Marc Holliday – Chief Executive Officer Matthew DiLiberto – Chief Financial Officer Steven Durels – Executive Vice President & Director of Leasing and Real Property Isaac Zion – Co-Chief Investment Officer Andrew Mathias – President

John Kim – BMO Capital Markets Alexander Goldfarb – Sandler O’Neill Jamie Feldman – Bank of America Manny Korchman – Citi Michael Lewis – SunTrust Robinson Humphrey, Inc. Vikram Malhotra – Morgan Stanley Nick Yulico – UBS John Guinee – Stifel Jed Reagan – Green Street Advisors Craig Mailman – KeyBanc Capital Markets

Thank you everybody for joining us, and welcome to SL Green Realty Corp.’s Fourth Quarter 2016 Earnings Results Conference Call. This conference call 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 Securities and Exchange Commission. Also during today’s conference call, the company may discuss non-GAAP financial measures as defined by the SEC Regulation G, the GAAP financial measures 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 measures can be found on the company’s website at www.slgreen.com, by selecting the press release regarding the company’s fourth quarter 2016 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 two per person. Thank you. I will now turn the call over to Marc Holliday. Please go ahead, Marc.

Okay. Thank you. Good afternoon everyone. Let me begin by thanking all of you who attended our investor presentation on December 5th. By all accounts, it was enormously successful and proud day for our company where we got to showcase our achievements for the year, we provided a strategic framework for 2017, goals, objectives and market expectations. I think we had a record crowd of investors and analysts who attended and that for us is always sort of a crowning event for the company, for the year and we covered a lot of ground so, I’ll keep my comments relatively brief at the outset here so it’s not too duplicate a lot of our thoughts and where we’re headed for the year. But I will try to go into some updates about what has transpired since then. It’s only been about seven weeks that have elapsed since the investor conference, but in that time we’ve begun to implement our plans and I think it’s evident that even at this very early stage we are making great progress towards another year of sector leading operating and financial performance. We actually wound up exceeding the high-end of our guidance range by $0.04 thanks impart to lower interest expense, operating expenses cost controls in the real-estate portfolio and higher net interest margin in the debt and preferred equity structured finance portfolio. Also during those seven weeks, we leased another 205,000 square feet of Manhattan office space exceeding our already elevated goal for 2016 and chipping away at 2017 Manhattan office lease expirations which as we stand today, those remaining expirations are less than 900,000 square feet throughout the entire portfolio. Given that we are executing at such a very high level on the leasing front, the available inventory of what we have to lease is obviously reduced and it should come as no surprise that SLG’s quarterly leasing volumes will be below previous amounts when we have much more growth portfolio space and lease rollovers to attend to. This should not be mistaken by what I sometimes hear and read about, as a slowdown. In fact, as we sit today, we have a pipeline of over 630,000 square feet which has actually increased from our last Q3 earnings call by about 5% or more, even though we have less place to lease as we sit today and therefore we remain very confident that we will meet or exceed our stating leasing goals for the year. At this point, given the high degree of occupancy in the portfolio, our focus shifts away from sheer volume of leasing and towards maintaining market leading occupancy of 97% or greater while achieving mid-teens or higher mark-to-market on expiring leases. This of course will be enhanced as we acquire or develop new inventory to drive future growth. This best in class operational performance reinforces the fact that high quality, well located and reasonably priced office space is still in high demand and we will utilize our enviable portfolio and market positioning to drive the best lease economics possible. Before opening up the call for questions, I want to take a few moments to discuss a milestone achievement for the company that we announced this morning regarding the recapitalization of the One Vanderbilt Avenue development project. This morning’s announcement of the completion of the joint venture with NPS and Hines brings to a successful conclusion our capitalization goals for the project that we set forth on this call one year ago. I can’t tell you how excited we are to partner with NPS and Hines on this extraordinary development of what would become the single best commercial building in Manhattan. After a global exploratory process conducted jointly by SL Green and Hines, we were fortunate enough to find a partner who shares our commitment and vision for developing, owning and operating this iconic property. Through its $525 million minimum commitment into the project, NPS and Hines will be providing the majority of the development equity capital left to fund over the next 3.5 years. I want to take this opportunity to congratulate all the men and women at NPS, Hines and Green who have worked diligently and of course tirelessly on this project for the better part of the last four months in order to bring it to fruition this morning. In particular, the effort was led internally by Isaac Zion, Robert Schiffer and Andy Levine who made it their priority to close this transaction within this stated timeframes we laid out to everyone on this call 12 months ago. I can’t be happier with the outcome which strikes the right balance between reducing SL Green’s overall capital commitment to the project while still maintaining 71% ownership for the future. We thank our shareholders for having the confidence in us to put together this best in class of construction financing that we announced I think on the last call, $1.5 billion of construction financing along with this new venture ownership structure. You will all be substantially rewarded for this as the project moves forward towards its next phase of construction and lease-up which will unfold over the next several years. So with that, I’d like to open it up for questions.

Thank you. [Operator Instructions]. Our first question comes from the line of John Kim with BMO Capital Market. Your line is open. Please go ahead.

Thank you. Since the Presidential election, there’s been enormous optimism on the bank stocks and I’m wondering if you’re seeing any of that optimism reflected in lease markets from financial institutions?

I think I can speak to seeing it reflected in a vibe and a confidence with all of the different counterparties we meet, whether it’s bankers, potential partners, tenants, people in the financial community, brokers. I would say clearly, the vibe, the confidence, the psychology has become much more enthusiastic, much more positive, much more optimistic in terms of what everyone perceives to be the opportunities for growth and incentives, lower taxes and possibly with – regulation and whatever else is driving that enthusiasm, we definitely see it. In terms of translating that into signed lease deals, I guess over the past month or two, I don’t know if you could point to it directly although may be Steve could shed some light on the experience we’re having at 280 Park which is as good as an example of a financial oriented commercial asset as we have in the portfolio as any and I would say the experience there the last couple of months has actually been surprisingly robust. So Steve…

Yeah I think that’s spot on. The end of last year and most of last year, financial services came back into the market in a material relative to the other business sectors. And post-election, we certainly saw bump in activity, tour activity, proposal activity and leases that are being negotiated 280 Park Avenue in particular. We have a number of transactions that are pending over there, reminding ourselves we don’t have a lot of space left in the building at this point, but we’re on track to basically knock off of the square footage in that building. And every deal that we’re negotiating right now is a financial services tenant. We’ve also seen some increased activity at 10 East 53rd Street, also dominated by financial services. So, it feels like that sector is back in the market, they’ve got some new enthusiasm and we’re hopeful that we’re going to see more activity throughout the year.

And then conversely as far as policy changes or potential changes, how concerned are you about a potential 1031 exchange – especially being one of the most active REITs as far as – capital.

1031 is something that we’ve utilized in the past as a mechanism for like-like exchanges and we’re first and foremost optimistic that the new administration will continue to recognize the benefits to the country as a whole in terms of allowing like-for-like without - taxation. If it does happen, I don’t see that being all that impactful to the way we operate. We have certainly demonstrated an ability to sell [indiscernible] assets, monetize assets in ways other than 1031 but still comply with all regulations for, not triggering current gains but rather differing gains this position and there’s always other elements that are available to us such as dividend out the cash or timing sales for when you have excess shield in depreciation so that we can time these events to minimize or eliminate the tax burden if any. I think we’ve done that as good as anyone in the sector over the 20 years because we’ve been sort of the highest net disposer of assets or interest in assets. I think Matt and Maggie and Mike and the team has done an extraordinarily good, thorough and logical job at guiding us through all of the various requirements for maximizing retain cash for shareholders and minimizing tax impact. We’ll keep our eye on 1031, but I would say it’s not something that we look at as having as much of an effect on a company like us as it might have on other parts of the community particularly individual owners who look to get out of projects with low bases into other projects that are more secure and have long-term cash flow nature. It’s part of the state planning, it should remain that way into the future, but we’ll just have to see what happens.

Okay, thanks for the color.

Thank you. And our next question comes from the line of Alexander Goldfarb with Sandler O’Neill. Your line is open. Please go ahead.

Great. Thank you. So, I guess Steve, just following up on your commentary obviously seeing pretty optimistic and have heard similar from one of the other REIT landlords. But when we speak to the brokers, they seem a little bit more subdue, they talk about increase of concession, sort of black market why would anyone pay hike north of $100 rent. So just -- is it a matter of it’s a difference between landlords talking about specific buildings whereas when people are looking at the overall market, the overall market is still slow or is it that I’m just trying to reconcile the two of – the building specific stuff or there are some trends in the market that are slowly building, they haven’t gone through the full city yet, but given your commentary you’d expect that we’d start to see that ripple through the rest of the market over the course of this year.

Right. Well with all due respect to the brokers’ community, they frequently have a point of view that’s either in their research reports that are trailing statistics - statistics were trailed with what’s happening in the field and the broker feedback is sort of just of the moment reflective of whatever their current activity level is. The owners I think are better source of insight because we have a good visibility as to the deals that are actually getting signed, term sheets that we’re considering versus other, one deal versus another and how the broader perspective as to the types of businesses that are coming through our door, whether it’d be tour activity, proposal activity or actual leases that we’re signing. So not surprised to hear you say that but in my travels, I think most brokers are fairly optimistic right now, I don’t get a lot of negativity back from them over the past 30-45 days. So we’ll see how the year unfolds but we’re still feeling very strong.

And as far as the One Vanderbilt JV announcement, sort of a two part; one, just curious the involvement of Hines, I thought you already had – as a construction manager and you guys seemed to hire a dedicated team internally. And then the other part of that is the equity commitment of not less than $525 million, does that mean the JV partners haven’t paid you guys cash yet, they’re just committed to fund the rest of the equity component of it and therefore SL Green has no more equity that needs to be funded in One Vandy?

I would -- and again, I think we diagramed this out in December that our money was in I forget the number that we flashed up December, I want to say $894 million was left to fund and we’ll be funding that alongside of our JV partners over the balance of the field in our respective ratios. But that was the way we’ve always described it and the way we went out to the market. So maybe that’s just a clarification, but we’ve always shown it as such in whatever we put up there publicly. What was the other question? Hines? Well Hines is -- Hines has been there with us from the outset, so they’re not new to the table, they’ve been --

[Indiscernible] involvement in partnership.

Yeah. They’ve been a co-development manager in this project I think since 2012. So the only thing that’s changed now is the Hines principles have invested significant amount of their own personal cash into the deal alongside NPS which sometimes they do and I think sometimes they don’t. So we took it as an enormous vote of confidence from Gerry Hines and Tommy Craig and Chris Hughes and the whole team who sort of wanted as much as they could get, I don’t think I’m overstating it in saying that, but this is what we felt made sense. We could have gone deeper, but I think what I said in my opening remarks is we should try to strike a balance between bringing a sizeable amount of equity capital to defray future funding obligations while not selling off too much upside too early and may be there’s no exact number but this one felt to be just right. And that’s how we came to this 71-29 venture.

Okay. Thanks, Marc.

Thank you. [Operator Instructions]. Our next question comes from the line of Jamie Feldman with Bank of America/Merrill Lynch. Please go ahead. Your line is open.

Great. Thank you. Can you provide some color on the transaction market and foreign flows and what you’ve seen since I know the Investor Day was shortly after the election, but just any changes on where capital is coming from and interesting assets in New York City?

Jamie, it’s Andrew. I think it’s been status quo which is to say an enormous amount of foreign interest. Obviously we announced the Korean deal this morning, so that’s one data point. You still have a lot of the assets on the market that we spoke about on Investor Day, people are actively touring and so we’re getting rid to bid on those assets. And we’ve also closed several financings in the interim between investor conference and now and some of those financings have come from notable foreign capital sources. So, I think -- we haven’t seen any change in terms of foreign demand since the election.

Is there any shift in underwriting or change in underwriting outlooks? And is there a shift in the type like where money is coming from versus may be where the interest has been in the last couple of years?

Not that I’ve seen. I mean Isaac anything -- in terms of the brokers’ guidance from their conversation, I think it’s still the same pool of suspects and targets.

Yes, I agree.

And in terms of underwriting, people haven’t modified their year.

You’ll see a little bit more activity from the newer players and we sort of mentioned that at the end of the year as well like Japanese are a little more active. Clearly, the Koreans are a little more active, so still the larger players from around the world are still actively engaged in trying to find [indiscernible]

Okay. And then we’re hearing there’s just going to be fewer assets on the market this year than the last couple of years, just more in the hands of long-term holders. How should we think about what that means for your debt and preferred equity business and the opportunity set if – deals?

I don’t know I don’t want to take that as a presumption. I don’t know that we agree there’s going to be less fields I’m not quite sure who’s saying that. I mean we see a fairly significant pipeline of deals Isaac do you have any…

Right. Well right now in terms of what we’re tracking, there’s close to $20 billion of assets on the market, there’s already been a $1 billion trade this year and there’s another three or four that are actively being talked about now, they’re actively being toured.

Yeah and that billion includes the NPS deal this morning?

No, no.

So, I’m not – I guess I would start by saying, I don’t think we see necessarily a slowdown clearly from ‘15 that was kind of a peak year, ‘16 levels sort of reset themselves in the second half of the year but I don’t see why ‘17 wouldn’t be as on par with if not slightly ahead of second half of ‘16. I would actually say to you that’s our expectation I would further say that on the heels of successfully concluding a major, major re-cap of 11 Madison I don’t want to forget that one, that wasn’t too long ago I know the memory here is sometimes quite short, but that was surely within the past six months domestic partner on the $2.6 billion transaction for 40% of that deal. Now we’ve got One Vanderbilt re-cap behind us, you should expect will contribute certainly probably another big sale or re-cap to the market as they’re both simultaneously out there looking very actively for new deals.

Okay, that’s great. Thank you.

Thank you. And our next question comes from the line of Manny Korchman with Citi. Your line is open. Please go ahead.

Good afternoon everyone. Marc, may be Steve, can you talk more about the relationship between pushing rents and maintaining occupancy if those are sort of both your goal? And how do you think about retention in that context?

Well, I think our ability to push rents – let’s just talk about the market overall. Our mark-to-market is going to stay healthy this year, so that’s one measure of unlocking the embedded value in the portfolio. The overall ability to push rents is obviously a function of the health of the market and if leasing stays on paced with last year, then there should be pretty good absorption, less supply therefore there’s good opportunity that rents will continue to increase this year. And we have the portfolio that’s sort of in the sweet spot of the market to take advantage of that. The majority of our portfolio is in that sort of value play price point kind of the $60 to $80 price point and that’s where a lot of the activity has been most recently. Reminding ourselves of last year’s 2.5 million square feet of net absorption in the market, so if that supply comes off, there should be some pricing pressure. And as far as retention renewals, Marc started off by reminding you that there’s less than 900,000 square feet of roll and that is clearly a function of a lot of hard years in advance of attending to early renewals which is always and has been and continues to be a top priority for the firm.

Yeah, so I mean I think generally, better leased you are, the more you can try to drive economics to the point at which you feel you optimize them and the difference between crossing the finish line or not, I mean we tend to cross the finish line than anybody else, but clearly we have our goals set out for ourselves in our budget and if our net effectives don’t lend where we think they can or should, then we’ll hold our rents and take a little more vacancy and wait to make our rents, but more often than not, I think we have as good a barometer of anyone that fine line where supply and demand meet and where to make a deal and maximize our net effectives while keeping occupancy at 97.

The other thing to add to that is with our high level of occupancy and low rollover, these are the times that we put a lot of emphasis on making sure that we’re trying to uptick the quality of our credit within the portfolio. So, as we have tenants that are rolling out that are weaker credit, we use this as an opportunity to call some of that out.

Great. And then on the One Vanderbilt JV, could you just talk about how the partners would share in any cost savings or cost overruns? So for example, if cost came in $100 million less than you thought, would the equity check be smaller, would they get a larger share of the project, how would that sort of pan out?

I would just look as it’s a pro rata JV I mean there’s no preps…

Side by side, overruns and JV.

Got it. Thank you.

Otherwise there’s no opportunity for the partners to rise above 29%.

Got it. Thanks.

Thank you. And our next question comes from the line of Michael Lewis with SunTrust. Your line is open. Please go ahead.

Thank you. A couple of weeks back there was an article about the 625 Madison and I believe Andrew was even quoted in the article, so I don’t need him to repeat everything that was said there. But I’m wondering if what you think about the potential for significant mark-up signing ground leases and are there any that are close that may be you have negotiations already?? I know the 626 Madison won’t start till 2021 so maybe that’s a little further out, but is there anything that might be a surprise there?

It’s Andrew. I don’t think -- there’s a nature tension there obviously between fee holder and lease holder. That situation is only unique because we do own a fee interest across the street from 625 and the leaseholder on that property is the fee owner on 625. So, we have sort of the exact inverse position and we’re going to do our best to try to affect a good outcome there. We’re very cautious in terms of the leasehold positions. We take on and we’ve been through probably more revaluations than any other firm in the city. So we understand the way appraisers look at these calculations when they’re set. I don’t think across our portfolio there’s any other situation which should get that higher level of concern, 625 is probably the biggest pending revaluation we have. We have successfully revalued leasehold positions at 420 Lexington, The Graybar Building, 711 Third Avenue and many of our other assets. So it’s sort of part of ongoing business here in New York.

Perfect. Thanks. My second question is as we all kind of evaluate the new administration in Washington and what that means, obviously a lot of the financial stocks have run - people have asked about that already on this call. How do you think about potential upside from your tenants for example, if the fiduciary rule doesn’t go through, is that kind of a -- do you think that’s a game changer in your space for demand or corporate tax rates get rolled back, does that dramatically kind of change your outlook?

I don’t know if we can quantify bank profits, bank demand to the roll back or modification of the fiduciary rule or not, obviously it’s sort of binary, it would appear to be helpful if it was repealed or at least certain aspects of it were reformed. But I don’t know if we can quantify it as to what it would mean. I think that – we look at these things a little bit more generally in terms of the psychology of tenants who are making lease commitments into what they think are going to be a positive three to five years forward, always want to air on the side making sure they allow for enough growth and opportunity so they don’t get themselves boxed in by making a long-term 10 or 15 year deal and calling their growth and their space incorrectly. So I think that looking at that along with whole host of other economic reforms that are likely to impact not just the finance sector but legal sector and otherwise, we think that on balance, tenants will be a little bit more aggressive or should say defensive, would be a little more defensive when it comes to their own space and making sure, A, they’re acting early to lock in rents now as opposed to what they might be increasing to in the next few years; B, making sure they have some growth space to accommodate positive economic conditions; C, flexibility so that if things don’t pan out the way they wanted to, they have the ability to sublease, assign or small shedding rights. That will just unbalance we think tip tenants more towards an active market for this year and we’re starting to see that sentiment take place now. I know there’s been couple of questions now on finance sector which is important because it’s over 30% of our market, but I wouldn’t overlook the substantial amount of dollars that might come into New York as part of any kind of major infrastructure spending bill because there are a number of shovel ready projects throughout New York that are kind of well-defined whether it would be the Gateway project, the tubes under the Hudson or Second Avenue Subway line extension now that the first part of the Second Avenue Subway is complete or continue funding to complete East side access, bringing LIRR into Grand Central or the major, major redevelopment projects that will be taking place at LaGuardia and JFK. So that’s just to name a few and that’s like -- it’s probably $50 billion of projects plus or minus and that’s not comprehensive. So that kind of excess activity, that kind of financial inflow could affect a lot more than just the financial sector, obviously we’ll just have to wait and see what of that comes to fruition, how much New York is able to allocate towards it projects relative to the rest of the country and how quickly it happens.

Interesting times. Thanks.

Thank you. And our next question comes from the line of Vikram Malhotra with Morgan Stanley. Your line is open. Please go ahead.

Thank you. Good afternoon. So just to get a little more clarity on the last point about the broader market, just in terms of your pipeline, if I remember correctly, may be three to six months ago you had mentioned that financial formed a very small part of the pipeline. Can you give us a bit more color on sort of what makes up the pipeline by price point and end market today?

Here’s a good statistic to answer that, of the leases that we have out right now, 45% of the square footage are leases with financial services businesses. And of the deals that are term sheet proposals, probably a smaller percentage but still a very meaningful portion of the pipeline. And I think if any of our percentage of deals done sort of trail away from financial services, it’s probably going to be more of a function of the type of products that we are starting to lease up and we’re going to run out of that inventory and therefore, it won’t be -- financial services means we won’t have the right space for them. But for the inventory we’ve got right now, it’s a very meaningful part of the deal flow.

And it’s still in that sort of $70 midpoint range?

Or higher, or materially higher quite frankly.

And just so my second question, given that you’ve done so much forward leasing and you’ve taken down so much of the space still left to do this year. Does this sort of allow you to focus may be even more, put more resources towards One Vanderbilt and does this any way change your timeline that you had shared with us at the Investor Day in terms of lease-up?

I would say with the announcement of the JV today that probably is directionally devoting less resources to One Vanderbilt. Our resources in the One Vanderbilt are fixed if we’re talking about monetary resources. If we’re talking about human resources, there is a completely up and running team that’s kind of designated separate, it’s marketing, it’s building every day. So that’s not going up or down depending on what happens to the rest of portfolio. I think what it means is that what we do best developing or redeveloping all these buildings, we’re going to take a hard look first at our internal portfolio and see what’s the next great redevelopment project that we can execute over the next couple of years like we did at 100 Park, 10 East 53rd, 3 Columbus etcetera, etcetera, I mean on and on and on, I mean that’s our bread and butter stock and trade. And trying to lift those rents up whatever they are $10, $15, $20 put post-redevelopment. So we actually have one or two projects in our sites now for that purpose, just lending themselves for considerations due to some lease roll in ‘18 and ‘19 that would make that favorable. And also as Isaac said earlier there is $20 billion of -- so we hope to get our fair share of looks and opportunities within that portfolio, some of those are on market, some of those are off market within that $20 billion is proprietary, that’s not $20 billion total brokered. So that’s our tracking list and we would fully expect to convert some opportunities there to create more opportunity for leasing as we max out the portfolio. But that’s just basically what we always do and have been doing. So that’s where I’d see the focus shift for ‘17.

The other thing to add to that on One Vanderbilt, the lease up timeline there is not a function of resources or tenant demand, that’s really a function of construction timeline. We’re still roughly four years out before we deliver it and being realistic about when tenants are going to make decisions that really needs to be more within the 20-24 months timeline before going to delivery as to when tenants are going to pull the trigger on those decisions. So that’s why 2018 is really more of the target date for significant lease up.

Great. Thank you for the color.

Thank you. And our next question comes from the line of Nick Yulico with UBS. Your line is open. Please go ahead.

Thanks. Just following up on One Vanderbilt, Steve, could you may be talk about some of the latest types of lease discussions you have in there, types of tenant size? And it sounds like you have some good activity there yet you are saying 2018 is more likely to get some announced, but wondering what are the chances of actually getting a lease done at some point this year because the demand is good?

I mean Steve will answer, but again, Nick, it would be no different than the same we’re sitting here now working on our 2021 expirations. We’re just not. It’s too far out. Every year and you know as well as anybody, we work on expirations current year, a year out and then maybe we’ll knock off some 2019s. Four tenants that are anywhere between that 50,000 foot to 250,000 foot range, that not just what I’ll call customary, it’s almost exclusive that the leasing activity we do in that size range really won’t – sitting here at the beginning of ‘17 won’t really extend beyond ‘19 certainly nothing in ‘20 or ‘21. So that’s the same analogy of saying hey, you’re going to get One Vandy lease up or at least cut this year. We might, because it’s not unprecedented, that we could do some early leasing in ‘20 and ‘21 but if you back over our 20 year history, it’s just not how the market moves. It’s not a statement about the market, it’s not a statement about the building to the contrary the receptivity of tenants have been I would term extraordinary and the same degree of confidence we had in getting it financed, finding our equity partner, we have been getting it fully leased up at best in market range, but I would just cautionary - realistic to the timeframes when those side tenants will make commitments because typically you’re looking one to two to may be – years out for physical occupancy. So with that, Steve.

I think you really need to look at the lease up at One Vanderbilt as a marathon, right? This is not a sprint, it’s a marathon. The efforts that are being invested today are really just to educate the brokers’ community, get the word out so people understand what the product is, we’re doing a good number of tenant presentations, but again, it’s very early in those tenants’ decision timelines. And it’s not a one presentation, get a proposal, make a deal kind of exercise, it’s a – you make a presentation and if you’re talking to one tenant, it ultimately gets through a term sheet, you’re probably making five or six or seven presentations as you sort of work up the corporate hierarchy inside an organization to build consensus on a long-term decision like this. But it’s a lot of hard work, a lot of time and we’re at very early stages.

Okay. That’s helpful. And then Marc, just going back to your comments before about looking for some more opportunity in your market or in your own portfolio and thinking about over the last year you’ve reduced your leverage, you have managed your expiration scheduling, you’re trying to keep occupancy high. And so now it sounds like you’ve may be become a little bit more optimistic about doing projects or may be the market I mean what’s kind of shifted in that thinking?

I don’t know that I did really clarify the shift I’d say in most years, 7 out of 10 were the most acquisitive in the markets. So I would say last year if nothing else, One Vandy did take a lot of attention I think appropriately so. We settled litigation, with construction financing in place, we’ve got the JV equity in place, the project is now almost 80% bought which is extraordinary at numbers we’ll sort of be able to give you guys better update on come our April call, but I feel very good about the numbers we presented in December and may be there’ll be savings for those numbers. There was a moment in time, we’ve got the 11 Mad JV done, we did how much 3 million square feet lease – something, so I would just say that was the right thing at the moment and right now, it’s not that there’s any shift I would say, it’s what we would traditionally do is go out there and hunt typically off market deals where we think we can go in, bring our value add brand and approach to anything in midtown Manhattan or South to 23rd Downtown and create value, I’d say for us it’s almost like a formula, it’s a recipe. I’m confident we can do it. We have an extraordinary amount of capacity right now to do it which will even be enhanced because as I said earlier I think we’re also going to be looking to roll out one other big project, let’s say in 2017 on the heels of One Vanderbilt or JV. So there will be -- hopefully this will be a year of opportunity, but consistent with other years, think back to growth portfolio 1O and 2O those were laden with opportunities and I think we will have our share of that this year.

Appreciate it.

Thank you. And our next question comes from the line of John Guinee with Stifel. Your line is open. Please go ahead.

Thank you. Marc in an effort to just to get to a current valuation of One Vanderbilt, is it possible to provide how much total cash needs to be spent, someone can then plug in their expectation of gross value and subtract out construction spend over the next three or four years to come out to a current value today?

We put – I’d rather than do – we can do those calculations, I don’t know if have it here, we can – let me refer back to the numbers in December. We put the wholesome budget up there, this – what do you got there Matt? So it’s about call it – at least the sources news we put up in December, amounted to $3.2 billion of which $1.5 billion was the construction financing, the balance is equity either funded to-date or remaining to fund. I think at the time we said it was $895 million left to fund, so that is what’s left to fund. So the project is about $3.2 billion of total cost with I guess – commission everything else it probably gets up to a number of close to 3.3 in change that’s the basis upon which NPS and Hines bought into the deal, it’s not obviously not reflective of our basis and we put those numbers in December, but that’s the magnitude of the project, that’s the amount of debt financing for the project, the balance is equity and of what’s left to fund $525 million we put [indiscernible] partners.

So overly simplistic if people think that the asset is worth $3.3 billion and that you have $2.4 billion remaining to be spent, a fair valuation as of today is roughly $900 million. If someone thinks that this assets were 2,500 a foot or $4 billion at stabilization, you have $2.4 billion left to spend the quick math is it’s worth $1.6 billion. So I’m just trying to get to a very simple way to put it in people’s NAV.

So what it’s worth depends on what you think is worth at residual. I think and again, I’m doing this little bit by memory, so I want to have my proper – disclaimer. I think we put like around $200 million or so of stabilized NOI I don’t know if we have that number here. So I think John it will come to I don’t know what cap rates you want to apply to that and then you can sort of back into on a present basis what the value is you want to put in – by the way, the value is extraordinary, whatever, I mean you can make an argument for sub - cap because it will be I think the best building in Manhattan, you can argue for a forcap[ph] you want to be highly conservative I guess four in a quarter, four in half, I mean that’s in the eye of the holder. So I’m looking here $198 million of NOI base case rented 155 foot average in $2,028. So that’s -- I don’t want to put a number out there because there is no singular number, it’s how do you want to value $200 million to stabilize NOI for this kind of building which I would say will be the trophy of trophies in Manhattan upon completion.

Great. Okay.

And therefore I think the number is very substantial.

Okay, perfect. Then the next thing is I was looking at I guess for Matt, I look at page one which sorry page 21 on your sup which looks like you’re on about an $840 million cash NOI $210 million in the fourth quarter times four gets you about $840 million. But then looking at your cash NOI assumptions in your Investor Day, they add up to that $900 million. Is there a bridge between the fourth quarter reported on page 21 and your Investor Day numbers?

Yeah that is in large part the 3.2 million of square feet of leasing for what hasn’t commenced yet rolling through the numbers. So we have in total a million square feet of leases that have signed and not yet been commenced about 350,000 square feet of which is vacant space. So that will contribute the bulk of the growth in the portfolio over the course of 2017. Of course, offsetting that is a little bit of roll off, we said we have vacancy coming at 45 Lex and 220 is 42nd. But that leasing has a 6 to 12 month lag on it that Steve did in 2016 rolling through 2017 that are the bulk of that bridge John.

Great. Thank you very much. Talk to you in a quarter.

Thank you. And our next question comes from the line of Jed Reagan with Green Street Advisors. Your line is open. Please go ahead.

Hi, good afternoon guys. It looks like leasing cost in your portfolio picked up quite a bit in the fourth quarter and would you say those levels are representative of where the market concessions are now? And may be just if you could comment generally on the trends you’re seeing across the market in terms of leasing cost?

Just so we’re clear, define picked up quite a bit, what are we talking about?

I think the TIs were up modestly I didn’t see – which large increase you’re referring to?

Just in terms of concessions as a percent of first year rent so it’s like…

No, I got it just want to get to the number, I have Matt looking at the numbers.

So Jed, you clear you’re looking at the $48 of TI compared to $40 last quarter?

Is that what you’re referring to or is there something more than that? We’re not hearing you Jed. That wasn’t us, we didn’t cut you off Jed.

Jed we’re not hearing you but Steve’s going to answer your question…

So let me answer the question, I would first say if we’re talking about TI, I think there was sort of a modest increase which I think that’s just sort of fluctuation specific leases, month to month. Why don’t you address that?

So it’s really driven by a number of deals where the higher rent price point deals and they carried the higher TI allowances rather us doing a build to – toward giving a greater amount of cash contributions. Something that you’ve seen in the market before, but I think there’s this perception that it’s up across the entire market, not really true. It’s really the high priced point of the market. So in our case, we had a number of deals that were signed in the fourth quarter that were rents in the 85-95 plus kind of range and not surprisingly, those carry a bigger contribution. And if that was a bigger part of our leasing for that particular quarter, it averaged up. So, I think we expect to see a more moderate level in the first quarter of this year.

Jed, I don’t know if you’re still with us, but if you are, we looked at 17 budgeted concessions which we feel pretty good about versus 16 concessions, that’s all new leases for ‘16 versus all new leases for ‘17. We actually have TIs and free rent as a total concession package flat to down year-over-year from 17 to 16. So again, I’m not exactly sure where the increases are coming from which you’re referring to but I think A, we see them as relatively steady for the bulk of the market other – they may be the very high end of Steve Durels just referred to and also more importantly from my perspective is I think we budgeted properly before that in 2017 so that we still should be right on the numbers of what we showed everybody in December. Alright. I guess that is it. We’ll check if there are no more questions in queue. Jed?

Thanks for that color. Just one more if I may, with respect to the planned observation deck, does the pro forma forecast you guys laid out last month, does that assume there’ll be a fifth observation deck at the Hudson yard? And do you think that deck opens before One Vanderbilt’s?

Yeah, no that was – we’ve had two or three different firms do studies. Those studies obviously look at existing but also look at future proposed and then they come up with expected market share for each. I think what --

Both those -- are well aware of the plan deck of the Hudson Yard.

So the answer is yes, it incorporates it. Even with that, I think the numbers they came up to which we showed you in that – in December it was I think 1.9 million visitors a year if I’m not wrong plus or minus. Capacity for the deck will be closer to 2.5-2.6 million, we think it will be much closer to capacity than it will be towards the kind of fair share projected because we do think it will be sort of an extraordinary best class up deck, but if you sort of look at them as all equal, that’s the kind of numbers we flashed up in December. We’ll take one more question operator, then we’re going to wrap up.

Our next question comes from the line of Craig Mailman with KeyBanc. Your line is open. Please go ahead.

Hey guys. Thanks for taking the question. Just curious your thoughts here on direction of cap rates, if long-term and short-term rates continue to migrate higher and that effect has kind of remain under pressure.

I think – interest rates obviously we can’t predict, but we have seen debt providers continue to be very aggressive and we see spreads I would say steady to even compressing as rates rise which often happens because you have bond buyers often target to an all yield as opposed to spread the treasuries. So, the cost of financing I think it’s held barely stable and we don’t project any big movement in cap rates, that notwithstanding we’re looking at the curve of interest rates like everybody else and if something should dramatically exceed expectations in the curve, we wouldn’t rule out the impact that could have on cap rates. But we think that that’s unlikely this year and as we said that that demand which is really a lot of factors underlying it but a safe haven demand, currency demand and overall sort of growth expectation of New York, we find to be very fairly isolated from interest rates and we don’t expect to see any big moves based on it.

Hey Craig, thank you for the question and I want to make sure for everyone who is still listening, we make sure not to let pass by the opportunity to celebrate the moment where just prior to this call, there was a press release as I understand from S&P that hit the wires just before the call started, upgrading the outlook for SL Green to positive from stable so obviously a step towards a ratings upgrade we would certainly hope in the future. This is the first important step so we now have two different agencies Fitch and S&P that have come out with outlook increases I think in the past 45 to 60 days or so which I think is a testament to the extraordinary job we and in particular Matt and Maggie and the team have done shepherding the balance sheet to probably the lowest levels of leverage, highest levels of debt service coverage and capacity we’ve had as a company I think ever. So A, congratulations; B, all this means is that we’re now going to have to relook at our goals for the year as we had talked about two upgrades, may be we’ll have to talk about three upgrades based on the next call. I’m not sure we’ll get into that, but we’re certainly very happy with S&P’s affirmation today and Fitch’s affirmation a month or two ago. So thank you everyone and look forward to speaking to you on the next call.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a great day.