https://seekingalpha.com/article/436...all-transcript
Vornado Realty Trust (VNO) CEO Steven Roth on Q2 2020 Results - Earnings Call Transcript
Aug. 4, 2020
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Steven Roth
Thanks, Cathy, and good morning everyone.
I hope all of you are continuing to stay safe and healthy. Yesterday, after the close, we announced a very important 730,000 square foot lease with Facebook at our Farley Building. We normally don't go for the drama of timing deals with earnings call, but this one just worked out that way. This deal has been in the works for a while, and has not been a secret in the marketplace.
People have been speculating, will a - even a great company such as Facebook committed in the middle of the pandemic crisis? Will they commit their physical assets in light of all the work from home stuff? Will they continue to expand in New York, in effect doubling down? We now know the answer to these questions is yes.
This commitment is a dramatic statement from one of the most important global tech companies, that even in the midst of a pandemic, commerce must continue. This deal reinforces New York City as a great and unique place to do business, with an unlimited highly educated workforce. New York continues to be the place to be.
Farley is an unique property like none other in New York that occupies a double-wide block. It is actually part of the Penn Station Complex, the busiest transportation hub in the nation, across the street from Madison Square Garden, you get the picture.
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220 Central Park South is the most successful residential development ever. We are 92% sold or under contract, and we are now reaping the financial rewards from 220. It is a financial engine feeding our liquidity and financial strength.
Year-to-date, through July, we are closed on 13 units for net proceeds of $598 million, all of this during the health crisis. From inception through July, we have closed 67 units for net proceeds of $2.42 billion. We expect closings in the balance of the year will bring in an additional $496 million in net proceeds.
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Michael Franco
With the city reopening for construction in mid-June, our development efforts have resumed in the Penn district. At Farley, we are targeting a December opening at the Moynihan Train Hall, along with some limited retail openings and first delivery of office space in January 2021.
Retail demand is strong here given the expected daily foot tract. Farley, PENN 1 and PENN 2 are the center point of our vision to transform Penn district, the new eco center of New York, where we will be delivering for tenants, cutting edge, next generation, health and wellness environments, amenities and services unmatched anywhere.
Even during the shutdown the reactions in the brokers community and multiple perspective tenants for PENN 2 bustle design has been outstanding. And we are confident, this is exactly what tenants want as we emerge in a post-COVID world. As we have said before, these three large Penn district projects are debt free and are being funded out of our balance sheet, including the aforementioned proceeds in 220 Central Park South closes.
As these projects are completed and leased up, they will generate large accretive earnings. Beyond our developments, broader district improvements continue to progress also. The 33rd Street Long Island Railroad entrance is almost complete and on schedule to open this December, adding another signature elements to the district and improving the experience for commuters.
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Steven Roth
Your comment specifically went to the Hotel Penn. I don't really have much to say about that except that, as we continue to march - to march along from the Farley Building to 2 PENN, to 1 PENN, et cetera, the Hotel Penn is arguably one of the top two or three development sites that are available in the city. By the way, at 350 Park Avenue, many of the people in the marketplace think is the single best development site. But be as it may be. I couldn't resist getting the plug in.
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Steven Roth
The other thing, by the way, is the design of the building with the bustle creating the overhang, creating the prominence, creating the entrance to Penn Station, et cetera. I mean, it has got universal applause.
And so, we're pleased about that. There is an elephant company that's in the marketplace that is looking - by the way, it happens to be looking at both 350 Park Avenue, and 2 Penn, which is an interesting combination of locations. And their boss basically said that going through the renderings and the presentation that he thought that the design and the bustle were extraordinary piece of architecture and we agree with that.
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Jamie Feldman
Okay. Thanks for the color. And you're saying that the tenant looking at 350 Park and 2 Penn, they would only take one. They are not --
Steven Roth
Glen is good, but he can't sell a space twice. No, they would only take one.
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Alexander Goldfarb
....Next, I was going to give you a plug for talking to Steve Schwarzman, your buddy about anchoring 350, but sounds like Glen is also trying to sell him on Penn Station. So look forward to that as well.
Steven Roth
Well, first of all, I'll pass the congrats off to Glen and David. Second of all, don't make that conclusion. It's not a good conclusion.
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NEW YORK is Back!
“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.
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