Heidi Gillette - Director of Investor Relations Marc Holliday - Chief Executive Officer, Director and Member of Executive Committee Matthew Diliberto - Chief Accounting Officer and Treasurer Andrew W. Mathias - President James E. Mead - Chief Financial Officer Isaac Zion - Co-Chief Investment Officer

James C. Feldman - BofA Merrill Lynch, Research Division Vincent Chao - Deutsche Bank AG, Research Division David Toti - Cantor Fitzgerald & Co., Research Division Jordan Sadler - KeyBanc Capital Markets Inc., Research Division Joshua Attie - Citigroup Inc, Research Division Erin T. Aslakson - Stifel, Nicolaus & Co., Inc., Research Division George D. Auerbach - ISI Group Inc., Research Division Vance H. Edelson - Morgan Stanley, Research Division Brendan Maiorana - Wells Fargo Securities, LLC, Research Division Jed Reagan - Green Street Advisors, Inc., Research Division Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division Ross T. Nussbaum - UBS Investment Bank, Research Division

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2013 SL Realty Corp. Earnings Conference Call. My name is Philip, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host, Heidi Gillette. Please proceed.

Thank you, everybody, for joining us, and welcome to SL Green Realty Corp.'s fourth quarter and full year 2013 earnings results conference call. This conference call once again is being recorded. At this time, the company would like to remind listeners that during the call, management may make forward-looking statements. Actual results may differ from the forward-looking statements that management may make today. Additional information regarding the factors that could cause such differences appear in the MD&A section of the company's Form 10-K and other reports filed by the company with the SEC. Also, during today's conference call, the company may discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at www.slgreen.com, by selecting the press release regarding the company's fourth quarter and full year 2013 earnings. Before turning the call over to Marc Holliday, Chief Executive Officer of SL Green Realty Corp., I ask that those of you participating in the Q&A portion of the call, please limit your questions to 2 per person. I will now turn over the call over to Marc Holliday. Please go ahead, Marc.

Okay. Thank you Heidi, and good afternoon, everyone. Thanks for joining in. Many of you listening in today also attended or heard on the webcast our December investor presentation, which for us is always an excellent form to give in-depth market color and discuss goals and objectives for 2014. So that presentation, which is always sort of a highlight for our year in terms of being able to measure performance and describe the shareholder strategies and objectives, was something as a great benefit to us. And from the feedback we got after the presentation, I think we're confident that most shareholders found it to be very useful and informative as well. So we're still happy to put the kind of effort that goes into that presentation in order to do kind of a full dissertation, if you will, on where we see ourselves in the market. So having that just recently behind that, it's probably 7 weeks fresh, I think today what we're going to focus on primarily is material events during that 7-week period since the conference. And with that, I think you can put a circle around the Citicorp deal, the Citibank lease extension deal, which for us is really a crowning achievement for the company, I think for all those who worked on it, I would say, it was a personal achievement and getting that lease concluded for the company, for our shareholders after 18 months of negotiation, structuring and documentation and everything that went along with it, we were extraordinarily happy sometime and I think right after mid-December to get that signed up and announced, which made for good holidays for us. So I can tell you that much. And it was a deal where we had to do all of what I just said, while fending off the approaches of many, many suitors who were trying to convince Citi to relocate to various other locations and buildings throughout the city. And I think it's a real affirmation and testimony to the relationship we have with that tenant, to the flexibility and ingenuity, I think, that we put into that lease in terms of structuring something that worked for us and worked for the tenant. I think it's a real affirmation of Tribeca, what has now become, I would say one of the most desirable residential and commercial submarkets in Manhattan, which won out over many other locations and buildings that were deemed less desirable. And we couldn't be more pleased to have that behind us so that we can now, with Viacom put away for term, with Citi put away for term, it just allows us to really focus very offensively on figuring out ways to maximize our opportunities, mark-to-market and income opportunities going forward with the balance of the tenant base. A little more detail, if you will, on the Citibank deal. I think that the deal is resoundingly successful for this company, both when measured against market conditions downtown and when just looked at in terms of absolute levels of investment returns that we and our partner, Ivanhoe Cambridge, will enjoy on this investment. On relative terms, I think we look primarily at the more recent deals, with GroupM and Jones Day, GroupM at 3 World Trade, Jones Day at World Financial Center. And in that respect, we have a -- we were able to negotiate for a gross rent beginning in 2021 that, depending on where OpEx and real estate taxes go, but assuming that's somewhere in the range between 3% to 4% increases over time than that gross rent is somewhere right around $80 a foot. And that compares against starting rents with the GroupM deal at $68 a foot, starting rent at Jones Day at $60 a foot, each of which has a $5 bump. So that in the one case, the Tribeca location was about 22% to 23% better than a comparable vintage building that what financial center was able to obtain and 10% better than what new construction in the trade center was able to obtain. So we feel the rent was very appropriate, if you will, given the physical plant of 388 and 390, which are exceptionally good for financial tenants, the 388 floor plate was determined through the process to be as or more efficient for new construction and a 100,000 square-foot trading floor sizes at 390 are basically irreplaceable in that downtown market today. So that combined with the location and the autonomy of control over that campus, if you will, I think, was a major factor in helping us secure this tenant on a renewal. And when you look at the concessions, I would say there too, we were on a relative basis -- fairly pleased with the outcome, if you will. Where -- I think we had TIs of about $51 a foot, which is as against roughly $80 a foot on a nonrenewal deal, let's say $80 a foot trade for a new deal, plus free rent, which based on that gross rent in 2021 was about 7 months free. And I think we've seen numbers in the market ranging from 16 to 34 months free. I think that 34 months free is on the Jones Day deal, if I'm not mistaken. So that, I think, speaks volumes also to the quality of this building, the quality of the location that Citi saw in this specific property. There were some reports additionally on some additional base building capital that we committed to this deal as part of the Citibank renewal. That's fairly standard for us. So I'm not exactly sure why in this instance it's called out as something unusual in the 1 or 2 reports we saw. I think there's about $67 a foot or so of base building capital that's going to go into the improvements of the building and the restacking of the floors to make them more efficient. And given that we had put $0 into the building over the past 5 or 6 years since acquisition, and this is the sum and substance of what we'll put into the building over the next 22 years, I think that $67 a foot amortized over 28 years of lease term is something obviously $2.50 a foot on a straight-line basis. So we put redevelopment capital into almost every big building we purchase. In some cases, a little less. In many cases, more. I guess Viacom deal being a little less and 100 Park Avenue repositioning probably being more. So we think this is completely within the level of what's appropriate to invest, not really in a form of the tenant concession per se, but improvement to the asset, which we think is ultimately a good investment for us, and those are the economics of the deal now. Measured in terms of return, which is mostly how I like to look at these deals. I think we had an average yield through 2013 of about 9.25%. And as a result of this deal, going forward through, I believe, through the option date, that's actually a double-digit yield of somewhere between 10%, 11%. And I guess, most important one in IRR basis, which I think brings it all home to roost, the IRR deal from acquisition through date of earliest option would be something in around 9.7% to 10%. Now I can tell you with certainty that our ability today to go out and find commercial space in prime Tribeca neighborhood, where we have a high-credit tenant net leased, triple-net leased and with only about 50% or 53% loan-to-value achieve 10% levered returns would be highly challenging and that may be an understatement. So the deal itself is something we look at as a real victory for the company, if you will. We -- our strategy of buying credit tenant, net-leased deals at the tops of market is filling us 2007 purchase proved to be the right strategy in so much as we were able to maintain a very high yield through the '08 and beyond downturn. And now we'll be able to enjoy a consistently high and rising level of revenue, notwithstanding our financing costs fell during the first 5 years of this deal from $60 million a year to $34 million a year. So that's, in a nutshell, I think, how we evaluated the alternative of entering into this deal, which on the one hand is a -- it's a lot of capital because it's a 2.6 million square-foot lease. So it's big building, it's a lot of return. I think our share of the return, of the net return, from inception through earliest purchase date is something like $300 million net profit. So this has been extraordinarily profitable enterprise, now we're happy to say, we'll continue to be so over time, although we will have to invest some more capital into the deal. But certainly, as it relates to, I think, downtown metrics and I think as to -- just the measures by which we have to deploy capital, then and today, it's worked out fine. We did have it as a backup to our strategy a residential conversion of the property, which we think also would have been quite exciting and quite profitable, which would have played out many, many years from now. But as it turned out, we were able to meet our objectives as Citi seems also to be able to meet their objectives with the lease renewal, and in our eyes, that was in the best interest of this company and our shareholders. So we were happy to get that done. Some additional information, not really additional, just a summary of information that we posted on our website, which contains basically the data that's been disclosed in the press release, the supplemental and the 8-K, kind of put it all in one place, so people have the right data in front of them. And we can obviously answer any other questions, if you will, towards the back half of this conversation. But other than that, I'm going to open it up for questions, I would just say that if I had to handicap the 7 weeks since our December investor meeting, we are somewhere between on or ahead of expectations with respect to some fairly aggressive stretch goals and objectives we put up on the day of the investor meeting, both in terms of leasing and [indiscernible] philosophy, we have a good pipeline of leasing as it relates, even though it's January, which is typically not the most bullish [indiscernible] of months. We have a pipeline structured finance. We're working on other new equity investment yields and the sales market is still robust. So on all levels, we still see this as a market that is very consistent with what we conveyed 7 weeks ago. I think we'll be able to execute our program this year and we made that much the better by having the Citi lease renewal in the rearview mirror. So with that, I'd like to open it up for questions.

[Operator Instructions] And your first question comes from the line of Jamie Feldman with Bank of America. James C. Feldman - BofA Merrill Lynch, Research Division: So I guess it's safe to assume you guys are maintaining your guidance from the Investor Day. And if that's the case, are there any changes to the underlying assumptions?

Jamie, it's Matt. No, there are no changes to our guidance levels at this stage. James C. Feldman - BofA Merrill Lynch, Research Division: Okay. And then, I guess, just following up on the structured finance comments, can you talk a little bit more about the book and where you -- I guess if you look in the fourth quarter, it looks like your yields came down a little bit and your volume was a little lower. So can you just talk about maybe how you see that trending? And maybe timing on new starts or new initiations?

So, Jamie, yields actually, I mean, there are actually on the portfolio up quarter-over-quarter. I think you're talking about the -- maybe the originations in total are down, but remember we syndicate out some of those senior positions, and that takes our yield on the retained piece up. So the portfolio actually ticks up on a fairly static balance.

Well, otherwise said, I just want to make sure, I understand the question. The yield on the portfolio, I think, was up 20 basis points, 10 basis points quarter-over-quarter. And that was done on a balance that was roughly equal and a composition that was slightly more weighted like 400 basis points weighted to its mezzanine, so more ...

We had some bridge loans pay off in the fourth quarter, so that weighted the portfolio slightly more towards the subordinate paper in the portfolio.

Right. Separate and apart from that, there were new originations, quite a voluminous amount of which, I think it was $400 and some odd million, which averaged somewhere like 7, 10. So 10-point-something percent. If you're saying though that yield is less than the portfolio yield, if that's the question, that is true. But if you recall in our December investor meeting, we put right up on that screen, our expectation that we wanted to convey to you guys that we thought spreads would compress in 2014 and after almost 5 years, if you will, of spreads that were fairly well established. And there weren't a lot of market participants competing. That dynamic has changed. People have definitely come back in 2014 with allocations, with a desire to compete more for this business. And that's not hindsight. We did say that in the beginning of December, and I think, we actually modeled spreads as low as 800 to 850 over was our guidance back then. So I think we beat our guidance by a lot. But directionally, we're -- we have shed light on the fact that we see compressing spreads. And I think it's important that people on this call understand that.

Your next question comes from the line of Vincent Chao from Deutsche Bank. Vincent Chao - Deutsche Bank AG, Research Division: Just got a question on the CapEx side of things for the Citi renewal. Just curious if this is like the Viacom deal where they choose the timing of the spend or just curious how much we should be baking in terms of the CapEx here? Andrew W. Mathias: Well, it's not so much -- they have flexibility when they spend it. But there are -- there are stages as to when the capital is available to them. They get a little bit of money now and then it's spread out over the next 5 years as to when the balance of the money is available to them.

It's a combination of: One, when they're entitled to it; and Two, when they spend it. They've got to meet both those conditions, so that we try to stage the money in over time, which that's even a further point that I didn't make in my prepared commentary, most of the concessions granted in these markets are very much upfront weighted concessions. These concessions -- I don't have the exact schedule for. We don't know it because we don't know the timing of Citi spend, but there's a [indiscernible] component and benefit here to being able to spread it over 5 years and whatever the actual schedule turns out to be. Vincent Chao - Deutsche Bank AG, Research Division: Okay. And then, I guess, just curious if you can provide a little bit more detail on the option portion of the deal. I guess, starting in 2017, I think it is. I mean take a lot of the returns you discussed were sort of as of the early option date. Just curious what those returns look like if they don't exercise and what your thinking is currently on whether or not you'll take that option?

Well, there's really 2 parts to that. One is, if they don't exercise on the earliest date, but if they exercise on the latest date. And the second question is whether they going to exercise at all. The difference between earliest date to latest date is really small because on the one hand, there's a little bit of time value. On the other hand, we have rising rents due to CPI.

Yes, levered yield on the interim is right on top of the IRR.

So, I would say, we are somewhat indifferent between when -- if the options pull between 17 and 21 from a term perspective. Now if the option is not hit at all, our expectations are that it's certainly in this environment that would be accretive because their purchase option is roughly around 6 and 6.25 cap on projected NOI, if you will. And the cap rates today, we believe, would be less than that. However, depends on what the CapEx are at that point in time. But certainly, from an earnings standpoint, it's accretive. From a value standpoint, we think it will be accretive, but no way to answer that question until you're out there in 2021.

And your next question comes from the line of David Toti from Cantor Fitzgerald. David Toti - Cantor Fitzgerald & Co., Research Division: We've heard some reports of increasing property taxes and some pressure on assessments. Are you guys seeing any of that yet into the end of last year. I know you are underwriting. Any pressure on that going forward given -- especially given the change in government?

Yes, the property tax rules are out and it's consistent with our estimates. So as Matt said, our guidance for the year captured what we expected for property taxes this year. And it's an area of increasing budgetary constraints within the city. So we don't expect upward pressure on property taxes necessarily to abate. We just work hard with the city on the individual assessments for each of our buildings, making sure we keep those in line with reasonable market values and not out of line. So generally, I think, we feel it's a well-managed area of the business.

Yes, and also given that portfolio is plus or minus 96% leased, a lot of the increases are absorbed by the tenants because these are gross leases with stops and that doesn't make it any less undesirable to see increases that are higher than the rate of inflation, which is what we've been experiencing recently. But it does at least take away the earnings that -- mitigates the earnings impact of this increase. James E. Mead: It certainly will have a negative impact on cap rates either because cap rates, if anything, are down quarter-over-quarter. So... David Toti - Cantor Fitzgerald & Co., Research Division: And that kind of leads into my second question actually which is there haven't been a lot of large scale transactions recently. And the commentary that we hear from some of our industry contacts in the broker community is that cap rates are relatively stable and that the consensus for you is that cap rates probably won't compress much further. But I seem to be hearing otherwise from you. Do you have expectations for continued cap rate compression? Is that asset-specific or market-specific?

I think we indicated in December that we do expect cap rates to compress further, part and parcel, with rental growth over the next 3 years, that we're estimating it 20% to 25%. How -- and I think you'll see some trades that are in contract now that will close some on the value of land which continues to increase and then some on some stabilized office assets, which are continuing to push, I would say, average cap rates down.

And your next question comes from the line of Jordan Sadler from KeyBanc. Jordan Sadler - KeyBanc Capital Markets Inc., Research Division: Marc, last quarter, you sort of talked about the leasing pipeline as being very strong heading into the fourth quarter and nailed the leasing number. And it sounds again like the guidance for, or at least the pipeline for early this year, is pretty strong. You care to offer, I guess, as to what leasing might look like next quarter? Could it be as strong as the fourth quarter?

Next quarter?

Fourth quarter is going to be difficult. Citi was a little bit of an anomaly.

Let's talk about Citi, let's talk about Citi.

What did we do without a Citi -- look, we have 2 million square-foot signed lease goal for the year. So that would be roughly 500,000 square feet per quarter. I don't know if the world is that good where we can -- yes if we can get it down to 3 months increment, some of these deals are just -- we try to get them done at the wire, and some do, and some sign 2 days later, it trips to the next. So I don't know, I think the velocity is good. I think we're on our 2 million square foot. I don't want to say run rate because there are some things that have to go right to get there. But in a market like this, things tend to go right. And I think we will get there. And if we're not at the 7, 70, as we did this last quarter, which we probably won't be because that was that was exceptionally high, I have every reason to believe we'll be right around the straight-line average, of leases, 500,000 [indiscernible]

I think it's going to be like last year. It was choppy from quarter-to-quarter, but that was not necessarily because the tenant demand wasn't there. There were a lot of deals we had in the pipeline. We've got a big pipeline right now, where we have 59 leases that are being negotiated, it's covering 900,000 square feet. I can tell you that some of the bigger deals in that, that are -- won't get done in the first quarter because they're complicated and they just sort of long-dated type transactions. But I think it certainly gives us comfort that we'll hit our 2-million mark for the year. And I think it's going to be -- it's -- we're going to have the first quarter will be less than the straight line, second quarter will be bigger, but behind all that is what's happening in the marketplace, which is we continue to see good tenant demand across the board in all the buildings. Jordan Sadler - KeyBanc Capital Markets Inc., Research Division: Okay, as a follow-up, any color you can offer around the new assemblage on Fifth Avenue?

Obviously, given the vague disclosure, it's a highly-sensitive and dynamic situation. So it's tough to offer much more color. We think it's a site with enormous upside. It's highly, highly underutilized. There are just some incremental transactions we're working on, which will allow us to fully exploit the value of the site. So we purchased it completely off market, and we're trying to keep the balance of our discussions under radar and off market. So more on that certainly later in the year. Jordan Sadler - KeyBanc Capital Markets Inc., Research Division: Safe to say it's Midtown?

Safe to say, yes.

Next question, operator.

And your next question comes from the line of Josh Attie from Citigroup. Joshua Attie - Citigroup Inc, Research Division: On 388, 390, I just wanted to kind of confirm what the total CapEx number was. And then also kind of better understand how it would be spent. So looking at the presentation you posted on your website, it looks like the 3 different pieces, the TI allowance, the base building and redevelopment all kind of add up together to around $118 a foot. And then if you add in the free rent, you get roughly to around $380 million. And my first question is, is that the right number? And my second question is, how is that treated if the purchase option is exercised?

Well, I don't -- the number -- I'm not sure how to respond, the numbers are exactly as they appear in that 2-pager. Those are like to the dollar. So I don't want to characterize it one way or the other. Those are the numbers for this deal. What was the second part of the question?

How is it treated on the sale?

How is it treated on the sale? Well, most of these costs are expected to be funded or expended by the time of the closing of the option. So again, we're sort of modeling generally over the next 5 years. That takes you through '18. So there is, I guess, a slight chance for a mismatch. But if there is any mismatch, unfunded concessions would be credited.

Yes, Citi will get credit for that.

You can get -- assume the money spent and the option will be hit or not during the period, but it can be hit or not, but most of that money will be spent within the first 5 years. Joshua Attie - Citigroup Inc, Research Division: Okay. So all -- the whole concession package, including the free rent, would be credited to the purchase price if the option is exercised?

The answer is yes, but you got a, yes, but almost the vast majority has been funded or expended. So the credits, if any at the end, are very minimal. The first closing can't occur until the end of '17, as I recall. And they could, but I'm not sure it's likely, I think there's lots of motivations why if anything it will close later than earlier, but who the hell knows? I mean that's something nobody has a good point of view on. But if you -- we're at the beginning of '14, the earliest closing is end of '17, most of the funds are expended, this is a tale that's not it will get credit. Joshua Attie - Citigroup Inc, Research Division: Okay. And completely separate question. On the Investor Day, you talked about having net growth in the retail and residential portfolio of around $750 million this year. Can you just talk about how the acquisition pipeline looks? And whether it's more skewed toward retail or residential today?

It's more skewed towards retail today. We are -- we're looking at some residential deals as well, but I think from what we're planning on locking down on the first quarter, it's definitely more skewed towards retail. There's a lot of properties trading, a lot of good opportunities and continued strong tenant interest in our highly trafficked prime trade areas.

Your next question comes from the line Erin Aslakson from Stifel. Erin T. Aslakson - Stifel, Nicolaus & Co., Inc., Research Division: So $412 million was originated in the fourth quarter, but only about $80 million was actually kept on balance sheet. What were the syndication fees related to the originations there, which are recognized in the fourth quarter?

No, we didn't recognize any syndication fees, right? If we had syndication fees, those would be onetime. Generally, we will scrape a little bit or raise more fees and those get amortized in over the term of the loan. There are no onetime syndication fees in the fourth quarter. Erin T. Aslakson - Stifel, Nicolaus & Co., Inc., Research Division: Okay. So the 12 [indiscernible]

The effect of the positive [indiscernible] syndication is expressed in the retained yield on the $80 million, I think you said, that's the right number? And that's, hardly 1 million. And that's always been the case from day 1 in terms of how we recognize that income. Erin T. Aslakson - Stifel, Nicolaus & Co., Inc., Research Division: All right. So the additional income recognized by the structured finance portfolio, the $5-odd million in the quarter was all related to interest rates? Interest rates...

There was one repayment in the quarter. That's the primary difference that you're talking about. There was a repayment within -- an early prepayment penalty that we recognized in the fourth quarter. Otherwise, the rest of it is interest income. Erin T. Aslakson - Stifel, Nicolaus & Co., Inc., Research Division: Okay, how much was the prepayment?

Roughly $2.5 million.

Your next question comes from the line of George Auerbach from ISI Group. George D. Auerbach - ISI Group Inc., Research Division: Great. [indiscernible] ticked up quarter-over-quarter and spread looked a little bit better. Was this sort of a one-off result or anything that you think suggests that business in the suburbs is getting better?

I think, overall -- hi, this is Isaac Zion. I think, overall, the -- we've seen a lot of increased activity well-located buildings in Stanford and White Plains across industry lines, and I think going into early 2014, we've got some vacancies that we have to deal with, but I fully anticipate that occupancy will remain around that 82% and then start to tick up toward the end of the year as things get better and better. George D. Auerbach - ISI Group Inc., Research Division: And just one question on 1 Vanderbilt. With the [ph] moved the assets that are sort of [indiscernible] on the site into development. Can you just remind us of the timing of sort of when you empty out those buildings, when you maybe demo those. And we talked about it a little bit at Investor Day, but any early conversations with the new administrators about East side rezoning?

Well, on 1 Vanderbilt, we moved the assets to development. We are still working on various ways of seeing how we can get this development going under East Midtown primarily, if that comes back this year, as the mayor has committed to do several times publicly. And we're also looking to see if there are alternatives to the project we had originally proposed that would allow us to go forward under different formats. So I think that the zoning was just voted down in November. So it's only been, let's say, 2 months or not quite. And we would expect this is going to be resolved over the next 6 months. So I think a few months from now, I'll have a better answer for you on that. But we are still moving ahead on all fronts with the expectation that this will be developed. The only difference being that, as a result of whether East Side zoning goes through or not, we may have to alter the plans. But I think we can accommodate that into several different scenarios, and that's what we're working through now. And I would say, maybe on the next call, we will have more color on that, certainly within the next 6 months. And that's our kind of time line maybe the next 3 or next 6 months to have this sort of fully figured out as to what direction we'll be headed once we get through the planning process.

Your next question comes from the line of Vance Edelson from Morgan Stanley. Vance H. Edelson - Morgan Stanley, Research Division: So first, just shifting back to asset valuations, I think you'd consider yourself largely in harvest mode now, although it's a relative term. And I am sure you're regularly approached by others looking to buy, unsolicited or otherwise. So could you just provide any color on whether it's sovereign wealth, or pension money, et cetera, that's knocking on the door these days? Is the trajectory of inquiries up or down the past several months? And is it mainly for the trophy-type assets? Or do you sense there's demand out there across the board?

Yes. Vance, let me just give you the first part of that and Andrew can talk about the composition of the players and the trends. We are not in harvest mode. I mean we sell because we always sell. We sell every year. We sold last year. We sold 2 years ago. I think we've sold almost every year over the past 10 years, except for maybe in '08 or '09, that I'm not sure. But short of that, we sell when it's right for the asset, when we feel we've gotten most of what there is to get out of the asset and we can redeploy into more profitable new investments. We are -- we don't make calls on the market. I don't believe that we're in the business of only selling if we think the market is one way and only buy if it's the other way -- we moderate. We buy more early and we buy less late and vice versa, we sell more late and sell less early. But with that said, we are still finding a lot of good new investment activity. Last year, I forget the number, was well over $1 billion of new investment activity. A lot of that was equity. And while there was no major [indiscernible] acquisition last year, I certainly won't extrapolate that out to this year because there are a couple of interesting things. The way we create value is typically highly structured and off market. And if we can get those deals done, even in a market like this, which is a -- [indiscernible] tight market, there are opportunities out there. So you'll see us certainly sell some assets this year. And that's as we did last year. And we set those goals forth at -- in December, you'll see us buy actively. And we're going to be recycling money into new value-add deals because this is a good market to do value-added. The leasing market is getting much better. And I think you're going to start to see good mark-to-market rents that are at least on target with what we've projected. So I would not -- yes, I think people seem to be overly focused on interest rates. I would just make sure you're not focused -- not only you specifically, I just mean generally, people don't focus on interest rates, we spent focusing on rents because as commercial rents go, so goes value, so goes the stock price. I mean that's something I tried to put up on the screen in December to show the correlation between mark-to-market and value and stock price as opposed to interest rates, which has far less of a correlation. So, anyway, the first part Andrew.... Andrew W. Mathias: As is typical in January, we've been visited by many, many sources of capital over the first couple of weeks of the year who all have allocations for this year and are aggressively looking for new deals. So, you have sort of all the groups that Isaac went through in December at the investor meeting. The Southern Well Funds, the pension funds, the individual investors. And we've seen a lot of new entrants to the market, particular Chinese capital, which we highlighted on Investor Day, but also in Noreastern [ph] and Norwegian and all of these guys are flush again with allocations for the year and are actively looking for deals. So we expect transaction activity to be healthy in the first quarter. Vance H. Edelson - Morgan Stanley, Research Division: Okay. That's very helpful. And then any update or thoughts on the potential re-purposing of certain assets that you've mentioned in the past, the potential to tap into retail, residential or hotel demand? Do you think we'll see some of that down the road? Are you moving more in that direction on any assets?

Yes, I think -- we're always evaluating highest and best for any of the assets. Right now, our big redevelopment focus is 10 East 53rd, which is an office redevelopment. But that project is launched, and we're going to be bringing it to market top-of-the-line Class A space in a great floor plate on 53rd street. That's a prime area of redevelopment focus right now.

Your next question comes from the line of Brendan Maiorana from Wells Fargo. Brendan Maiorana - Wells Fargo Securities, LLC, Research Division: So probably for Marc or Andrew, but with 2 of your biggest assets kind of put together and put to bed in terms of the tenants you have there with Viacom and Citi. Does that -- are you thinking about being more aggressive in terms of doing value-add deals? I know you talked that they're attractive, but you've got a growth portfolio, that's -- call it, $3 billion or so. Might we see that number move up because you've got some pretty stable assets that don't have a lot of risk in your portfolio now?

Well, I think that's a reasonable assumption given our view of market rents, which we talked about earlier, that you'll see us continue to add growth assets, that where we can move the bottom line. And if we look to sell, it's going to be mostly stabilized bond-type assets where we've done our redevelopment work and we've executed our business plan, and we think we can take the money and reinvest into higher returning investments.

I would say also on the rental side, with coming expiries, it gives us the ability to, I think, push terms harder than we otherwise would if you had 2 major exposures out there. So with those put to bed, I think we can really try to help, meet the market, if you will, and push the terms and see if we can't benefit from what seems to be a market that's got a lot of job growth. 94,000 jobs last year. The stats say not a lot of office using as in prior years, but it was still positive absorption. And I think that number sort of belies the economic impact of 95,000 new jobs in New York City last year. That is an enormous amount of jobs that puts the total job count at over 4 million bodies. The city is projecting another 50,000 or maybe 45,000 or 50,000 new jobs, private-sector jobs for this year. And I'm not -- it would somewhat seem understated relative to last year's tally, and with the general feedback we're getting from tenants right now whose businesses seem to be doing on average extremely well and tenants seem to be growing in almost all sectors except financial row -- commercial banks. So I think we can push rents, we can push terms and we can be more aggressive as Andrew said on -- I mean in evaluating assets. Brendan Maiorana - Wells Fargo Securities, LLC, Research Division: That's helpful. Just switching gears question, probably for Jim. If I look at the mortgage on 388 390, it looks low from an overall principal. Now is there with the lease done now, is that something that you would think about refinancing? And could that be a source of funds as we think about over the next year or 2? James E. Mead: Yes I mean, the answer is maybe. I mean, we're looking at it now, and it's got a high credit quality, very stable lease on it for the long term. So it would appear to us to be an enormously good candidate to look at for refinancing. So the answer is, we're looking at it, of course. We tend to concern with finance our properties and don't really drive leverage in our property level financing. So we're going to take a close look at it over the next few weeks and months.

Your next question comes from the line of Michael Knott from Green Street Advisories. Jed Reagan - Green Street Advisors, Inc., Research Division: Jed Reagan here with Michael. Just wondering if you could talk a bit about the leasing pipeline in terms of how that splits out between the high end of the market and sort of the more value-oriented price point? Are you seeing more momentum in one than the other?

Well, if you measured it from the last couple of weeks or so, where all of a sudden we got a slew of offers in on the higher price point stuff. You would think that it was shifting towards that part of the market. But I think, in reality, it's much likely said at Investor Day, there's good demand across all price points as compared to 1.5 years ago, where it was all about the bottom end of the market. Today, it seems to be firing at both the bottom end and the top end of the market. Some good examples of that is 3 Columbus, where we're doing some deals in the tower of that building, the annual rents with $78 to $80 range, 600 [indiscernible] we've got 5 or 6 offers that we're negotiating in that building, and that's one of the boutiques, one of the higher price points in the portfolio. We just closed the deal a few days ago with 280 Park for 25,000-foot tenant. The bottom of the building rents there are still is been very, very heavy for that product. So we're seeing it across the board, but I think in particular, there's a continued improvement in the higher end of the market. Jed Reagan - Green Street Advisors, Inc., Research Division: Sorry, if I missed this. But, can you just clarify leasing commissions for the Citigroup lease that's included in the TI numbers presented in the supplemental? And if not, can you just share how much additional cost that represent?

The leasing commissions that we pay are shown in the -- on the FFO FAD page that shows the amount of capital expended related to the Citi deal, expended in 2013.

Your next question comes from the line of Alexander Goldfarb from Sandler O'Neill. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: Just 2 really quick ones. First, is Citi putting in any of their own money into the renewal in addition to the TI that you guys are providing in the base building? Or they are putting in -- what are they putting in as part of this, if any?

Well, we're not in a position to respond to that. Citi is going to do, I guess, what it decides to do. We're lead to believe they're going to invest capital in the building to lease back, make it more efficient and potentially make some improvements beyond our base building. We've seen situations where they do, and I think they are plans where they don't. So, we're just not in a position to address that.

They have announced that its going to be the new global headquarters, though, and it's reasonable to assume. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: Okay. That's helpful. I guess we can ask Citi their call. Second question is, on the West 34th Street you bought out 2 adjacent -- I'm sorry, you sold out 2 adjacent properties both earned in joint venture, but you retained some development rights. Can you just comment on what your plans are for those development rights?

34th Street, we sold -- the stabilized retail condos and retained the air rights. We don't have any imminent plans for those air rights. It's in an area where there is a lot of new developments going on, and the future store houses a value. We wanted to save and didn't feel like we could get adequately paid for today, so we sold the income-producing portions of the property. There's no immediate plans for the air rights. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: And Andrew, how transferable are the air rights like what -- how far of a radius can you transfer those around? Andrew W. Mathias: The block, which is a big -- between Fifth and Sixth is a very large block. So, there's a lot of potential between 34th and 35th Street there on the north side of the block.

Operator, we have time for one last question, and then we are going to -- have to take others in a different form.

All right, I understand, sir. Your last question comes from the line of Ross Nussbaum from UBS. Ross T. Nussbaum - UBS Investment Bank, Research Division: Can you guys talk about just an update on 180 Maiden Lane, as well as 280 Park Avenue in terms of different, I guess, time frames in terms of repositioning there? Just give us an update on how those are going so far.

Let's start 280, being the most advanced of the 2. Steve, why don't you?

Well, we profiled it at Investor Day, so the construction there continues to advance. We think we'll be materially done with all of the base building work by the end of the summer. We have a couple of moderate-sized leases that are in negotiation right now, and we just closed one for 25,000 square feet on the third floor of the building. We made some of the papers, we didn't put an announcement out. But, we continue to see that in our primarily financial services are the tenants that are coming through the door, and I think we're on track as far as both the lease of schedule and the rents that we're achieving.

The finished lobby on Park looks I think spectacular. If anyone has an opportunity to go pass and see it we kind of -- our aim and goal was to have the nicest lobby and presence on Park Avenue. I think we've achieved that. Top 180?

On 180, the redevelopment plans, we're working with the city to get the necessary approvals. AIG is finishing up their occupancy, and we're working with them on phase out. And we're actively showing the building to tenant prospects. So it's got lots and lots of showings, lots and lots of interested tenants. I think some of the dynamic of tenants being priced out of Midtown South is definitely starting to occur, and we're starting to see some of those tenants look downtown in the financial district. We expect that to be a big positive impact on the lease up there. Ross T. Nussbaum - UBS Investment Bank, Research Division: Andrew, do you have your arms around a capital budget for the repositioning of that asset yet? Andrew W. Mathias: It's still in, I would say it's still in formation because it somewhat reliant on city planning. The City Planning Commission, which has purview of all the public space, which a lot of that building, the ground floor is public space. But by next quarter, we will have much better color.

Okay. Thank you, everyone, for dialing in today. And we look forward to speaking to you again in April.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may all now disconnect. Have a wonderful day.