ALEXANDERS INC Q1 FY2023 earnings call

• Dividend: Paused dividends in Q2 and Q3, will reassess Q4 dividend. Authorized a $200 million share buyback program. - Office Performance: Business performing well, CEOs requiring employees back to office, with New York City leading the way. Ongoing projects in the PENN District total over 5 million square feet. - Leasing: Strong leasing activity with 22 leases totaling 777,000 square feet in Q1, including a full building deal with Citadel at 350 Park Avenue and 82,000 square feet at PENN1. PENN1 rents up to high $90s, PENN2 nearing completion with good tour activity. - Balance Sheet: $2.2 billion of liquidity including $1.3 billion cash and treasury bills, over $8 billion markdown value of debt-free unencumbered assets, limited recourse debt with well-laddered maturities.

Company-wide same-store cash NOI for the first quarter increased by 1.5% over the prior year's first quarter. Leasing activity was led by strong demand from traditional industries like financial services and law firms, with 7.4 million square feet leased in the first quarter, 40% of which was from financial firms. Starting rents at PENN1 were in the high $90s and reaching $100 per square foot in tower floors.

• Outlook unchanged since last quarter. Paused dividends in Q2 and Q3, will reassess Q4 dividend based on taxable income. Authorized a $200 million share buyback program, to be funded from asset sales or retained dividend cash.

• Market Challenges: Interest rate volatility, recessionary concerns, tough market conditions for selling assets. - Office Market Risks: Reluctance of certain demographics to return to office, large requirement deal flow lagging, high concessions in leasing.

Q: Steve Sakwa asks if 'going on offense' means just buybacks or could include buying buildings.

A: Steven Roth states buybacks are the best value, focusing on stock buyback over buying buildings.

Q: Alexander Goldfarb asks about dividend suspension and buybacks vs debt paydown.

A: Michael Franco states the $0.55 decrease in FFO included swap roll-offs, and Steven Roth emphasizes balance sheet strength and consideration of debt management vs buybacks.

Q: Michael Griffin asks about confidence in stock being cheap and leasing updates.

A: Michael Franco and Glen Weiss discuss stock valuation being heavily discounted and leasing activity in various properties including 1290 and 770 Broadway.

Q: John Kim asks about leasing pipeline and share count.

A: Glen Weiss and Michael Franco discuss leasing pipeline consistency and share count impact from buybacks and dividends.

Q: Camille Bonnel asks about financing market and showroom to office conversion.

A: Michael Franco and Glen Weiss discuss financing market challenges and progress in converting showroom space to office in Chicago.

Q: Unidentified Analyst asks about asset sales potential.

A: Michael Franco states it's a difficult market but they aim to sell targeted assets.

Q: Daniel Ismail asks about office utilization and tenant space build-out.

A: Glen Weiss discusses tenant space build-out trends towards collaborative environments and positive first impressions in properties.

Q: Derek Johnston asks about Vornado emerging stronger from office market.

A: Steven Roth states time is their friend as employers want employees back and cities are full.

Q: Vikram Malhotra asks about taxable income and asset sales.

A: Steven Roth states they left room for asset sales in dividend projection.

Q: Anthony Paolone asks about PENN District plans and Class A units.

A: Steve Roth discusses PENN District projects and Class A units redemption price.

Q: Nick Yulico asks about retail JV and refinancing.

A: Michael Franco and Steven Roth discuss retail JV resolutions and refinancing discussions.

Q: Ronald Kamdem asks about OpEx and refinancing.

A: Michael Franco discusses OpEx seasonality and refinancing discussions for properties like 280 Park.

Q: Alexander Goldfarb asks about 555 and San Francisco leasing.

A: Michael Franco and Glen Weiss discuss 555 loan structure and strong leasing in San Francisco properties.