Peter Abramowitz: Got it. So I guess to the extent that if you’re expecting say an acceleration on the NOI side, is that mainly just improving occupancy?
Matthew DiLiberto : Yes, of course. We leased a 1.8 million square feet last year. We’re going to lease 2 million square feet this year. Occupancy is increasing. Rents are increasing that translates into NOI increasing.
Peter Abramowitz: That’s all for me. Thanks.
Operator: Thank you. One moment for our next question. Our next question comes from Steve Sakwa with Evercore ISI. Your line is now open.
Stephen Sakwa: Yeah, great. Thanks. Matt, I was going to ask about the earnings miss in the quarter. I’m just kidding.
Matthew DiLiberto : You’re banned, Steve. That’s it.
Stephen Sakwa: Okay. Marc, I know you don’t like to talk about kind of partners. But I guess the transaction at 280, your ability with Vornado to basically pay off the mezz portion of that at $0.50 on the $1 was just a bit eye opening. And I know you can’t speak for your partner specifically but was that a situation where maybe their cost basis wasn’t at full par and that gave them some flexibility to do something with you at a lower rate because you know if there was viewed to have a lot of equity value in the building, I know if you were sitting in their shoes, you might not sell it at $0.50 on the dollar. So I think we’re just trying to get our arms around — it’s a great execution on your part, how that sort of maybe played out.
Marc Holliday: I got to tell you I think in times like this trying to overthink and overread people’s motives is dangerous. This is a foreign lender who has their own set of mandates, issues, objectives, things that we don’t know and can’t get into and don’t really want to get into. This is not at all unusual. There are lenders that have mandates to kind of reduce real estate as a percent of assets, period. And it’s not a wrong or a right objective. It’s an objective and it’s not an unusual objective. And in those cases, there can be negotiations around what is — and isn’t the right price and value for debt instrument at a moment in time that looks to want to be liquefied and monetized in an environment that I said earlier is still capital constrained but getting better.
And then there are those that will restructure and term out and hang in there and have different objectives. So to say that we all know how to calculate, how much equity is in a deal, you run the numbers. The numbers derive a current and a stabilized value. And that’s how we’ve always done it. And rates vary and values vary, but I don’t think, it’s a black box. And we believe there’s equity in the deal. I think the lender probably believed there was certainly stabilized future equity in the deal. But I think that’s disconnected from what any party decides to do at a moment in time here in April or — March or April of 2024. You do what’s in your best interest at the moment. And to take a moment like that and try and extrapolate as to what this building is going to be worth, when does the debt mature, Harry?
Harrison Sitomer: [September ‘28] (ph).
Marc Holliday : September ‘28. So we’ll revisit this issue close to [‘29] (ph). And we’ll have the conversation then about, you know, the equity in the deal in ‘29. I think this building, is going to ultimately respond well to this market. I mean, we’re working hard to lease it up. I think we did the Antares lease, right? 76,000 square feet. We’re in the props on that. Steve Sakwa, come [on maybe] (ph). And we’ve got more pending. So us and Vornado are in it for the duration. The duration is defined, I guess, for the next 4.5 years and every party did what was in their best interest it’s not a war it’s not a fight, it’s not a gamesmanship thing I think it was — this was a sensible business deal everybody decided where they wanted to be and on we go.
Stephen Sakwa: Okay, great. Thanks for the color. Maybe Matt, on the dividend, just how are you guys thinking about the dividend if you’ve got these investment opportunities in front of you? Just remind us kind of where the dividend is in relation to taxable net income and, might that dividend be served better either through debt reduction or through kind of the investments that you made, say, at 10 East 53rd?
Matthew DiLiberto : Yeah, the dividend was set based on taxable income which 100% of taxable income that’s the basis for it and we’ve been monitoring that closely because we’ve been generating incremental gains these DPO gains or taxable income as well. But we have, strategies we can employ and, try to maintain that taxable income trajectory that we’ve been on to keep the $3. So, you know, very comfortable with our $3, as we were when we set out, even more so now. And you know, we’ll look at the dividend again at the end of the year, but we’ve said over and over again how important the dividend is to us.
Stephen Sakwa: Great. Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from Caitlin Burrows with Goldman Sachs. Your line is now open.
Caitlin Burrows: Hi. Good afternoon, everyone. Like you mentioned earlier, 4Q was an active leasing quarter. 1Q was [2] (ph) — we’ve heard from some industrial companies that — we’ve heard from some industrial reach that companies are being hesitant about signing big leases. So I was just wondering, are you seeing any of this hesitancy related to macro uncertainty play out in your pipeline, or does it just seem like a different story?
Steven Durels : No, not at all. I mean, there’s no doubt that if you looked at the stats for overall market stats for the first quarter, big tenants, there was a dearth of big leases signed. But if you looked, you know, scratch the surface on the pipeline and deals pending not only within our portfolio, but if you looked on tenants in the market list, active tenant searches that are out there, there’s some very, very large requirements. I mean, I don’t recall a moment in time where I had the same number of large leases out or term sheets out with large tenants that we do today. So I think what you saw in the first quarter was simply a quirk in timing. There were a lot of big deals signed in the fourth quarter and I think you’re going to see a bunch of big leases signed second quarter and through the balance of this year.
