Heidi Gillette - Director of Investor Relations Marc Holliday - Chief Executive Officer, Director and Member of Executive Committee Andrew W. Mathias - President James E. Mead - Chief Financial Officer Matthew Diliberto - Chief Accounting Officer and Treasurer Steven M. Durels - Executive Vice President and Director of Leasing David Schonbraun - Co-Chief Investment Officer Stephen L. Green - Founder, Chairman and Chairman of Executive Committee Isaac Zion - Co-Chief Investment Officer

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

Good day, ladies and gentlemen, and welcome to the Quarter One 2014 SL Green Realty Corp. Earnings Conference Call. My name is Sheena, and I will be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. And now, I'd like to turn the call over to Heidi Gillette. Please proceed.

Thank you, everybody for joining us, and welcome to SL Green Realty Corp.'s first quarter 2014 earnings results conference call. This conference is being recorded. At this time, the company would like to remind all listeners that during the call, management may make forward-looking statements. Actual results may differ from the forward-looking statements that the 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 Securities and Exchange Commission. 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 first quarter 2014 earnings call. 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. Thank you. I will now turn the call over to Marc Holliday.

Okay. Thank you, Heidi, and good afternoon, and thank you to all, everyone dialing in to join us today. It pretty much goes without saying how happy we are with our first quarter achievements and the subsequent transactions that we announced yesterday. Our results and achievements had something for everyone and certainly sets a strong early foundation for what we expect to be a very good 2014. First and foremost, our Manhattan leasing results exceeded our expectations both in terms of leases signed and mark-to-market. The substantial leasing volume is reflective of accelerating demand as private-sector job growth continues in New York City at a historically rapid pace. Over 20,000 private sector jobs were created in the first quarter of 2014 alone, continuing last year's torrid pace of job growth, which neared 100,000 private sector jobs last year. Most of this growth in the first quarter took place among professional business services companies, which accounted for a quarter, probably slightly more than a quarter of the total growth. So clearly, from my perspective, job growth being the metric that has the greatest impact on tenant demand is clearly continuing at a strong pace, at historically significant pace. And at this point, it seems relatively unabated in it's job creation ability in these various sectors, notwithstanding financial services in the first quarter was down marginally. So again, these achievements were being done by all the other sectors that we've spoken about at length on these calls and in December. Complementing our leasing activities, was a typically busy quarter on the investment front as well. Year-to-date, we entered into agreements to acquire over $1 billion of real estate in 4 separate transactions, highlighted by our agreement to buy out our partner in 388-390 Greenwich Street. I consider the lease extension of Citigroup in December combined with the sizable buyout of our partner to be among the most important and impactful events in this company's history. These transactions served to derisk significant future lease role and also created substantial earnings momentum, which we'll be able to realize this year and value creation, which we'll be enjoying over the coming years. But while our investment volume for the year was front-ended, we were very conscious of making sure that we sold into this market, this market being exceedingly strong right now given high levels of investor demand, plentiful levels of debt and equity capital and as a result, we are able to achieve $586 million of sales and also 4 transactions. So that's over $1.6 billion of investment activity, 8 different transactions, the fourth month of the year is not even behind us, and that's not including another $160 million-plus of debt and preferred equity originations that we also were able to accomplish in the first quarter. So that's not to say we're by any means done for the year. We've got a substantial pipeline on leasing of about 1.4 million square feet. So we expect second quarter to be pretty much on par with first quarter on leasing in the range of 500,000 to 600,000 square feet, which would make for another outsized quarter putting us on target or in excess of our target for the year. And we do have further pipeline on the investments and sales front. So clearly, we've got a lot of work cut out for us for the remainder of the year, but I don't think I could have asked for a better start or a better market at this point to be conducting it in. The sales in particular, produce a significant amount of net cash proceeds and capital gains, gains being on those 4 transactions alone greater than $225 million of capital gains on those 4 deals, and those are noncore value-add kind of deals, which I think just continues our tradition and reinforces our pedigree of being able to create these double-digit returns in a highly competitive market. So for more color on that, let me turn it over to Andrew Mathias. Andrew W. Mathias: Thanks, Marc. The core areas of investment activity was highlighted by 388 Greenwich, which Marc touched on. In addition, we announced several other acquisitions and dispositions continuing on our theme of accretively recycling capital. In somewhat of a pair trade, we sold our leasehold position and what is probably the last remaining IPO asset at a 4.7% cap rate, 673 First Avenue, and we'll reinvest the proceeds of that sale into a fee position at 635 Madison Avenue. Although, the going in cap rate is a bit below the cap rate we're selling 673 for, we're getting an enormous upgrade in terms of location, upside and long-term value in the fee position at 635 Madison. Our returns on 673 are truly incredible, a 13.6% unlevered IRR over the 16 or so year-period since our IPO. They speak for themselves. We also announced several deals in the retail program centered around SoHo, the city's hottest submarket. Those deals were off market and featured in-place rents that are 50% and more below market and more opportunities to develop the space within those actual buildings. Combined with our strategic investment into 530 Broadway, which closed during the first quarter, 115 Spring and 121 Greene Street give us some of the scale that we're targeting to achieve in the SoHo market. Again, continuing with the recycling theme, we also closed this quarter on our sale of our interest in 21-29 West 34th Street, booking a 55% levered IRR on our investment and we expect to close on the sale of our interest in 747 Madison Avenue shortly as well. As we continue to take profits on interest in retail assets we own across the portfolio. With that, I'll pass the microphone onto Jim to dive into the numbers. James E. Mead: Thanks, Andrew. I'm going to touch on the financing activities and our liquidity position and then turn it over to Matt to go over some of the numbers. We closed $1.4 billion in 3 financings this quarter, including mortgage financings on our office property at our 100 Park Avenue, and at the retail property at 724 Fifth Avenue. And notably, we took advantage of the demand from bank lenders for funded loans to expand our bank term loan facility by $383 million to a total $783 million, extending the maturity date and lowering the pricing of the facility by 25 basis points. This was an excellent execution that achieved a LIBOR spread that we believe was at least 10 basis points lower than any REIT at the BBB- credit rating. As we look forward, we'll be refinancing 388-390 Greenwich and expect that there will be sufficient proceeds to fully fund the entirety of the acquisition of our partner's interest. So that, in combination with the other investments and dispositions we've discussed, leaves us in excess of our targeted $1 billion in liquidity. And so without any need to tap the equity markets for funding any of these activities. Thanks. Let me turn the call over to Matt now, please.

Thanks, Jim. Obviously, we're very pleased with our first quarter results and outlook for the remainder of the year. We came out of the gates in 2014 with a flurry of activity that Marc, Andrew and Jim just spent some time walking through, which puts us in a position of raising our 2014 FFO guidance by $0.26 a share at the midpoint to $5.90 to $5.96 a share only 4 months into the year, equating to FFO growth of nearly 15% over last year. In the first quarter, we saw operating performance as measured by occupancy and NOI in both the existing Manhattan and suburban portfolios that was in line and certainly ahead of our expectations. Renewed vacancy is nearly 100,000 square feet at 711 Third Avenue and 88,000 square feet at 810 Seventh Avenue. We put pressure on our first quarter occupancy in NOI but the strength of recent leasing helped alleviate that pressure and actually resulted in our first quarter same-store Manhattan occupancy exceeding our budget, putting us well on track to achieve an increase in our same-store Manhattan occupancy by 150 basis points by the end of the year. And our same-store NOI growth of 1% on a cash basis and 2% on a GAAP basis was right in line of what we expected giving us confidence that we'd be able to meet our stated goal of achieving 3% to 4% cash in same-store NOI growth for 2014 as comparable NOI builds in the back half of the year. The real catalyst to our upward guidance revision is the volume and timing of our real estate in debt and preferred equity investment activity. From an earning's perspective the most impactful real estate transaction is clearly the acquisition of our partners interest in 388-390 Greenwich Street which we anticipate closing in mid-May with financing in place. Net of a one-time charge of about $4 million that we will need to take at closing, for an amortized cost related to the previous financing and acquisition of this size at this yield is an early highlight of the year and contributes roughly $0.14 of net FFO accretion in 2014 and even more in 2015. In the debt and preferred equity portfolio, following a robust 2013, the first 4 months of 2014 have continued to provide a significant pipeline of opportunities to make new investments earlier in the year and at better yields than we originally projected, while the portfolio seismic fluctuate during the year, based on the current flow of activity, we projected the portfolio ends the year between $1.4 billion and $1.45 billion, roughly, where we anticipated. But the front loaded investment timing at better yields than the 8.5% we projected will be impactful and should result in $0.08 to $0.10 of accretion to full year FFO. We expect to fund our incremental investment activity in part with further property sales, tapping into embedded equity at the asset level. Included in our initial guidance with the sales of 21-25 West 34th Street was closed in the first quarter and 747 Madison, which is expected to close during the second quarter. While we have other opportunities to prove in the portfolio at attractive pricing had risen on the heels of the unbudgeted sales of the Arden portfolio in the first quarter and the sale of 673 First Avenue, which we expect to close in the next 30 days. We have several other assets currently out in the market for sale and anticipate being able to close at least 2 to 3 more dispositions before the end of the year. These sales will offset the FFO accretion for our investment activity by $0.03 to $0.05 per share. Finally, during the first quarter, we recognized previously unaccrued interest income on a mezzanine investment that was roughly $7 million, or $0.07 a share greater than what we provided for in our initial guidance. This income was required to be accelerated based on the expected sale of the underlying property at a price well north of our last dollar of exposure. With that brief summary, I'll turn it back over to Marc.

Okay, so we wanted to give everyone a brief overview today of our assessment of the quarter and the activities within, but we wanted to leave ample time to get into questions. I think, just to put a spotlight on it, the ability for us only 3 -- 4 months, I guess, 4.5 months after December investor to be able to come out with a guidance revision, and a guidance revision of this magnitude, I think is very telling about our feelings and belief about the momentum in the leasing market primarily in the mark-to-market, the accretion that we're realizing from our acquisitions and on basically, primarily if not exclusively, on a self-funded basis. The debt and preferred equity program, which continues to perform on kind of market-leading -- on a market-leading basis in this New York City market I think we're far and away the leader in subordinate. Debt provision, both in terms of volume and in terms of return to net business. And when you bring that all back, we felt that we had enough confidence in this market, and in the direction that the portfolio is going to come out with this earnings revision this early in the year. And as I said earlier, there's -- we have $1 billion-plus of liquidity that you've highlighted that will hopefully enable us to continue this momentum throughout the year. So with that, let's turn it over to questions-and-answers.

[Operator Instructions] This comes from Jamie Feldman, Bank of America. James C. Feldman - BofA Merrill Lynch, Research Division: I was hoping you guys can just provide some more color on the leasing market. Just some more granularity in terms of, what size the tenants you're seeing the most activity from, whether they're small, they're big, they're start ups, they're established. They're looking for high rents or low rents, especially with supply coming online downtown out on the West side. Just how should we be thinking about what's really the sweet spot of the market right now? Steven M. Durels: Jim, it's Steve Durels. The good news is I don't think there's a single theme to the demand, that's out there right now meaning that it's not limited to one part of town or one size of tenant the way it was a year or 2 ago. We're seeing tenants of size, large tenants that are out in the market, some driven by growth, some driven by expirations, some driven by consolidations. We're seeing higher price point tenants and within our portfolio, good examples of that are some of the pre-built spaces that we've done at 3 Columbus that have been leasing well. Some of the space is 600 in Lexington Avenue, which is one of our higher price point buildings. Where we had very good leasing activity this year. I think probably the best demand we've had since we've owned the building. And then continued activity on the lower price points as reflected down at the number of tours that we're getting at 180 Maiden Lane, where we're seeing a lot of Midtown tenants, shopping lower price points downtown. And then, the Midtown South market continues to be on fire. You saw the release today, where we had a corporate goal of leasing the penthouse at 635 Avenue of the Americas and we succeeded with that by leasing the top floor at $101 a square foot on a starting rent. Other than new construction at the highest price point that we achieved for a Midtown South building. So it's a little bit of everything all over town. I think it's driven by tenants who are hiring, tenants who feel good about their businesses and it's not limited to one industry. James C. Feldman - BofA Merrill Lynch, Research Division: Okay, and then we'd -- Marc had mentioned a leasing pipeline. How does that shape up in terms of the same question. Steven M. Durels: Yes, we've got demand right now from probably 5 or 6 sectors, I would say. We've got leases out with tenants in the finance world, marketing, legal, engineering, fashion, transportation. Those are probably the biggest demand we've got. I'd say the tenants that we are not in active negotiation with, but who we're seeing a lot of foot traffic from, in particular, are law firms right now probably more so than we saw last year. So it's -- though it seem to be there, at least within our portfolio, the big tenant demand.

And next is George Auerbach from ISI Group. George D. Auerbach - ISI Group Inc., Research Division: Andrew, you talked about the capital recycling so far in 2014. Do you get the sense of activity you'll see? And the market we'll see will be better this year than last? And if so, why do you think that's the case? Andrew W. Mathias: How are you defining better by total volume? Or by price per foot or...? George D. Auerbach - ISI Group Inc., Research Division: I'd say volume and opportunity. It seems like in the first quarter and even in the fourth quarter, there was just more for you to do in both acquisitions than dispositions? Andrew W. Mathias: Yes, I think it's extremely competitive out there and the pricing certainly in terms of price per foot I think this year will hurdle last year in terms of a better market volume, yet to be seen. So you got to see sort of what's going to come to market in the second half of the year, but we had the sale of the mobile building, which went to contract a couple of weeks ago to an individual entrepreneurial-type investor at really record-breaking price for a leasehold and a very large scale deal, the contract price there is rumored to be around $900 million. So I think year-to-date, we have seen $7.5 billion close, $9 billion under contract and about $5 billion more so on the markets. So it's very active out there. We're winning our fair share of deals. Most of our deals are off market like 388 Greenwich, like the retail deals I spoke about, but it's a very healthy environment for us right now to have a lot of success in. George D. Auerbach - ISI Group Inc., Research Division: Thanks. And also any color on the competitive landscape in the origination market? It didn't really impact yields in first quarter, but do you expect to see yield compression over the next 6 months? Andrew W. Mathias: Let me ask David to answer that.

I think we've had a good run this quarter. And I think based on our pipeline, the next quarter or 2 may be as robust, or more robust that yields looking in line or even above, where we are. So I think just through our existing relationships and kind of be aggressive with capitals back and taking the whole thing down, we kind of have the same success we've had in other years. So I think we're comfortable with that even though there are more entrants into the marketplace, still I'd like to keep that competitive advantage and put out money at these returns.

Next, we have John Guinee, Stifel. John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: Steve, at the lower price point of the market, 180 Maiden Lane, a few other assets you might have, are you getting any competition from Jersey City? Is anybody considering actually going over to the other side of the Hudson? Stephen L. Green: As best I can tell, most of the larger tenants that have been looking at Jersey City mostly used it as a stocking horse. We've seen a couple of big tenants, meaning 150,000, 200,000 square-foot guys, come through a door at 180 Maiden and been told that it was a discussion between the east side of downtown, the west side of downtown and Jersey. And I think in every one of those cases where we've seen those tenants, they ultimately turn their focus to stay in lower Manhattan. So, I mean, I've not heard or sensed that there's been much flight to the Jersey side. John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And then second question also for you, Steve, we got to Page 42 of the supplemental and it looks like a lot of roles in both your consolidated and your JV portfolio, a little bit of a potential rent, roll down based on asking rents in the consolidated portfolio, but a sizable rent roll up in the second quarter, 972,000 square-feet and the consolidated 254,000 square-feet in the joint venture. If you could just give us a little more color on what's happening with these sizable tenants? Steven M. Durels: Well... George D. Auerbach - ISI Group Inc., Research Division: If it's proprietary because you're in negotiations, just say so. Steven M. Durels: No. Our biggest explorations, where we think that we're likely to lose the tenant or there'll be any material change in the rent, we sort of already been through those. It was Cranes at 711 Third Avenue, it was Draft at 810 Seventh Avenue -- 919 Third Avenue and it was PLI at 810 Seventh Avenue. There are no other really big guys out there, that I can recall other than AIG and Harper Collins, which, I guess, in my mind have already -- that was sort of a last year event, where we knew they were leaving and that's one of the reasons we bought those 2 buildings. But the rest of the portfolio, at this point, it's really about filling the vacancy that we already have. I don't think there's anybody expiring between now and the end of the year of any size so we don't expect to keep and see a rent increase on.

Next, Vincent Chao, Deutsche Bank. Vincent Chao - Deutsche Bank AG, Research Division: Just wanted to go back to rent spread this quarter which was quite strong. Just curious, just given your commentary, I think I know the answer, but just curious how broad-based those increases are, was there anything sort of maybe deal specific that kind of drove that number and how are you feeling about the 5% to 8% for the year?

Well, I think, we -- in our guidance, we increased that yesterday to 7% to 10%, so we're feeling having come out of the gates, little stronger-than-expected. I mean, I wouldn't read too much into to it because I don't think we're expecting mid-teens in the second quarter, but we didn't expect in the first quarter either so, it's a little bit of a crystal ball. But I think if you look out over the second quarter, you'll see mark-to-market that's probably more in line with our revised guidance. And too early to tell third and fourth quarter. But again, if we have good visibility through the first half of the year and that average for the first half of the year is up around 10%, that caused us to raise the guidance up to 7% to 10%, which is a pretty significant movement because 5% to 8% which it was previously was already aggressive for, I think, by any measure for commercial companies in its market. So we're -- we'd be happy to end the year and be able to report that we are within that strike zone and I think that based on the $1.4 million of pipeline we have in place, where we can at least better estimate where those numbers are going to be and for all the deals that are really not yet known that we'll be doing in the third and fourth quarters of this year, the market feels like that's about the right level where we'll be. There's no outlier deal or 2 that contributed to that 15%. We just -- every quarter, that number is going to bounce around based on what's expiring so it's not a -- I wouldn't read too much into it, other than I'd read more into our guidance of 7% to 10%, then I would read into the 15%. Vincent Chao - Deutsche Bank AG, Research Division: And then just going onto the pipeline of investments that you guys -- that you mentioned. Just curious if you could give us some color on sort of the composition of that pipeline, and what are you looking at? It seems like retail was pretty active on the retail side here, but just curious what the pipeline looks like.

Our focus continues to be on retail. That's where we're seen in the best rent spreads and finding the most fertile ground for off-market deals. So I think you'll see some more retail deals executed. And looking at some office and residential deals too, but those areas are very competitive.

And next is David Toti, Cantor Fitzgerald. David Toti - Cantor Fitzgerald & Co., Research Division: Marc, I kind of want you to step back and talk about your structured finance portfolio, a little bit now that it's approaching about $1.5 billion. Can you just remind us sort of a guiding criteria if there is any, relative to return hurdles? Are you seeking to ladder in specific way? Or is it really just asset and relationship-driven?

So -- the last part of that question, David, just I didn't follow the last part. David Toti - Cantor Fitzgerald & Co., Research Division: Sorry, I guess, I'm just trying to understand that there's a -- if there's kind of a structural map as you build the portfolio out? Or is it more really opportunistic relative to the asset, the relationship and the return?

I mean, I think, this -- we're in 16th year of this program. And I would say that it's reasonably well defined from our perspective in terms of the kinds of assets we target, the kinds of return hurdles were looking for, which in today's market, I think, we had forecasted spreads, or yields on subordinate paper of about 8.5%, which we've been exceeding to date, so exceeding is a good thing. But I would always go with our guidance, rather than the actuals I think our guidance is our gut and feel as to where the market either is or will get to, throughout the year. Although we've been finding the ability to outperform that. The volumes are pretty much are on target, if you will, is what we have projected I think it was somewhere around $1.450 billion, $1.5 billion. In the past, we've talked about limiting the amount of investment in this particular business line to about 10%, which would be up close around $2 billion, so we're well within that, it always had been. I think we generally fluctuate somewhere around 5% to 6% maybe 7% or 8% at the high, and that really hasn't, except for some extreme moments in time, that's been largely consistent over the 15-year period. And we get -- we originate couple of hundred million dollars a quarter, but we get repayments. So I think the return hurdles we established based off our funding sources, so the funding sources for this are at slightly more expensive than for the equity component, but they're pretty efficient today in terms of the amount of equity and debt capital out there, looking for yield product, yield product is very much in vogue today. This is yield product in some of the best collateral out there in terms of how you can generate these returns nationally. I think our experience in Manhattan has been just heads and shoulders above most of the markets. And therefore, we're fortunate to be doing this in this market. We love the collateral pool we have. We have, I would guess the best relationships of any subordinate lender in town by far, which is why -- which is what keeps that business going at such a strong pace. Our market share, as an office owner is high, our market share as a lender it's even higher. So one business complements the other. And I think, that the collateral the target is pretty well specified, our relationships are strong. Our track records excellent and the returns are a couple of hundred basis points above the returns we look for in straight real estate because it is -- subordinate loan is a levered product, but I would say in terms of actual achievement, the returns in this business have been solidly well over 10% and I would say that represents excess return. David Toti - Cantor Fitzgerald & Co., Research Division: Okay, that's helpful. And then just a follow up on that. Given the sort of the growth of that platform and, again, I apologize I'm probably pulling questions out of my 2004 question list, but would you ever consider applying some of this business to sort of more of a broker concept where you're participating in maybe securitization, a machine of some sort? If you have the relationships and the absolute volume...

Well, I mean, that's are -- we do syndicate. And securitizations is just another form of syndication, as far as I'm concerned. So we are active, active syndicates. I think last year, I don't have the numbers in front of me, I think, we originated something like $1.7 billion originated, and we sold $1.3 billion and held, I guess, $400 million. So we love to syndicate. It's -- we prefer that we're not a securitization shop. We don't want to be a securitization shop, but having the ability to source and syndicate has an extraordinarily -- a shortening amount of indirect and direct benefits. Direct benefit is we -- it's profitability and higher yields on what we retain, but the indirect benefits are by delivering product to our relationships. We get product in return. It gives us broader access to the market, which helps the business grow and gives us more prominent names. So securitization, I would say, no, but to syndication efforts, definitely, yes.

Next is Manuel Coltron, Citi. Michael Bilerman - Citigroup Inc, Research Division: It's actually Michael Bilerman. Marc, you talked about the exceedingly strong transaction market. Clearly, being able to sell into this market and glad being able to liquidate assets, and you talked about 2 to 3 more assets and I'm just curious, wholly-owned? Or joint venture? And sort of size because a Manhattan asset, especially, in your portfolio, it could be quite smaller, could be quite large. I'm just trying to get a sense of the total volume of proceeds? And potentially, how more aggressive you could get beyond 2 to 3 assets.

I think, it's -- Michael, it's pretty consistent with the guidance from the investor conference. We've got a couple of other deals we're looking at, which are generally wholly-owned, non-core, but of the smaller size. I mean, small is relative, there's nothing -- nothing in the portfolio that's small, but certainly on a relative basis of a smaller size, and whether we transact or not, on one or both, this year, we'll see. Obviously, we know we test the market. We try and get optimum pricing because these assets are hard to come by, so when you sell, you want to make sure you're -- you want to feel as if you're getting the right price and feel good about selling knowing that the next buyer is, obviously, buying with the expectation of making money. So we're very careful with it. We feel no pressure with it. We'll probably hang 2 properties out there. If we get our price, we'll transact it. If we don't, we don't. We've already done, I guess, close to 600 for the year. So that's probably somewhat in line with our guidance. Yes, net-net. I don't think you're going to see anything -- there's no statement coming down the road with a large scale billion dollar-plus kind of assets, but there is a continued focus on trying to prune and improve the portfolio and take money out of lower growth assets and then redeploy into higher growth assets. Michael Bilerman - Citigroup Inc, Research Division: And then, maybe just coming back to Durels, just sort of on leasing. As you think about on lifting occupancy by the end of the year, I'm just curious, does that sort of exclude AIG and Harper Collins from what the current baseline? But even so, where is the growth coming from? And you think about the asset you're sitting in today, that occupancy has declined 660 basis points, big asset, I'm not sure if there's leasing going on there. I don't know how much of its 3 Columbus Circle. I don't know how much of it is sort of re-tenanting 7-Eleven, Third or 810 Seventh; where is the uplift coming that you're expected to drive through year end? Steven M. Durels: It does exclude 180 and 10 East but the rest of the portfolio is rapidly filling it's a vacancy. The biggest chunks that we have of vacant space, where we feel good about -- if not filling all of it, filling a big chunk of it is 919 Third Avenue, where we have a 150,000 square-feet and we have active term sheet negotiations covering all of that space. 3 Columbus, where we have 150,000 square feet and we have either leases out or term sheets covering half of that space. Contrary to what the numbers may reflect, Graybar has actually been our most active building. It just doesn't reflect it in the Lease Commenced category yet, because of that deal we did with Metro-North for 260,000 square-feet and we have another 30,000 square feet of expansion space pending with them, and those leases just haven't commenced yet. Of that 260,000 square-feet, half of it was expansion space and my availability at Graybar today is down less than 2%. Hard as that may be to believe, Graybar was probably one of our weaker buildings 2 years ago, and is now our strongest building. We've raised rents in Graybar 3x over the past 6 months and are doing deals today in the mid-50s a square foot, whereas 1.5 year ago, we were doing rents in the high 30s, low 40s a square foot. So that's a little bit of granular response and then on the bigger side, we're seeing demand in the entire portfolio for vacant space, so I think that's where the lift is coming from.

Next, we have Jordan Sadler, KeyBanc Capital Markets. Jordan Sadler - KeyBanc Capital Markets Inc., Research Division: Curious to sort of harken back a little bit to a discussion at the Investor Day regarding sort of tenants in the market. I mean, I'm hearing your comments, Steve, on the demand you're seeing. Things sound and seem to feel pretty good. Large tenants in the market, the guys that you guys had identified in one of your slides, a number of them from financials, legal and the TAMI sectors, and I know of or have heard of Macy's and Google, some others being added to the market, how is this dynamic affecting the market right now? I know there are some availabilities and some potential developments, et cetera, but are we setting up for a potential spike in rents or a broader spike in rents in Manhattan?

We're not underwriting a spike, most of our -- I'd say most of our competitors are and they're underwriting spikes that we see on the loan submissions, that are between 25% and 35% over the next 3 to 5 years, so very aggressive rental spikes. I mean, our whole way in which we've oriented this portfolio is about repositioning and leasing of vacant space and creating hundreds of millions of dollars of kind of identifiable earnings, without regard to any kind of rent spike. Rent spike would just be coming on top of that. So the earnings increase today is without regard to any rent spike or any rent increase from where we are today. We don't see a rent spike at the moment. However, the market would tell you that the next 2 to 3 years, given this dwindling amount of space, our portfolio being, I think, typical of that should push rents certainly higher than 3% to 5%, which is what it's been since the trough and, I guess, you could create a scenario for a couple of years about size increases between 5% and 10%. Rental increases, in certain product type, it is happening today, right? So the lease at 635 Sixth, which no one's mentioned yet, tripled, maybe Steve did. Yes, tripled -- $80 a foot for the regular floors, over $100 a foot for the penthouse space. I mean, that's clearly rent spike kind of material, and I would say, other of our Midtown South properties are increasing, not at 3% to 5%, but at probably, you can measure it, 10% to 20%. It does depend on which properties, which buildings, but we are looking at 27 million square feet, overall. And in that regard, we're modeling that out at returns that we think -- at increases that'll probably be at or exceed 5% for the next couple of years. So we have been talking about another 25% on top of the 25% we've already realized since the trough, to get back to and ahead, in certain cases, of peak level rents. We are there in certain properties, I think we will be there in most to all of our properties the next year or 2. So it's a good market and it's a good market, notwithstanding the overhang from the West Side, which has taken a couple of big tenants. But we sign, probably, 250 leases a year. So in the past 2 years, let's say, last year actual, this year projected, 500 leases, I can count on one hand the number of conversations where Hudson Yards was a main competitor for those tenants because the meat of our market, which is maybe anywhere between 10,000 and 50,000 feet, as "the average," it's just not looking at multi-floor tenancy in new building Hudson Yards says, at their option. So we still feel it's a very competitive market. It's a good landlord market and we're still projecting 96% overall occupancy for the same-store portfolio, which started the year, I think, at 94%, Matt?

94.5%

So that's 200 basis points of positive increase in the same-store portfolio that we're projecting, which is a lot of leasing. Jordan Sadler - KeyBanc Capital Markets Inc., Research Division: I appreciate that color. I had one another. At the other end of the spectrum, on 635 Madison, what's the play there? It's a little bit of a head-scratcher for me. I remember -- I think, the last time you guys were buying, encumbered fees were -- it was 2007, maybe. I'm just kind of what's the play on that deal?

Well, I think it's across the street from an asset we own at 625 Madison, so -- and the lease holder on 635 happens to be the fee owner on our asset at 625, so there's some potential synergies there. It's a very good receiver for our significant gains from 673 First Avenue, and it's a prime corner. So there's a significant revaluation. The rent on the existing position is significantly under market. So it's a revaluation opportunity in sort of the medium term, but it's our job to go out and create value in that position in the shorter term. Jordan Sadler - KeyBanc Capital Markets Inc., Research Division: Is the GAAP cap rate below the 4 7 [ph] that you referenced on the sale or that's the cash gap?

The GAAP cap for both -- both are below, GAAP and cash are right on top of one another because the rent is flat until the next revaluation under the fee position.

Next is Vance Edelson, Morgan Stanley. Vance H. Edelson - Morgan Stanley, Research Division: Just going back to the rent spreads and the higher mark-to-market expectations in Manhattan. Could you touch on pricing strengths by submarket? I know you mentioned it's hard to pinpoint any specific drivers in terms of overall demand, but does anything stand out when it comes to pricing, when we think about Midtown versus Midtown South versus downtown? Or is that also just strong across-the-board? Steven M. Durels: Broadly, I would say it's strong across-the-board. I think, downtown, you've seen rents rise, I think, to a lot of peoples' surprise, rents have been rising kind of disproportionately, as a lot of the big blocks have gotten soaked up and as the World Financial Center is starting to lease up and there's a lot of the big blocks on the East Side of downtown, have found tenants or starting to find tenants from Midtown tenants, Nature America, Revlon, being examples of that, who've gone downtown looking for price relief-type space. But as that inventory gets soaked up and space diminishes and the rents are starting to escalate up. Midtown South, the demand is insatiable. So if you've got the product and you're putting the capital into the building, then there's a ready supply of tenants that are willing to pay for it and it's not just the TAMI market, the technology guys. But it's really traditional Midtown tenants who want to be cool Midtown South tenants, and they're willing to pay the price. The problem there is just a lack of supply of space or lack of buildings with large enough footprints or enough inventory that rationalize an investment to take advantage of the opportunity. And lastly, I think, Grand Central is starting to get a lot more traction as far as tenant demand and rents are increasing in Grand Central slowly. The best barometer of that being the Graybar Building, as I mentioned earlier. But Grand Central, which is probably a laggard over the past -- in 2013, that and -- oh, I see, that's Sixth Avenue. Sixth Avenue, today is, tremendous amount of activity on Sixth Avenue. If we had inventory at 1185 Avenue of the Americas, I can rent it for $10 a foot more today than we were doing deals last year. I just -- the buildings pretty well locked up. We're talking a few tenants about trying to recapture space in order to take advantage of the tenant demand. So it's a bit of a shotgun approach, but broad stroke, there's good demand everywhere and pricing is increasing. In certain some markers, more than others, but I think most landlords have a view and most brokers share it, that rents are on the rise. Vance H. Edelson - Morgan Stanley, Research Division: Okay, and that's very helpful. And then, shifting gears, could you just touch on the suburbs and the improvement you're seeing there, occupancy starting to move up, months of free rent was down a bit. Maybe just bring us up-to-date on how you feel about the suburbs, in general, right now?

This is Isaac Zion. There's continued improvement across-the-board. In Westchester, in particular, we're seeing more demand from the health and health tech sector and biotech. In Stanford, it's financial services, general corporates. The activity levels in the 5,000 to 10,000 square-foot range are clearly improving, and we anticipate into the next quarter to have probably about 150,000 to 200,000 square feet of leasing as well, and mark-to-market to be about the same, flat to up a little bit. So things are generally positive, it's just the pace is a little bit slower than the city, obviously.

Next, we have Brendan Maiorana, Wells Fargo. Brendan Maiorana - Wells Fargo Securities, LLC, Research Division: In guidance, original guidance, or in your current guidance, I think, Matt, you laid out that $0.14 is higher from 388-390 deal offset by $0.03 to $0.05, or, call it, $0.04, the midpoint of dispositions, that sounds like maybe later in the year. And so, I guess, if I think about that, it's $0.10 up in terms of net property acquisitions. And some of that is driven by, timing with the 388-390 deal early in the year. Some of it is probably cap rate arbitrage, where you've got a higher cap rate on the 388-390 deal versus what you sell. But it seems like there's probably an expansion in the asset base, also. So, I guess, the question is, are you comfortable funding that expansion in the asset base with incremental debt? Or do you think, at some point, ATM issuance or an equity would be needed as you think about the investments for the year?

I mean, I think, right now we're focused on liquidity as a benchmark of sort of whether we are adequately funded and from a liquidity standpoint, and remember, the sales of assets that we're talking about also released large capital or large gains, as Mike had pointed out. So I think, from an overall liquidity standpoint, with the financing of 388 effectively paying for the acquisition and with the other things that we're doing, we have ample liquidity through the year. That doesn't -- so we're not -- we don't need to go to the equity markets to raise any money for liquidity purposes. We'll look at the market and look at what our need is, going forward, as we go through the year. And that will determine our stance on new equity, but I think the important takeaway here is that we really don't need equity to fund the plan that we have in place. Brendan Maiorana - Wells Fargo Securities, LLC, Research Division: Okay. And then, just a question, probably for Andrew. But the retail deals, it seemed like the details in the press release yesterday were a little light. Just wondering if you can provide any color on size of those acquisitions and maybe current yield or longer-term yield expectations? Andrew W. Mathias: We're unfortunately limited by contractual obligations until we close up those deals, which are expected to be this year, one of them in the fall and one of them later in the summer. So we'll be able to release further details at the time we close those deals.

Next, we have Michael Knott, Green Street Advisors. Michael Knott - Green Street Advisors, Inc., Research Division: Curious if there's anything to read into the slightly shorter lease terms this quarter? And then, also, Steve, just curious if you can comment on the trends in lease concessions? Steven M. Durels: No, you shouldn't read anything into it. It was a -- we had a number of tenants that -- it was a hodgepodge of reasons. We know, in one case, we intentionally were lining up expirations on the floor, so therefore, we held the term back. In others, it was some tenants that wanted to do short-term because they had some growth expectations. But there's no broad trend that you should take away, just the opposite, quite frankly, is that we're more pushing just to reject short-term deals of late, in favor of holding out for longer-term deals, because we think the market and the leverages is our side to demand that. In concessions-wise, I think, if it's people who are trying to tighten it up, I think there's greater willingness of tenants that is to pay higher rents, in exchange for not taking it -- a reduction on the concessions. But I think the free rent's slowly getting tightened up a little bit. I think, there are fewer a build-to-suits where the capital sort of exceeds the typical allowance for wall space of $60, $65 a foot. So you see more deals where capping the capital, but it's -- that's still a tough fight right now. I think there's a greater ability to push rents as opposed to rein in concessions. Michael Knott - Green Street Advisors, Inc., Research Division: Okay. That's interesting and somewhat backwards from what the normal course is, correct? Steven M. Durels: Yes. And I think, that must be the world we're coming out of, where -- tenants who are capital sensitive. After the recession, it's certainly contrary to prior cycles but coming out of the recession where businesses were capital sensitive, there's a little bit of hangover of that mentality. Michael Knott - Green Street Advisors, Inc., Research Division: And then, Andrew and Marc, just curious, the pricing on 673 First seemed pretty attractive. Seems like cap rates have been trending down further. Just curious if the fact that it's a partial user sale contributed sort of pricing now? Or should we read into it that cap rates in Manhattan have continued to trend lower even just over the last couple of months? Andrew W. Mathias: I think, both. I mean, there's an incentivized buyer here, but I think that was roughly a market transaction for them. I don't view that it would have been a materially different result one way or the other had we taken it to market. There's a grab out there for good solid well-leased assets. This is one of those. It's non-core for us, just given its size and location. But for a lot of buyers who are kind of structurally priced out of the large scale Midtown Manhattan office market, this would be a highly attractive asset with great credit tenants and the ability to finance that project accretively well below the 4 7 cap rate would probably support a price right around there. James E. Mead: If you look at the pricing on the Mobil building, in fact, that as well is a long-term leasehold and that is supportive of this kind of levels or even a little tighter. Andrew W. Mathias: In that, obviously , Mobil was not a user. So you have 2 great, fresh data points all over the past week or 2 to go by. I think that we could conclude that there's a great investor demand and there's also big institutional user demand from -- which we've been saying, from the hospitals and from the schools.

And next, is Ross Nussbaum, UBS. Ross T. Nussbaum - UBS Investment Bank, Research Division: Marc, on the retail deals that you just announced and the ones that you might have in the Hopper, are you going to be partnering with Jeff Sutton on those? Or you going to be flying solo on them?

Yes, on the Greene Street deal, we'll partner with Jeff. And the Spring Street deal, likely not. Although we haven't had decided the full capitalization of those deals quite yet. Steven M. Durels: As we've said in the past, it's really case dependent. Generally, most of the retail we own, we are partners with Jeff. We continue to partner with them on deals like 650 Fifth and which of the 2 here -- Greene Street deal. We're going to be partners with Jeff, so that's still -- that joint venture continues to produce great results and a great relationship. But not every single asset fits the matrix for us, or for Jeff, so occasionally, as in the case of Spring Street, well, that one we're purchasing ourselves whether we JV it down the road or not is, I guess, an issue for a later date. Ross T. Nussbaum - UBS Investment Bank, Research Division: Okay. And on the leasing front, we've been hearing that Bank of New York and Time are potentially close to taking 1 million square-feet around the World Financial Center. I'm wondering if that's what you're hearing, and then, if that's true, it would seem to open up your prospects for 180 Maiden taking off the far west side of downtown, if that's getting leased up, make's your life's a lot easier. Steven M. Durels: I would agree with everything you just said. And add to it that, as they're finding -- if they make those 2 deals, I think that, basically, we'll lock up all of their big blocks of space at the World Financial Center, and the word is, that they're raising their rents in the center, which can only help things further as far as the east side having even that much more of a competitive advantage from a pricing perspective it.

And next, we have Alexander Goldfarb, Sandler O'Neill. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: Two quick ones. First, Matt, you addressed the extra investment income from the acceleration on the mark on that sale. The other property income that was $14.5 million was up considerably from the historic run rate. Was there anything -- what was in there? Was there one-timer stuff? Or was that a run rate for this year?

We had a promotive of about $7 million recognized in the first quarter coming into the year. We provide in our guidance for expected promotes or lease termination income, as best as we can project them, so that's what's in the first quarter. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: Okay, so you guys got a double positive there in the first quarter, on that side --

Both are positive, yes. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: You got the promote and you got the acceleration on the preferred position, so that was good. On 1 Vanderbilt, how comfortable are you guys sort of emptying out that assemblage and starting demolition ahead of getting approvals?

We've made no such -- we're in the process of getting the approvals and we're certainly in dialogue with the administration, trying to get that. We've set the building up and there are selected areas we have begun termination proceedings, but I would say, it's been very slow, very measured. And we'll just have to see how that plays out through the balance of this year in terms of the entitlements. That building will be developed or redeveloped, there's no question that we will do that. I think, the question is, what will be built there and when, is the question we're still grappling with and that'll weigh in heavily on the timing of the actual vacate to the tenants. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: Okay, so the point is that you wouldn't look to sort of emptying it out and demo the site before approvals. You're going to sort of keep some income there until you get approvals.

You know what, for reasons, I can't get into on the phone, I can't get into that exactly. Alexander David Goldfarb - Sandler O'Neill + Partners, L.P., Research Division: I got you.

What our strategy is going to be, what our timing is going to be, we have a definite decision to move ahead and develop or redevelop this property, that's happening. And the timing is going to be largely predicated on the receipt of the entitlements, but with that said, we are -- we have every expectation of building this building at 1 Vanderbilt. We're optimistic we're going to get the zoning, it's part of East Midtown, or work through some other mechanism and we're very much focused in on it and it would be a great thing for Grand Central. It'll be a great thing for the city, for the MTA, to see this building built and everybody that we presented it to, with the administration, the civics, the neighborhood community, I think, everybody seems to be very much in favor of having a new building built, not just on the West side, not just the World Trade Center, but one right smack in the middle of Grand Central where you have one of the 2 busiest commuter hubs in New York City and it's only getting bigger with East Side Access. So -- and the thing we have to face is building that without subsidy, whereas, a lot of the other developments are with subsidy, makes it, certainly, more economic and easier, but we are prepared to move forward on a full market rate based development, on a site that is perfect for the building we've designed, with a lot of -- with a lot of benefits for the city and MTA, and it's a very special occasion. So we're doing it, but the granularity of when and how and what kind of income will be in place this year, next year, we can't really get into that.

Thank you, ladies and gentlemen. I would now like to turn the call over to Marc Holliday for closing remarks.

Thank you, everyone, who is remaining, and look forward to speaking with you in the next 3 months.

Thank you. Thank you for joining today's presentation. This concludes the presentation. You may now disconnect. Have a very good day.