Tom Durels: Sure, Camille. For — of course, this quarter for in our Manhattan office, we achieved a 5% positive spread. We were — had negative spreads in the Greater New York Metropolitan office portfolio this past quarter. It’s all going to depend. Going forward, the leases spreads are going to depend on the mix of spaces that we lease and what types of spaces they are and what the prior fully escalator rents are. If you look at our in-place rents for you asked specifically about Greater New York Metropolitan office, we’re probably just going to see flat to modest negative spreads in the Greater New York Metropolitan portfolio. As we go forward in leasing up our vacant space in Manhattan, given the prior escalated rent was around $53 per square foot and we’re doing deals above $60 square foot and where we can move the needle more significantly, I would expect positive spreads on new leasing in Manhattan.
And then on retail, we really don’t have a tremendous amount of retail spaces rolling over the next several years. But if there, it’s — if it’s flat to markdown, it’s going to be more than offset by the value of the lease up of vacant space. That could be in the range of $5 million, $6 million. Well offset any modest negative spreads that we might see on leases expiring.
Camille Bonnel: Okay. And on the point around higher operating expenses due to utilization, does how much of the anticipated impact to your same-store NOI outlook will be front-end weighted, given the tougher comps in the second half of 2022?
Tom Durels: You mean how much will be front-end in terms of increased operating expenses? I would expect that we’re going to see a gradual increase in operating expenses due to utilization. Some of the increased costs that we’re — that we’ll see next year will be things like union rate increases. So that would be spread over the year. And then we’ve got some one-time expenses that will be a bit lumpy. So basically, it’s a bit of a mix. You’ll see some of our expenses that will gradually rise due to utilization and others will be a bit lumpy.
Camille Bonnel: Okay. And final question, can you please comment on what’s been driving the lower leasing and leasing commissions and tenant improvement costs throughout the year? And if Q4 is a good level of where these costs will be in 2023?
Tom Durels: Well, our leasing costs increase this quarter compared to last quarter, the costs, as you see historically vary by quarter and they really depend on the length of term, the space type, whether it’s white box, a pre-built, a first-generation and second-generation space. And you’re going to see the lease costs per year of term as a percentage of initial rent, this quarter was really in line with the past four-year range. It’s kind of in that 15% to 19% range this quarter on an aggregate basis or dollars per square foot, we were around $54 per square foot and that’s well below our last five quarters that average about $79 per square foot. But we really think of leasing cost as and we focus on net effective rent and what we saw in 2022 is our average weighted net effective rent increased on a year-over-year basis by about 5%. So we think that that’s a very positive stat and that’s what we keep our eye on going forward.
