2025 Lease Expirations and Vacancies
Q: What are the large lease expirations and potential vacancies up to 2025?
A: Google and JPMorgan account for about 4% of our 2025 lease expirations. " " Google will vacate 340,000 sq ft, 168,000 sq ft at our share, in 2025. " JPMorgan is expected to give back more than 50% of their 2025 expiring space of 241,000 sq ft, but we believe they will keep some portion. " " We are having constructive conversations with other tenants and expect to retain a good portion of the remaining 2025 expirations. " "

Net Effective Rent Outlook
Q: Will net effective rents remain under pressure?
A: We believe we are at or near the bottom for net effective rents, with New York already improving, especially for Class A and Trophy assets. " In San Francisco, the market may lag due to higher vacancy rates, but even there, rents for Class A properties may be close to the bottom. "

Same-Store NOI Guidance Increase
Q: What's driving the increase in same-store NOI expectations?
A: The increase is due to strong second-quarter results and anticipated reduced operating expenses in the second half. " However, same-store NOI will be negative in the second half because of the vacancy of Clifford Chance, our second-largest tenant, and the impending lease expiration of Leerink at 1301. "

Funding Potential Acquisitions
Q: How will you fund potential acquisitions given your capital situation?
A: We plan to invest asset-light, using outside venture capital, and will not significantly use our own equity or liquidity. " We're carefully evaluating opportunities in Class A and Trophy assets, noting the bid-ask spread is narrowing, but we will be very cautious before proceeding. "

San Francisco Market Improvements
Q: What are the early signs of improvement in the San Francisco market?
A: The demand pipeline is increasing, with venture capital funding flowing into San Francisco-based companies, particularly in AI. " " One-third of second-quarter leasing activity was from new tenants to the market. " " We see increased tour activity and proposals, making us more optimistic than six months ago. "

Interest Expense Guidance Update
Q: What assumptions are in your interest expense guidance after this quarter's increase?
A: We adjusted our assumptions based on current expectations of rate cuts for the remainder of the year, leading to an incrementally higher interest expense than previously guided. " The rate cap and swap at 1301 expire in August, which is factored into our guidance. "

Non-Core Assets Off the Books
Q: When will the non-core assets at 111 Market Center be off the books?
A: We are still in negotiations and cannot predict the exact timing. " The loan on 111 Sutter Street has been extended to December 2025, and discussions are ongoing for Market Center. " "

Leasing Pipeline and Guidance
Q: How much visibility do you have on achieving your lease rate guidance?
A: We feel confident based on our strong pipeline. " We need to lease over 200,000 sq ft of vacant or soon-to-be vacant space to reach the midpoint. " We have more than 300,000 sq ft in advanced negotiations. "

Portfolio Diversification Strategy
Q: How do you balance tenant concentration risk with diversification benefits?
A: Our portfolio is diversified across sectors including tech, finance, and entertainment. " Each building caters to different tenants, and we believe we've managed this balance well. "

Leasing Updates on Specific Properties
Q: Any updates on leasing at 712 Fifth Avenue and Showtime at 1633 Broadway?
A: We have more activity on the retail space at 712 Fifth Avenue than ever since marketing began. " We've leased space to Harry Winston at rents nearly matching previous levels. " We're carefully considering tenants in the luxury segment to fit the building's profile. "