Michael Franco: Yeah. Yeah, I would say, by the end of the year. I mean, again, it depends on timing of certain things. And I don’t know that I can say it with precision this will happen by the fourth quarter as opposed to January or whatnot. But we think, rough numbers, it will end up there. So — but we’ll see. It’s still — we’re still in the first half of the year and we just have to see how it plays out. But I think, like, occupancy, it’s down, now it’s going to trend down a little more, given, for example, the Meta move-out in June, but we have some other things in the works that we can pick that up. So we’ll see where it comes out in total. I think as we look at trend line, it will, we think, increase meaningfully over time.
We are going to bring PENN 2 into the numbers next year. Depending on where we are from a leasing standpoint there, that number could bring the average down, but obviously, that’s sort of an extraneous event that’s being added to the denominator. So we’ll evaluate it as we get closer.
Operator: Thank you. The next question is a follow-up from Michael Lewis with Truist. Please go ahead.
Michael Lewis: Yeah, thanks. I just have one more. You sold two condo units at 220 Central Park South for about $32 million. Are the remaining four units similar in value, roughly $16 million a unit? I don’t know if you have — maybe you have a penthouse left or you have smaller units. I was just wondering about that.
Steven Roth: No, the remaining four units are smaller, lower, view impaired, so they’re much less valuable.
Michael Lewis: Okay. Thank you.
Steven Roth: Basically, this — that job is basically sold out.
Michael Lewis: Perfect. Thanks.
Operator: Thank you. The next question is a follow-up from Alexander Goldfarb with Piper Sandler. Please go ahead.
Alexander Goldfarb: Thank you. Steve, with the new office to conversion incentives, does this open a door for you to contemplate either assets from the existing portfolio or perhaps assets that are — that you’ve always eyed as would be great for conversion and seem to maybe have a motivated owner who would be willing? Just seems like the incentive package that they passed is pretty lucrative for office landlords to convert.
Steven Roth: Alex, good morning again. Yes — the answer is yes, of course, though, there’s a couple of things. First of all, the building that you’re going to be converting, the target building, has to price somewhere in the neighborhood of some $200 a foot or sub-$200 a foot. So these are really distressed office buildings. They’re not — they’re distressed office buildings. Let me leave it at that. So the pricing and the economics really don’t allow you to pay more, maybe even a pinch more, but probably not. So that’s step number one. Step number two is that, obviously, if those are the economics and those are the target, the target building, these are the B and C buildings in the office market. So when those buildings are taken out of the conventional office market, they really don’t help the prime A market, because the tenants that we deal with who are interested in A space don’t really ever look at that.
So the answer is that we will be able to, as an industry, convert a decent number of buildings. It will make a dent — not a big dent, but a dent in the residential market and the demand for residential space. But it will have a marginal effect on the conventional Class A office market. But clearly, we’re looking at that. It’s an interesting activity and it’s a — it’s something that we will look at. I’m not 100% sure that the returns on capital are going to be what some people think they are, but anyway, we are looking at it pretty aggressively.
Operator: Thank you very much. There are no further questions at this time.
Steven Roth: Okay. Thank you all very much. We appreciate your joining us this morning and we will be anxious to — we always learn from these calls and so, thank you for that. We are excited about the next the quarter and the future, and we’ll see you at the next earnings call. Thank you.
Operator: Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. You may now disconnect your lines.
