I mean those kinds of assets rode through this period of time with chance. But there’s — there’s a lot of other buildings out there that need to be attended to. And I think you’re going to see the liquidity break. And the first step are these capital pools forming and then the institutions will follow right behind, in my opinion.
Anthony Paolone: Okay. And then just second one, you may have given this out and maybe I missed it, but on the debt fund, how much is going to be SL Green’s I guess, coinvestment?
Marc Holliday: Well, we know, but I think that’s TBD in terms of announcement. So I would say standby, I guess, it’s not a question. I mean we — we — as you know, we tend to like to have real skin in the game. I mean, we’re investors as much as where managers have monies for others. So we’ll have real skin in this game. But it has to fit within our overall liquidity program for the year. And we feel very good about the levels we’re going out with will show our confidence and belief in this program.
Operator: Our next question is going to come from the line of Vikram Malhotra with Mizuho.
Vikram Malhotra: I just wanted to — maybe Steve Durels or even Matt, just you talked a lot about market improvement, the job outlook picture looking better and return to work and all that. I’m just trying to square that with — if you look at the leasing pipeline, that you mentioned plus the expiration in factor in renewal rates. I’m just trying to square all that with how you — your latest thoughts on occupancy and then tying that occupancy back, Matt, perhaps to ultimate at cash flow generation. It just seems like there could be a big lag between all the lease-up, the known move-outs, et cetera, before you actually see a meaningful inflection in underlying FAD generation.
Matthew DiLiberto: Yes. The — obviously, sitting here in January, having given guidance about 7 weeks ago, we will say we’re on plan. The pipeline is actually probably a little bigger. As Steve said, than it was back at the investor conference, even after signing 100,000 feet in January, 100,000 feet back in December. The pipeline still grow. So it puts us and based on what’s in the pipeline, puts us squarely on our targets for occupancy increase, which was going from 90% at the end of the year with the goal of 91.6% by the end of ’24, with a goal of 2 million square feet of leasing this is a great start towards those goals. As to how that translates back through to Fed, yes, of course, there’s a lag, particularly when you’re doing new leasing, and you’ve seen that over the last couple of years, it lags when occupancy is going down, the roll down takes time to roll through.
And the same thing will happen on the roll up. So do we see the biggest benefit of going from 90% to 91.6% in the ’24 Fed. No, it will roll through in the coming years. But we are on the right trajectory and consistent with the plan we laid out in December.
Vikram Malhotra: Got it. Okay. And then just — sorry to go back to I know you’ve had a lot of questions on 2 Herald, but just 2 clarifications. One, can you give us any color or maybe even just based on present like how should we think about the ground lease reset. I believe it’s 2027 and then related to that, you mentioned there are a variety of strategies that you have in mind. But perhaps you can give us some thought about time line because Today, if you look at a lot of office buildings, just where debt is where values are, you would argue like equity value has been diminished tremendously. And you need to sort of take perhaps a long enough time frame to think about value creation. And given this building, I think, is what 20% or 30% leaves, it seems like there’s a very heavy lift. So I’m just trying to get us more thought around how you’re thinking about, A, the ground lease and then B value creation.
Marc Holliday: Well, the value creation question is I tried to address earlier, I mean step 1 is come up with our plan. I can’t — that’s as really as far as I can go with that at this moment is this is an asset we’ve probably been involved with redeveloped and maximize assets like this for the last 27 years. And I think we’ve done 124 million square feet of investment almost all of which is exclusively Midtown, much of which is like 2 Herald. So this doesn’t present in my opinion, the unique challenges you might be referring to. We look at this as opportunity. I love the flexibility, and I like the location and we’ll come up with a plan. The comment about it’s going to take a very long time Yes, I don’t know about that. I mean, I heard a lot of that on 625 Madison, and that turned into a very excellent resolution for this company in a very quick period of time.
So I wouldn’t I wouldn’t subscribe to the notion that it’s going to take a long period or a short period of time, we’re going to just manage it the way we manage the other 30 million square feet we’re involved with and I have no particular concern about anything unique to this asset, I think it’s a very good asset. It’s vacant because we had a tenant go out. I mean it’s no miss. I think prior to the tenant going out, it was like very well leased. So buildings sometimes go from well leased to having some vacancy when a tenant rolls out, but then you resolve that vacancy, and I mentioned we can do it in a number of different ways, and we’re going to look to optimize this. That’s that. On the ground lease, there’s a reset. I don’t know if there’s much to talk about there because it’s early, but there is a reset.
I don’t know anyone have the details on that recent?
Unidentified Company Representative: ’27 is correct. I would just say we’re going to have a well aligned fee owner here. They want to see us maximize and create value. I’m sure you won’t be surprised to hear, we’re in active negotiations with them to give us the opportunity to maximize the value. So we’re working through that, and it will be part of the updates as we get through the year.
Vikram Malhotra: No, that was helpful. And my comment, I guess, just I was wondering if there was something more specific because….
Marc Holliday: No, not at the moment. I would say stay tuned. I would stay tuned and in June or on the next call, actually, it won’t be next call. I would say, give us 6 months and we may have more to come on a business plan, but we don’t have it yet. Just [indiscernible].
Vikram Malhotra: I was just surprised like in general for the lender like there was $180 million loan. And like the way you described it, it sounded like there was a lot of optionality. So I was just surprised that the lender was okay with 7 and that’s why I thought there was something more specific to this asset which was my comment, yes.
Marc Holliday: I understand. Thank you, and we’ll definitely readdress it later this year.
Operator: Our next question comes from the line of [indiscernible] with Bank of America.
Unidentified Analyst: Impressive outcome on the 717 First Avenue sale, are you seeing third-party demand at these levels for high street retail beyond the user buyers we’ve seen in the deals that you’ve mentioned in your opening remarks.
Marc Holliday: Yes. No, that’s an excellent question. We’ve got Brett Herschenfeld, you know, heads up all of our retail and strategic. Why don’t you — so the question is putting user demand aside, how is the sort of the high-end rental market would look.
