trains stopped right in front. Several of the tenants have proactively approached us for early renewals and we've got spin, which is a pingpong experience in the lower level of the building. It's a great neighborhood and corporate event amenity.

Here, we're in the process of full building submeter upgrades, which will improve our data tracking. 304 also has a strong ENERGY STAR score of 79 and certified.

Now down to the tallest building in SOHO. We're now in for its retail office and residential space. The SOHO building is remarkable. The way we acquired this asset is a testament to the investment teams relationship building. We acquired 110 from Janet and Jessica Goldman, who inherited this property from their father, Tony Goldman, and they were very focused on who could carry on the family's legacy. Not only did the family get comfortable enough to make us the stewards of the asset for the next generation, but they also allowed us to house their vast collection in the corridors of the office space. A lot of future potential here for residential conversion, but the building also gets very high rents as office space, yet another wholly owned unencumbered asset supporting that unencumbered base.

This is a popular boutique building with tons of quirky character. It has a mix of both office and residential tenants. The office suites are creative, open plan designs, which typically need only modest amounts of TI in connection with reletting. We have a curated art program that runs throughout all common areas of the building and rents are surprisingly strong $80 to $90 per square foot.

Recognized by BOMA as a regional operating building of the year in 2022, the only major capital project plan is a sidewalk replacement in 2026. This project was identified during our original underwrite and we've been able to defer this work for over a decade due to regular maintenance. We completed an extensive restoration of the landmark facade upon acquisition and don't foresee any additional near-term repair requirements.

As both Harry and Steve mentioned, 110 green features an extensive fine art collection from the Goldman family. The building's lobby and corridors are equal to an immersive art gallery with classic pieces throughout the building. 110 Green also has a communal rooftop deck, and we're planning an amazing upgrade in 2024. We're going to be adding a small bespoke sauna to bring a spine wellness amenity to tenants.

As I'll show you later in the presentation, no retail submarket has grown and performed better than SOHO. It's a 24/7 lifestyle environment with the best restaurants and stores and rents and occupancy at all-time highs. The retail at 110 Green Street has so many twists and turns and a great conclusion. When we acquired the building, Design within Reach had its SOHO flagship year, paid a rent of $1.85 million per annum. In 2021, at the expiration of DWR, we leased the space to a jewelry tenant for a gross rent of $3.2 million, with a $1 million TI, no credit, but a $6 million security deposit. The jeweler was slow to start construction, however. And with the market moving, I quietly approach the top 2 fashion houses in the world, LVMH and Kering for a behind-the-scenes competition for the space. And in the end, Balenciaga merged as the new tenant. Funding the buyout of the jewelry tenant itself, paying a rent of $3.75 million per annum, $550,000 more per year. They handed us back the $1 million TI and they replaced the $6 million security deposit with multibillion dollar Kering credit. At SL Green, even when the space is leased, our work is not done. Got it, Steve.

Here, we have an incredibly high ENERGY STAR score of 92, one of the highest in the portfolio. The buildings got a central heating system with high-efficiency boilers and electric tillers. The commercial tenants here are also very low intensity energy users. And it's a masonry building with punch opening. So all these factors contribute to its energy efficiency.

We're at the last one. After this, Marc is going to take you through all 80 assets we've owned and sold. So this is going to be a long day, buckle up.

You guys asked for it.

100 Church is next. Fortunately, Fidi and Tribeca is not a submarket we have a big footprint in. But if you're going to have a presence in this market, 100 Church is the right asset. We took over 100 Church through our DPE business as part of a deed-in-lieu in 2010. If it's a perfect example of us taking advantage of our DPE business like we did at 245, 885, 590 Fifth and 625 Madison, and that list goes on. We took this asset in a basis of $181 million. The building is 93% leased with almost 9 years of WALT. It serves multiple city agencies. In fact, I think the city law department keeps almost all of their files sorted in the basement of this building, and they've been there for over 40 years. We put on $370 million of debt last year, which we fixed at 5.89% with the maturity in June 2027. There's plenty of coverage on this asset in term to run on that debt.

No secret, the downtown market is struggling, but fortunately, 100 Church is located in one of the better areas with close proximity to the World Trade Center. Our 2 largest tenants occupied 750,000 square feet, with leases going through 2032 and 2034. We currently have one lease in negotiation covering 28,000 square feet, which I think it's a high prospect to sign within the next 45 days.

Another prime example of an asset with minimal base building capital required. The only near-term project is a code required elevator upgrade. On the Local Law 11 front, we have a project plan for '25 and '26. The last major facade restoration was over a decade ago. And after this project, we don't expect another project for 5 to 10 years.

So here, we're considering activating the roof deck to create a tenant amenity. So we'll report back on that in the future. The building also features the members only Nexus Club on the seventh floor, which has dining, a kids club, spa and wellness, fitness, and golfing. So obviously, Matt's going to be a member. And the Nexus is -- it's really a great tenant to have in this building.

And the retail at 100 Church has benefited greatly from being across the street from the Downtown Four Seasons Hotel. We signed a lease with a Danish bakery this year and have a lease out for the remaining space of the property.

And on the sustainability side, we completed a full BMS upgrade in 2020, positively impacted our ENERGY STAR score. And I will point out that this building performs remarkably well during demand response events because the BMS system design allows our engineers to control very targeted electric loads. So this also generates curtailment revenue for us, which is a win-win.

The irony of all this is, I don't think Matt plays golf. I really don't. So I don't know how we got pinned into this. But that is the summation of our downtown portfolio. We have some very exciting assets there. In terms of liability management, we've got debt coming due at 11 Madison, not in '24, obviously, we'll be working on that, but that's a '25 role, if I recall correctly. And then we have obviously One Madison where we'll be looking to convert that loan to a mini-perm after we get from about where we currently stand to about 75% leased, which we expect to by end of year. So I think we'll be able in '24 to work on the One Madison debt, maybe not the 11 Madison debt. So when we get to that point in time at the end of next year, we would hope to see some announcement on the One Madison extension. And in terms of NOI contribution, it's obviously almost 2x, 2.5x our portfolio average because we've got so much lease-up and contribution coming in from One Madison. So just like One Vanderbilt has kicked a lot of income in, One Madison will do the same and we get out to '24 through '26. And you'll see occupancy start to rise considerably when we get through that full lease-up period. We've also got this year the construction office rolling out of One Madison because we're done there. We'll have to lease that up at 304 and the data company is...

IDC.

IDC is where the...

At 100 Church.

At 100 Church. So work to do here, but there's definitely a path towards stabilization and some work to do on restructurings. There's a lot of space to lease here, 426,000 feet. And you don't see a bump in the occupancy because One Madison is not same store, but that doesn't mean we're not loading the guns for future growth. And that's where we are in that portfolio. So with that, completes our review of the core office holdings. We will now continue on -- look at our assets by turning to high street retail portfolio. There's a couple of assets left there, even though we were very early on the disposition trend, and then we'll roll through the balance of the portfolio, residential and otherwise. And for now, I'm going to turn it over to the always entertaining and informing Brett Herschenfeld.

All right. Thanks, Marc. As we have communicated to you for the past 6 years, we continue to reduce our High Street retail exposure. Since 2017, utilizing our proprietary tenant information, we've selectively sold or refinanced 10 High Street retail assets for $2.65 billion in gross proceeds. Lots of work and significant value already realized here, and it's well in excess of the performance of the rest of the market. While we sold or recapitalized many of the assets, we still consider ourselves the market leaders and track the street retail market closer than anyone, always ready for opportunity. As I mentioned last year, retail has continued its recovery in Manhattan, availability rates are down in 9 of 11 submarkets Brick-and-mortar retail sales in New York City continue their upward momentum, 3 years in a row of growth. You see here on the middle screen a sample of the major leases signed in 2023. With this renewed confidence Tenants are once again spending real money, building flagships, the ones that we've always known in New York City. SOHO, as I mentioned earlier, has seen 31 leases signed through the third quarter of 2023. But in my opinion, the immediate retail growth story lies in the Madison Avenue Gold Coast, which once again has claimed its throne as the luxury destination in New York City. When we signed the flagship retail lease with Giorgio Armani at 760 Madison in the first quarter of 2019, Madison Avenue had a staggering 29% vacancy rate. But our work and not least, catalyze the revival of the corridor. As of the third quarter of '23, the vacancy rate on Madison Avenue has dropped below 12%. That's the lowest on record. Look at all these new deals and globally recognized brands taking space on Madison in 2023. I'm really proud to be able to present the retail at 760 Madison Avenue to everyone today. It's a long time in the making. We formed a tremendous partnership with Giorgio Armani a decade ago and worked to create this boutique retail and residential condo project that continues to receive accolades. Executing a retail lease on a future new development is always challenging, particularly one with over 17 million a year of triple net rent for a new 15-year term and credit. But we got it done with our partners at Armani, and I'm proud to say that Bob, Phil and his team delivered the space, Armani has formally accepted possession and the rent has commenced as of November 1, 2023. The capital you see here is the retail share of the development closeout capital. The store plus the new Armani Ristorante will open for Fashion Week 2024. This will be a great cash flowing asset for years to come. We own it unencumbered, no debt service and no capital. Our only other High Street retail asset currently on balance sheet is 85 Fifth Avenue, an asset we took as REO through our DPE book in 2020. We own this property unencumbered in a joint venture with Wells Fargo. It's an outstanding piece of retail located in a very strong submarket, the Flatiron District. The property is fully leased long term to [ PINOIO ] which I introduced you to a few investor days ago. They're a creative software company that decided to utilize retail space as a showroom for their software product. The bottom line is, we receive a clean net income, there's no debt service and there is no capital. And now Harry is going to take you through the residential portfolio.

Thanks, Brett. Our current residential portfolio is spread across 3 different submarkets Fidi is a submarket where we have built multiple dormitories for Pace University, along with our residential project at 7 Dey Street. Midtown is our backyard, but is almost entirely been a commercial submarket for us, but Rob will take you through our residential strategy here. And then we have our first luxury condominium project, which is located on the Upper East side. Brett already took you through the enormous achievement in delivering the Giorgio Armani space on schedule, but now I want to take you through the 10 boutique residential condominiums located at 760 Madison. You've heard us talk about this project for several years now, but this summer, we finally obtained attorney general approval to start selling residences. With only a few months -- within only a few months, we have signed up contracts for 4 units, have one contract out for signature and have 2 contracts in negotiation. With these deals, I expect the residential to be 70% under contract approximately 9 months before we deliver the units to buyers next summer. As a testament to the offering, we have already achieved the accolade of selling the highest price per square foot unit on the Upper East Side. Shifting all the way downtown is our latest development for Pace University. After delivering over 100 -- 1,800 -- almost got that wrong, 1,800 dorm beds for them across 3 different projects, soon Pace is going to build the statute of [indiscernible]. This project speaks volumes of the incredible teamwork and never take no for an answer attitude of SL Green. In 2019, we acquired the site from a seller who told us he would never sell and then simultaneously signed a lease with Pace University for the entire building for dormitory and educational facilities. In 2020, we vacated 45 small commercial tenants from the existing site. And in the first months of COVID, we brought in KPCU for an 80% stake in the project. And fast forward in less than 3 years from buying the site this summer, we achieved TCO on schedule and $10 million under budget and delivered to Pace the entire building. Our team led by Peter, John and Jason made this happen. Pace is already rent paying and the project is cash flowing. With extension options, the debt matures in 2025, but we are already working on an extension and trading paper with the lender. Next up is 7 Dey Street. 7 Dey is a brand-new residential and commercial project adjacent to the Fulton Transit Center, which benefits from a 35-year tax abatement as a result of the 64 affordable housing units we have delivered. The project has been meticulously run and managed by Megan Gill and her team. But before I pass it over to Megan, our SVP of Operations and Residential Extraordinaire, I just want to note that while the debt matures in 2 weeks, we are trading signatures on a 3-year extension of the debt. I expect that to close like in the next few hours, imminently.

Thank you, Harrison. While I oversee operations, residential has become my side hustle. And it's nice to make money for the company instead of spending it. And in true panel fashion, 7 Dey is my favorite building. I first presented the asset 2 years ago and outlined our leasing objections, which we have blown out of the water. Market rate rents are averaging over $100 per square foot and have increased by almost 2.25%. Our average occupancy rate has been remarkable at nearly 98% and our retention rate is above 60%, which is a testament to the high standards that we deliver to our residents. It certainly helps that the building is over amenitized relative to the unit count and that these units were fit out with kind of level finishes. The property sits above a major transportation hub and a great neighborhood with great views of downtown. And as a brand-new development that is maintained to the highest standards, there is no real capital needed in the near term. While residential here has been a blowout success, the 3 commercial floors have been a bit of a challenge for us. We are out to nonprofits and nontraditional users to lease or sell condo interest on a floor by floor basis. something that we will remain focused on in the next year. Retail, on the other hand, has been performed tremendously well. Thanks to Brett.

Thanks, Megan. We bought this development site with the same thesis we had across the street at 180 Broadway, where we leased to TD Bank, Urban Outfitters and Pace University. It's great real estate across from the central downtown transportation hub, the Fulton Transit Center. With the constant foot traffic 7 days a week, it's no surprise that we fully leased the retail to Wells Fargo corporate, T-Mobile corporate and On Medical corporate. That's over 16,000 square feet of retail lease concurrent with the buildings opening.

I am chomping at the bit to get my hands on more residential and Rob Schiffer is working on an exciting opportunity for an office to resi conversion, which he's going to walk you through now.

Thank you, Megan. Good morning, Rob Schiffer, Executive Vice President for Development. Unfortunately, the Governor's housing proposal failed in Albany last spring. And in the meantime, New York City's housing crisis has only worsened. We need 300,000 new housing units today. And as population growth continues, by 2030, we will need 560,000 housing units. In the face of this crisis, 421a, a generator of both market and affordable housing units was allowed to expire. And housing starts are at their lowest level in 13 years, down 62% from last year. The dearth of new supply has driven rents to peak levels. Albany remains in a stalemate as issues of displacement and densification are weighed against this existential crisis. But a solution is in front of us. It's the outdated and largely vacant Class B and C office market in Manhattan. This market is far underperforming the overall market with availability at 20% and rents that are down 16% since the pandemic. Empty obsolete office buildings in this market all face the same capital cost inflation, freeze in debt and equity capital markets and slow leasing demand. And for these buildings, capital infusion is uneconomical, so they remain empty and land in hands of their lenders, decimating local retail and restaurants. New York City needs to convert these buildings and add the potential 50,000 units that come with it and with benefits that go far beyond unit production. So what are those benefits? Well, the concentration of these buildings around transit nodes means it's a low-carbon footprint solution. And with the reuse of existing steel and concrete structures, a solution that results in significant embody carbon savings relative to new construction, replacing empty offices in obsolete buildings with modernized structures, housing residents at full occupancy as a lifeline to retailers and restaurants reinvigorating struggling retail corridors. And most importantly, it creates housing quickly and without displacement. So why are there only a handful of conversions underway. Well, conversions are complicated. We've studied the buildings in our portfolio, and we've encumbered the list of issues you see here. The buildings need to be taken down to their structural steel -- there's the issues, need to be taken down to the structural and foundation systems and then rebuilt as purpose-built multifamily buildings. We applaud the Mayor of the City for yes initiatives, but conversions need more. They need a tax abatement program. And now we're going to unveil our next major development project. A conversion of 750 Third Avenue to residential use. 750 Third is my favorite project. It's the first transaction I worked on at SL Green in the spring of 2004, and when we bought this building with 485 Lexington from TIA Craft. Moving before Albany, we are preparing the building to be the shining example for office to residential conversions that provide affordable housing. Yet another example of SLG leading the way and working as stewards of our city with elected officials to fashion policy. 750 Third is a pre 1961 Class B office building that we've slated for redevelopment since the pandemic. It's a great conversion opportunity because the entire building can be converted. It boasts perfect efficient resi tower floors with lots of setbacks for terraces, but also has the challenge of a large and deep podium. The building sits on the western edge of the vibrant Sutton Place residential neighborhood, grade out are the commercial buildings, all else are residential, consisting of walk-ups, townhouses, rental buildings, co-ops and condominiums and scores of well-known bars and restaurants. I mean who hasn't spent one night at Jamieson's. As we just completed the redevelopment of 170-year-old structure, we know this is a big lift, and we need a talented team we can trust. As we learned at OVA, OMA, and at 7 Dey, a strong team makes for efficient development. So we brought back together partner firms that are leaders in conversion and added ARP for their multidisciplinary engineering approach. This is the building as it sits today with only a handful of office tenants remaining in 2025. The challenge is to create legal light and air for units in the large podium floors. So ARP devised a novel solution, removal of the portion of the building on third [indiscernible] above the existing office lobby, creating an out court. This creates efficiency factors in the podium that average 70% and as well as creates opportunities for rich amenitization of the building. We will build on the success of 7 Dey that Harry and Megan described and load the building with best-in-class amenities. The tower floors will have sweeping views and highly efficient, almost 85% layouts. The overall construction schedule is fast because this is a conversion and adaptive reuse, only 24 months to the first delivery of units and 29 months to full completion. You can see on this chart that unlike ground-up development where trades are sequenced to follow other trades as the building rises, and a conversion, multiple trades are working simultaneous and in the same spaces, which drives up risk and therefore, cost. As the numbers show, for a Midtown office building with a higher embedded land value even a full market conversion does not pencil. But we can create market housing here and affordable housing, generating attractive returns with a full tax abatement as was done over the last 20-plus years with the widely successful 421G and now expired 421A programs. Our recently hired Vice President of Government Affairs; Darren Armwood and I are going to engage the leaders at the city and the state level in the coming months to work to enact as critically needed legislation. Back to you.

Last one standing up here. Okay. So now I want to take you through our suburban portfolio. As many of you know, we hold a $185 million judgment against HNA and in the background, we've started seizing assets to collect on that judgment. The Palisades conference center in Orange Town, New York is the first asset that we have taken. The asset is an incredible development site, perfect for residential, storage, data centers and film production situated on 106 acres right off 9W. We took over the site without any debt, and we are negotiating a contract with the buyer, and I would expect to see us selling this site in 2024. The next slide is Landmark Square. We elected to hold this asset and we sold off the balance of our suburban portfolio for a few reasons. It is located in the heart of Downtown Stanford. 6 of the 7 office assets are well positioned with 86% occupancy and significant free cash flow. Additionally, we have long-term debt fixed through 2027. And I mentioned 6 of the 7 assets, but what about that last asset, that seventh? Well, like all of our assets you're hearing about today, we are hard at work mining value from this portfolio. That seventh building is nearly vacant and prime for resi development. And in fact, we just received approvals from the city of Stanford to develop over 400 residential units at the location of that seventh building, which also happens to be in an opportunity zone. We're in the process of capitalizing this project with third-party equity, and I hope to be able to reveal more next year. Our final suburban position came about because one of our preferred lenders foreclosed on the Galleria Mall in downtown White Plains. They immediately came to us and asked us to help them reposition the mall, and we, in turn, brought in the Capella organization, our partner and premier developer in the area. Behind me, you will see a photo of the Ritz-Carlton White Plains, which the Capella organization developed across from the Galleria. In the past year, SLG and the Capella organization vacated the entire mall, and we are now in the process of rezoning the site to accommodate a 4 million square foot building with over 3,000 units and see some images by me. The beauty of this project for us is we will continue to earn fees and upside participation without any future investment. Finally, everyone has had their favorite property today. I reserve that. I never used the word favorite, but special servicing is my favorite business line of SL Green, mostly because we're really good at it. Green Loan Services has established itself over the past 15 years as one of the premier large loan special servicers in the country. Led by Andrew Falk, our special servicing team utilizes our knowledge, sensibility and experience in asset management and loan structuring and vast Rolodex of lenders to grow this third-party asset management business. Over the past 3 years, we've been appointed special servicer or asset manager on over $7 billion of loans. However, I believe we have just scratched the surface in terms of earnings potential for this business. In the past month alone, we've been appointed special servicer on over $725 million of loans, and we have another $1 billion in pipeline. Not to mention a few of the loans where we were pointed special servicer will be maturing in the next 1 to 2 years and will require that special servicing skill set from our company. Given our growing relationships and reputation in the space and the market dislocation, I would expect to outperform Matt's budget next year. And I will do a small shameless plug year if anyone needs any special servicing I'll wait outside trade business card. With that, I'll pass it off to Marc.

All right. Okay. So I think this is the last component of the assets that we started talking about, about 90 minutes ago. I mentioned at the outset that we're in the process now in December and by month end, we'll have moved certain of our assets to a new alternative strategies subsidiary to better illuminate the balance sheet and profitability of everything you just saw as opposed to this grouping of assets up here on the screen, which we're calling the alternative strategy portfolio. And you can see here that these are assets that what we've heard over time, the investor community, notwithstanding our view, the investor community perceives a little in the way of contribution or equity in these assets. You know us. We look at everyone of these as an opportunity to mine value mine earnings. But rather than sort of have that debate, if you will, what we're doing is we're grouping these assets together, and we're actually putting them all within a subsidiary affiliate and they basically represent a small group of legacy assets that have above-average leverage within our portfolio. They generate little to no positive earnings and free cash flow at the moment. So there's a theme there. And the majority of these alternative strategy assets have less than $10 million of book balance. And in fact, $7 million of the $10 million in the aggregate have negative book value as they currently sit on the book in the aggregate. And important to note, all of the indebtedness associated with these assets up here is nonrecourse because that's been a question, and I think maybe a misunderstanding and we wanted to make that clear. Just so that there's no misunderstanding about the impact of any grouping of assets as it would have on all the other buckets of portfolio assets that we went through today. So we intend to continue in an attempt to maximize value of these assets through debt restructuring, through asset repositions, just through creative mining of value that we do and hopefully, a lot of these will resolve favorably over a period of time. But we'll -- for reporting purposes, Matt can expand on it more, we'll have these sort of in one grouping and bucket of assets that will make it easier to track as we go forward. So now I think we're going to -- that concludes the assets. That's everything, I think no stone unturned in the portfolio. Clearly, I hope one of the takeaways is there's something more to talk about than One Vanderbilt and One Madison, even though we love talking about that. There's a lot of great assets with great upside. Everyone of them has got a business plan. Everyone of them were working hard on it, everyone is going to contribute to our long-term success. And here they are, I guess, in totality, 26 million square feet of core assets, 3.8 million square feet in the alternative bucket for 30 million square feet total throughout the city, concentrated in Midtown. And we'll be able to stand here a year from now, and I'm sure compare ourselves to the benchmark we put up there. And hopefully, we don't just meet those results, but we outperform them. Now I know this has become sort of a calling card for us at the end of the asset discussion, rolling it all up into an implied NAV, net asset value, what it means? So I'll take you quickly through that. We have here at the $40 closing price on Friday, an enterprise value -- associated market enterprise value of $13.7 billion. First, we adjust to take out the alternative strategy assets at the debt amount. Again, we think there is contributory value in that bucket. But rather than have that debate, we take it out at book or I should say, at the debt balance, and that gets us down to $12.5 billion of adjusted market enterprise value. Then we adjust off of that for all the assets that are other than fee simple Manhattan office buildings. So we've got lease fees and leasehold interest, 711, 1185, one or two others that are in there at 5 cap on fee and leasehold at 10 caps implied, which we think are a conservative way in this market to look at those interests and high street retail. You saw the 2 assets Brett spoke of. I think they're sort of Armani is a world-class asset, but we put in a kind of a conservative 6 cap rate for this valuation. The suburban portfolio we run out basically discounted cash flow, Summit, that's only reflective of the OpCo, the $250 million of value. not the bulk of the revenue, which comes through when Vanderbilt, the form of lease payments, but that's the OpCo projected revenue at a 13.5% discount and a 10x multiple. Development properties are generally at cost, except 711 -- sorry, 750 residential redevelopment that Rob Schiffer talked about is in there at land value. One Vanderbilt is at FMV where we expect and hope to transact in 2024 on JV -- additional sale of JV interest. We have 2 held-for-sale properties 625 and 7 something. Matt, you don't want to give it to me. 625 is the bulk of that held-for-sale, debt and preferred equity portfolio, is at 0.85x book, even though we think that portfolio is largely in good shape and that balance reflects the taking out, if you will, of 625 Madison. And then we have some other assets which are valued in the way we valued them in the past, represents a small amount of value. We get to $4.5 billion of fee simple Manhattan office buildings, which will generate $428 million of NOI at share implies a cap rate at Friday's close of 9.5%, almost a 10 cap implied and $385 a foot kind of below land value. If we sensitize those results up on the right, we show a 6% cap rate more normalized $78 a share and $611 per square foot blended average across the whole portfolio. And then we stress it from there for those that are using higher cap rates. So that is the way in which -- not we look at the asset, this is kind of what's implied by the market. We have our own asset-by-asset roll-up. We obviously feel very, very strong about where we are on an embedded value basis, I think this back of the envelope, if you want to call it that, is very illuminating, at least to me, by taking out 3 million feet at the debt amount. We still are looking at numbers in the $70 to $80 range on implied stock value based on cap and price per foot. So that's it on net asset value. Now we're going to go and bring up the always lively Michael Williams, and I think Rob is going to join him as we -- someone lively, Rob, Rob Schiffer, to come and talk about Summit. After that, we'll wrap up with casino and appreciate everyone hanging in or this is going to be good. Michael, take it away.

Please welcome General Manager and Managing Director, Summit One Vanderbilt Michael Williams.

Let's try that again. All right. Come on. How's everybody doing? Well, you guys -- I could tell you right now, you would ever work for me at Summit with that sort of response. Welcome. I have seen, but more importantly, heard so many different things when it comes to Summit, especially when people take that first step on the transcendence, even on few obscenities here and now. But most of all, it's an emotional response. It's one that really -- it comes up within you. It's something you can't even pretend that you can't have. It's a smile. It's a sense of awe. And that's what every single person that comes to Summit takes away. I'm Michael Williams, General Manager and the Managing Director of Summit One Vanderbilt, the one-of-a-kind global sensation of Summit right here located in the greatest city in the world. And yes, I may be biased, maybe, but you don't have to take my word for it, just like you saw in the video a moment ago. You can ask Ms. America. You can ask Black Pink, you can ask Monday Night Football, how about FIFA unveiling the world championship trophy for the Women's League here at Summit. Out of everywhere else in the world to do that here. This is what it speaks to, speaks to everybody from the morning show to what you see [indiscernible] and Jetta or even the bassist for Metallica, Robert Trujillo. All of them have one thing in common. They all love Summit, and they also want to be seen here. But it's not just about celebrities. It's not just about sports stars, really truly, it's about our guests. The people that come through our doors from all over the world every single day. And at this point, it's closing in on 4 million people in a relatively short amount of time. From all over the globe, we have people that come to Summit and leave becoming one of our ambassadors, let's say evangelizing what we do every single day and just what it is, it's different. Everyone who comes to our doors has given an opportunity to tell their story, to take their private journey, their personal journey and make it their own. And that is really what separates us from everybody else because we're not just a tall building with a great view. We are a truly unique personal experience that we allow you to take away with and make it however you want. We have seen more than 90% sell-through or if we can go back see more than 90% sell-through of people coming through with 60% of our operating days. But more importantly, here as New Yorkers we're not impressed by much. We have 40 repeat customers from New York every day. Nowhere else in the city. If you're in New Yorker, can you say you're going back to the landmarks or destinations or every time throughout the week, Pretty amazing. When we stop and think about that, as I mentioned before, closing in on 4 million people that's pretty spectacular is a really probably a good word. That's what we're doing. And we're only going to continue to get better. Most innovative Travelers choice, most Instagrammable location, the best design. They all tell one thing and one thing over, Summit is in demand. Those industry awards, those accolades speak volumes. But again, it's our guests to come through that ultimately tell the best story. With a year-over-year increase in our global media placements, a 36% increase in celebrity influencer visits, which, by the way, we don't pay for any of them. Other place to pay to have these folks come in, we don't pay a dime. It's 25% traffic to sale conversion on our website. And what this is all add up to over 32 billion impressions worldwide with people that are actually talking about Summit, mentioning Summit. When we have an experience like Summit, it's not up for us to basically tell you what it's going to be. The people that come through give us some of the most incredible content on their own. They created unique personal, authentic. In today's environment, where posts and likes or like currency, Summit is definitely a buy-now opportunity. We used to look at the growth year-over-year, a 26% increase in Instagram followers alone. The trajectory, the hockey stick is more like a rocket ship taking off. You can't have a great experience without a great team. And when you think about what we've done at Summit, we have a 95% retention rate for our employees. We hire the best. We keep the best. And we work through to make sure that we have them and give them opportunities for growth within the organization. We only have a 5% turnover rate. People get here and they want to stay. It's not just about the experience. They are part of the experience. That's what separates us again. All of these things speak to the fact that we are different than everyone else. And how do you do that? You do it through training. It's the foundation of what we believe here. It's what helps us continue to deliver the best experience in class around the world. Our new hires get 80 hours of training every day when they -- every year when they come on board and 130 hours for current employees, team members, reinvesting, currently working through them over and over to make sure that they know how to deliver the best experience for our guests as they come through the doors. Someone asked me one time, what brand is? My response was, it's 1 part expression, but 2 parts experience, and that speaks directly to what Summit's all about. You can tell people what you want your brand to be, but until they experience it for themselves, until they know exactly who that interaction with, what that engagement is, where they can take it away, make it their own, that's truly, again, what speaks to what we do on the marketing side, authentic, genuine, really right to the point of telling our story. And whether it's doing something here in New York, we're doing something in Tokyo, doing something U.K., doing something in Paris, each of these speak to our audience and speak to our market in a message which is different. Come to Summit. We allow you to basically tell your own story. So this is a great quote. We got some baseball fans here probably. "Yesterday's home runs don't win today's games." Why is that important? Because we don't rest on laurels here. We're not complacent at all. We're always looking for opportunities to do new things, continue to strive to drive revenue, to drive growth, and we're excited to share with some of those things with you today. So we are constantly approached about opportunities by people, individuals, large global brands to do events at Summit. And one of the things that you have a problem with when you're sold out 90% of the time is you can't do it. I'm here to tell you today that we've changed that. Introducing Summit events. As you heard Steve Durels talk about earlier, there was one space, one space only left to One Vanderbilt. Well, I'm here to tell you, Rob?

100% leased.

100% leased. So Summit is going to be introducing Summit events in the space also within One Vanderbilt. And the same thing that we did with Summit, we're going to be doing with Summit events. We will take that space and deliver unique personal experience unlike anyone else in the city. We will now set the bar at what event space is supposed to be moving forward and everyone else will be catching up. From sea to dining, overlooking the New York skyline to cocktails and horderves? Or can you only imagine, how about a private dining experience with all of the Michelin-Starred, Chef Daniel Boulud himself? All of these take what we've done on the Summit side from the experience and applying that same mentality, that same approach to what we're going to be doing on the event side, and you have definitely a formula for success. Rob, do you want to come up and talk how that's going to translate.

Sure. Thank you, Michael. Not a hard -- in 2019, I told Marc, that the Observatory at the top of One Vanderbilt not yet named Summit would stabilize with attendance of 2.1 million people. While we're proud to say we hit that mark a full year earlier than projected. We'll continue to impose our self-imposed hourly capacity cap and continue to deliver an experience with Net Promoter Scores that are off the charts. Note that in 2023, we took a cent out of service and shifted some of that experience inventory. As we look forward -- sorry, I didn't realize, as we look forward with our stabilized attendance of around 2.1 million people, we're going to look to drive meaningful revenue increases through a 3-pronged strategy. First is to optimize ticket pricing largely by a clear identification of peak versus nonpeak time slots, using data that's available to us through proprietary and public sources. Second, amidst projected 2024 tourism numbers that will be the highest ever on record, reallocating marketing dollars previously slated for awareness campaigns into conversion campaigns. We're already on everyone's to-do list. Now we just have to make sure they don't spend their entire trip at Caesars Times Square and save a couple of hours for us. Finally, our third-party vendors on both the revenue and expense side have been valuable partners. But as we are doing across the portfolio, we need each vendor to increase their efficiency to drive further revenue growth and ultimately EBITDA growth. As we look out towards the future, if we execute on this plan, we see EBITDA growing as much as 5% per annum to as high as $70 million to $80 million a year. Last year, we introduced Summit Global and added as a 2023 goal, the announcement of a Summit Global location. We spent the entire year focused on this effort. And so to answer the question, Marc asks me at least once a day, why is this taking so long? What we want to ensure that the first summit of what we know will be many summits across the globe is as much of a success as Summit One Vanderbilt. We're doing a lot of due diligence on potential target sites to ensure they have the canvas for Kenzo is one-of-a-kind masterpiece as well as the bones and infrastructure to deliver on experience. As we've narrowed the choices down and begun to discuss economics additional considerations have come to the floor. No single summit experience will be the same, and it seems no single summit deal structure will be the same. And so we formed a holding company Summit Entertainment Ventures, SEV, in partnership with Kenzo and that partnership is already negotiating term sheets for not only future summits in our target cities, but also for management and consulting contracts in additional cities, largely as a result of Michael and his team's operational excellence, and those locations might become Summit managed operations. What we've created here has the potential to be a sizable business for SL Green. And to illuminate how large a business this could be by 2030, let's look at each component. As I walked you through earlier, if we execute on our plan, Summit One Vanderbilt will grow to a $70 million to $80 million EBITDA building -- business before dilution from partner interest and excluding fees and promotes. The event space has the ability to generate EBITDA of close to $500 per square foot. We anticipate that each Summit global location will be at a minimum of a $15 million EBITDA a year business, and our largest locations achieving close to $50 million. This upside case in each location are really just driven by the ticket pricing in those location-based entertainment markets in those cities. So the total potential EBITDA of close to $200 million excludes these Summit management agreements that I've just discussed as well as other consulting services that we know will be a regular source of income for us. So while we were hoping to be able to announce a location this year and yes, the year isn't quite over yet, Matt steadfast and we're getting a thumbs down. But I'm still holding out hope. And if 2023 doesn't happen, I'm making 2 locations by 2024 objectives.

Please welcome Executive Vice President, Brett Herschenfeld.

Let's go. It's great to be back with you to review the work we've been doing to secure 1 of 3 coveted full-scale gaming licenses in New York. Today, I'll give you a sense of the time line, the competitive landscape and why we feel the Times Square bow tie is where a world-class gaming resort belongs. Five years ago, when Marc and I originally scouted sites within our portfolio for a gaming destination, we anticipated the time line concluding with the license award at the end of 2023, like today. As you can see, the state process is moving just a bit slower than we anticipated -- no worries, no worries. But look, from the day the Dutch West India company purchased Manhattan for $24 in 1626 to today, 400 years later, we've been waiting for a casino on this great Island. What's another year past our projected time line. And it's important that the state takes its time and get it right. But the clear takeaway for everybody here is this is happening. Look no further than Mayor Adam's announcement last week of a proposed zoning text amendment to allow for the streamlined siting of a gaming facility in New York City. When the RFA was issued by the state, there was a lingering question as to how New York City proposals could conform to the state's required local land use approvals and still compete with other counties with drastically shorter zoning processes, but no more. We give credit to Mayor Adams, Chair of City Planning; Dan Garodnick; and City Council Speaker, Adrian Adams for moving forward a city-wide zoning text amendment that deems all applicants passing the local siting stage as compliant with local zoning. It's further evidence of a city of Yes as Deputy Mayor, Maria Torres-Springer declared earlier, removing red tape and facilitating the development and growth in New York City. Important to note that nonconforming site-specific elements such as bulk, light, et cetera, will still be reviewed by the Community Advisory Committee in the zoning context during Stage 1. And that gives our proposal at 1515, which is in an existing building a true zoning advantage. Before sharing more, let's go back in time and make sure we all understand what is the decision in front of the state today? In 2013, New York voters approved seven Class III gaming licenses in this state. The first 4 immediately awarded upstate, as you can see here on the middle screen, with the remaining three authorized for downstate in 2024. Downstate includes New York City, Westchester and Long Island. And for clarity, these are 3 new licenses incremental to the existing VLT parlors in Ozone Park and Yonkers. Those could continue to exist with 3 full-scale gaming facilities awarded elsewhere giving the state the ability to generate revenue from 5 venues if they want it. The decision in front of New York today is not whether casinos are good or bad or whether they should be here. We already voted and decided on that. The decision at hand is where do the 3 licenses belong? Where do they have the greatest positive impact in their community. And then as a group of 3 licenses together, what is the largest revenue pool for New York State. So let's decide that together today. There's only one way to do this by filling out the SL Green Investor Day December Madness Casino Bracket. Let's zoom in on the bracket in map form for the overall competitive landscape. You see here everyone who at one time or another has proclaimed to be submitting a gaming bid. And while it's a wide open bid for the moment, we've cleared it the way we believe it will be perceived to be the most competitive bids. And we broke the competition into 3 locations in the Bronx and Yonkers where MGM and valleys will go head to head, in Queens and Long Island, where Steve Cohen and Hard Rock have a proposal on the parking lot next to City Field Sands has a site surrounding the Nassau Coliseum and the existing Genting facility with the VLT operations at Aqueduct Racetrack. And lastly, on the far west side, where Related and Wynn will propose a venue on the Western railyards of Hudson Yards. And the home team right in the center of the global entertainment universe, Times Square. Part one of our thesis for site selection is creating the largest consumer pie available to generate revenues and taxes. That should be pretty obvious, right? There are 7 customer categories visiting gaming venues worldwide. Picture you're a tourist, you're in California, London Japan, and you could take a trip anywhere in the world. A brand-new Caesars Palace gaming and entertainment attraction opened in the center of Times Square. Will you check it out? Yes. Tourists will come to Manhattan for this. The same for incented gaming customers who are unlikely to bypass Las Vegas for far reaches of downstate New York. But they will take a special trip to spend their hard earned gaming points in the beating heart of Manhattan. With 12 million business travelers coming to New York City every year and nearly all of those business dealings are in Manhattan, and they're unlikely to leave the island to game elsewhere. High net worth local customers, the vast majority already live in Manhattan. And aside from the U.S. Open in a ball game, they usually stay in Manhattan for their entertainment. Regional gaming customers and local consumers with means are the only gaming customers, which would frequent more disparate locations outside of Manhattan. But there's more to the local story. Our bid will work closely with Alberoz in New York City to make their local businesses within the Caesars Palace envelope. So that our success will drive incremental commerce everywhere and that cross marketing will drive locals from all over into Times Square for the world's greatest entertainment experience. So we get to count locals twice. And lastly, look at the distance between the proposed venues. Two licenses within one zone will only create cannibalization, and that does not grow the consumer pie. The care conclusion is this, one license per zone, but in all cases, one for sure in Manhattan. And in Manhattan, there are 2 competitive bids, but we see only one winner, the home team. And let me tell you why? Presenting the crown jewel -- presenting the jewel in the crown of Times Square. Part 2 of our thesis is which proposal in Manhattan represents the most authentic New York bid. What does it mean to have the privilege to develop this use in New York City? It means you do it the time-tested way. It includes best-in-class ownership. SL Green, Caesars Entertainment, who already pays in excess of $100 million a year in sports gaming taxes in New York State and Roc Nation, founded by Jay-Z who means more to New York and its demonstration of hard work paying off than anyone we can think of. It means representing the full diversity of this great city and the benefits we create, the support that we have built and in our ownership. It means densification, so that hard-working businesses and neighbors surrounding our project rise together as one. There's no denser commercial area than Times Square. Our proposal purposely creates more demand than it can create for hotel rooms, meal and entertainment, creating a halo effect that will bring billions in economic impact beyond our 4 walls. And Caesars will allow its gaming rewards program, which is the largest in the world, to be used as currency at third-party businesses in New York. The first time this has ever occurred in further testament to our commitment to uplift our community. It means building around transportation hubs and with 11 subway lines in its proximity to Penn Station, Grand Central and Port Authority. There is no other casino bid that comes within the same ballpark as Times Square and its accessibility to mass transit. It means sustainable development. Our bid represents the only adaptive reuse proposal avoiding the creation of significant carbon footprint, inherent in new construction. Guess what? All other bids besides ours are new construction. This will be the world's greatest entertainment attraction but not just our venue. All of Times Square will be the attraction. And that is why Caesars Palace Times Square is the only authentic New York Casino proposal. As a testament to that, we're the only bid that has the exclusive support of neighboring businesses. Here's the coalition support list we showed you last year, 29 supporters. And here's the list of supporters which now stands strong with Caesars Palace Times Square, a list of 78 and growing every single day. These are hotels, restaurants, retailers and unions, landlords as well. And to give you perspective, when is the last time a developer said, I'm bringing a new hotel and other hotels next door said, yes, please come. They recognize the uplift this project will have on their businesses. I'd like you to hear further from Jeff Garcia. When Jeff joined the support from -- for our project, he was the President of the Latino Restaurant Bar and Lounge Association. Last month, Mayor Adams appointed Jeff as the city's new Executive Director of nightlife. [Presentation]

I know you're already sold on the license award now. But why not check out some images of where you will be rolling crafts a few years from today? Programming includes a new Broadway theater, digital interactive art installation, gaming space, restaurants, sports book, the world series of Poker, which Caesars owns will take place at Caesars Palace Times Square. The 40-40 club and Roc presents lounge, spa and wellness, hotel rooms, sky villas and more. Brand-new 3-dimensional signage, no gaming on the ground floor. Keep Times Square for families, too. Broadway Theater entrance and Roc Nation artists, the next generation of entertainment in Times Square. Here's the ground level and plan, the theater, gaming and hotel entrances. Now we're entering the hotel, check out this lobby, world-class design with New York authenticity, the first Broadway -- first new Broadway theater in 40 years. Look how well a casino floor plan lays out. Minimal columns, tremendous ceiling height. A typical hotel room with 6 star finishes of the highest end. Our Sky Villa Suite at the top of Caesars Palace Times Square. And the new skyline of New York City. Can you imagine experiencing New Year's Eve from the terrace of the top Caesars Palace Times Square? I hope that taking you through this competitive analysis leads the same conclusion as us. No other gaming proposal represents what it means to deliver world-class development projects in New York. This is investing in New York, the New York way. And that's what we feel a gaming license selection process should value most.

Thank you. Ladies and gentlemen, here comes the young Italian, One hole left in a 2-shot lead, the pressure must be monumental for DiLiberto. Good thing he spent the last 10 years in a golf simulator. He was born for this moment. Ladies and gentlemen, Matt DiLiberto.

Taken some shots today which are actually pretty funny because for those who know me, everybody here knows me reasonably well, I don't play golf. I've been out with a few people in the room who have never been invited back. I'm like the groundskeepers most wanted list. They repair courses for weeks after I go. So I do appreciate that we have a lot of golf amenities in the portfolio now, but it's probably not going to help my swing, which is better suited for chopping wood than golf. And it is also interesting, kind of bold people are going to take shots. It's -- I'll talk about G&A. Focus on cutting G&A. And they're going to take shots right around December, which happens to be comp time too. So we'll see how that plays out in the next couple of weeks in any case. Beginning as I typically do, with a brief discussion of liquidity and liability management, consistent with our long-standing objective of maintaining at least $1 billion of liquidity at all times. We expect to end 2023 with about $1.1 billion, dispositions generated about $1.6 billion, including the nearly $600 million generated by this watershed announcement this morning, 625 generated a lot of cash flow for us since our initial acquisition, and now we park with it at over $1,100 a square foot. These dispositions, coupled with the almost $600 million we received from our partners at One Madison and over $226 million of FAD. Where did that liquidity go? We maintained our all-cash dividend for the entire year and still paid down $1.2 billion of debt. We will have invested about $260 million into the DPE portfolio, including the preferred equity position we expect to put out 625 if that closes before the end of the year and $350 million into railment projects, $160 million of that is funded by in-place financing. In 2024, we're going to increase liquidity closer to $1.2 billion, while still paying a very healthy $3 dividend, all-in cash every month. Dispositions remain a liquidity source, $1.45 billion generated primarily by the sales of additional interest in One Vanderbilt and 245 Park, along with condo sales from 760 Madison that we expect to start closing late in the third and early fourth quarter. On the usage side, we still remain focused on liability management, $1.1 billion of debt reduction expected in 2024. We continue forward with our development projects, completing 760 Madison and One Madison and getting the project at 245 Park in full swing. $100 million of this $300 million will be funded by in-place financing. On debt reduction, take a look back to where we were 1 year ago, almost $12 billion of combined debt, which is a peak for us, driven in higher in the second half of the year by the acquisition of 245 Park at 100% and 32% of 5x. In just 12 months, we will have brought that debt down to about $10.5 billion, including a $439 million reduction in unsecured debt. Now we back out the $1.2 billion of nonrecourse property level debt on the alternative strategy portfolio gives us a much more representative of core combined debt of just $9.3 billion. In 2024, our objective is to reduce that closer to $8 billion, putting us in a very, very comfortable leverage position, allowing us to pivot from the more defensive posture we've been in for the last year or so to be more on offense. Also worth noting as part of that debt reduction plan over the last couple of years, our unsecured debt will be reduced around $1.7 billion from the peak of $2.7 billion in the first quarter of 2022. That compares with an unencumbered asset value conservatively $3.5 billion to $4 billion, so well covered. All the effort we put in to reduce debt, refinance and extend maturities, puts us in a very comfortable position heading into next year, debt maturities, especially when you back out those alternative strategy assets, leaving just $200 million of corporate unsecured term loan to deal with next year. We are already in discussions to extend that out on comparable terms, pay down maybe $50 million to $100 million. After giving consideration to this and all that was conveyed earlier in the asset level discussion about the activity over the course of 2024. We expect to have very few maturities to deal with as a company until 2027. Another component of the liability management strategy, mitigating our exposure to interest rates. Rates remain stubbornly high, but we stand firm in our efforts to manage floating rate debt even those rates are supposed to come down. We use derivatives, caps, some pretty innovative swaps, and they're generally through the term of the hedge debt. As a result of this effort, the only floating rate debt that we have in the core portfolio other than a small piece of 15 Beekman is our revolving credit facility. That's it. That's tough to hedge because the balance fluctuates. So we hedge it by -- through our floating rate DPE investments and by maintaining a balance as close to 0 as possible. With that limited exposure of the forward SOFR curve where it's a move by 100 basis points in 2024, the grand total impact, $5 million. So we feel we are very, very well hedged against the movement in rates. And that's just the cost on the revolver and any replacement caps next year. Finally, concluding with this section, not entirely. A quick look at our credit facility, fixed charge covenant. A topic of conversation, rather boring conversation, but everybody likes to talk about it. So I said, "Why don't we just put this out there. These are the components of it done on a consolidated basis at the end of each quarter on a trailing 12-month basis. And these are the outputs of that over the last few years against the SOFR curve, not surprisingly, perfect inverse correlation between the two. Also important to note, certain events that affected that metric over time, but it's a trailing 12-month calculation. So those positives and negatives take time to work their way through the calculation. So you see the effect of 245 Park, the acquisition took some time with rates to drive that covenant to the lows we saw in 2023, but the sale of 50% interest in that asset, additional sales next year, increased consolidated EBITDA, mitigating rates all have a materially positive effect such that we expect to end next year at a very comfortable 1.81x, that is a 1.4x covenant. Now let's again flex the SOFR curve up and down. see how well hedged we are. Again, this is consolidated metric, still comfortably ahead of the threshold even in the downside scenario. Moving on to earnings guidance. My legal language may include some non-GAAP financial measures. So you should look to our SEC filings, including the 8-K filed this morning for comparable GAAP financial measures and required reconciliations. All right. Recapping where we stand for 2023. We definitely benefited from being nimble and flexible this year. If I laid out all the variances since December of last year, I'd probably need 50 more screens and several more hours. But at the end of the day, we expect to end up on a normalized basis after normalizing for onetime charges. And even after deferring the sale of an additional interest in One Vanderbilt until next year, we expect to be at $546 million as against the $545 million midpoint that we put out last year, immense credit to the very, very small team that manages our projections. They say, right outside of my office, only 4 or 5 people, we look at earnings, covenants and metrics every day. So thanks to those guys. Moving on to 2024. Liquidity continuing to be a primary focus. We expect to remain paused on our share repurchase program. It's just about $100 million left in the $3.5 billion program, but we saw earlier embedded NAV discount, very persistent. So we look forward to being back in the market buying our stock with incremental sources of liquidity. In the real estate portfolio, GAAP NOI of about $729 million is down from 2023, reflecting asset sales and occupancy that shifted lower in the back half of -- in 2023 and recovered more slowly in the back half of '23 than we expected. I'll also give another shout out to Megan Gil and all of the property managers. Their cost containment on the operating expense side is second to none, best in the business. Now we've diversified our income stream over the years, but Manhattan office still is the bulk of our profitability. Next year, One Vanderbilt's cash NOI continues to increase as it approaches stabilization. Almost all tenants in place paying cash rent in 2024. That has a positive effect on cash NOI, not as much on GAAP because much of that has been straight-lined in already. Cash and GAAP NOI benefit from the Bloomberg lease at 919 we signed back in November of '21, and we expect to make significant headway in leasing up the same-store portfolio, which has some benefit in '24, but is more impactful on '25 and beyond. Offsetting the positives, larger lease expirations where tenants are leaving or renewed on most, but not all of their space. Some of the bigger ones, 100,000 feet at 280 Park with Cohen & Steers. They expire at the end of January. 50% of their space has been leased, but revenue recognition won't begin on that until January of '25. CBS at 555, renewed down 2/3 of their space, but 137,000 square feet will vacate at the end of this year. We're in the market to release that. And at 100 Park, Wells Fargo and BDO will be vacating and combined 200,000 feet, 42% of that has already been leased by AlphaSights. The remainder of that is also part of our '24 leasing plan. At our share, the GAAP NOI from just those 3 properties next year is expected to be down by about $30 million. In the development of redevelopment portfolio comprises just 2 properties for my classification purposes, One Madison revenue recognition begins next year, but it is fairly muted late in the year because it's triggered by tenants moving into their space. It's only about $2 million of GAAP NOI at our share next year, while cash NOI remains negative, as tenants are in their free rent period. In the High Street retail portfolio, this is the contribution you see next year from Armani. We will start recognizing revenue on the Armani space in May. And the last component to the portfolio, the suburban residential assets where you see NOI from Landmark Square and White Plains that Harrison talked about and residential NOI highlighted by 7 Day Street and a full year of NOI from 15 Beekman. Now we layer in just to round out the NOI picture, the NOI contribution from the alternative strategy portfolio worth reminding people again that cash NOI does not cover the debt service. In the same-store portfolio, a couple of additions, 885, the retained office condo and the 450 Park JV interest come in while we will remove 21 E 66 Street, which is under contract for sale, we expect to close in December. And any of the alternative strategy portfolio assets that were in same-store come out. All told, they actually don't impact same-store positively or negatively, but we are taking them out of the same-store pool. They will be reported separately in a separate subsidiary. Now coming off a very strong year in 2023, same-store cash NOI in 2023 between 5.5% and 6% or that's about 250 basis points over the upper end of our range, makes for a tougher comp here next year. So we do get benefits from 919 Third and 450 Park as well as One Vanderbilt, but the lease expirations that I talked about earlier have effect as well as higher expense [ imbursements ] in '23 than '24 along with just that higher comp. We have strategically reduced our debt and preferred equity portfolio over several years, but assuming we closed that 625 deal in December, we expect to end this year with roughly the same portfolio balance as last year. Next year, our focus will be on launching the $1 billion fund that Marc talked about. We will invest at least $50 million into that fund consistent with that goal to be back on offense, taking advantage of the market opportunities we expect to see next year and beyond. In other income, we continue to focus on growing high-quality ancillary income streams complementary to our real estate investments. And next year, we hope to maintain that by -- with a trajectory of over $84 million of other income including third-party management, leasing, construction and financing fees paid to us primarily by our joint venture partners, $12 million of fee income from the sales of additional interest in One Vanderbilt, the special servicing business that Harrison touched on growing, $7 million in 2024, projected up from $5 million in 2023. I bet Harrison will beat that. Lease termination income of $13 million, more than half of which has already been specifically identified and round out by the Summit operator, Michael doing a spectacular job, generating net profit of over $17 million. That's extraordinary growth. We've only been open 2 years. All right. Interest expense, reducing debt dramatically and maintaining the hedging strategy we do has definitely benefited us in interest expense. Forward curve coming down next year will also benefit. Those factors in interest expense are offset in large part by capitalization coming down. I'll touch on that in a second, resulting in GAAP interest expense year-over-year that is roughly flat. Now because there are many components of GAAP interest expense, we look at the models, we see there's sometimes some complications in doing it. We lay out the components of it here. Not surprisingly, cash interest expense, biggest component coming down dramatically as a result of the paydown of debt through our asset sale proceeds and there is the offset through capitalized interest. Again, I'll touch on that in a second. You also see a component here. It wasn't a large component, but it's often missed hedge amortization, which is the cost -- the upfront cost of caps that have to run through interest expense over the term of that cap. Swaps don't have a similar situation because they actually are factored into the rate. All right. Add to interest expenses is just for presentation purposes, not consistent with the income statement necessarily. Preferred dividends, amortization of deferred financing costs, which is the fees we pay upfront to execute on all of our financings. Others earlier had their favorite buildings and their favorite projects. I mean, capitalized interest. Clearly, my favorite topic in GAAP. I spend 99% of my day trying to explain it to people. Here it is laid out for 2024, increasing occupancy, particularly at 760 Madison that has an effect. One Madison, we received $577 million from our partners, prior to receiving that, we were capitalizing interest on that $577 million. Now that we have it, we can't do that anymore. That occupancy there is also ticking up towards the end of the year, but fairly muted effect. And we're selling 625 Madison which was a capitalizable development property previously. In G&A, we see a huge movement lower level not seen in over 12 years, just $81.5 million, and that is a full 16% below the 10-year average of over $97 million. And based on people's comments earlier, maybe we can take it down a little further. These savings are significant. The decisions that drive them can be difficult. We looked at every expense under microscope and particularly made cuts in executive compensation and professional fees. This does include the recently announced change in public accounting firm after 26 years and because we do have some representatives from the UI team here in the room, I do want to thank them and all the teams that they've had with us for 26 years for all of their service, we all greatly appreciate it. So now we bring together all the components of 2024 FFO. As Marc said earlier, we are turning the corner, and I'm going to add one more component for good measure gains on discounted debt extinguishment. This is an opportunity for us to take out debt -- existing debt at prices substantially below par. I think $20 million is light. I think we have a path to do a lot more, and I wouldn't be surprised if somebody has set the bar a little higher than that for us later on. Using a $5.05 midpoint, keeping the range relatively wide, given a lot of execution, 2024 FFO guidance range $4.90 to $5.20. And finally, rolled down to SAD, significant reductions in executive compensation and straight-line rent. Second cut capital, still fairly high, but the base building, it's a credit to Bob DeWitt, we said earlier, base building component of that, very low relative to the size of our portfolio, only $28 million of that number. The rest is related to all the leasing that we've done last year -- or sorry, this past year and we expect to do next. That's my portion. I Would now like to welcome our visionary tax director, Laura Jackson, who works tirelessly with her team to design and execute some very complex and innovative tax strategies to discuss our dividend in more detail.

Thanks, Matt. I'm delighted to be presenting again this year. For any new investors who may not know me, I run our strong but lean all women tax group here at SL Green. For those I met last year in my debut year at SL Green, it's been a year beyond my expectations working with this leadership team. And yes, jokes about Matt never get old here. Since last we met, and while always keeping our eyes on all things REIT and tax. Our tax manager, Kaitlyn, founded the inaugural stair climb here at One Vanderbilt, raising money for the FDNY, and I was back in the Bronx with my She Builds committee attracting over 100 volunteers to transform the Claremont Community. Today, I'm covering the part you've all been waiting for. How our portfolio and projected financials impact you as shareholders, it's dividend time. As 2023 progressed, our tax department worked tirelessly to align 2023 taxable income with our annual dividend of $3.25 per share to eliminate the need for a special dividend. For 2024, we use the positive cash flow generated by our strong portfolio of assets to distribute taxable income to shareholders without the need for a special dividend. As they say, Not All Heroes Wear Capes. As we announced in our press release this morning, we have established our 2024 annual cash dividend at $3 a share. A positive outcome reflecting our strong business plan designed to distribute taxable income while retaining cash flow in a challenging but improving New York City office market. The dividend will continue to be paid monthly. Our monthly dividend cadence is a better cash management strategy as opposed to quarterly payments and is reflective of positive feedback we've received from our diversified shareholder base. The 2024 dividend aligns with our current business plan, representing approximately 91% distribution of FAD, 59% distribution of FFO and 100% distribution of taxable income. As a refresher from last year, let's walk through the correlation between FAD and REIT taxable income. By law, REITs must distribute 90% of taxable income. But practically, REIT distribute 100% as otherwise, they would be subject to 10% of tax. And I'm here to make sure we don't overpay taxes. To get the taxable income from FAD, we make adjustments for tax appreciation and tangible property deductions. We adjust for our tax entity structure, differences between capitalization between GAAP and tax and lastly, for capital gains and losses generated by assets sold. So how does our dividend yield stack up against our Central Business District office 3 peer set? Factoring in our new dividend at $3 per share, our 7.5% dividend yield is one of the highest in the peer group. Equivocal result, which is continuously the impact of having an undervalued underpriced stock while maintaining a high sustainable cash dividend for our shareholders. And now I would like to turn it back over to Matt.

Thank you, Laura. Now I have the distinct pleasure to welcome up for one last investor conference. I know he is going to miss this grind terribly, a man who has helped shape the success of SL Green for the last 25 years, whose silent assassin like dealmaking skills are legendary in the New York City market, a man who seemingly moonlights as part of the coaching staff for the Brooklyn Nets and who is rumored to have forced Taylor Swift to settle for Travis Kelsey because he's not available. Most of all, the guy who looks like this today. But for those of us who go back to the very early days, we may remember that guy -- my friend, mentor and the outgoing President of SL Green, Mr. Andrew Mathias.

Thank you, everybody. Welcome, and hope you enjoy today's presentation. It's a bittersweet for me, but thrilled to still be part of the company as a Board member and adviser, and I'm definitely available for future investor conferences at a very reasonable rate. Just my part today, looking at '23, the scorecard, I think this year was incredibly challenging, probably one of the most challenging in my tenure here, we set the goal is very lofty and very proud of what the team was able to accomplish in an environment where Jerome Powell started really loving the microphone. And it was the triple threat of interest rates and New York City real estate and the recovering effects of COVID and a national real estate environment, which presented enormous challenges on the liability side as well. So very proud of what we were able to accomplish on these stretch [pulse]. So walking through leasing 1.8 million square feet, Steve Durels corrects me, done to date. So very proud of that accomplishment in a tough environment for leasing, same-store occupancy, we missed a bit because a lot of that leasing took place in non-same-store assets. The team took you through a lot of the same-store portfolio today and our strategy is to pick up leasing in those assets and mark-to-market returned to positive this year, a very positive sign for the market for our leasing in general, spent a bit too long in the negative column. It was great to get it back into green numbers. Investments Group, we scrapped restarting the share buyback in favor of liability reduction. Matt showed you the enviable gains we made in that area. Acquisitions, we met our modest goal of $200 million. We exceeded it. Dispositions delayed the JV sale of One Vanderbilt and additional 25% sale of 245 Park. So we still managed to achieve $1.6 billion of dispositions by far, the market leader pretty much making the market in Manhattan this year. DPE origination, we will exceed given the 625 Madison pref equity origination on that sale. That rate will be lower than our targeted rate because we chose to move [indiscernible] in the capital structure there. The new investor, the purchasers making a very significant cash equity investment. So we chose to plug more of a middle mezz slot there than our usual higher leverage DPE originations. One Madison, Marc talked about the challenges in tech in the market, tech on pause. That definitely impacted our leasing goals here. We have great activity right now in trading paper with several tenants, but missed our goal of more than 0.25 million square feet of leasing this year. TCO, Bob DeWitt and his team exceeded our expectations yet again, delivered the TCO ahead of an already aggressive schedule. And the building looks spectacular. You'll see it on the tour shortly. 760 Madison, again, construction team, great job. We turned over the retail space to Armani, no small feet, on time in the fourth quarter. And we hit our goal right on the nose of selling 50% of the units there, 5 out of the 10 units are under contract. 245 Park Avenue. We shook the market this summer that didn't think it was possible to get any liquidity and announced our 50% sale of 245 Park. We held off on the balance, the additional 25% given the great leasing activity at that building and sort of finalizing our plans for the capital program there. 15 Beekman. We met our goal here, built this building, turned it over for a 30-year lease to Pace University. That's the third building we've delivered to them in our partnership. And financial performance, same-store cash NOI growth, we blew away the 3% goal and 5.5% cash NOI growth that's through that expense management that Matt talked about. Debt reduction, given the deferral of the JVs on One Vanderbilt and 245, we did not reach our $2.5 billion goal there, but still reduced debt by over $1 billion. And TRS, let's -- this has been a while. We exceeded our 10% goal, blowing it away with 31% total return to our shareholders and beat the Dow Jones REIT index by, what that is, 20x or so -- almost 20x. The stock market rewarded us for solid dividend and the capital markets transactions we're able to achieve. ESG, GRESB, we feel moved the goalpost on us as LEED has done in the past and toughened up their requirements to try to reach that 90 score. And I'm told in a strange twist of fate, higher office occupancy, bodies in the office leads to more energy consumption which negatively affects GRESB score. So we'll take the miss here in exchange for people back at their desks. And then on the community side, Brett told you about the downstate casino license, which was delayed, hopefully until 2024, that's out of our hands, in the state's hands, but hopefully, that process can get on a schedule and march towards award. Summit Blue Air attendance goal of $1.8 million with 2.1 million visitors this year. And Rob spoke to you about the second summit location, why it was a bit delayed. I'm sure we'll see that back up for next year. So with that review, let me bring Marc up to go through 2024's goals and objectives.

All right. So before I begin, I just want to say, I think Matt gave you a great lead and as did Laura. But Andrew and I began this journey. We signed on 25, 26 years ago, recruited by Steve Green, who's with us today here, our Founder and Chairman, John Alschuler, Lead Independent was there day 1 as well. On the beginning of that journey, we were -- had an average age of 29 years old between us back then with an idea and an ambition about building a big and great real estate company to enhance all that Steve had put together at that point. And one of the lasting legacies will be -- this company an imprint, Andrew has had in everything, you've seen up there today in one way shape or form a meaningful impact and also all the folks you see there in the group. I think one of the hallmarks of Green has been our ability to recruit and train, something Andrew or I take very seriously. We've got 300 of the best professionals in New York City, led by this management team. And we've also got quite an alumni network there, Andrew had quite a birthday party the other day in Brooklyn. There was a lot of alumni and said, holy macro. So I think we're going to have like an alumni party now quarter, 25-year alumni, greedy alumni party. People have gone out to do really great things. So very satisfying. And look, we'll miss them, for sure. So Andrew, well done. And we all own him a debt of gratitude. All right. So '24, let's see what we got. Leasing, this is what I like to lean into the most, really raise this by hard 2 million square feet for next year, couple of hundred thousand square feet higher. You saw those leasing goals on the buildup, they're robust. It's going to be a lot of work to attain. But I think our track record of meeting this is pretty good and I'm confident in our ability to do that. That should translate into about 150 basis points of same-store improvement over and above the slight improvement we've had over the past 2 quarters. We're going to leg into that and hopefully be at around over 91.5% by next year. And in terms of office mark-to-market, it was, I think, somewhat positive this year on the scorecard, Matt. So I want to push further into that mark-to-market. A lot of deals may not all meet the positive zone, but we've got some big deals we're working on that will, and on average, we think it will wash into a much more positive zone, particularly aided by the leasing we're going to be doing in our East Midtown portfolio. On the investments front, you talked about a New York City opportunity fund, Matt called it a DPE fund. I think there will be a lot of DPE within that fund, but there'll also be allocation for opportunistic. We've been out speaking with folks domestically, Middle East and Asia. We feel like we have an ability to get this done. Get it done in the first half of the year. And we're sizing it at about $1 billion, which is not to mean that's the dimension of opportunity. That's just where we want to peg the first fund. In terms of deployment, we hope to deploy out of that fund in the first -- second half of the year, about $150 million. And the dispositions, you saw, I guess, Matt's buildup, it should tie roughly equally to $1 billion -- almost $1.5 billion of dispositions, primarily driven by 245 Park and this incremental sale here at OVA. Development One Madison percent leased. We want to get that to 75% leased by end of year and as part and parcel doing that. Hopefully, that will be the trigger we need to then go out and refinance and mini-perm out the debt we have on One Madison. 760, it's a great project. We hope to be 100% sold and closed by the end of next year. 245 Park is part of the disposition program. So an additional 25% interest, which will benefit from the leases we did this year with EQT, Stonepeak, others that are in dialogue. 750 Third, we want to launch the residential conversion, which really is probably a multipronged thing of getting the tenancy lined up, getting the conversion incentives lined up in Albany and passed this as part of the budget and commencing construction or demolition, I should say, more accurately. Community, downstate casino licensing, Brett did a great job. [Technical Difficulty] it's trying to make extrapolations instead of doing the fundamental work on these 31 core assets and coming up with individual valuations.

Okay. The next question is for Steve. You mentioned the West Side being the toughest of your portfolio of submarkets and yet Sixth Avenue is often viewed as a really strong healthy submarket. So just sort of curious if you could talk a little bit more about the comments about the West Side being your toughest and yet Sixth Avenue is one of the...

We'll answer -- I just want to -- we don't want to do earnings call right now. Let's answer it, but these are really -- I just want to hit a few questions if we could that are -- we're going to have the earnings call in January. We can do over all the leasing stats and everything else. But I just want to make sure everyone has a chance to ask quick questions about some of the new things they saw here today, et cetera. But with that said...

Well, in my commentary, I acknowledge that 2 of the buildings in our West Side portfolio in Sixth Avenue is one of the better submarkets. And we're seeing a lot of proposal lease activity in those 2 buildings, 1185 Sixth and 1350 Sixth. But then when you look further west, like the BMW building off on the 11th Avenue, that's where it gets more challenging. Nontraditional tenants harder to fill. So when we get a vacancy over there, it takes a longer period of time. So going to take a little more work to get that one back to full occupancy.

On the op fund, does that have priority on acquisitions or on balance sheet acquisitions?

Right now, the material focus of the fund is credit, though we do see a big opportunity to do some equity within that fund as well. One of the big questions people want to know is whether they will have priority or exclusive. It certainly will have priority with respect to credit and we'll certainly leverage the investors or that fund for equity investments. But it certainly is not finished whether it will be priority or exclusive within that vehicle.

Yes, given priority exclusivity at this moment in time for $1 billion of investment, which in most normalized years, we would do between $1.5 billion to $3 billion of activity. It's a fairly, I don't call it modest because in today's world $1 billion is a lot of capital, but it's a very discrete manageable amount that we would expect to deploy relatively prudently and profitably quickly if the market goes in the direction we think it's going to go. So I don't think it will be impairing in terms of like what we can do going forward except for a moment in time with regards to a discrete amount of capital.

Steve Sakwa with Evercore. Matt, can you just clarify on the dispositions? Is the $1.45 billion kind of your share or is that the gross number? And then just maybe comment on kind of how you see the timing and kind of maybe a range on cap rates?

Yes. It's -- I'll leave the second part of that to Harrison. The calculation is gross asset value at the share we're selling. So if you sold 25% -- just as a way of example, 25% of 245 Park at a $2 billion valuation, that's $500 million. That's the part of that calculation.

So it's pro rata, it's not gross. Yes. And the other piece, Harrison-- in terms of cap rates, what is the question? I'll answer the first, the second piece first. Timing all the transactions that were on that board are things that were in active dialogue. With respect to One Vanderbilt that I think I noted, we're in terms sheets and negotiations with multiple groups and fairly advanced in that process. I would say, one of the 3 assets that's in that material list is probably a second half, but the 2 big ones are in the first half and 245 will be a little bit based on where we see leasing and activity at the asset. With respect to cap rates, every deal is going to be different, as Marc noted. I think we printed the 245 cap rate and our expectation is that those premium assets trade in those types of levels. But an asset like 625, as noted, doesn't have NOI, so hard to use that as a benchmark for cap rates.

And you saw we used -- I'm not sure, but we put a cap rate of up on the screen, that's what -- if you're saying what's a representative cap rate we think leading into '24, that's -- we put up the and then a range beyond that. Next question? Just want to make sure we get the wings here.

Tony Paolone, JPMorgan. Two quick ones. One, on 625 Madison, what was the actual cash proceeds you got back? And how -- and yes, what was the actual cash? Did you get it already?

Well, it hasn't closed yet, but it will be about $150 million.

Okay. And then second quick one for you, Matt. We have to rebuild our models because the disclosure is going to change with ASP now?

Not really. I know a lot of people, regrettably, you have to build off our GAAP financial statements, which are difficult to back into the numbers you actually need. All we're going to do is classify them separately for purposes of property, tables, debt tables, things like this and other -- it will be a consolidated -- as is model, you're just going to be able to pull those assets out separately and classify and quantify them separately.

Next question and we'll move to the other side of the room.

Michael Griffin with Citi. I wanted to go back to your comments on 245 Park and potential disposition you've got there. It seems like the commentary around leasing has been pretty constructive. I guess, why not retain more upside in that building and not sell it if you think the leasing demand is going to be stronger there?

Well, I think by leasing it first, then JV it, we're doing just that. Not too dissimilar from what we did -- we're in the process of doing in One Vanderbilt, where we sold part of it upfront. It was like 30% or so. And then we're now after fully leased selling upwards of another 11% plus. So there, we wanted to put a capitalization in place that we felt was a good, stable partner for us long term, and we did 49% of the deal, to my recollection. Now we're getting a bunch of leasing done since the closing of that and then towards the second half of next year. Hopefully, we'll make substantial inroads on leasing and then look to re-JV it again. But we'll do it at whatever the appropriate market price is reflective of -- I think the fact that more time is a lapse, more leasing has occurred and we'll probably have almost a year of development under our belt at that point. So we would hope for a better market and better terms at that point. But if the question is why at all, it's kind of what we do. We sort of create the value, and then we look to as part of our asset-light program that I introduced here 2 years ago or last year, asset-light program in a market where we really don't -- can't access public markets for equity at levels we would find appropriate for the analysis I put up on the board, our source of equity predominantly is monetization partially of assets like a 245 that we could then redeploy into the next, next, next development projects. That's been our philosophy.

Floris Dijkum, Compass Point. A question on the ASP. I know one of the things that people always talk about is the low coverage ratio you guys have. And if I look, you've just reduced your dividend, but your coverage ratio is still relatively low. What's the implication of the ASP on your interest coverage ratio going forward if that was excluded from the whole portfolio?

Not in the covenant. Those are unconsolidated joint ventures. I think very small asset. So...

Not from a covenant perspective, but from a reporting perspective, how much would that improve?

If we strip them out, it would be positive to coverage.

Do you know about what...

I don't know what the metric is. But those are assets that we've said, they don't flow cash to us. So definitionally, the coverage would improve, we've excluded them entirely and then we'll recourse on them. So...

Fair enough. And the second point was potential tax implications, if you were to get rid of all of those, would that increase? Would you take a gain? Or would that incur a loss? And how does that impact your taxable...

If we were to dispose off all of those, I think the embedded is a tax gain, but that is -- Marc talked what the strategy is. So that's not part of our [indiscernible] for 2024. Those assets are not in the $3 dividend calculation.

I wouldn't come away from today thinking we're getting [Technical Difficulty] with the assets. If that's -- I mean, we're just trying to bucketized the assets into ways that I felt would better illuminate value of sub portfolios because I felt that there was too much of a perception of new assets and everything else. Maybe that perception is wrong, but you take your shot in [indiscernible] your best and hope you convey the right information. So we bucketized everything into core assets, core submarkets, resi retail, suburbs, special and a grouping of assets we thought belong together because their symmetry there was above average leverage and very little in the way of contribution to cash flow earnings in the company. And there's no -- we're not intending to dispose off those assets. The question is, I think, would there be an embedded gain, I think the answer is yes. So there would be an embedded gain, but I wouldn't expect that in '24. Any other -- this side has been quiet. Any -- supposed to be some questions here. Well, Steve, why don't you read into the mic and answer the first one.

So the first was, can we provide a little more color on the 1.25 million square foot of leases pending a negotiation new versus new average size mark-to-market? So [1 million] 250 is in the pipeline, 250,000 square feet of that or leases that are in negotiation, the balance of 1 million square feet are term sheets and negotiation. Notably, of the 1 million square feet of term sheets, 900,000 square feet of that are new tenant proposals as opposed to renewal deals. They span the gamut of size. There's a good chunk of deals that are kind of 40,000 to 100,000 square feet each, but there are 45 plus different deals in that pipeline. A lot of financial services driven from the industry side and a little bit of a law firm as well. And then mark-to-markets, right now, if I close everything that was in that pipeline, we'd be modestly positive. And I think what you're going to see throughout the year, it's going to go up and down, quarter-over-quarter. But as Marc said on our goal, we expect at the end of the year to be up a couple of points.

Okay. The next one here is -- Harry, you want to read this and then...

Sure. Several buildings seem to be in negotiations to extend debt maturities. Can you touch on how those conversations have evolved versus 6 to 12 months ago?

I think I went asset by asset today in terms of the conversations that we're having and the extensions we've already gotten done. The reception is very positive. Lenders look at us as stewards of these assets. They have a lot of faith in us. They know that they're in the best possible hands that they can be with this management team and Steve leasing the assets. So it's the same thing we're seeing today I was seeing 6 or 12 months ago, which is, they want us to own the assets. They don't want to do anything other than work with us to get extensions done and give us plenty of term to feel comfortable that we can invest in these assets, lease these assets and have a longstanding run at making these assets work. So conversations are very positive. I'm very optimistic about every piece of debt I walked you through today and the deals that we can get done. Those deals are there to...

This [indiscernible] will swaps or caps be used? I mean, what's our approach to how we're approaching? We're working closely with Matt and his team to make sure that we're hedging interest where appropriate. In some cases, lenders are not requiring it as part of an extension. But in almost all cases, we're still putting in appropriate hedging just to make sure that not only be locking in long-term debt, but the debt is hedged for wherever interest rates go. I would say even -- more so than that, we're working with lenders to fix it directly rather than having to put even hedging instruments in place, and they're working on the swaps on their own side. So again, feel very confident in everything I presented to you today.

Okay. Are there other questions? Commodity assets trading in the range of 450 a foot. So the question is there have been recent sales, well-occupied commodity assets trading in the range of 450 a foot, 1,370 AoA and others, will these buildings are not reflective of SLG's quality of assets, what's your view on the value of unoccupied commodity buildings? My view is, thank God, we don't have [indiscernible] for 750, which we're converting. So beyond that, what do you think?

It's very tough to generalize because those trades are well occupied, but you have 80% leased and it depends on what the rents in place are. So to try to read into unoccupied from that is there are no sort of vacant comps, most of the vacant comps would trade for alternative use, really, right?

Right. Well, what's interesting is.

625 is as close to vacant as we have and that...

That's true. I mean, you could say, look, 625 the space is -- I mean, it's reflective of Apollo's occupancy over almost 20 years ago, right? When they did that initial build-out substantially vacant -- I mean, 90% vacant, 1100 a foot, now locationally different. But this is sort of interesting because even if you take -- I don't know if this is a worst case, but unoccupied commodity buildings trading at 450 a foot, my takeaway, it's still 100 [hours] a foot higher than our implied stock price for premier assets fully leased or 90% leased. So I mean, what does that tell you -- next question? if there is any or that's it? Okay. Any more questions? We're done?

Thank you for joining us today for our formal presentation. For those of you continuing to tour the One Madison Avenue, the most efficient way to get to One Madison is to use the metro card in back of your nametag. Alternatively, it's a beautiful day to walk and enjoy New York City. Lastly, a bus with limited spaces available on 43rd Street between Vanderbilt and Madison Avenue, exit left from the main One Vanderbilt lobby. The tour will start at 1.45 at the front door of One Madison Ave on Madison between 23rd and 24th Streets. Thank you.