So we need to be prudent about how much we do at a given time. And clearly, we’ve done a lot in size.
Blaine Heck: That’s very helpful, Christina. And then probably for Tom, I guess, can you talk a little bit more about demand for your prebuilt suites. Clearly, some of the largest operators of co-working and flexible space are having trouble and Tony has been vocal about leasing to them in the past. But are you guys seeing this as an opportunity to expand that offering? And how has that demand kind of trended for that type of kind of turnkey space?
Tom Durels: Well, we’ve always had consistent demand and good leasing activity for our prebuilt suites. Fortunately for us, we have about a little over 200,000 square feet of vacant prebuilts, which where we’ve already incurred the costs and don’t have to incur that cost on a go forward, basically lease those spaces and they’re ready to go, ready for immediate move in. The — really, I can’t say that we see a big trend of movement from tenants that come out of co-working type spaces into our prebuilts. I think that generally, those that want their own office space, their own separate environment have opted to lease with someone like us in built space. And a lot of those prebuilt tenants that we lease to have gone on to grow within our portfolio to subsequently lease full floors with us.
And look, a lot of those tenants also want the direct relationship with the landlord and don’t really want to be in, call it, a shared or co-working environment. But we signed 14 leases for prebuilts this quarter. It’s pretty consistent with our pace over the last couple of years.
Anthony Malkin: And just not to overstate the obvious, if there were a great deal of demand within those co-working spaces, those companies would not go out of business. So it’s a question of what those tenants have been, what those users have been and are they suitable for us in the first place.
Operator: Our next questions come from the line of Dylan Burzinski with Green Street.
Dylan Burzinski: Just sort of going back to capital allocation, and I appreciate the comments on how you guys evaluate underwriting new acquisition opportunities versus repurchasing your stock. But I guess just when you guys are underwriting new acquisitions, just from a property type perspective, are you guys acquiring a larger rate of return when you guys are underwriting office opportunities? Or I guess just can you give us a sense for how you guys think about that internally when evaluating opportunities across property types?
Christina Chiu: Yes. So our interest continues to be, as we’ve mentioned, New York City office, retail and multifamily. The return requirements have gone up across the board, and we’ve discussed a bit on how we underwrite and think about office. And it’s hugely predicated on basis and making sure we get high-quality space that we can do our work on. Within our interest in multifamily, I think we do have a recognition that, that asset class is being valued differently, even access to financing is different. So that will come into consideration as we look at it. That asset class has access to agency financing, you are able to buy down on the rate and that cost of debt capital will impact the returns that buyers will expect. And it’s also a very healthy asset class with high occupancy levels and continued rental strength.
So we have to keep that in mind as we look at opportunities. That said, we’ll still look at individual opportunities that come along and make sure that, that asset is additive to our portfolio, and there is upside to our entire portfolio and shareholder base.
Dylan Burzinski: Appreciate that commentary. And then I guess just one on occupancy. I think you ended the quarter at 87% occupancy. You didn’t change guidance, so you guys are ending the quarter at the high end. Just curious sort of the moving pieces here as you look towards Q4.
Anthony Malkin: Yes. Well, first, we’re confident that we’ll achieve our guidance that’s 85%, 87% for the portfolio and about 100 basis points higher for Manhattan office. As I stated earlier, we do expect about 136,000 square feet of tenants to vacate in the fourth quarter, and that will be partially offset by sign lease that commenced in the fourth quarter and anything new that we signed that will also commence in the fourth quarter. In 2024, as I commented, I feel really good about our ability to increase both occupancy and leased percentage based upon the modest amount of known move-outs. We’ve proactively managed our rent roll. We have built space. We have modernized buildings where we have robust amenities. We’re adding to those amenities that open up next year. So I think we’re very well positioned to improve upon our performance and our percentages for next year.
Operator: Thank you. We will now turn the call back over to Tony Malkin, Chairman, President and CEO, for closing remarks.
Anthony Malkin: Thank you very much, everybody. A few final notes. This month, we celebrated ESRT’s first decade as a public company listed on the New York Stock Exchange. Since our IPO on October 2013, we really have not followed the crowd as we have made and executed our plans to be the New York City focused REIT with 4 diverse verticals; office, the iconic Empire State Building Observatory, retail and multifamily and a best-in-class balance sheet. Our leadership and sustainability in our carbon-neutral commercial real estate portfolio continues to put points on the board with leasing and the development of practices to inform policy. The biggest call-out goes to our dedicated employees, directors, tenants, stakeholders and partners who drive our success and position ESRT for future growth.
Thank you all for your participation in today’s call. We look forward to the chance to meet with many of you at non-deal roadshows, conferences and property tours in the months ahead. Until then, thank you for your interest in onward and upward.
Operator: Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.
