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DATE

Tuesday, May 5, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Steven Roth
  • President and Chief Financial Officer — Michael Franco
  • EVP, Head of Leasing — Glen Weiss
  • Chief Operating Officer and Treasurer — Thomas Sanelli

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TAKEAWAYS

  • Comparable FFO per share -- $0.52, down from $0.63 primarily due to the reversal of previously accrued N1 ground rent expense and higher net interest expense, partially offset by FFO growth from the NYU master lease and PENN 1 and PENN 2 income gains.
  • Full-year comparable FFO outlook -- Now expected to be slightly higher than 2025, with quarterly ramp driven by new GAAP rents, anticipated lower interest expense post-June 2026 bond repayment, and some seasonality.
  • PENN 1 and PENN 2 lease-up -- Management expects “significant earnings growth in 2027 as the positive impact from PENN 1 and PENN 2 lease-up takes effect” and from the Park Avenue Plaza acquisition.
  • Leasing volume -- 426,000 square feet leased in total for the quarter, with 311,000 square feet in New York; average Manhattan starting rents were $103 per square foot, positive 11.7% GAAP mark-to-market, positive 9.7% cash, and a nine-year average lease term.
  • SNO pipeline -- $200 million of signed-not-commenced leases, with “probably two-thirds Penn” and 10%-12% expected to commence per quarter over the next couple of years; management suggests $0.40 per share to the bottom line from this pipeline, beginning in Q1.
  • Park Avenue Plaza acquisition -- 49% interest in a 1.2 million square foot asset acquired for $950 per square foot (65%-70% discount to replacement cost), with a sub-3% fixed-rate loan maturing 2031; building is 99% occupied, leases average 11 years at rents 40%-50% below market, and acquisition expected to be approximately $0.10 GAAP accretive on a full-year basis (but not for all of 2026).
  • 350 Park Avenue development update -- Ken Griffin exercised the joint venture option for a 1.9 million square foot Citadel HQ tower with Citadel as anchor tenant; Alexander’s (ALX +1.08%) holds a 36% interest, with management stating “It is a good bet that we will go all in.” pending a mid-summer decision tied to Citadel’s commitment to occupy at least 850,000 square feet.
  • Share repurchase activity -- 7 million common shares repurchased at an average price of $25.80 per share, totaling $180 million under the existing $200 million buyback program; board authorized an additional $300 million repurchase.
  • Liquidity position -- $2.6 billion total liquidity, composed of $1.2 billion cash and $1.4 billion undrawn credit line; no significant financing requirements for 18 months, with some loans to address over the next two to three years.
  • Occupancy direction -- Executives target returning to mid- to high-90% occupancy over several years, historically achieved, and attribute a 70-basis-point occupancy rise partly to taking 350 Park out of service.
  • Office leasing market conditions -- Management highlights “The landlord's market we have been long predicting is very much here,” citing a significant supply-demand imbalance in Class A assets and rising rents, with limited new supply for the foreseeable future.
  • Verizon lease status at PENN 2 -- Verizon’s decision not to build out its space allowed GAAP revenue recognition to start this quarter, supported by a public parent guarantee; the space (200,000 square feet) is being actively marketed with favorable credit standing.

SUMMARY

Alexander’s (ALX +1.08%) reported a sequential decrease in comparable FFO per share, driven by reversals and higher interest expenses, but management maintains guidance for improving full-year results and substantial earnings growth in 2027 as leasing at PENN 1, PENN 2, and Park Avenue Plaza ramp up. The company completed a notable Park Avenue Plaza acquisition at considerable discount to replacement cost, backed by a long-term, below-market rent tenant roster and highly attractive in-place debt, bolstering the asset base. A decision on participating in the 350 Park Avenue joint venture is expected by mid-summer, contingent on Citadel finalizing its anchor tenancy. Shareholder capital return accelerated via board approval of a new $300 million buyback. The ongoing $200 million of signed-not-commenced leases, with primary concentration in the Penn District, are expected to contribute incrementally to income in coming quarters.

  • Chairman Roth said, “Alexander's, Inc. will pay $560 million in real estate taxes this year,” indicating major fiscal contribution within the New York City market.
  • Blue-chip tenant strength and 11-year weighted average lease terms were emphasized for Park Avenue Plaza, with management noting rents are “at least $50 a foot below market.”
  • Management confirmed no major financing needs are anticipated before late 2027, as maturities for 2026 and 2027 have largely been addressed.
  • Roth stated, “there are no sacred cows,” clarifying all assets could be considered for sale, with decisions dependent solely on pricing and business strategy.
  • Verizon’s lease at PENN 2 will be accounted for throughout 2026 due to GAAP rules following the sublease decision, with ongoing marketing of the space under a public parent guarantee.
  • Manhattan leasing volume reached nearly 12 million square feet, the highest for any first quarter since 2014; management attributes momentum to tightening availability and lack of new supply in target submarkets.

INDUSTRY GLOSSARY

  • FFO (Funds from Operations): A key REIT performance measure representing net income plus real estate depreciation and amortization, excluding gains/losses from property sales.
  • SNO (Signed-Not-Commenced Leases): Lease agreements executed but for which tenants have not yet taken occupancy or started rent payments; considered contractual future revenue.
  • Mark-to-Market: The difference between current market rents and existing in-place contractual rents, indicating potential for future rent growth upon lease renewal or re-leasing.

Full Conference Call Transcript

On the call today from management for our opening remarks are Steven Roth, Chairman and Chief Executive Officer, and Michael Franco, President and Chief Financial Officer. Our senior team is also present and available for questions. I will now turn the call over to Steven Roth.

Steven Roth: Thank you, Steve, and good morning, everyone. Business at Alexander's, Inc. continues to be excellent, and it is getting better and better. We are riding the wave of a strengthening, long-lasting landlord's market. And New York is by far and away the strongest real estate market in the country. Michael will get into the details shortly. But today, I have different fish to fry, and I will ask the first question. Question. What do you make of the spat between Mayor Mandami and Ken Griffin, and how will it affect your 350 Park Avenue development? Answer. Let me begin by saying that I do not and cannot speak for Ken. But I do unambiguously stand with him.

Notwithstanding the mistakes and bad swarm of the recent video that went viral, we are pulling for Mayor Mandami to succeed. Let me establish my credentials. Alexander's, Inc. is a New York company, and I am a New Yorker. Born in Brooklyn and attended D. W. Clinton Public High School in the Bronx. Both Alexander's, Inc. and I are lucky to be New Yorkers. My daughter and three granddaughters live in the Bronx. And my son and his family live in Brooklyn. My wife of 56 years and I live and work in Manhattan. We follow the rules, and we pay our fair share.

Alexander's, Inc. will pay $560 million in real estate taxes this year, and I am pretty sure that is in the top three. That does not begin to count the personal income taxes that I and our Alexander's, Inc. population pay to the city and state of New York. We work our asses off, and we are not boastful. We are very proud of our lifetime of achievement. We are the company that is investing billions to transform the Penn District. New York is a union town, and we are a union shop. It is thousands of hardworking New Yorkers in our buildings and on our construction sites.

The ugly, unnecessary video spat is personal to Ken and sort of personal to me too. You see, Alexander's, Inc. and I are the developers of both 220 Central Park South residential building and the 350 Park Avenue Citadel Tower. We are all shocked that our young mayor would pull this stunt in front of Ken's home and single him out for ridicule. This was both irresponsible and dangerous. As I said, Alexander's, Inc. is the owner of the 65-year-old building on the Park Avenue block front that will be razed to make way for the Citadel New York headquarters tower. It will employ thousands, further cementing New York as the financial capital of the world.

It will pay significant taxes and on and on. This building is being designed by the same Foster and Partners architectural team that designed JPMorgan Chase's new headquarters down the block. This is now the if-we-move-forward project. Now, a project of this scale takes years, and we have already worked with two prior city administrations, both of whom have recognized the benefits and have been enthusiastically welcoming and supporting, as evidenced by the rare unanimous ULURP approval for this project. Demolition began literally days ago, and we at Alexander's, Inc. are ready to go.

I must say that I consider the phrase “tax the rich,” spit out with anger and contempt by politicians both here and across the country, to be just as hateful as some disgusting racial slurs and even the phrase from the river to the sea. What these whole pols seem to be saying is that the rich are evil, or the enemy, or the targets, or maybe even just suckers. But the rich whom the politicians are targeting started with nothing, are the epitome of the American dream. They are our largest employers and largest philanthropists. And it is the 1% that pay 50% of New York's income taxes.

They are at the top of the great American economic pyramid for a reason. They should be praised and thanked. Ken, our partner and friend, is the best of the best. So where are we now? As we discussed last quarter, Ken exercised his option to enter our development joint venture and build a new 1.9 million square foot tower with Citadel as the anchor tenant. We have until July to decide whether to participate with Ken in the venture or to sell to him. It is a good bet that we will go all in. This fence cannot be amended by a short, terse, insincere private apology.

What I beg my mayor to do is to begin every day being business welcoming and business friendly as his first priority. That is the only way to get the growth and financial wherewithal to accomplish his program, some of which, I must say, are interesting and valid: public safety, schools, child care, clean streets, housing affordability, homeless programs, etc. The election is over. Now is the time for hard work and management, not showboating. New York is an enormous enterprise with a city budget of $120 billion and state budget of $250 billion. If there is a $5 billion or $10 billion budget shortfall, surely that money can be found by managing rather than by taxes.

It is interesting to note that high-tax New York spends more than double per capita than low-tax or no-tax Florida or Texas. There is a lesson here. Maybe something good could come out of this blunder. Maybe we can draft Ken to become active and lead an effort to educate New York voters and to elect like-minded candidates. Ken can do it. He is the one who could galvanize the entire business community. Here is an interesting fact: members of the Partnership for New York City alone employ 1 million voters. Hundreds of our business leaders would line up to support Ken. I would be first in that line.

I was taught, and I believe, that in America after an election, all sides get behind and support the winning candidate for the greater good. Our mayor is young, smart, and energetic. With a little tweak here, a little tweak there, his leadership could make this great city even greater. He will learn over time that growing the tax base is a winner, and raising taxes is a loser. I will say it again. He will learn over time that a growing tax base is the winner, and raising taxes is the loser. And that the hardworking 1% are allies, not enemies. Let us learn from this mistake and move upward. Turning to Alexander's, Inc.

We now have a lineup of assets and in-process projects which I am confident will deliver the highest growth in our sector. Executing on all this is now our singular focus. In this year, 2026, we will complete the heavy lifting of leasing at PENN 1 and PENN 2. As Michael and Tom have already been saying, quarter after quarter, our published numbers will reflect all this by 2026 and going into 2027. As part of our focus on enhancing our portfolio and making great deals, we announced last week the acquisition of a 49% interest in Park Avenue Plaza, a 1.2 million square foot Class A office building along the prime stretch of Park Avenue.

This asset is directly across the street from our 350 Park Avenue project. The building is 99% occupied by blue-chip tenants with an 11-year weighted average lease term at rents 40% to 50% below market. Prime Park Avenue AAA assets rarely trade. We believe we made an excellent purchase. We are buying the asset at $950 per square foot, which is a 65% to 70% discount to replacement cost, and we are inheriting a fixed-rate sub-3% loan through 2031 to leverage off an enhanced return. We expect the transaction to be approximately $0.10 accretive on a full-year basis in the first year. We are happy to be partnering with the Fisher family, who own the other 51% of the asset.

We have a long relationship with the Fisher family. They are first-class operators who think much like we do. With Park Avenue Plaza, our recent acquisition of 623 5th Avenue, and the pending development of 350 Park Avenue, we will be adding, call it, 2 million square feet at share of the very highest quality to our core portfolio at very accretive economics. Speaking of 623 5th Avenue, our 383,000 square foot asset, which we are redeveloping to be the premier boutique office building in Alexander's, Inc., we are far along in our design and planning. We are receiving outstanding reactions from the market and already have active tenant interest at or above our underwrote.

Demand for our retail assets is robust and accelerating. We have a handful of assets for sale in the market. I covered share buybacks in my recently posted shareholders' letter. To date, under our $200 million share buyback program, we have repurchased 7 million common shares at an average of $25.80 per share, totaling $180 million. Last week, our Board authorized an additional $300 million buyback program. Now to Michael.

Michael Franco: Thank you, Steve, and good morning, everyone. First quarter comparable FFO was $0.52 per share, compared to $0.63 per share for last year's first quarter. This decrease is consistent with our comments from the prior quarters and is primarily due to the reversal of previously accrued N1 ground rent expense in prior year's first quarter and higher net interest expense, partially offset by higher FFO resulting from the execution of the NYU master lease at $7.70 in the prior year and strong income growth at PENN 1 and PENN 2. We have provided a quarter-over-quarter bridge on Page 2 of our earnings release and on Page 6 of our financial supplement.

We now expect full-year 2026 comparable FFO to be slightly higher than 2025, ramping up each quarter due to GAAP rents coming online, lower interest expense after our June 2026 bonds are repaid, and some seasonality relating to our sign. As previously indicated, we expect there to be significant earnings growth in 2027 as the positive impact from PENN 1 and PENN 2 lease-up takes effect, as well as the positive impact of the recent acquisition of Park Avenue Plaza. Turning to leasing. The Manhattan office market is head and shoulders the best in the country and is off to its strongest start to a year in over a decade.

Manhattan leasing volume reached nearly 12 million square feet, the highest first quarter level since 2014. There is a significant supply-demand imbalance in the 180 million Class A and better building market in which we compete, as the availability rate in the prime submarkets in Midtown and the West Side has tightened significantly and there is little new supply coming for the foreseeable future given the significant cost and duration to build. This is all resulting in tenants competing for space and rents rising aggressively. The landlord's market we have been long predicting is very much here.

While the macro environment we operate in today has gotten even more complicated since our last call, and the geopolitical volatility is as high as we have seen in some time, the U.S. economy just continues to chug along, as does New York's. While there is a risk that the Middle East conflict lasts much longer and has a greater economic impact, to date we have not seen any change in tenant behavior. Moreover, while there has been a lot of AI fear mongering out there, while we are respectful of the risk, we believe it is overblown.

Over the past 50 years, office-using jobs have continually evolved based on new technology—from the computer revolution of the 1980s, when personal computers and word processors were introduced, to the era when the Internet transformed workflows and the way we communicate, to now with AI improving efficiencies and increasing productivity. In every example, office-using jobs were not reduced, but they shifted from clerical-based functions to knowledge-based roles. And each new revolution spurred productivity and economic growth with new businesses and net positive jobs created. There will be winners and losers by industry, by job function, and by geography. But make no mistake: New York and San Francisco will be winners as the intellectual and innovation capitals of the country.

Their talent will continue to aggregate in the best buildings. At Alexander's, Inc., we are coming off our second-best leasing year in our company's history, where we leased 3.7 million square feet, with 960,000 square feet of New York office in the fourth quarter. Business continues to be very good, and the momentum from last year has continued during 2026. In the first quarter, we leased 426,000 square feet of office space overall, including 311,000 square feet in New York. Our metrics were very strong. Average starting rents in Manhattan were $103 per square foot, with mark-to-market of positive 11.7% GAAP and positive 9.7% cash, and an average lease term of nine years.

Our New York office pipeline is robust and has over 1 million square feet of leases in negotiation in various stages of the cycle. Turning to the capital markets. The financing markets continue to be strong and liquid for Class A New York office assets, though pricing has widened a bit given the current geopolitical environment. The investment sales market continues to heat up as well, with a broadening set of buyers keenly focused on New York City. We were very active in the capital markets in the first quarter, most of which we covered on the last call.

Given we have dealt with almost all of our 2026 and 2027 maturities, we do not have any significant financings we need to complete for the next 18 months. We do still have a few loans that we need to work through with lenders over the next two to three years. Finally, our liquidity remains strong at $2.6 billion, which is comprised of cash of $1.2 billion and an undrawn credit line of $1.4 billion. With that, I will turn it over to the operator for Q&A.

Operator: Thank you. We will now open the call for questions. Star then 1 on your touch-tone phone. If you wish to be removed from the queue, please press star then 2. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Each caller will be allowed to ask a question and a follow-up before we move on to the next caller. Our first question comes from Steve Sakwa at Evercore ISI.

Steve Sakwa: Yes, thanks. Good morning. Steve, thanks for your opening comments on the City and the administration. I guess maybe going to Michael's commentary on just the pipeline and the million feet. I did not know if Michael or Glenn could maybe expound a little bit—how much of that is for upcoming lease expirations, how much of that is for kind of within the portfolio? And I guess most of that is probably in New York, but maybe discuss the New York versus Chicago versus San Francisco demand trends.

Glen Weiss: So, you know, our pipeline is extremely well balanced. Of the million feet, it is right down the middle—50% new/expansion, 50% renewal. The other thing I will note is on renewals, due to the lack of quality space available in the market, we are seeing many of our tenants coming to us early on renewals since they cannot find quality alternatives, which is a key indicator of a rising landlord’s market. As it relates city to city, San Francisco is coming on very strong. While we have some vacancy, as you see from the first quarter numbers, we have tremendous activity on all the vacancy. Our deals in the tower at 555 are now north of $160 a foot.

Volume in San Francisco overall is strengthening week to week, and certainly everyone out there is feeling a lot better and deals are happening in a very rhythmic pace. Chicago is starting to come up. Demand is improving. The deals are tough, but there are certainly tenants coming new to the market, and we are seeing a lot more tour proposals coming to the market as we go into the second quarter and into the summer.

Steve Sakwa: Great, thanks. And then maybe just as a follow-up, we did notice that in terms of lease commencements, the Verizon lease kind of had a little bit of a change in status. I am just wondering if you could maybe talk about their ultimate status with the building and did that lease start earlier, and is that a benefit to the 2026 earnings growth?

Thomas Sanelli: Steve, it is Thomas. I will take the first part of it, and I guess Glen can talk about the status. So, because Verizon told us they are not going to build out their space and they put them on the sublet market, GAAP allows us to start revenue recognition early. You will see that flow through all of 2026. It started in the first quarter.

Glen Weiss: On the leasing front, the block of space is excellent. It is 200,000 feet and includes 30,000 feet of outdoor space. We are in a great position. We have a Verizon public parent guarantee for the entire lease to begin with, so great credit. We continue to show this space as does Verizon. There is very good action, and whatever the outcome, Alexander's, Inc. is in a great spot as it relates to that position.

Operator: Thank you. Our next question today comes from John Kim at BMO Capital Markets. Please go ahead.

John Kim: Thank you. Steve, really appreciate your opening remarks. It really provided a lot of clarity on how you are thinking about moving forward. But I wanted to ask you about your statement that you are already at 350 Park. Are you all in even if Citadel will not commit to the building? And how should we think about the put option you have in July?

Steven Roth: I did not hear the last part. What—

John Kim: How should we think about the put option, is that something that you will let pass or that the date could be extended?

Steven Roth: The answer is that Ken exercised the go-ahead. We have until the summer to decide whether we are a participant or a seller.

John Kim: And—

Steven Roth: I expect that we will take all of that time, which is the smart and correct thing for us to do. There are still some documents and other details to be ironed out. But my remarks were that I expect we will be all in. I do expect we will be all in, but that is not a legal commitment at this time yet.

John Kim: And that is all in with or without Citadel commitment? No—the question is, is it all in regardless of whether Citadel is committed or not from a lease standpoint?

Steven Roth: No. Citadel will have to be committed. They will be committed. So, I mean, this whole deal is based upon the fact that Citadel will be the anchor tenant taking no less than 850,000 square feet, although we expect more. And Ken Griffin is the 60% partner. We are a 36% partner, and the Rudin family is the 4% partner. That is the state of play. Ken has committed to start. This whole thing will all come together and become very clear in the mid-summer.

Operator: Thank you.

John Kim: And then I wanted to ask about the $200 million of signed leases not commenced figure that you provided last quarter—if there is an update to that figure in terms of dollar volume, timing, and if there are any offsets through move-outs during that timeframe.

Michael Franco: Good morning, John. I would say the number is still in that general neighborhood. It is probably a touch larger today, but it is still in the same ballpark. In terms of thinking about it, probably 10% to 12% comes in per quarter over the next couple of years from a pacing standpoint. There are some offsets, whether it is expiries, vacancies, etc. I think Steve on the last call said from a modeling standpoint assume $0.40 a share flows through to the bottom line. So we are going to stick with that for now, but that will give you a sense in terms of the pacing of that $200-ish million. And that started this first quarter. Thank you.

Operator: Our next question today comes from Floriss VanDekum with Ladenburg. Please go ahead.

Floriss VanDekum: Hey, thanks, guys. Appreciate some more color on that large SNO pipeline. Could you maybe just expand on that a little bit? What percentage of that SNO pipeline is in the Penn District, and how much does it include retail leases? You have done some leasing on Upper 5th Avenue in particular. Maybe if you give us a little bit more color on the Penn District versus other areas in your portfolio.

Michael Franco: Morning, Floriss. That number is pretty much all office. So I cannot give you the retail number as we sit here right now. Obviously, the lease with Meta is a big positive. And in terms of the $200 million, in terms of Penn versus others, I would say probably two-thirds Penn. That should not be surprising given the lease-up of PENN 2 and the balance in PENN 1.

Floriss VanDekum: And maybe my follow-up question as it relates to your Park Avenue Plaza acquisition: what caused that deal to happen? Why did the Fisher Brothers, I guess, sell out? It looks like it is like a 6%–7% yield on cost, if I am not mistaken, to get to the $0.10 accretion. That seems pretty attractive. Is that a cash yield or is that a GAAP yield? And how much of a mark-to-market—how much more growth in terms of earnings do you expect to get from that property going forward?

Michael Franco: I cannot remember everything you asked here, Floriss. We are thrilled about the acquisition. These types of assets do not trade very often on Park Avenue. It is certainly one of the best assets on Park Avenue. In terms of the yields, on a cash basis—given the in-place debt is sub-3%—the cash-on-cash to us is roughly high single digits. On a GAAP basis, it is well into the double digits. And as Steve said in his remarks, rents are well below market here—probably at least $50 a foot below market. So over time, things are not static; there is action with tenants. We will capture that—and that is without rents growing. So if rents go further, that gap should widen.

We are excited about it. The Fishers did not sell out. They remain; they still hold their 51%, and I think their track record of performance on the asset is stellar. It is a blue-chip set of tenants. The leases are long term. They are quite effective at signing long-term leases with high-quality tenants, and that is reflected in this asset. And the tenants—some of which we spoke to about their experience—could not have raved more about the quality of the asset, and they have grown over time there. So we are excited about the asset. We think there is tremendous value to be created over time. I think I addressed all your questions.

Operator: Thank you. Our next question today comes from Alexander Goldfarb at Piper Sandler. Please go ahead.

Alexander Goldfarb: Hey, good morning down there. And, Steve, yeah, echoing, appreciate your comments upfront. Just crazy. But thank you for your statements. Michael, just following up on Floriss' question. The two items in the 2026 guidance: one, the $0.10 accretion for Park Avenue—was that the GAAP impact or cash, just as we think about FFO? And then the second part is, there was an item about the master lease changing at 350, and just want to know how that impacts the earnings for this year. That is my first question.

Michael Franco: Park Avenue Plaza, the $0.10 is a full-year run rate on GAAP. So obviously we are not going to have that for all of 2026. That is a GAAP number. On 350, the change there was done given Citadel wanted to kick off the development. They wanted to vacate; we could not start demolition without defeasing the old CMBS loan. And so that loan was defeased, as you saw in our 10-Q. The master lease was modified. There were a number of changes made in the documents. And that was a negative to 2026 earnings—we talked about it.

Steven Roth: Alex, the deal always contemplated that when Citadel vacated the building so the building could be demolished, that the rent would be reduced or even go away. The earnings ding by that reduction—much of it will be made up by capitalizing interest, etc. So while the earnings do not get what exactly is going to happen—

Michael Franco: So in 2026, for the next few months until we decide whether we are going into the JV, that is an awash. There is no earnings coming out of 350 Park. Once we make that decision, assuming we go into the JV, we are going to start capitalizing interest and costs.

Steven Roth: And so you will start seeing—

Alexander Goldfarb: Will that equal or exceed—or be less than—the basis?

Michael Franco: It will initially be a little less, and then eventually over 2027, 2028, 2029 basically equates to what we would get. For five or six months, there is a negative ding given the master lease. But, again, that is previously communicated. Does that satisfy you, Alex?

Alexander Goldfarb: That is awesome. Second question, Steve, is big picture. With regard to Citadel and the whole tension with the mayor, back in 2019, Amazon wanted to open in Queens. They were rebuffed. I do not recall this amount of instant negativity and political nervousness. Today, it is clearly escalated a lot quicker. What do you think has changed? I mean, certainly, politics have become more left, more progressive here. But why do you think this time the politicians seem to be much more eager to make everyone be happy versus Amazon—the city and the state seemed happy. It was not even a ripple when Amazon walked from Queens. It does not seem that. What is the difference now versus then?

Steven Roth: Gee, I do not know. But you are correct that the body politic does not seem to have any remorse about losing Amazon. On the other hand, the body politic thinks that Citadel is important and an enormous contributor, and there is a significant feeling amongst the political leadership and the business leadership that this was a mistake—which I described as a blunder. And this is something that should be repaired. We will see where it goes.

Operator: Thank you. Our next question today comes from Dylan Burzinski at Green Street. Please go ahead.

Dylan Burzinski: Hi, guys, thanks for taking the question. Michael, I think you mentioned that pricing has widened given some capital markets volatility associated with the war in Iran. Curious if you can provide more color on that. And then maybe if you can flavor in some commentary around—last quarter you guys mentioned looking to put assets in the market—just any color you can provide on how those processes are going.

Michael Franco: On the financing markets, financing markets were incredibly strong in the last year and beginning of this year—tightest spreads as we have seen in some time. Given the volatility, it has backed off a little bit. There is still depth in the market. Deals still can get done, particularly for high-quality assets. I would not call it a huge impact, but the reality is, look, Treasuries are probably up 30 basis points or so, and spreads have widened out a little bit, so that makes the borrowing cost a little wider—but not wildly different. It is still a very functioning marketplace for high-quality assets, but off maybe 40–50 basis points in total.

I am glad we did what we did when we did it. We are not really dealing in today’s markets, but again, you can get deals done. On the asset sales side, as Steve referenced, we are working on some asset sales, and that is true. When we have something ready to announce, we will announce. But the answer is we have a few things that are meaningful in the pipeline. We are in active discussions with potential buyers. I would say the interest in New York City, as I said in my remarks, continues to expand in terms of type of buyer. I think there is consensus on New York being head and shoulders the best market.

Rents are rising; assets are at a discount to replacement cost. There is recognition that not a lot of supply is coming. And so I think global capital has a lot of comfort in it. One of the things we are hearing from capital sources around the world is the U.S. remains the safest, most liquid market—particularly given everything going on around the world. I think you are going to continue to see capital M&A from other parts of the world come into the U.S. New York City is going to get a heavily disproportionate share of that. So that is what we are seeing.

When we have specifics to announce, we will announce them, but we are encouraged by what we are working on.

Dylan Burzinski: And then just on the rent growth piece, several quarters ago I asked—if you saw 20%–25% rent growth over the next five years, what would your thoughts be on that? Steve, I think you mentioned while that is good, that would be disappointing given everything you are seeing on the supply and demand imbalance—especially for high quality office. Can you just talk about how far rent growth could go in your mind? And have your thoughts around that 25% cumulative rent growth figure changed at all?

Michael Franco: I think we would still be disappointed in that, Dylan. The backdrop for office is as favorable as it has been in a long, long time.

Glen Weiss: And it is very difficult to add supply here.

Michael Franco: Which at some point we are going to need. There is going to be a building a year maybe as we get into the next decade—but that is very little. At the same time, we have supply coming out of the bottom end of the market. So, the fundamentals are great.

Glen Weiss: Companies, as we have said, continue to want to grow here.

Michael Franco: We are seeing still significant activity from the financial services sector, law firms, accounting firms; frankly, AI has picked up more recently. So I think all that results in rents continuing to rise. I do not know if it makes sense to give you a prediction, but we would be disappointed if it is 25% over five years. Glen, do you want to add any comments on what you are seeing?

Glen Weiss: Tenant rent sensitivity is not even high on the list right now. Tenants want to be in the best buildings with the best landlords. If you think about our leasing performance, $100 a foot has become the norm for us because of the quality of our product. Over the past eight or nine quarters, our average starting rent is $100 a foot. That is a great trend. As we go on here, and the way we are shaping the portfolio with the addition of 623, Park Avenue Plaza, the new 350 Park—being balanced on the West Side and now Park Avenue—we are really excited about that.

We think we are in perfect position for what is to come on rents and tenant demand.

Operator: Thank you. Next question today comes from Analyst at Bank of America. Please go ahead.

Analyst: Good morning. Thank you, and congrats on the strong start to the year. Michael, appreciate your comments on the 2026 FFO now expected to exceed 2025. Just curious if that is primarily from the Park Avenue Plaza closing in 2Q or also from 1Q being slightly ahead and carrying throughout the year?

Michael Franco: I would say it is the latter.

Analyst: Great. And then maybe on 555 California, you could give some update on demand, leasing, and rents there, and are AI tenants becoming a bigger part of the pipeline there and in the New York pipeline as well?

Glen Weiss: Thank you. It is Glen. How are you? Rents in San Francisco are rising a lot. As I said earlier, our rents in the tower have now gone north of $160 a foot for substantial leases—50,000 feet and greater, not small deals. We are leading the market by far at 555 California. We are also seeing a lot of really good activity at 315 Montgomery in the campus, with more technology/AI-type tenants. So, certainly, that activity we are seeing at our complex as well. But other than tech and AI, financial services is growing in San Francisco—something we have kept a very keen eye on—as well as law firms.

So it is not just AI, although it is helping a lot as the city improves. The other industry sectors are really coming on strong, and the city overall feels great. I was out there a few months ago—walking the street, meeting with people. It is really feeling good out there, and people are already positive again in San Francisco.

Operator: Thank you. Our next question today comes from Anthony Paolone with JPMorgan. Please go ahead.

Anthony Paolone: Great, thanks. You talked about having some assets out in the market for sale. But if we think about just 350 Park, 54th Street, and then 5th Avenue—some of these projects that are going to be in the pipeline—how are you thinking about your pro rata leverage level over the next couple of years, and whether there will likely be a bigger disposition program, or whether you think you will just use project financing and take on a bit more leverage?

Michael Franco: Morning, Tony. We have the capital earmarked for all these opportunities in our cash forecast. We have some asset sales in the works. We obviously have a lot going on between these investments that we have made recently—623, Park Avenue Plaza, the buybacks, some of the future development. What I would say about the future developments—something like a 350—is the bulk of our equity is coming from our land contribution. So any incremental capital is really not required from Alexander's, Inc. for probably close to three years. We have ample time to plan for that, and so forth. When you look at our capital needs over the next few years, it is fairly well laddered.

At the same time, as we execute, hopefully, on some of these asset sales, that is going to give us some additional firepower, frankly beyond just what we are talking about in terms of these developments.

Steven Roth: If you look at our history with respect to capital planning, we have three or four things that we have historically done. Number one, we generally hold billion-dollar-plus cash balances. Second, we almost always pre-fund well in advance of our capital needs. For example, we loaded in—call it—$2.0–$2.5 billion of capital two years before we started the PENN 1 and PENN 2 development so that, notwithstanding the fact that the capital markets got a little bit rough and volatile when we were actually building, we had the capital on our balance sheet. That is what you can look at for what we do.

The other thing is we like to operate with lower rather than higher debt levels, for the obvious reason. The last is that our philosophy is that we like non-recourse, project-level debt as opposed to unsecured credit, which basically makes the entire corpus—call it the company—liable. So, we like non-recourse project-level debt, which is the majority of the way we finance our business.

Anthony Paolone: Got it. And then just a follow-up question on the leasing side. I think there is about 600,000 square feet in the fourth quarter that comes up. Is there anything larger in there that is a known vacate? I just cannot remember if there are any big deals in that mix to watch out for.

Glen Weiss: There are two larger tenants expiring in the second half of this year, and we believe both will renew their leases. We feel good about our expirations for the remainder of 2026. And as you would expect, we are all over the 2027–2028 expirations as well. But 2026—we are pretty well taken care of. We feel good about what is going to happen.

Operator: Thank you. Our next question today comes from Vikram Malhotra with Mizuho. Please go ahead.

Vikram Malhotra: Good morning. Thanks for taking the question. First one—given all the activity you have had with the Penn assets, any update on Hotel Penn and Manhattan Mall in terms of users, monetization, etc.?

Glen Weiss: No update.

Vikram Malhotra: Okay. And then just on the earnings side, you mentioned 2027 FFO nice pickup. I am wondering two things. One, are there any offsets we should be thinking about for 2027? And then, particularly, FAD—given the ramp in FFO, I am assuming there will still be elevated TI in 2027. So should we think about FAD really perhaps picking up only in 2028? Thanks.

Steven Roth: Hey, Vikram. I would make one comment. I cannot wait for the free rent to burn off. That is when this business will get to be real fun and will generate substantial positive cash. That happens over the next year or two. I cannot wait for that. Now go ahead, Michael. By the way, Glen, take note of what I say.

Michael Franco: On the FAD side, Vikram, your comment is right. There will be continued elevated TIs this year and next year. Even on deals we have committed this year, tenants do not occupy for a while, so that will go into next year. And then 2028, we expect to see that drop materially and cash flow be much higher. So I think your general direction is accurate. On the earnings side, there are always ins and outs. There are always offsets.

I cannot tell you specifically what those are, but in the history of Alexander's, Inc., I think we have given you as much guidance as we can give you with respect to next year in terms of what the bottom line is going to be.

Operator: Thank you. Our next question today comes from Nick Yulico at Scotiabank. Please go ahead.

Nick Yulico: Thanks. I just wanted to go back to 350 Park to be clear on a couple of things. One, in terms of the new $16 million annual rent versus the old rent—did that already happen in the first quarter? Is that a second quarter accounting impact? And then I also want to be clear on that new rent that is being paid—what is the maturity on that lease? Is that concurrent with the new mortgage that matures next year, or does it extend beyond that?

Michael Franco: Good morning, Nick. On your first question, the new rent started—there were a few days in March where it started—but by and large, it will be second quarter. So maybe there were 15 days in the first quarter where the new rent was reflected. The new rent is coterminous with the execution of the new mortgage. That new lease runs until early 2027. Why is that? Because there will be a resolution—either the venture will be formed, we will put the asset—something will happen—prior to that maturity.

Nick Yulico: Okay. So the new rent is only in place until the point at which the mortgage matures. There is no rent being paid beyond that date on the new agreement.

Michael Franco: Correct. But there will be a resolution—door A or door B—before that, which the rent would have gone away anyway. There is no building for the tenant to pay rent for.

Nick Yulico: Got it. Okay. I just wanted to be clear on that. And then second question is—you have talked a lot about breadcrumbs on 2027, how to think about that. It is also the 2027 FFO is a piece of the executive comp per the proxy plan. So I guess I am just wondering, Steve, any new thoughts about finally getting earnings guidance? You are at the point now where the tide is turning. You are being measured by that from a comp standpoint. Why not give formal FFO guidance at some point?

Steven Roth: Oh, lord. How do I answer that question? You know, there are two sides of it. We have a simple business which has complexity, and the numbers are moving. We find that it is difficult to guide and counterproductive. Warren Buffett—who is not a friend of mine but an acquaintance of mine—he has been a no-guidance guy for his whole career. The big banks’ guy—he does not guide either. But all of our competitors seem to be able to guide. So what is wrong with us? Right now, we have no plan to guide, other than the snippets that we put in these calls here and there, which I hope you find helpful.

Now, what I think you are saying is that if our earnings are going to explode up, why do we not just pat ourselves on the back for that and guide to that? That is something that I am going to put under my pillow and think about, because that sounds like maybe it is a good idea. But as of right now, our policy is we selectively and in a limited way guide, but we do not give full guidance. And you could probably guess that is going to continue for the future.

Thomas Sanelli: I agree.

Steven Roth: Tom says he is happy he does not have to guide.

Operator: Thank you. Our next question today comes from Analyst at Citi. Please go ahead.

Analyst: Hi, thanks for taking my question. In the annual shareholder letter, you referenced the “no sacred cows” policy again. It sounds like the New York office market is improving. You mentioned inflows given the U.S. is a liquid and safe market. How do you think about potential asset sales? Should we think about those being more non-core dispositions, or any core asset sales that you are thinking about?

Steven Roth: I do not want to shock you, but basically, I am in it for the money. And so, therefore, there are no sacred cows. There are assets that are critical to the business; there are assets that are important to the business; there are assets that we love more than other assets. But based upon price, economics, and business strategy, there are no sacred cows. Now, what does that mean? There is a handful of assets that we have already determined that we do not want in the business mix, and those assets are for sale.

Our intensity to liquidate those assets rises and falls with the market, but over a short period of time, there is a handful of assets that will not be part of our portfolio. Now, getting to the rest of it, there are assets that we hold near and dear that we think are very valuable, that we underwrite as being much more valuable than apparently the stock market underwrites them. Even those assets—if, I think Sam Zell said, a godfather-like bid came in for one of those important assets—we would execute on that, because that would be the right thing to do.

That is the right thing for the management to do, and more importantly, it is the right thing for the shareholders too. So there are no sacred assets. There are places that are critical, but in terms of whether we would execute on selling something, it is all a function of what the price is.

Analyst: Great, thank you. And then for my second question, how do you think about incremental potential acquisitions versus accelerating the share buyback, and balancing that versus your current leverage levels?

Steven Roth: There are three things inherent in that question—acquisitions versus stock acquisition and leverage levels. The answer is that we are certain that we can basically do all three. We are certain that we can buy selectively important assets that come up in the bull's-eye location of our heartland. We are certain that we have the capital to buy back our stock in a measured way. And we are also certain that we are able to keep our leverage to a controlled level. We think we can do all of that. And we have some things that are in process that will augment all of that.

Our two most recent acquisitions of 623 5th Avenue—which we think is a terrific deal—and the Park Avenue Plaza acquisition that we just announced—we think is a terrific deal. And then we think buying back our stock at $30 a share is a terrific deal as well. So we are doing all of that. I hope that answers your question.

Operator: Thank you. Our next question today comes from Caitlin Burrows at Goldman Sachs. Please go ahead.

Caitlin Burrows: Good morning, everyone. Maybe just on the pricing side—I realize the reported leasing spreads are only on a subset of second-generation space. So first, I was just wondering if you can go through your expectation today of portfolio mark-to-market across New York, San Francisco, the Mart, and then also whether you expect that portion that gets included in the spreads to increase as in, could downtime become smaller?

Glen Weiss: Good morning. It is Glen. On the question of mark-to-markets, we expect to continue the performance we have had over the past couple of years, which are positive, positive, and positive. During the last two years, we have only had one quarter negative—which we like—and we expect to continue. Many have been in the double-digit positive. We expect free rent to continue to reduce, and even TIs are starting to come down. So we are working hard on that piece, of course. San Francisco is the same; with the rents we are achieving, the mark-to-markets will continue to improve. Chicago, as I said, is still most challenging, although demand is picking up. Rents are staying firm.

Concessions are high in Chicago; those have yet to break downward. But demand is certainly improving.

Steven Roth: Think about just Economics 101 or macroeconomics, focusing on New York for the moment. We have said—and I have written—that we compete in a subset of better-building Class A space, which is under 200 million feet. So the fact that there may be 400 million feet in New York is irrelevant because we really compete in a market which is about half that size. The availability of space in that market is evaporating very quickly—somebody used the analogy of an ice cube in a microwave. We know that we are a key factor in the market.

We know that because the incoming calls from brokers looking for space with their clients are starting to get more anxious and even more desperate. As this availability of space shrinks, obviously, the price goes up. Now there is something else going on which is equally important. The cost of a new building has gone to somewhere around—pick a number—$2,500 a foot. Interest rates and the cost of capital have gone from, you know, zero or 2% to 5%, 6%, and 7%. So the rents that have to be achieved to make a new building economic are well into the $200 a foot and even touching $300. That has never happened before.

So, obviously, rents on older buildings—which are still great buildings in great locations—are going up because of scarcity and because of the cost of new supply coming on the market. This is just basic Economics 101. The next part of it is that I believe—and my team can speak for themselves—we are in a long, long, long-term landlord's market where these dynamics will continue. Why is that? Because there is nothing in the short term that can change that other than if interest rates get down to 2% or something like that, which—you can make your own judgment whether that might happen.

So if that happens—basically—I am not in a big rush to rent space at today's prices because I think tomorrow's prices are going to be higher and maybe even a fair amount higher. Thanks.

Caitlin Burrows: I guess maybe just to follow up on that last point. I know leasing volume in the first quarter was relatively low. Would you say that is lumpy? Is it more about that you are not in a rush because prices could be rising? Or something else?

Steven Roth: Glen is in the business of renting space as quickly, aggressively, and as hungry as he can be. So if there is any fall-off in volume, it is not because I directed Glen to get out of the market. Glen is in the market every day working his ass off. Thank you, Glen.

Operator: Thank you. Our next question today comes from Ronald Kamdem at Morgan Stanley. Please go ahead.

Ronald Kamdem: Hey, just two quick ones, and thanks for taking the questions. Number one, I think last call you talked about some guideposts for occupancy over the next 12 to 18 months—and thinking sort of mid-90s on a leased basis. If you could provide any update both on a leased and on a physical basis—what that occupancy target looks like over the next 12 to 18 months again? Thanks.

Michael Franco: We have historically run our portfolio in the mid to high-90s, and we expect to get back there. That probably is over a couple-year period. Given all the dynamics that Steve alluded to and we have talked about in the market—and the lack of space availability—that is going to happen. Obviously, leasing up Penn is a key part of that. One of the analysts picked up this quarter that our occupancy actually went up 70 basis points, not the 40, because we took 350 Park out of service. That is what we are expecting.

I cannot tell you exactly what quarter it is going to be, but over the next couple years or so, that is where we expect to get back to. But there are a couple of things to focus on.

Steven Roth: There are a couple of buildings that we are not renting. Why is that? Because they are overleveraged and underwater, and it is uneconomic for us to rent space in those buildings—which really are almost owned by the banks. If we put TI into those buildings, it is basically burning money. We have chosen to leave those in the aggregate statistics—where some of the folks in our industry have taken those buildings out of the numbers, which makes their occupancy higher. If you take those buildings out of our numbers, our occupancy goes to—what—94%? So we know that number, although we do not publish that number, and maybe we should—although, right now, I am publishing that number.

The thing is that I look upon—in a landlord's market like this—vacancy and available space as an asset. Because as we rent that space—and we will with 100% certainty—that will grow our earnings. So when you think about investing, maybe the best company to invest in is the company that does have available space in this market, as opposed to a company that has all space already rented. You can make out of that whatever you will.

Ronald Kamdem: Thanks. Really helpful color. And then my second one, if I may, was regarding a lot of the footnotes in the supplement. On PENN 1—any idea when that litigation will be—just in terms of timing? Obviously, you cannot comment either way, but in terms of timing, is that something that can be done this year? And also, the change in retail from the base of the office buildings being put in the office segment—just the thinking there. Thanks.

Steven Roth: I will take the litigation. I have absolutely no comment on anything having to do with that litigation, other than I am optimistic.

Michael Franco: On the segment reporting, we did not change our segment reporting—obviously, we have two segments: New York and Other. This is a sub-segment. Ronald, what we did here is we tried to align the sub-segment more on how we view the assets. So we grouped all the retail assets together and the office assets. So the base of 1290 retail is now included in office as opposed to being in retail. Any ancillary office that is in a retail building is obviously in the retail sub-segment. It is all disclosed in the supplement, and we give you the exact buildings that are in each sub-segment so you can follow along.

I think this is the better way of looking at it as opposed to the way we were doing it previously.

Operator: Thank you. Our next question today comes from Brendan Lynch at Barclays. Please go ahead.

Brendan Lynch: Great, good morning. Thanks for taking my questions. First one on Sunset Pier Studio—any interest from the current short-term tenants in converting to longer-term leases? Just an update on that.

Glen Weiss: There is great interest in Sunset—in the studio. We are leased right now. The place is unbelievably great—great location. We have very good activity: long-term folks looking, short-term folks looking. We expect to fill up the project once this year's leases expire. The reception has been A-plus. We expect to do really good things during the leasing. Direct answer to your question, I would definitely prefer to be in the long-term leasing business with that asset rather than month-by-month leasing. So the ownership of that asset prefers to be in long-term leasing if the market gives us that opportunity.

Brendan Lynch: Okay, thank you. That is helpful. And then a follow-up on the Verizon space at PENN 2. Can you just walk us through if they find us a subtenant versus you finding a tenant—and how we should think about potential termination fees? Any accounting around the TIs that you might still be responsible for if it is just a sublease instead of a cancellation and new lease?

Steven Roth: Glen prefers that I do not talk about it. Go ahead.

Glen Weiss: As I said earlier, we are in a great spot no matter how it comes out. We will only be opportunistic to make money on this space. We have a very good lease position, and we will see how it plays out. But that is as much as I want to talk about it for now.

Steven Roth: We have basically a 19- or 20-year lease. So we have a long-term lease with a super credit. That lease will never be terminated under any condition. The only thing that might happen is around the dynamics of a subtenant coming in because Verizon wants to reduce their liability. But we do not have anything to say other than that long-term credit lease is not something that we are going to terminate or monkey with.

Operator: Thank you. There are no further questions at this time. I would like to hand it back to Steven Roth for any closing remarks.

Steven Roth: Thank you all very much. I think the team and I are delighted with our activity over the last three, four, six months. We are excited. I did make the statement in my remarks this morning that I am certain that over the next year or two, we will have the highest growth performance of any company in our sector. We are excited about that. We have a lot of great stuff going on, and thank you for participating. We will see you next quarter.

Operator: Thank you. That concludes today's conference call. We thank you all for attending today's presentation.