S&P 500   4,990.32 (+0.46%)
DOW   38,088.82 (+0.27%)
QQQ   417.50 (+0.69%)
AAPL   166.03 (+0.62%)
MSFT   399.80 (+0.17%)
META   489.11 (+1.67%)
GOOGL   154.72 (+0.41%)
AMZN   176.85 (+1.27%)
TSLA   140.95 (-4.15%)
NVDA   771.44 (+1.24%)
AMD   147.69 (+0.72%)
NIO   3.70 (-2.63%)
BABA   69.72 (+0.94%)
T   16.65 (+0.85%)
F   12.18 (+0.33%)
MU   108.00 (+1.15%)
GE   148.50 (+0.30%)
CGC   8.21 (+3.53%)
DIS   113.00 (+0.35%)
AMC   3.25 (+2.85%)
PFE   26.00 (+0.00%)
PYPL   63.02 (+1.14%)
XOM   119.45 (-0.36%)
S&P 500   4,990.32 (+0.46%)
DOW   38,088.82 (+0.27%)
QQQ   417.50 (+0.69%)
AAPL   166.03 (+0.62%)
MSFT   399.80 (+0.17%)
META   489.11 (+1.67%)
GOOGL   154.72 (+0.41%)
AMZN   176.85 (+1.27%)
TSLA   140.95 (-4.15%)
NVDA   771.44 (+1.24%)
AMD   147.69 (+0.72%)
NIO   3.70 (-2.63%)
BABA   69.72 (+0.94%)
T   16.65 (+0.85%)
F   12.18 (+0.33%)
MU   108.00 (+1.15%)
GE   148.50 (+0.30%)
CGC   8.21 (+3.53%)
DIS   113.00 (+0.35%)
AMC   3.25 (+2.85%)
PFE   26.00 (+0.00%)
PYPL   63.02 (+1.14%)
XOM   119.45 (-0.36%)
S&P 500   4,990.32 (+0.46%)
DOW   38,088.82 (+0.27%)
QQQ   417.50 (+0.69%)
AAPL   166.03 (+0.62%)
MSFT   399.80 (+0.17%)
META   489.11 (+1.67%)
GOOGL   154.72 (+0.41%)
AMZN   176.85 (+1.27%)
TSLA   140.95 (-4.15%)
NVDA   771.44 (+1.24%)
AMD   147.69 (+0.72%)
NIO   3.70 (-2.63%)
BABA   69.72 (+0.94%)
T   16.65 (+0.85%)
F   12.18 (+0.33%)
MU   108.00 (+1.15%)
GE   148.50 (+0.30%)
CGC   8.21 (+3.53%)
DIS   113.00 (+0.35%)
AMC   3.25 (+2.85%)
PFE   26.00 (+0.00%)
PYPL   63.02 (+1.14%)
XOM   119.45 (-0.36%)
S&P 500   4,990.32 (+0.46%)
DOW   38,088.82 (+0.27%)
QQQ   417.50 (+0.69%)
AAPL   166.03 (+0.62%)
MSFT   399.80 (+0.17%)
META   489.11 (+1.67%)
GOOGL   154.72 (+0.41%)
AMZN   176.85 (+1.27%)
TSLA   140.95 (-4.15%)
NVDA   771.44 (+1.24%)
AMD   147.69 (+0.72%)
NIO   3.70 (-2.63%)
BABA   69.72 (+0.94%)
T   16.65 (+0.85%)
F   12.18 (+0.33%)
MU   108.00 (+1.15%)
GE   148.50 (+0.30%)
CGC   8.21 (+3.53%)
DIS   113.00 (+0.35%)
AMC   3.25 (+2.85%)
PFE   26.00 (+0.00%)
PYPL   63.02 (+1.14%)
XOM   119.45 (-0.36%)

Vornado Realty Trust Q1 2023 Earnings Call Transcript


Listen to Conference Call View Latest SEC 10-Q Filing

Participants

Corporate Executives

  • Steven Borenstein
    Senior Vice President and Corporation Counsel
  • Steven Roth
    Chairman of the Board and Chief Executive Officer
  • Michael J. Franco
    President and Chief Financial Officer
  • Glen Weiss
    Executive Vice President, Office Leasing and Co-Head of Real Estate

Presentation

Operator

Good morning and welcome to the Vornado Realty Trust First Quarter 2023 Earnings Call. My name is Sarah, and I will be your operator for today's call. This call is being recorded for replay purposes. All lines are in a listen-only mode. Our speakers will address your questions at the end of the presentation during the question-and-answer session. [Operator Instructions]

I will now turn the call over to Mr. Steve Borenstein, Senior Vice President and Corporate Counsel. Please of ahead.

Steven Borenstein
Senior Vice President and Corporation Counsel at Vornado Realty Trust

Welcome to Vornado Realty Trust's First Quarter Earnings Call. Yesterday afternoon, we issued our first quarter earnings release and filed our quarterly report on Form 10-Q for with Securities and Exchange Commission. These documents, as well as our supplemental financial information packages, are available on our website, www.vno.com, under the Investor Relations section. In these documents and during today's call, we will discuss certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in our earnings release, Form 10-Q and financial supplements. Please be aware that statements made during this call may be deemed forward-looking statements and actual results may differ materially from these statements due to a variety of risks, uncertainties and other factors. Please refer to our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2022, for more information regarding these risks and uncertainties. The call may include time-sensitive information that may be accurate only as of today's date. The company does not undertake a duty to update any forward-looking statement.

On the call today from management for our opening comments are Steven Roth, Chairman and Chief Executive Officer; and Michael Franco, President and Chief Financial Officer. Our senior team is also present and available for questions.

I will now turn the call over to Steven Roth.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Thank you, Steve, and good morning to everyone. Let me get a few things out of the way first. Our business is performing well in this environment. Our outlook hasn't changed since last quarter. We are full-speed ahead on our current projects, totaling over 5 million square feet in the PENN District. Any comment in the newspapers or industry tabloids that we have stopped is incorrect and just plain silly. Just take a look at our three-block long construction site, when you next go through PENN Station or next go to a Knicks playoff game.

Now, some commentary on last week's dividend press release and reactions there, too. Simply stated, we are going on offense. Let me say that again, we are going on offense. A few facts for context. You know about dividends. In 2022, our dividend was $2.12 or $435 million in cash. Over the past 10 years, we have paid and happily paid $5.1 billion in regular dividends and another $400 million special dividends. Last week, an analyst characterized weak dividends as sacred, and I agree. Well, I guess I sort of agree. For this year, we have already paid a $0.375 or $75 million cash first-quarter dividend. We will pause paying dividends in the second and third quarters. And in the fourth quarter, based upon known facts, actual taxable income, including asset sales, etc., we will pay out, as we must, taxable income, but we'll reassess whether it is wise as appropriate to pay in cash or in a combination of cash and scrip. Shareholders should be indifferent as to whether they receive cash or scrip, but that cash if retained by the cooperation might be more wisely employed for debt management, stock buybacks or whatever.

As most of you know. I have resisted buybacks for years and years, resisting copycatting sister-industry companies and resisting the pounding from analysts to quote, "Close the NAV gap." I believe my resistance was logical and fact-based. But since last quarter's dividend announcement to this quarter's dividend announcement, our stock price has declined 35% from a low-level to an even lower level. Seeing value in the stock and an opportunity to create shareholder value, last Wednesday included in our dividend press release, our Board authorized a $200 million share buyback program. We will proceed carefully and in a measured way, funding the buyback from asset sales or even cash retained from paying the dividend in scrip.

Since our dividend is sized based on taxable income, not FFO earnings, here is the math. 2021 taxable income was $2.03 versus a $2.12 dividend. 2022 taxable income was $2.08 versus $2.12 dividend. 2023 taxable income is currently projected at $1.05 without any asset sales, and surely there will be asset sales. The difference between 2022 and 2023 taxable income is primarily increased interest rates.

A couple of other comments. We think we have seen the peak in work from home, more and more CEOs are now requiring their please back to the office. With each passing week, the office buildings show more like 2019, and we believe it's just a matter of time before everyone is back for good. New York City seems to be leading the country in this regard.

Lastly, with all CBD office stocks having been crushed, and great concern about the future viability of office, it is important to review our financial position and our liquidity. We [Technical Issues] $2.2 billion of liquidity, including $1.3 billion of cash and treasury bills. We have over $8 billion at today's markdown values of debt-free, unencumbered assets. PENN 1, PENN 2 and Farley are all unencumbered. The remaining capital program to complete PENN 2 has been pre-funded and will be paid for out of cash balances. These buildings have significant future embedded earnings growth and as PENN 2 rents up, that incremental income will do wonders for our debt metrics.

We have relied primarily on project-level non-recourse debt, old-fashioned mortgages. Only 2.5 of our debt is recourse, and that's with well-laddered maturities. We are clear-eyed and realistic about the near-term financial market challenges. It is not pretty when 3% rolls over into 6%, 7% or even an 8% market. We will certainly have a few workouts to deal, but over the next couple of -- a few workouts to deal with over the next couple of years, but that is the point of having non-recourse debt. We have no maturities this year, limited property-level maturities next year, and no corporate maturities until 2025, with sufficient capacity on our line that matures in December '27, so that we don't have to breach the asset finance at current -- in the current hospital market.

Thank you, and now over to Michael to cover the financials and the market.

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Thank you, Steve, and good morning, everyone. During our last earnings call, we said that we expect 2023 comparable FFO to be down from 2022 and provided a known impact of certain items, totaling a $0.55 reduction, primarily from the effect of rising interest rates. So the current economic environment makes forecasting more difficult than usual. This remains a decent assumption, absent the impact of any asset sales.

As expected, first quarter comparable FFO as-adjusted was $0.60 per share, compared to $0.79 for last year's first quarter, a decrease of $0.19 or 24.1%. This decrease was driven primarily by higher net interest expense from increased rates. Our company-wide same-store cash NOI for the first quarter increased by 1.5% over the prior year's first quarter. We have provided a quarter-over-quarter bridge in our earnings release and in our financial supplement. Our core office and retail businesses remain resilient with long-term credit leases.

Now turning to the leasing markets. Amidst the backdrop of interest-rate volatility and recessionary concerns, we remain encouraged by the level of activity year-to-date. Leasing activity has been led by strong demand from traditional industries, financial services and law firms in particular, with many financial firms growing their footprint and accounting for 40% of the 7.4 million square feet leased in the first quarter. The availability rate of newly constructed properties has substantially declined, with much of the new trophy space now largely absorbed at record level rents.

Tenants in the market are increasingly focused on the highest-quality, redeveloped Class A buildings that are well amenitized, have strong sponsorship and are near transportation in Midtown and on the west side, which is resulting in rents moving up in these buildings. Our office portfolio is filled with these types of buildings. Companies are clearly willing to pay more for the right work environment that they believe will help them retain and attract talent, as well as motivate their employees back to the office. While there is solid activity in the market, large requirement deal flow is lagging and concessions remain stubbornly high.

Focusing on our portfolio. During the first quarter, we completed 22 leases, totaling 777,000 square feet with healthy metrics, including starting rents at $101 per square-foot and a positive mark-to-market of 1.7% cash and 8.5% GAAP. This included our full building 585,000 square-foot deal with Citadel at 350 Park Avenue and 82,000 square feet at PENN 1 at $92 starting rents. If we exclude the Citadel deal from our statistics, our team completed 21 leases, totaling 192,000 square feet at $83 starting rents, with a very strong cash mark-to-market of 13.1%. We are continuing to experience good momentum in the PENN district with a steady stream of new leases at PENN 1 at ever-increasing rents, now in the high $90s and breaching $100 per square-foot in the buildings' tower floors, reflecting tenants' attraction to the unique amenity offering we have in the most successful location in the city. Tour activity is picking up with PENN 2 as well now. The project is nearing completion and tenants can better appreciate the redeveloped products. Overall, we have very good activity at many of our assets, generally at higher rents than a year ago. Our leasing pipeline in New York remains healthy. We have more than 400,000 square feet of leases in negotiation, plus an additional 1.4 million square feet in our leasing pipeline. Much of this activity is at buildings where we have significant move-outs this year and next. The financial sector in particular continues to be active.

With that, I'll turn it over to the operator for Q&A.

Questions and Answers

Operator

Thank you. [Operator Instructions] Our first question comes from Steve Sakwa with Evercore. Please proceed.

Steve Sakwa
Analyst at Evercore ISI

Yeah. Thanks. Good morning. Steve, I appreciate the comments on the dividend and the additional color there. I just want to make sure when you talk about going on offense, does that really just mean buybacks or could that include potentially buying buildings as well or is buybacks really the only thing on the table at this point?

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Buybacks and much -- the best value is in buying back our stock. So, we will focus on our stock at the expense of buying a building here and there. If we buy a building that used to be a $1,000 a foot for $700 a foot, that potential pales in relation to the value that we see at our stock.

Steve Sakwa
Analyst at Evercore ISI

Great. And then as a follow-up, Michael, I'm just wondering if you could maybe talk about the leasing dynamics, sort of between PENN 2 and PENN 1. It sounds like with the renovation of PENN 1, you're getting really good traction at -- the triple-digit rents you sort of talked about when you did the redevelopment. And I'm just curious, are you getting closer to getting some tenants in and secured at PENN 2? Was that project kind of near its completion by the end of this year? Or, well, I guess what's the hold-up on getting leases signed at PENN 2?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Go ahead.

Glen Weiss
Executive Vice President, Office Leasing and Co-Head of Real Estate at Vornado Realty Trust

Yeah. Hi, Steve. It's Glen. See, as PENN 1 one is on fire, leasing activity is strengthening really week-to-week, great tenants, financial, technology, accounting, consulting, and rents are now piercing $100, so we're really pleased how PENN 1 is coming along. And really as PENN 2 unfolds month to month, the project is looking better, better and better, just amazing product we're delivering. And as the PENN 1 activity continues to strengthen, that seamlessly flows in the PENN 2 action. So we now have tenants who are getting boxed out of PENN 1, looking at PENN 2. Our tour activity is higher than ever right now with PENN 2. Some large activities, some single, double -- two-floor activity. The building will lease. It is the best product available in the market. It is in a perfect location. It is at transportation with amenities like no one else has. So we're supremely confident in the product, and we look forward to great success at leasing those.

Steve Sakwa
Analyst at Evercore ISI

Okay. Thank you.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Steve, hang on for one more minute. You should know that earlier we had the opportunity to lease the bustle floors, about half of the bustle floors to two different prospects, important companies, and we turned them down. So we had a great deal of confidence in the product and the building, as Glen says, the building will lease.

Operator

Our next question from --

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Next question, please.

Operator

Our next question comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb
Analyst at Piper Sandler Companies

Good morning, and thanks for taking my questions. So two questions. First, Steve, you guys recently -- on your third quarter call, you outlined the potential to resize the dividend, which you guys did, and then a few months later decided to suspend it. Obviously, the rate environment has remained up, and to the right. The office leasing, the capital needs of the company, everything else sort of stayed the same. So what changed in your view or the Board's view between deciding to resize the dividend from $0.53 quarterly to $0.375 to then suspending it? I'm just trying to figure out what changed, because of the macro and the leasing fundamentals and the balance sheet, all seem to be the same.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Alex, hi. Actually, you're correct, nothing changed. The only thing that really changed was that our stock went down 35% from, as I said in my remarks, from a low level to an even lower level. We put our heads together, and we decided that after years and years of avoiding buying back stock for lots of very good, logical financial reasons, we decided that the time was now. We consider buying back stock to be an offensive move. And we decided that we were going to buy back stock. So that's the first way. We think the value is there. We think it's -- by the way, I'm not calling a bottom. What I am saying is, is that our company is going to devote financial resources to buying back stock. So that's the first thing and we announced it. By the way, it was a little awkward for us to announce a stock buyback in a dividend press release, but nonetheless, we thought that they match together, they were a pair. So that's the stock. We're going to buy back stock. We consider that to be an offensive move and we're very excited about it.

Now, the next question is with dividend, and where do we get the resources to buy back stock. Well, the first question is, is that the taxable income is moving around, things are changing. We will be selling assets, presumably. We cannot yet predict how much the asset sales will be, what will be the taxable income from them. We just don't know yet. So that's the first thing. The second is, is that we announced in the dividend release that we will pay the dividend at the end of the year, as we must, but we don't consider suspending the dividend or postponing the dividend for two quarters to be a big deal. Maybe you do, but actually I don't. We will pay the dividend, as we must, in the fourth quarter. And we will pay the dividend in whatever the appropriate size is, so that's one unknown. The second unknown is we announced that we would pay it either in cash or in a combination of cash and scrip. I think that it's not impossible that we will pay the dividend in scrip. I'm not making a prediction, but I'm saying we are retaining that option. Why? We believe that a shareholder receives stock in lieu of cash in a dividend should be different. It's exactly the same. You can sell the stock and turn it into cash, etc. So we believe that is -- by the way, sort of humorous, we did spend a significant amount of time in our council room and in our boardroom going round and round, ah, let's just think about this. We are going to be perhaps issuing stock in lieu of cash for the dividend. But we're going to be buying back stock. Isn't that circular? And the answer to that is, no, it's not, because the issuing stock for a dividend is pro rata, everybody has exactly the same percentage ownership in the company the minute before they get the stock and the minute after they get that stock. When -- a buyback, however, is discriminate, because people will make a decision to sell and reduce their percentage of ownership in the company or to not sell and increase their percentage of ownership in the company. So anyway, that's -- the fact of the matter is, is that we will size the dividend at the end of the year. We will make a determination as to whether to pay it in all-cash or part cash and stock. And if we pay it in part stock, that will go a long way to funding buybacks or whatever. So that's our thinking. We think this is an -- I think it's offensive and we think actually the right thing to do. Go ahead, Alex.

Alexander Goldfarb
Analyst at Piper Sandler Companies

So that segues - yeah, that segues into the next question. So, I mean, obviously, you've seen your Cross Count peer do a few billion, Hudson did a buyback. I mean, there's not a lot of evidence that buybacks help, but when we look at your balance sheet, it looks like you have $2.4 billion of debt where the swaps expire later this year. So my question is wouldn't the $200 million be better spent paying down that debt? And Michael, in the $0.55 that you said this year would be down versus last year, that includes these swaps burning off, or these swaps burning off are incremental to that?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

No, so, whatever is -- whatever we mentioned last quarter reflected our expectation of swaps, caps, etc., that roll off this year. So that's in that number.

Alexander Goldfarb
Analyst at Piper Sandler Companies

And do you think the [Speech Overlap]

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Alex, we have a great deal of confidence in the strength of our balance sheet. We think that our maturities are well-laddered. We think that most of our debt, the vast majority of our debt is non-recourse, and that's a crucial and very important element in the strength of our balance sheet. We -- obviously, we'll consider management of our debt in contrast to buying back our stock each time we get into the situation of making that choice. We have confidence that we will make the right decision by the way.

Alexander Goldfarb
Analyst at Piper Sandler Companies

Okay. Thank you, Steve.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Yes, sir. By the way, one last point, okay, there is no other company that I'm aware of that is spending multiple billions of dollars on a [Technical Issues].

Operator

Our next question comes from Michael Griffin with Citi. Please go ahead.

Michael Griffin
Analyst at Smith Barney Citigroup

Great, thanks. Maybe just piggybacking on Goldfarb's question there about the stock buybacks. I mean, Steve, just used the phrase, I'm not calling the bottom. I guess what gives you the confidence that the stock is trading so cheaply relative to your expectation, right? We've known that office NAVs relative to the stock price have been pretty materially depressed recently, but your share price relative to GFC times is down 30-plus percent from the beginning of '09. So have you drawn some analysis? Is there really some kind of thought behind it? Or is there a worry that this could be akin to catching a falling knife, so to speak?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

It's Michael, Griff. Good morning. The answer is, what I think when Steve said he is not calling the bottom, I think that commentary relates to the macro environment is likely going to remain choppy near term. The Fed appears to be coming to the end of their tightening cycle, but it's not definitive. We don't know whether rates will stay higher for a more extended period of time. But I think as we evaluate the company, and we look at the price throughout the intrinsic asset value, even on a stressed case, we think it is heavily discounted, right. So we think that the pricing has become irrational. Every day, there's negativity about office in the media and some of that's warranted. But we think that's the whipping boy for today. And so that's going to continue and that obviously has an effect on sentiment, and so it's gotten a bit extreme, right. And I think our action is a reflection of that and as we stress the valuation and we have, we think there is a significant margin still.

Michael Griffin
Analyst at Smith Barney Citigroup

That's helpful. And then maybe just one on leasing for Glen, I guess ex-Citadel this quarter it's about 200,000 square feet of leasing. Was there anything really driving that? And then do you have any big updates on, I guess, the move-out at 770 Broadway? And then I think there is potential expiration at 1290 AOA, I think it's with AXA Advisors. But if you could just update us on that, that would be great.

Glen Weiss
Executive Vice President, Office Leasing and Co-Head of Real Estate at Vornado Realty Trust

Yeah, sure. So the color on the 200,000 feet that we leased outside of Citadel was substantially PENN 1 and then some strong financial service deals at our Plaza District buildings, with rents that start at $83 a foot, cash mark-to-market at 13% [Technical Issues]

Michael Griffin
Analyst at Smith Barney Citigroup

Hello?

Operator

Pardon me, this is your conference operator. Please proceed. It seems we had a bit of an interference. The main speaker line is connected. Please proceed with your response.

Glen Weiss
Executive Vice President, Office Leasing and Co-Head of Real Estate at Vornado Realty Trust

So, that was first quarter non-Citadel activity. As it relates to 1290, 770 and other expirations this year and in '24, we're obviously in the market, and we're seeing very strong demand for those properties. If you think about the portfolio, we think it's the strongest in the city and those buildings particularly have underwent great redevelopments in the past. We're adding some of our work-life amenity programs to those assets currently on the board being drawn up. So a lot of our pipeline is that the 1290s, the 770s, the 280 Parks, the PENN 1s, etc. So we're out there. We're already in paper on a lot of space at some of those assets. And I feel good about those properties and those spaces coming back in terms of making matches with the tenants, we're in demand in the market right now.

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

And Griff, I may just add to that. I think I mentioned this in my opening remarks. What -- if you look at what's happened in the market, right, the new trophy space that was delivered, which has seen record rents, significant demand, that's largely spoken for. And I think we've talked last quarter about a broadening out of tenant activity, and not everybody wants to pay high $120 square-foot rents. Well-located, redeveloped assets near the transit hubs are what is seeing that demand. So the buildings where we have holds in them the 280s, the 1290s, etc., we're seeing very good tenant activity there. And rents are starting to move up in those assets. And so I think that's important, right. Concessions are high, but rents are starting to move up in these other assets, because there is such a delta between the new buildings and these redeveloped assets that are well-located. And proximity to transit is critical. Obviously, the state of the buildings are important, but that's a continuing trend we're seeing, and we're pleased with the activity at a number of our assets that are consistent with that theme.

Michael Griffin
Analyst at Smith Barney Citigroup

All right. That's it from me. Thanks for the time.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Thank you.

Operator

Our next question comes from John Kim with BMO Capital. Please go ahead.

John Kim
Analyst at BMO Capital Markets

Thank you. Good morning. I wanted to follow up on the dividends and the secular aspect of suspending it at this time. Two questions on that. One, do you anticipate your share count will be reduced by year-end? And two, when you decide whether or not to pay the dividend in scrip, are you committed to only issue it at a higher share price than where you're buying it back at?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

John, I think that we anticipate the share count being -- I think it all depends on the execution of the buyback, right. We're going to have we're going to monitor the marketplace and decide when to execute, how to execute. So, I think it's difficult to answer your first question today. Obviously, the dividend wouldn't get paid out until year-end. So I'm glad because the share count would go down and then back up, as Steve alluded to, in terms of similar -- we increase the stock dividend. And then issuance, again, when it comes to year-end, and we evaluate how to pay it, everything will be taken into consideration. We'll evaluate the cash versus scrip component and decide at that time, based on what we've bought back, and how much we generated from asset sales, etc., etc., what's the right mix. Too early to answer all those things.

John Kim
Analyst at BMO Capital Markets

Okay. It just seems like if you're buying it back and extend -- sorry, go ahead.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

So, I'm remote and my equipment stinks. So, sorry, I cut out, and I'm back. The reason for the pause in the dividend is to give us time to evaluate all of those things that Michael just mentioned.

John Kim
Analyst at BMO Capital Markets

I was going to say it makes sense to buy back at these levels I suppose at a 10% implied cap rate or so, but then if you should issue it back at 10%, then it doesn't really make an impact. But my second question is --

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Hold it, John. John, it does for an individual hold, right. Now, if you -- right, all that's pro rata, as Steve said, if you hold throughout, then you own more of the company going forward.

John Kim
Analyst at BMO Capital Markets

Got it, okay. My second question is on the leasing pipeline I think, Michael [Speech Overlap]

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

And -- John, as I said, that's the circular argument, which we spend a great deal of time on in our council room and even in our boardroom. But the issuance is pro rata. You own exactly to the penny the same percentage ownership of the company that you used to own, you have a few more shares, but it's the same percentage ownership, whereas the buyback is the opposite of pro rata.

John Kim
Analyst at BMO Capital Markets

Right, okay. My second question is on your leasing pipeline. I think, Michael, you mentioned 400,000 square feet in negotiations currently. I wanted to see how that compared versus the last quarter. I think you mentioned last time, it was 1.2 million square feet, 275,000 being finalized. I know those terms are a little bit different. But apples-to-apples, where does your pipeline compare today versus a few months ago?

Glen Weiss
Executive Vice President, Office Leasing and Co-Head of Real Estate at Vornado Realty Trust

Hi. It's Glen Weiss, John. I would say very consistent. So when we talk about 400,000 feet out, that leases document in negotiation, where the term sheets are final, and the lease documents are being negotiated. The additional 1.4 million feet are deals that we're speaking with brokers and tenants. We have proposals in the house. We responded to those proposals, and we have a rhythmic back-and-forth on the deal-making. So it's consistent I think quarter-to-quarter what we're seeing. Mainly, the activity is financial service and law firms in that pipeline. But across the board, I'd say the rhythm of the deal-making, the tenant demand, the tours have been consistent the last call it two to three quarters.

John Kim
Analyst at BMO Capital Markets

And can you bring that -- break that out geographically?

Glen Weiss
Executive Vice President, Office Leasing and Co-Head of Real Estate at Vornado Realty Trust

I would say between PENN and Midtown, for us, pretty well averaged out between the two submarkets. And in Midtown, mainly the Plaza District buildings, which attract the financial service tenants.

John Kim
Analyst at BMO Capital Markets

It's very helpful. Thank you.

Operator

Our next question comes from Camille Bonnel with Bank of America. Please go ahead.

Camille Bonnel
Analyst at Bank of America

Good morning. Could we touch on the financing market? We've been hearing over recent weeks that the credit spreads have moved higher since the issues around regional banks. But notice you completed a refi on Roslyn Plaza this month and the spread came in slightly lower. Was this a surprise, or more of a reflection of other characteristics of the loan?

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Michael?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Yeah. Camille, like, I think every asset is an individual situation, right. It's -- so in that particular situation, it's not a large loan. We de-levered it a bit. And our job is to find the best lenders for each situation. So it was a good execution. As a general matter, I agree with your first comment. The markets are challenging, spreads have widened out. But again, it's asset-dependent, sponsor-dependent. There is capital out there. It's not robust by any measure, but there is capital out there for the right sponsors, right assets. And with good term or the right loan-to-value levels, the spreads, albeit wider than a couple of years ago, are still okay. I think that's where you have assets that are higher levered or there's much more volatility in the income stream near term, where it's more challenging. So, I think Roslyn was a small asset, good execution and reflective of a high-quality location.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

My take on this, Camille, is markets are extremely hostile. This is the time in the cycle where you're best to not have to refinance or finance. If you have to finance, you're at a huge disadvantage. And one of the things that I like about our strategy is, is we have very little that we have to finance. So, especially with our cash hoard, which is financing our PENN construction. So the markets are really hostile, and the best bet is just stay out of them.

Camille Bonnel
Analyst at Bank of America

You were cutting out a bit, Steve, but I think I got parts of your message. So, thank you. And then just switching, in the last quarter, Glen talked about the opportunity of converting showroom space to THE MART -- at THE MART to office. I was wondering how that specific business plan is progressing and how interest has been tracking so far into April?

Glen Weiss
Executive Vice President, Office Leasing and Co-Head of Real Estate at Vornado Realty Trust

So, the casual business, departed for Atlanta in the fourth quarter, we're now preparing that space office leasing. I mean, in general, we have a pretty good pipeline in Chicago. Our amenity program will be complete by June. We're going to be out there at NeoCon and another broker event this summer, which we're looking forward to, to really bringing the program out to the market. The pipeline is good in Chicago. The market is tough. There is not a huge lot of tenant demand, and particularly not a large tenant demand except the present. Our showroom business continues to perform. We've leased about 60,000 feet this quarter at $60 starting rents on the showroom business. The office business, we've leased over a half a million feet of office the last three years. We have modest expirations the next three years. We're running out the office. We're getting looks from all the majors. We're in very solid discussions now with a couple of tenants looking to move their headquarters to THE MART. So, starting to feel better, but certainly tough conditions in Chicago as we sit here.

Operator

Our next question comes from Julien Blouin with Goldman Sachs. Please go ahead.

Julien Blouin
Analyst at The Goldman Sachs Group

Hi. Good morning. Thank you for taking the question. I wanted to go back maybe to the potential for asset sales. I know on the last call, I think the comment was that you didn't foresee being able to de-lever via asset sales for the next 24 months. But now it sounds like you see a real potential for asset sales this year. Has your thinking changed at all? Is it really down to maybe the share price and now thinking that even at sort of distressed pricing, you can get some accretion from repurchasing shares? Just curious to sort of get your thoughts on that.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Michael?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Yeah, Julien. I had seen your -- or I guess Caitlin's note, and I was a little surprised by the comment about no asset sales in the next 24 months. I don't think we said that on the last call. I think we've said it's a more difficult market to sell assets in, but I don't think we said we weren't going to try to sell assets. I think we said we're going to be targeted and recognize that you have to be realistic and thoughtful about what do you sell. So, I don't know that our outlook is changing that significantly. It continues to be a difficult market to sell assets in. We think we have some that, as we think about which assets are going to sell, it's a mix of retail and office assets. We do think they're salable. And I think your comments sort of at the end of -- that while the market may not be strong or strong as it was, and pricing has been impacted, our share price has been impacted more. So I think that's exactly right, right. We may not love the price of some assets today relative to where they were a few years ago, but relative to our stock price, we do like that pricing. So the answer is we're not a forced seller. We don't have to sell anything. We're going to be targeted. We think we can execute some sales. We have some dialogs going on certain assets. We're going to pursue sales on a couple of other things that probably were not in our thing a little bit earlier in the year. And our expectation is that we're going to be able to execute on some of that, but given the uncertainty in the market, not going to guarantee it and nor are we going to be forced to sell anything. So, we'll see how the rest of the year plays out, but it is our intent to try to execute on some of those sales.

Julien Blouin
Analyst at The Goldman Sachs Group

Okay, great. Thank you.

Operator

Your next question comes from Daniel Ismail with Green Street. Please go ahead.

Dylan Burzinski
Analyst at Green Street

Hi, guys. Dylan on here. Just touching on the asset sales, I guess, do you guys have anything in the market today? And if you could provide sort of further detail or color on sort of what sort of the profile these assets are? Should we expect these to be some of the higher-quality properties with long wall?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Daniel, not going to get into specifics. The answer is we have discussions going on a few assets. This is not generally a market that you blast things out. You got to focus on who as capital, willing to deploy. I will say there are a number of investors that view this as an interesting time to enter New York. And in some cases, there's decent duration on the leases. In other cases, it's more traditional, rollover in terms of buildings in a certain percentage every year. And as I mentioned, it's a mix of both retail and office. So not going to get anything more specific to that until we have something to announce. But as I said, we do think that they're executable if you're -- if you find the right investor and you're realistic on price.

Dylan Burzinski
Analyst at Green Street

Okay, that's helpful. And then just, we're three years through the pandemic, office utilization still remains fairly low relative to the 2019 levels. I was just curious if you guys have seen any changes with regards to how tenants are building out their space?

Glen Weiss
Executive Vice President, Office Leasing and Co-Head of Real Estate at Vornado Realty Trust

This is Glenn. Yeah, generally I would say more collaborative, collegial spaces, open workplaces, like I always call IT hangout spaces. But if you look across the portfolio, generally, you're still seeing some private office mix with the traditional cubic open areas. In terms of densification, some industry types are more dense. Some are of the same density they were. It's really a mixed bag. I wouldn't say a consistent layout of any industry-type as you relate one to the next. So, generally, I don't think there's much of a new theme than what we've seen previously other than the "hangout, collaborative, collegial environment." I mean, the one thing that we have focused on in the workplace is what we've done in the buildings, particularly at PENN 1, what we're doing at PENN 2, what we've done at THE MART, what we're going to do shortly at 1290, where we believe tenants want to be in these buildings because of the way we have really improved the experience when you first enter the asset. So the first experience of that impact we think most important to our success when people come in, they're comfortable, they can eat, they can drink, they can hang out, they can go to the gym, whatever they're going to do, we look at it like they're coming into a concierge hotel environment. And that's how we've created these new workplaces in our portfolio, which has been working extremely well, I mean, as it relates to that program.

Dylan Burzinski
Analyst at Green Street

Great. Appreciate the color. Thank you.

Operator

Our next question comes from Derek Johnston with Deutsche Bank. Please go ahead.

Derek Johnston
Analyst at Deutsche Bank Aktiengesellschaft

Good morning. Years ago in 2018, which seems like another world, you hosted Seinfeld at 555 California Street for investors. So stay with me, so Jerry's bit was about, "You know me, I could be anywhere. Why am I at pent in San Francisco?" So, Steve, now, look, we all know you. You could be anywhere, but you're right here. You're sticking this out. Which means to us that you see a way out of this negative office REIT narrative. So I guess the question, how do you envision what's it going to take for Vornado to get past this environment and emerge stronger?

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Well, I need to get Jerry Seinfeld to help me answer this question. I think it's happening now. I think the -- I think time is our friend here. I think that it's very clear that employers want their employees back in the office. They want to be able to have people working together. They want managers to be able to manage their people and so they have been struggling because there is a cadre of employees that don't -- that are sort of fighting coming back to the office. I think that over time, if you go back -- if you go forward now and you look out five or seven years, I think we will go back to what was considered normal five years ago. I think time is our friend here. It's pretty -- by the -- just to add to that, it's pretty clear people want to be in the cities. So, the apartments are full. The restaurants are full. The cities are full, the streets are full. Maybe there is a reluctance on the part of certain demographic of coming -- actually going to work in the office, okay? That is starting to evaporate. Okay. Time is our friend.

Derek Johnston
Analyst at Deutsche Bank Aktiengesellschaft

Thanks, Steve. That's it from me, guys.

Operator

Your next question comes from Vikram Malhotra with Mizuho. Please go ahead.

Vikram Malhotra
Analyst at Mizuho Securities

Thanks for taking the questions. So just first, I wanted to clarify, you said nothing has changed between when you adjusted the dividend down a couple of months ago and then now. But I'm just sort of looking at the dividend run-rate you had been -- and now the taxable income you're projecting, can you just help bridge what appeared to be sort of your projected taxable income -- run rate of let's call it $0.37, $0.38, and today it's more like $0.25? I'm just wondering your debt is fixed now. I'm assuming you had outlined I think a $0.50 impact and that was due FFO I know, but you had outlined various impacts that you'd baked in. So I'm just trying to bridge the two numbers, what has changed in driving that projection lower from here? And can you just comment if that projection now includes a change in the way expirations maybe renewed?

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

As I said, nothing has changed. We had left room for some asset sales. By the way, if you read the Boston Properties' CFO's comment in their earnings call, you will see basically exactly the same statement that I've just made. So what I'm saying is, is that we right-sized the dividend, and we left room for asset sales.

Vikram Malhotra
Analyst at Mizuho Securities

Okay, that makes sense. Sorry, go ahead.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Yeah, I'm sorry, go ahead.

Vikram Malhotra
Analyst at Mizuho Securities

So, I was just going to say you talked about asset sales not knowing where pricing is, or what could be achieved. But just from your vantage point, we've seen a variety of different rates, some in New York, some in California, with handles that are -- we probably didn't think we would see this may be a few years ago, $300, $400 a foot, some other buildings or may be higher. But I'm just trying to understand, A, how are you -- what -- how are you identifying what assets to sell? And then is there a point in which you just say the sale doesn't make sense, given pricing? I guess I'm just trying to get a sense of where do you see values shaking across a variety of office types?

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

We're familiar with the -- what you're referring to. We are not a distressed seller. We are not a weak seller. In fact, we are selecting a -- focusing on a very select pool of assets, a few assets, where we consider ourselves to be offensive sellers, because of the proceeds will be -- if we can execute, the proceeds will be invested extremely accretively, so you can count on a couple of things. We will be very selective. We are not in the wholesale selling business. And if we do -- by the way, we know how to walk away. We know how to say no. If we do execute, we will -- it will be extremely accretive.

Vikram Malhotra
Analyst at Mizuho Securities

Okay, thank you.

Operator

Your next question comes from Anthony Paolone with JPMorgan. Please go ahead.

Anthony Paolone
Analyst at JPMorgan Chase & Co.

Yes, thank you. Just on the PENN district, apologies if I've lost the thread on just the back-and-forth with the press in your comments. But if we look out the next couple of years, is there a way to crystallize what you intend to do or spend beyond what's underway right now with the buildings and stuff that you're doing that's in the sub. But what's committed to or what do you intend to do outside of that, if anything?

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

We haven't gotten into that. We haven't announced that. We haven't quite gotten that far. We have already in the PENN District done heroic accomplishments. We did the Moynihan Train Hall in a private-public partnership. We did the widening, The Long Island Railroad Concourse. We have retail on both sides of that Concourse. We completed the 730,000-odd square-foot Facebook deal in Farley. We have done a massive and very successful renovation at PENN 1, where we have driven the rents from $55, $60 to the starting sign of $100 a foot and delivered value to our tenants. And we are in the middle of a billion-dollar renovation of PENN 2. We -- together with that, we are doing area-wide improvements, infrastructure to the public realm, and we're going to take a breath. The prospect of doing ground-up development, we will likely start with an apartment project. But we have not yet announced what we're doing. We're in the middle of planning that, and we're actually very excited about.

Anthony Paolone
Analyst at JPMorgan Chase & Co.

Okay, thanks. And then just one, just maybe a clarification question for me, or just a reminder. Like, if I work on your balance sheet, 14 or so million Class A units seem to have a redemption price, if I think about $23.5 a share. I mean, given where the stock is, is there any thought that those holders could exercise and am I looking at that right?

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Michael or Tom, you're going to have to help me with that one.

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Yeah, so Anthony, let us come back to you on that one.

Anthony Paolone
Analyst at JPMorgan Chase & Co.

Okay, thank you.

Operator

Your next question comes from Nick Yulico with Scotiabank. Please go ahead.

Nicholas Yulico
Analyst at Scotiabank

Thanks. So I was -- wanted to see if there is any update you could provide on the retail JV and I know the loans that matured, we're still talking to the lenders. Just how we should think about that? Is it a situation where you are prepared to walk away from the assets? And specifically as well, that one mortgage, 645th, which matures next year, which is one of your loans that is recourse to the company, what should we think about the plan on that specifically?

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Michael?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Yeah, morning, Nick. On the first asset, St. Regis which we talked a little bit last quarter, that continues to be in discussion with the lenders. And we're I think heading towards a mutually acceptable resolution there. So hopefully, that'll be done in the next 90 days. And with respect to 640, which matures next May, that's something that we started to work on now, start to gauge the financing markets, talk with an existing bank loan, so obviously the existing lender is some that we'll continue to have discussions with as well. So too early to tell exactly what's going to happen there, but obviously the intent is to refinance that asset. And whether we do it at par or pay it down a little bit, but the expectation is that asset will get refinanced. I will also -- sorry, Nick, I think one interesting dynamic sort of two, three, four years ago, retail was a four-letter word, nobody wanted to touch it. That's changing. That's changing -- unfortunately, office is now in that category for most people. But for retail, it's flat. Retail, I think people view that the worst is behind us. The capital markets are more constructive, both investors as well as lenders. And so yes, they have to sort of understand and think about how to deal with above-market rents, in some cases. But I think in general, the capital markets are more constructive on retail today than they have been in a few years.

Nicholas Yulico
Analyst at Scotiabank

Okay, yeah, thanks, Michael. Just one other question is going back to the commentary on a potential buyback. I mean, the debt capital markets right now seem as bad as they've been for office since the Great Financial Crisis, and there is a bearish argument that maybe the lending markets don't come back in a way that they existed in the past decade. So it seems to me that if we're talking about asset sales to fund the potential stock buyback, there is implicitly a view that you think the lending markets improve. And I guess I'm wondering why make that call now instead of paying down debt. I mean, you have a balance on your line of credit, you have maturities you're dealing with over the next year or so. Why isn't that the better use of capital, sell assets, pay back debt and perhaps that would even reward your stock price more so than a buyback?

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Michael, why don't you try that?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Yeah, Nick. I don't think -- I mean, just to be clear, I don't think we said buybacks and not -- I mean, when we said asset sales, I don't think we said just buyback, right. I think depending on -- I think we said that, first of all, the buyback amount we put out I would characterize is fairly modest. And as Steve said earlier, it could be funded largely from retained cash from the dividend. But in terms of asset sales, yeah, I don't think we've said anything about that's just oriented towards buyback. If we execute on asset sales, of course, we're going to look at the proceeds and what the best use for that is. And we're very mindful and our number-one priority is making sure our balance sheet remains strong. We can tackle anything. And de-levering situations or pushing out maturities by paying down -- of course, that's going to be in the toolbox. So we agree we're going to focus on making sure the balance sheet is strong and asset sales are going to be used for a variety of different things.

Nicholas Yulico
Analyst at Scotiabank

I appreciate it. Thank you.

Operator

Our next question comes from Ronald Camden with Morgan Stanley. Please go ahead.

Ronald Kamdem
Analyst at Morgan Stanley

Hey, just a couple of quick ones. So I was looking at the cash flow statement and looking at the $92 million of operating cash flow this quarter. Obviously, there is some working capital seasonality, but just one, can you talk about what happened to OpEx in the quarter? It looked elevated, and I suspect sort of flow through. And then two, I know you said nothing changed, but was this sort of cash flow in 1Q part of the connecting the dots about postponing the dividend and thinking about doing a scrip dividend just to preserve cash flow?

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

On your second question, I'll definitely not. I mean, again, nothing has changed. So now, on the OpEx --

Steven Borenstein
Senior Vice President and Corporation Counsel at Vornado Realty Trust

Maybe there's some seasonality. Ron, we could work offline and take a look at your model.

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

I don't think it's material.

Steven Borenstein
Senior Vice President and Corporation Counsel at Vornado Realty Trust

I don't think it's material, though.

Ronald Kamdem
Analyst at Morgan Stanley

All right. And then, just the last one, just on the refinancing, you already hit on Fifth Avenue property, which I was going to ask about. But any comments on 280 Park as well which is coming next year? And just any general color when we're thinking about the model, what sort of rates, potential paydown, how are you guys thinking about that? Thanks.

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Yeah, what I would say as a general comment, Ronald, is your existing lender is your best new lender. So, I think most -- and I think most lenders appreciate that. It's going to be difficult to refinance certainly large assets for the foreseeable future. So they're going to have to work with their borrowers. Sponsors they feel are the right stewards of the asset, which I think clearly we are. And so I think on a number of these situations, you're going to see extensions for these loans. So on some cases, there might be paydowns, other cases there might not be. So the answer is discussions have started there, and we'll see how they ensue. But I think on these larger near-term situations, I think the lender -- the lenders and the borrowers are fairly tied together for the near-term.

Ronald Kamdem
Analyst at Morgan Stanley

Thank you.

Operator

The next question is a follow-up from Alexander Goldfarb with Piper Sandler. Please go ahead.

Alexander Goldfarb
Analyst at Piper Sandler Companies

Hey. Thank you for taking the follow-up. Maybe I missed it, but did you guys talk about 555, one, the debt restructuring with the servicer, what you guys are thinking about that? And two, just given all the stories that we hear about just the state of San Francisco's office market, what's going on with leasing in the building, The Montgomery Street, Box, etc.

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Yeah, I'll touch on the first, and then I'll have Glen touch on the second, Alex. It's -- it can be a bit frustrating when things you're reading which are just not fact-based. This notion that 555 was in a work-out, there was something that got -- the answer is, building is performing extraordinarily well. There's no issue with the loan. We took out an outstanding loan two years ago, and it was structured as a 2-year initial loan with a series of five-year, one-year as-of-right extensions, right. My as-of-right, if you want the additional term, all you have to do is send in a letter and you get it, right. So once a year, we're going to send a letter to the servicer, we're going to extend the loan, and that'll be that, right. So there's no threat of default. There's never been a threat of default. There's never been an issue with this loan, which is a seven-year loan structured that way. So all the articles written on this thing, nobody did their homework. And maybe other situations like that. So it bears understanding how the loans are structured, and what the real story is, which everybody that wrote on that just got it dead wrong.

In terms of the building, I'll let Glen talk about it, but again, it continues used to be I think the best-performing asset in San Francisco with just a premier lineup of financial service tenants.

Glen Weiss
Executive Vice President, Office Leasing and Co-Head of Real Estate at Vornado Realty Trust

Hi, Alex. It's Glen.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Michael, the rate is swapped.

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Yeah, yeah, that's right, Steve. [Speech Overlap]

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

So, the rates -- Alex, first of all, it's really a seven-year loan,

Michael J. Franco
President and Chief Financial Officer at Vornado Realty Trust

Right.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Which as a combination to lender was structured as a two-plus five ones.

Alexander Goldfarb
Analyst at Piper Sandler Companies

Okay.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

They're going to be a seven-year loan. And so anything -- the newspapers got it all wrong. The second thing is, is that it was a floater that we swapped at a very favorable rate. And we swapped it for, I don't know, 6.5 years or something like that. So -- and the second thing is, it's the best financial services building in the marketplace. It's full. Glen, do you want to comment about the quality of the building?

Glen Weiss
Executive Vice President, Office Leasing and Co-Head of Real Estate at Vornado Realty Trust

Look, the building has been perfectly insulated against everything you're reading about in that marketplace. We've lost zero tenants to anything, Goldman Sachs, KKR, Microsoft, BofA, they all renewed their leases during the last three-year period, which speaks to the asset. I think that's what you really need to know and none of them were reduced in size. And we're obviously in the market with the Cube 345, that's our only vacancy of 77,000 feet. We finished the redevelopment obviously a couple of years ago. We continue to show it, but the camp is -- the three buildings has performed perfectly during this period and it's clearly shown that it's the best asset in the city.

Alexander Goldfarb
Analyst at Piper Sandler Companies

Okay. I appreciate both comments, so thank you.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

You'll pardon us if we get a little bit in the way of this disinformation.

Alexander Goldfarb
Analyst at Piper Sandler Companies

That's the beauty of these earnings calls.

Operator

This concludes the question-and-answer session.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Next question, please.

Operator

I would like to turn the call back over to Steven Roth for any closing remarks.

Steven Roth
Chairman of the Board and Chief Executive Officer at Vornado Realty Trust

Well, thank you all very much for joining us. We are actually very excited about beginning a buyback program. We're also -- we think what we're doing with the dividend is extremely logical, and we understand and appreciate your support. Thanks for joining and we'll see you in three -- we'll see you all in three months.

Operator

[Operator Closing Remarks]

Alpha Street Logo

 


Featured Articles and Offers

Search Headlines:

More Earnings Resources from MarketBeat

Upcoming Earnings: