Marc Holliday - CEO Matthew DiLiberto - CFO Steven Durels - EVP & Director of Leasing and Real Property Andrew Mathias - President

John Kim - BMO Capital Markets Alexander Goldfarb - Sandler O’Neill Jamie Feldman - Bank of America Manny Korchman - Citi Michael Lewis - SunTrust Vikram Malhotra - Morgan Stanley Steve Sakwa - Evercore ISI Craig Mailman - KeyBanc Capital Markets Nick Yulico - UBS Vincent Chao - Deutsche Bank Blaine Heck - Wells Fargo Jed Reagand - Green Street Advisors John Guinee - Stifel

Thank you everybody for joining us, and welcome to SL Green Realty Corp.'s First Quarter 2017 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 also discuss non-GAAP financial measures as defined by 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 first quarter 2017 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 yourself to two questions per person. Thank you. I will now turn the call over to Marc Holliday. Please go ahead, Marc.

Good afternoon, all, and thank you calling in today. It's hard to believe that the book is already closed on the first quarter. More typical let down in activity we often see in the winter months was certainly not appearing this year as we had a very active quarter with solid results. I’ll hit some highlights and convey to you some observations on how our markets are performing, before opening up the phone for questions. On the demand front, our leasing performance was ahead of budget and we remain on track to meet or exceed our leasing goals for the year. We concluded leases for nearly 350,000 square feet of Manhattan office space within the portfolio having a 21% mark-to-market, supporting our December projections of market activity in Midtown. Since the end of the quarter, we signed another 70,000 square feet of deals and our current pipeline is actually expanded from the last quarter to a total of 665,000 square of leases and term sheets currently in negotiation. This pipeline represents over 50 transactions almost entirely made up of deals for space that are 50,000 square feet and under reflecting the highly lease nature of our portfolio. At this point, we are really just filling in pockets of space around the portfolio and renewing our bigger exposures which are scheduled to be happening in the future generally occurring within the next 24 to 34 months so that we keep maintaining our industry-leading average lease terms of 10-years plus and we keep our near-term rollovers for the balance of 2017, 2018 and then into 2019 at very, very low levels relative to the total portfolio size of about 28 million square feet. A particular note, we're generating this leasing activity while still holding the line on tenant concessions. Our average TI for renewal deals was just under $20 per square foot for the quarter and just around $63 per square feet for new deals. This represents levels well below what we incurred throughout all of 2016 which makes our rental achievements for the quarter I believe that much more impressive. We certainly read the reports and we’re aware of certain deals will take a different approach and buy up the rents with outsize TI packages. While these occurrences are infrequent in terms of you know number of deals in the market where we see that occurring, they often do get a lot of scrutiny enough variety and I think that elevates to a level that indicates a trend which really we don't see within our portfolio but our philosophy is to lease at the market and hold the line on tenant concessions and we encourage shareholders to take note of the varying approaches to leasing, none being right or wrong different. On the retail leasing front, certainly our success is we're not limited to office as we carry out our business plan to re-let substantially all of the space vacated by arrow style last year and to do so it rents that will ultimately result in a 30% mark-to-market relative to the old arrow rent. The lease we previously announced with the Korean technology giant, LINE FRIENDS, combined with a just recently announced retail leased to Viacom is certainly further proof of SL Green's ability to outperform the market with respect to retail, as well as office. In fact, we currently only have two spaces available within our high street retail portfolio with limited explorations to 2018 and in those limited instances we believe we will have the opportunity to substantially increase our rents due to the below-market nature of what's rolling. While there are fewer retailers in the market at the moment, we certainly have a different retail story to tell as our high street portfolio continues to be a source of extraordinary earnings growth and profitability and I think this was crystallized in our recent announcement yesterday regarding one or two Green Street where we entered into an agreement to sell a 90% interest in the property and an attractive valuations to the Company due to the expectations of our ability to lease that space and favorable market rates in the near-term. So these balance leasing markets both in the office and retail sides of the equation are supported continued high property valuations and I think this is evidenced on the largest of the sales with the sale 245 Park Avenue which trophy asset that traded hands to a Chinese purchaser with several others including ourselves in pursuit. This transaction shows that private institutional demand in contrast to public read equity markets is still significant with what seems like literally amount of equity capital searching for high quality deals in Manhattan. I’ll sort of wrap this with a discussion of some of our achievements relating to our One Vanderbilt development project in the first quarter and then we’ll take some questions. There's a lot that went on in the first quarter, I’m happy to say that we are really starting to feel the excitement and the enthusiasm of this development project as we complete our excavation, we begun our foundation walls, we will be laying our first deal in June and by the end of this year, we would expect to have five or six floors of steel rising from base level of the project. In furtherance of that, Tishman construction has signed the GMP with us for the entire construction cost of the project and I'm happy to say that that GMP was signed below the low-end of our what we call the goalpost, the low end of our goalpost budget. So we have experienced some savings to date with our 80% procurement and we expect to be able to deliver the other 20% of procurement at or below budget as well and you know essentially a big element of risk in the project has now been assumed by Tishman not just for construction costs but also milestone scheduling all of which I believe will lead us to a very well executed development that will be delivered both on time and under budget. So we were happy to report that and that was done in conjunction within a matter of days of having received from the city of New York our building permit. So it's good to know that we can actually go forward and officially build this project. We've cleared, we took about six or nine months of hurdles with the city to submit all the plans and go through all the requisite, inspections and meet all the different requirements to be eligible for this permit. We now have it so we are completely green light to go in that regard. Obviously we talked about previously in the first quarter of closing of our joint venture for approximately 29% of the equity with the Korean pension fund service and with Hines investors. And that obviously 71% of the project with us but with $525 million equity commitment that we now have in the project combined with the $1.5 billion of construction financing which is locked and loaded, our future equity commitment to the project between now and 2020 is less than $100 million a year and we feel that this project is now extraordinarily well-capitalized and able to be completed so that really all focus at this point can be put on marketing and leasing at this space while the construction group carries out the construction project. And to that end, in furtherance of our marketing efforts, I would say we achieved a sort of a pivotal moment and the deal where we were able to partner with one of the most renowned chefs and restaurant tours in the country perhaps in the world Daniel Boulud. And we are extremely happy to have announced just days ago our partnership with Daniel to construct and operate a 11,000 square-foot restaurant on the second floor of One Vanderbilt, I think really marking a point of, not just fine dining which is certainly will be but really a whole rebirth of great restaurants in this Midtown area. This restaurant I think in particular will be leading the way not only for the local business folks and in residents and tourists but also for tenants of this building this will be an extraordinary amenity in terms of the food offerings that will be made available to tenants in a number of different ways throughout the building. So, all in all great progress in three months happy to report that, and it really I think sets up well for a hope will continue to be very successful 12 to 18 month marketing efforts as we continue to meet with tenants on our path towards being able to sign-up some leases which we know had rolled out. Our expectations for that both last December again January a lot of that happening towards the middle and end of 2018. So, that's the report on One Vanderbilt and the quarter. With that operator why don’t we open up the calls for questions.

[Operator Instructions] Our first question comes from John Kim of BMO Capital Markets.

Thank you. Marc I wanted to ask if you can elaborate on your views on the pricing of 245 Park Avenue, do you think this is a high watermark as far as price per square foot for the size and how will this impact pricing for properties like Worldwide Plaza and 1515 Broadway if at all?

Well, let me first speak about 245. I don’t really see it as a higher watermark, I mean it's about 1240 foot or so depending on I guess, you know, what foot you're using, but let's call it right around 1200, 1250 foot. That I think for trophy asset and quality location is somewhere between average, maybe even below-average. I think the best building in New York today have commanded and I think will continue to command $1500 a square feet and higher, the best building new construction 1800 square feet to 2000 feet. So that to me - if you want to add high watermarks, they'd be looking at 1800, 2000 feet for that's the construction in new - in best locations 1200 a foot, I think is unto itself unremarkable I would look at the yields going in cap rate on that, its reportedly somewhere around between 4.8% and 5% again depending on exactly how you would go about measuring that. And I think when - most importantly the proper for measurement is what kind of expected returns would a investor be able to see a project like that and I think is very consistent with returns where they've been marked for assets sold in '15 and '16 and beginning of '17, I would say unlevered IRRs approaching 6% and levered IRRs is of depending on how much leverage you put on to 8% and 8.5%. So I think you heard on these calls before 6%, 8%. 6% unlevered, 8% levered for trophy assets completely in line and I think completely understandable in an environment where borrowing costs are 4% or less for conventional level of financing. It's an excellent asset and I trust the buyer will be quite happy with this particular purchase over the long haul.

Can you provide an update on 1515 Broadway and what the potential use of proceeds going to be?

Well, an update in terms of that's one of the assets that we currently are in discussions with certain larger investors for potential JV in the property. So I can't update you rather than to say, I would have said you looking for, we're in discussions and I think we are having good discussions. But, that’s the update. In terms of the later expect the use of proceeds, you know, everything is front of our business plan. We saw our goals for the year when we met in December, I presume that we had acquisition goals, we have the potential for increased levels of structured finance. We have a stock repurchase program that's up on the - that’s been allocated and approved and we could always choose to further de-lever although sitting here on an NAV basis below 37% loan-to-value, that, you know, I don't think is necessarily the highest and best use of those proceeds but it is a possible use of proceeds. I would point you towards those and possibly others. Thank you.

Thank you.

Our next question comes from Alexander Goldfarb with Sandler O’Neill.

Good afternoon. Just first, on the New York REIT, the stock position was there something - presumably this was something legacy for many guys were in the hunt for it or was this transaction that was after you guys were pursuing that company?

Alex, this is Matt. So that position we divided in the second half of '16 and then sold out in the first quarter.

Okay, cool. And then, maybe for Steve Durels. In some of the broker commentary you were highlighting - and Marc you talked about it but the increase of concessions out there in the marketplace. How do the tenants look at it, are the tenants swayed by, you know, there is one landlord that’s offering a huge amount of concessions that high base rents versus other one, someone else is more on effective basis. Are the tenants really swayed by that or is it something where we are going to see more of this comment and more appropriate commentary about concessions especially as step on the far west delivers?

I don’t think there is a consistent way that tenants look at, it has a truth. Everybody manages their business from a different point of view. Some are all about capital preservation, others are about occupancy, savings, so it really depends on who you talking to. You could sort of bucket a little bit by industry sometimes but, having said that, it's very hard to partial that. I mean we deals with tenants where they want the turnkey installation and they want to pay a premium rent, it will put the capital into the space. We have other tenants who come to us to say, hi, we are sitting on capital, we are willing to put in the space, we would like to net down our rents. And, you know, from the management of our portfolio we have the flexibility to address each of those desires.

Okay. But, you have never seen - but it sounds like in general, you don’t see tenants unless or like to maybe a small looking for pre-built, it doesn’t sound like you have tenants who are readily swayed because one person is offering significant concessions first and other there, sounds like they look at pretty much the effective?

No, no, I think just the opposite. Some tenants look at it net effective but I think the driver could be one young person looking in and saying, I want to lower my occupancy cost and therefore net out some concessions. Others will look out and say, I want to preserve my capital and I’m going to pay higher rents. So, it really is great tenant specific. Clearly, you have seen some landlords going to the market, and it's sort of a new phenomenon I can tell you, certainly in my career where landlords who generally have a short terms investment horizon or willing to spend extraordinary amount of capital to buy out the rents, because they expect to exit other buildings in the near future. But, that kind of new to the game but, and I think it's part of it is driven by the fact that interest rates remain low.

Okay. I appreciate that. Thank you.

[Operator Instructions] Our next question comes from Jamie Feldman with Bank of America.

Great thank you I guess Steve sticking with you in the leasing market can you just give us a little more color on kind of trends you saw during the quarter I know you still come toward the 1.6 million square foot target, but thinking about how much you did in the first quarter look at your comfort keeping that level?

Well I tell you the big difference is that in some of the buildings that we were challenged with last year even though we had good velocity and buildings we had portions of certain buildings that were challenged. First example being 10 East 53rd Street where we did a lot of leasing but it was on the top half of the building and this year we've been able to knock off a good portion of the base of the building which are, the larger four place relative to a small building, but don’t upgrade lying there and different price point. But last year it was hard pressed to even generate proposals and this year we've already signed two leases we’re about to already sign a third floor we’re trading paper for the balance. So that building is well on a path to be fully backed by third quarter I would say. Tower 46, same story and that went down to the last 145,000 square feet of space over there. We're about ready to sign a full floor lease. We got a lease out in one of our pre-builds, tour activity has picked up partly because I think you know once the building was fully introduced to the marketplace we started to see more tenants come through. Once the first tenant occupies the building and the doors were open for business that generated a level of activity. So I feel very good about that. And the fact that quite frankly we don't have any big blocks of current vacancies to speak of - we've got pieces and parts that were backfilling in us as Marc spoke about. So we’ve got good velocity and – a lot of deals to meet the leasing target because we don't have that big block in the B sort of two or three big monsters that ramped it up for us.

Okay. And can you remind us what are you next big blocks that you’re working on or that you have available now?

Well I’ve got a Tower 46 to start 146,000 square feet remaining. 45 Lexington's got 200,000 square feet and the news building the 220 still has gone a 124,000 square feet. After that the largest I know but those are not contiguous blocks those are just availabilities after that our largest availability in the portfolio drops down to more like 67,000 square feet.

Okay. And then your next big expiration?

Would be 100,000 square feet of small spaces rolling in Graybar so the largest unit of being about 20,000 square feet and another 70,000 square feet of 45.

Okay. All right, thank you.

[Operator Instructions] Our next question comes from Manny Korchman with Citi.

Good afternoon. Steve just while you’re earn on if I'm thinking about tenants renewing and whether they think about renewal timing and also rate. Are they more willing to sign with you now sort of 24 months ahead of expiration are they willing to roll a dice and see how sort of momentum of rental rate and availability goes over the next calls to off to 24 months?

Again it’s not a hard and fast rule with that it’s generally driven by size of requirement so the bigger tenants have a longer time horizon where they'll make a decision earlier to the game the smaller guys went away to the last minute, most tenants I think are influenced by or many tenants are influenced by their point of view as whether they think the economy and the marketplace is headed. But, you’ve seen us over the past several years we’re able to get ahead of our lease roll because we’re actively out there encouraging tenants to do early renewals. And that’s benefited us through our market cycles and as we sit here today with a beneficiary, with a low rollover of both 2017 and 2018. So we can weather wherever storms comes our way.

Great and then on March it’s going impact anyway RT appreciate the timing comes from that but maybe you could provide us some more behind your thought process of both buying and deposition and selling it more recently?

So I think in terms buy into it we underwrite and we pursue New York City assets so I don’t think we’re particularly driven by weather it’s owned in public or private entity I mean you should assume I would think at all times that any large deal New York City-based asset – office asset offerings will have significant interest in and from time-to-time take a division. What was the second part of the question?

Why sell now?

Well when you say sell now I think we sold now I think we sold – a few months ago as I recall but we sold it right after the announced plan of liquidation. So I think just right at or when we plan a liquidation it was either done or in our minds was headed towards absolutely being dumb we decided that was the right context in investment for us so that was it.

Right thanks.

Our next question comes from Michael Lewis with SunTrust.

Thanks not to beat New York REIT to debt but were you initially interested in finding the security or the company – because if it was security why not just buy shares of SL Green which also traded at this now?

Can you ask that Michael I am not sure I understood that?

I am just wondering if you were interested in you sort undervalue at security or if the interest initially was really to own the assets or the company and if it was the security why by that instead of buying your own stuff?

Look I mean I don’t look at it as either/or so that’s I think those are your words. We buy assets routinely I guess you can make a question why do we buy any assets. This was a stock purchase I think we’ve got industry-leading knowledge of New York City assets. We thought it was a prudent investment we made at that time I think it turned out we were right but I think we made money on it. So I'm not sure how 4.5 million to us a share of purchase or whatever you know thereabouts has any bearing or relation to everything or anything else we do in the company. I wouldn't set it up as a either/or scenario, I think we invest lots of money every year sometimes in fiscal year ability to more or some years less. And we’re always looking to try and get the best risk-adjusted returns we can and cover all the ground we possibly can in New York City. And so I think that you’re already saying job well done, so thank you. Anyway, next question.

My second question this largest mezzanine position in your book is that 666 Fifth Avenue and if it has given it’s been in the news quite a bit lately, how do you kind of view your position there?

Yes, I think first of all what is your largest position.

It is not 666.

I mean we don’t disclose - our position specifically – we don’t disclose specifically…

We don’t disclose our position specifically but it is not typically.

Do you have a loan on 666 Fifth or you can’t disclose that either?

No, I mean we never have - I don’t know what you’re saying yes or no because it’s.

We don’t disclose specific mezzanine investment.

I think this supplemental to-date has given just about as robust our disclosures as we can short of actually pinpointing particular locations we do that really for borrowers who otherwise are in a custom to that type of discrete note I disclosure of the capital stacks when they borrow traditionally from banks other forms of lenders. So but I think we put just about everything else in terms of type of loans, exposure, rate, term and everything so it’s all in there, but no you asked about the large exposure it’s not 666.

Okay. The largest one it’s look like the last dollar per square foot is almost $1,200 is there anything to talk about there then?

Yes, it’s an asset with a significant retail components so I think the asset yeah.

Understood okay.

About 1,200 north of book.

It is short of get to may be more of the hardware what you’re asking we are extremely confident that that book is money growth. If that’s the question I am just not sure of the question. But if the question is hey you got a big loan at €1,200 a square foot do you think what do we think of that and others. This portfolio on average we think is about 65%, 70% loan-to-value just like our value. Often our borrowers value, appraised value, market value tend to be a little higher but in our internal values we’re at around 65% to 70% less dollar there is nothing in the portfolio approaching you know anything that would be over 100 or probably not even over 90 or 80. So it's an extremely good collection of New York City collateral almost entirely made up of office and retail, maybe some multifamily and maybe a couple bridge loans. I want to say almost completely devoid if not entirely of luxury condo loans, development or otherwise and its yielding somewhere between 9% and 10% my guess. So this is a program we've been doing for about 20 years extremely profitable you know losses are infrequent almost not for two I would say nonexistent and dating back on this over a decade ago and you know it's still a very good market for us to be originator and syndicator of that paper which we did inside in the first quarter. I want to say over $450 million worth of so of new originations.

Okay. I appreciate it thank you.

Our next question comes from Vikram Malhotra with Morgan Stanley.

Thanks. Just on One Vanderbilt the partnerships that you announced can you give us anymore color on sort of what the economics of this partnership is this sort of template on model let me be used for other retail restaurant deals in the building?

No I think to the contrary because this is not a template to roll floor this is very what I would call special situation I mean we have many restaurants, tenants and leases and some very excellent and high-performing - World number one restaurant just voted this year 11 Madison soon to becoming Four Seasons 280 Park legendary forces with 280 Park it’s very high performing lava over say 25 Madison we have excellent tenants and restaurant tenants and we have ones that are very profitable in the space. But this is, I think you have to look at this much differently this is a part of the fabric of the building because of the interconnectivity of the importance of creating a restaurant that is both a destination a quality of food offering that are going to be consistent with the extraordinary high quality of the building itself and the location itself. And the kind of amenities that it can provide to our tenants of the building which is something that we want to be a part of quite frankly and having the opportunity to partner with the Chef Daniel Boulud to look as extraordinarily honest and real happy to do it and the economics are pretty much straight up. I mean we’re going to all be investors. We’re going to our joint venture consisting of us and our partners they are going to put up the lion share of the capital. But Daniel has a real money invested and I can’t speak the cost or any details yet because this restaurant now will be first design and costed, but we are confident that it will be squarely within our budget because we have a within our three point whatever billion dollar budget. There is - obviously ample dollars that have been allocated for restaurant and amenity space and op deck et cetera. So it will fit squarely within that and the profitability we hope will be in excess of what would have achieved as a leasing results because we've got some really special things that were working on together that we think will be quite successful and quite rewarding in monetary sense. So we’re really looking forward to it. Thanks for the question.

Okay. And then just on the back on the leasing pipeline I am just trying to get a sense versus the last quarter we’ve been tossed back and forth on different ways, verticals in the financial segment in terms of easing. I am just wondering in your own pipeline have you seen that the composition change anyway are financials now a bigger part smaller part and any interesting trend by price point?

There is no double that the pipeline of both leases out and term sheets been negotiated are heavily weighted towards the fire sector right now within our portfolio. No comments about the overall market per se but I think that’s a function of the product that we currently have available are the type of buildings that appeal to that profile tenant you, but within the leases out probably half the square footage that we have leases out right now are with our fire sector tenants and the good third of the leases that we have in term sheet negotiation are in the fire sector as well.

Okay, great. Thank you.

Our next question comes from Steve Sakwa with Evercore ISI.

Thanks, good afternoon. Steve I was just wondering if you could spend a little more time on the leasing and just maybe give us a sense for the types of tenants and their desire to expand are these new deals, are these kind of movements within the city, are these new tenants to Manhattan just trying to get a sense for you know how many are taking expansion space, how many contracting and maybe if there is any kind of flavor around the industries?

Well first remember that with the leasing that we've done to-date and with the leases that we are asked right now there's no monster deals right it has been a lot of mid to small type leases because of – while we stop right now. But generally speaking it certainly not new initiatives moving into the city its tenants that are making decisions to either go into a different quality building or different quality of space. They’re restacking they want to use the space differently a bunch of them have been driven by expansion, but maybe I think it’s different tack on it. One of the things for instance that is – that’s kind of notable right now I think if you look at 280 Park Avenue, 280 Park has been on fire this year. And we had more space we have more deals for that building and all the financial services most of them have an expansion component. And if we signed all the leases that are out right now we’ll be down to 1% vacancy in that building. So that building is put away when you look at tenants over 10 East 53rd Street pretty wide diversity of type of businesses both financial services, luxury goods, fashion tenants are driven by largely by needing to restack and pick up expansion space. And then if you look at Tower 46 I think that’s been a pure track to percent who want upgrade for the quality of the space.

Okay, thanks. That’s it from me.

Our next question comes from Craig Mailman with KeyBanc Capital Markets.

Just on One Vanderbilt I know you’ve kind of recent expectation can’t expect leasing until next year, but one of the financial service tenant that importantly looking at your buildings also now importantly looking at the west side. Just curious if those requirements would be the same or if they’re kind of different and they could take space at both spots?

Well I tell you know what any big tenant of size is coming through our doors there is no doubt about it. We still are you three and a half to four years out on time horizon so that’s our biggest challenge to-date, but you know whether they come our way or they go to the west side it confirms one thing very clearly which is that New York City is start for new construction. And if our building were being delivered sooner than we would have a very active leasing pipeline right now. And I feel very good about that based upon the presentations that we begin with the tenants and feedback that we’re getting from both the brokerage community and the tenants that we sit with.

And on the pricing has that I think you guys need around 150ish average, is that price point and receptive to people I know it's very early in the process but just to explain to that?

We don’t need 150 - 150 you’ll remember we put up on the screen with a 7.1% development yield which is fairly extraordinary for a building of this quality and size. So I would just – lead is funny word I mean that's our expectation, Mike I hope you guys can hear me at the other end otherwise I will be doing a lot of talking and no one been hearing. That’s our expectation of where the market will be with rents at the base of the building, taking some below that and rents above middle of the building, somewhat higher than that. But I thought we put up on the screen around December a deal at a $135 a foot which still yielded something in excess of like 6%, or right at 6%, just in excess of 6% which is still actually quite high. So you our expectation of pricing averages about 150 for the building. We feel very good about that price level based on all the conversations we've had up to this point and where it falls in relative to the other significant and most attractive Midtown properties around town where those leases are being done here. They were many, many deals done at levels of a 125 foot and higher over the past 12 months, it just not the million square foot deal now we are not targeting the big million square foot plus financial user for this building and we said. So and you know that doesn’t mean we’re not going to have those discussions, doesn't mean it couldn't happen, doesn’t mean it couldn't work great, it just means that this is a very you know we’ve spoken from two building that is designed for value users and kind of the base and mid-session of the building and very high end users at the top of the building who are very focused on location, amenities, design, space, infrastructure, and the like. And within that regard I’d say we feel very good about where the rents will come out in $20, $22 or something like that as we talking about rents four or five years from now.

Just to add to add that the presentations that we've been asked to give to tenants have been with users that have been everything from as small as 35,000 square feet to obviously the very large tenants but the majority of them are for a large tenant and this generally in the 150 to 250,000 square foot range. And we think you know likely what will happen is will land one or two tenants like that and the balance of the building. We will be one and two, four tenants at a time.

Great, thank you.

Our next question comes from Nick Yulico with UBS.

Thanks. Summing your total a bit about the West side and how it relates to the rest of Midtown I mean sounds like there are some leases in the works that are going to get related Hudson yards some more even further leased up. Brookfield, sounds like has a good interest and starting to hear stories about tenants actually being turned away from West side looking for space because they can’t be tolerated. And so I’m wondering how much does that are you seeing that helping traditional Midtown yet and what you're trying to lease in One Vanderbilt I mean have some has that activity picked up and that tenants just can't be accommodate over there and increasingly working EBITDA?

Yes, you’re correct. New construction five Manhattan less in particularly they’ve got two deals pending it left one or two tenants on the side line because they would slightly pull the trigger. Does bode well for us maybe but I think they’re going to deliver this space immediately. Our is still off in the time horizon but it tells you one thing and I keep saying and I think it’s an important which is that tenants want new construction and One Vanderbilt being the only new construction to be delivered in Midtown, is the place where tenants are going to come once we're in this - in the sweet spot of timing.

Okay. And then I guess just on the tenant preferred equity investment activity I'm wondering if you could remind us at what at what level you’re comfortable providing financing. If you look it for example 245 Park there looking for it looks like about an 80% overall loan-to-value on their financing I mean can you just remind us kind of where you’re willing to land up to on that and where is sort of pricing in the market right now for that type of mez for those types of investments?

It’s Andrew Nick and we definitely do not have a hard stop anywhere in the capital structure so we are risk adjusted return investors which means we’ll judge the risk of any given position, but what we think is the appropriate return on it and that sort of where we’ll provide capital that goes for equity preferred equity junior mez, senior mez the note, a note mortgage whatever part of the capital structure it is that’s the platform we filled and that’s why we are so successful at generating above market returns. So because we are one of the only guys in New York City if not the only guy in New York City that can do that so we've seen areas of the capital stock compress for sure. There is a very active senior mezzanine paid right now I think you’ve seen us sell pieces of debt we’ve originated into that market. So you’ve seen ourselves senior mezzanine positions on several of the loan origination we’ve done over the last six months. The CMBS market is near its post 2007 lows so AAA spreads they were at 75 to 80 over swaps. So the CMBS market aggressive, the debt markets in general there is a very active senior b.i.d. which creates great market conditions for us to generate above average returns in the junior portion.

Thanks everyone.

Our next question comes from Vincent Chao with Deutsche Bank.

Good afternoon, everyone. All of my questions have already been answered here, but maybe just sticking with a DP portfolio I know there is not a lot that’s going off of the balance of the year but I guess is anything notable in terms of timing of the ex Greece scores are practically radical?

It’s Matt I mean it’s pretty radical I mean there is nothing really to your point there is not much left to expire for the year or to mature for the year, but nothing significant any one giving quarter and t much like you saw in the first quarter are expectations are that the originations that David and his team do at least equal if not exceed whatever mature at any one given course.

Got it okay and then just maybe a cleanup question again maybe on the account side here you mentioned the deconsolidation of position at [indiscernible] Third. Can you just talk about how that’s going to sort impact the reported numbers going forward?

Sure yeah we got hung up in accounting no man’s land when we sold the asset last year about February at which point we had to keep the real estate asset on our books and $135 million debt position that we originated couldn’t be shown and we couldn’t record income on it. The buyer of the asset the current owner refinanced the mortgage in April which means starting with the second quarter we won't have to keep the real estate assets that we actually don’t own any more on our books any longer and we can start to pick up the income on the debt position that was $135 million position and about 5.75% yield. We will start recording income on that here in the second quarter and that is consistent with what our expectations were when we put out guidance as we did expect the current owner to refinance the mortgage this year.

Okay, thanks.

Our next question comes from Blaine Heck with Wells Fargo.

Thanks. Matt sticking with you it’s look like the spend related to Viacom at 1515 Broadway was relatively modest this quarter which was a positive to cash flow. Can you remind us where you are with respect to the total spend there and whether we should expect that to go away this year?

Originally I think when we did a lease we said we would expect to go away like two years ago so it's a bit beyond our control is really money that allocate to Viacom to use at their discretion and they have taken quite a long time to use it. So I want to say we have you call it $50 million or so less to fund them I think our expectations are that happens this year but really no way to tell.

Okay. And that's been a pretty big drag on cash flow the last couple of years or so and I guess once you guys have done sending on that you'll be seeing higher cash flows so do you think that’s going to have any direct affect on your thoughts on the dividend?

Dividends get evaluated at the end of every year as we look forward to the next. Our expectations are we payout a 100% of taxable income we’ll continue to do so whether I don’t think Viacom contrary to your point I don’t think has been necessarily a big drag on cash flow. Every year we have leasing capital we need to spend that's just one lease that had high capital spend for the last few years. But with income increasing cash flow increasing you would expect a dividend to increase.

Fair enough, thanks.

Yes I think we have time for two more questions please.

Our next question comes from Jed Reagand with Green Street Advisors.

Good afternoon, guys. You mentioned that GMP with Tishman and how that was set at the low end of the budget range. Just curious if that crystallizes savings versus the kind of $3.2 billion total budget you guys have laid out for One Vanderbilt if so what that new budget is?

I think we’ll revisit that a little later Jed I mean I did say in December and also to reiterate now our goal unlike I think of lot of other people's goals when we set out on a project like this is, God I hope we need budget. We want to realize hopefully significant savings to this budget that we presented to you in the past, but there’s still a long way to go, there is still a lot of unknowns and the GMP is a giant step forward in terms of realizing upon, you know not just the savings at the time of GMP, but also with respect to all the contingency we have in this deal to the extent unused by the end would represent additional areas of significant savings. So I think it's too early for us to start to quantify that and as we go forward we'll have an opportunity to do that but it does feel good sitting in the position we are now not only to be able to identify those areas of savings right at this early stage before it pieces still and put into the ground just based on purchases we’ve contracted for but also the milestone dates look like we pulled the project forward so far about a month. And whether a month sounds like a lot to you or it doesn’t sound like a lot to you, in project of this size 30-days forward from what was expected to be in August day to go vertical now in July big, big difference. So it's early and we hope to have continued success as we go forward with the construction but so far things look pretty good.

Okay, that's helpful. And then have you guys seen any kind of noticeable changes in values for the street retail market, Manhattan, I guess where would you ballpark cap rates for kind of stabilized retail at this point and investor retail in the city?

I think the first part of the question no I think the values they’re still a lot of demand for retail properties no better indication and our trade on one or two green we announced today. And then in terms of stabilized cap rates we always looked between 4 and 4.25 on a stabilized cap rate basis. Obviously most of our street level retail as part of the prime portfolio has rents that are significantly below market, so we’ve used lower cap rates in terms of expressing the value of those assets. But when they're sort of stabilized and marked at current market 4 and 4.25 cap I think is a good indicator.

Okay. Could you guys see yourselves being net investors or net sellers in that business over the next year or two?

I think it totally depends on the opportunities. We’re watching the market carefully. There is some interesting situations in terms of properties on the market and tenancy situation. So we'll continue to monitor that is just be totally based on opportunity but certainly not an area of investment we would shy away from.

Okay. Thank you.

Our next question comes from John Guinee with Stifel.

Great, thank you. Matt real quick, depreciable real estate reserve charge of 56 million, can you explain that if you haven’t already. And then second changing over a little bit multi-family, any place on the island on Manhattan where landlords have pricing power in terms of the rent residential and then do you have an opinion on the pricing or the valuation of the condominium market.

Where is the net expected rent of John, common, we're prepared for the first time.

You know there were 24 of those already I think.

I think the first one is for me right John, so depreciable real estate reserves when you put assets out for sale like we have, exactly likely growth under contract in Sanford Towers which is out being marketed, you need to take the potential losses on those ahead of actually closing on them.

Okay. So suburban market, okay.

You got it.

On the multi-family question, I think we're seeing good lease up statistic continually to skies, so when I would and say on the far west side of 42nd street, we continue to see good absorption in that building and that's increasing net effective rents so I guess it say there is pricing power there although we are leasing the top of that building as we go up. So the rents per foot for the higher apartments and I think Manhattan in general multi-family is a relatively balanced market. But I think for new product with great amenities like building like sky, there is pricing power. Residential condominiums I don’t think anybody in this room has any view of.

Great. Thank you.

That would do it for today. Thank you everyone and look forward to speaking again sometime this summer.

Ladies and gentlemen this concludes today's presentation. You may now disconnect and have a wonderful day.