Jacques Cornet - IR, ICR, Inc. Albert Behler - Chairman, CEO and President Michael Walsh - EVP, CFO and Treasurer Ted Koltis - EVP, Leasing Vito Messina - SVP, Asset Management.

Vance Edelson - Morgan Stanley Jamie Feldman - Bank of America Merrill Lynch Vin Chao - Deutsche Bank Nick Yulico - UBS Brendan Maiorana - Wells Fargo Jed Reagan - Green Street Advisors Rich Anderson - Mizuho Securities Gabriel Hilmoe - Evercore ISI.

Greetings and welcome to the Paramount Group Third Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded.

I would now like to turn the conference over to your host Jacques Cornet of ICR. Thank you sir. You may begin..

Thank you, operator and good morning. By now, everyone should have access to our third quarter 2015 earnings release and supplemental information. Both can be found under the heading Financial Information, Quarterly Results on the Paramount website at www.paramount-group.com in the Investors section.

Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements within the meaning of the federal securities laws.

These forward-looking statements, which are usually identified by the use of the words such as will, expect, should or other similar phrases are not guarantees of future performance.

These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect and therefore you should exercise caution in interpreting and relying on them.

We refer all of you to our recent SEC filings, including our most recent Form 10-K as updated by our subsequent quarterly reports on Form 10-Q for a more detailed discussion of the risks that could impact our future operating results and financial condition.

We encourage investors to review our regulatory filings including the Form 10-Q for the quarter ended September 30, 2015 when it is filed with the SEC. During today’s call, we will discuss non-GAAP measures, which we believe can be useful in evaluating the company’s operating performance.

These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our third quarter 2015 earnings release and our supplemental information.

Hosting the call today, we have Albert Behler, Chairman, Chief Executive Officer and President of the company; Michael Walsh, Executive Vice President, Chief Financial Officer and Treasurer; Ted Koltis, Executive Vice President of Leasing; Vito Messina, Senior Vice President, Asset Management; and Wilbur Paes, Senior Vice President and Chief Accounting Officer.

Management will provide some opening remarks and we’ll then open the call to questions. With that, I will turn the call over to Albert Behler..

Thank you, Jacques, and good morning. We appreciate everyone joining us today. We had a very productive quarter and continued to make progress on the leasing front which will unlock the significant embedded growth in our portfolio.

Vito and Ted will discuss in more detail but during the quarter we leased 390,000 square feet of space and since the end of the third quarter, we have completed another 260,000 square feet of leasing.

Including this additional leasing, we are happy to report that as of today we have leased over 1 million square feet and have exceeded our leasing goal for the year. While we are very happy with the leasing velocity, we are just as excited about the double digit mark-to-market increases we have achieve on the re-leasing of the space.

Our cash mark-to-markets for the quarter and the nine months were over 13% and 14% respectively. Since the IPO we have received many questions from investors and analysts on our pending expirations, especially at 1633 Broadway. To that end, we thought it would be appropriate to provide an update on the large leases that were set to expire in 2015.

Bank of America had 150,000 square feet that was set to expire at the end of September. As of today we have re-leased 100% of the space. Bank of New York also had 150,000 square feet that was set to expire at the end of September. As of today we have extended or re-leased 100% of the space.

Morgan Stanley had 100,000 square feet set to expire at the end of October. As of today not only have we extended 100% of the space with Morgan Stanley but we have also leased an additional 160,000 square feet, all of it for a 15-year term.

Kasowitz has a 100,000 square feet that is set to expire at the end of November and as of today we have re-leased all but 15,000 square feet of the space.

These four leases which have understandably been the focus of many investors’ questions are 97% re-leased as of today and I would like to point out that while the leased occupancy at 1633 Broadway has dropped to below 90% at quarter end, it does not include the additional 160,000 square feet expansion by Morgan Stanley.

This progress is a clear indication of tenants valuing the location and quality of our assets and we are well-positioned to carry forward this leasing momentum into 2016. As I mentioned last quarter we understand the temporary impact that lease expirations will have on our earnings for the remainder of 2015 and into 2016.

However given our leasing success in 2015, the momentum we carry into 2016 and the quality of our portfolio, we are confident we will achieve meaningful long-term NOI growth as we mark our portfolio to market and increase occupancy.

On the capital allocation front, we utilized the cash on our balance sheet to acquire our joint venture partner’s interest in 31 West 52nd Street and we already have good news to report. As I've said in the past this property provides the largest office mark to market opportunity than any of our New York assets.

While the property has no near-term lease expirations when we announced the transaction, we have already been able to leverage our proactive management style and tenant relationships to unlock a large mark-to-market opportunity of nearly 110,000 square feet or 15% of the space in this asset.

We have successfully negotiated to move an existing tenant in the top five floors of this building that is significantly below market to middle floors at 1633 Broadway.

Their new space at 1633 Broadway not only better suit their current needs but this investment grade tenant is now paying market rent at their original lease which was set to expire in 2026 at 31 West is now set to expire in 2032 at 1633 Broadway.

We are now marketing the 110,000 square feet at top of 31 West and are confident that upon re-leasing this space, we will achieve cash mark to markets in excess of 50%. Capitalizing on opportunities such as this was the largest motivating factor in pursuing 100% ownership of this property.

In San Francisco, during the quarter we leased 67,000 square feet at starting rents in excess of $100 per square foot and cash mark to markets in excess of 66%.

We wish we had more space to lease at One Market Plaza and now that the Lobby and retail renovation is substantially complete with the new public seating and 20 new and reconfigured store-fronts and shops. We have made one of the best assets in San Francisco even better as we look forward to some meaningful leasehold in 2016.

If any of you are in San Francisco, we encourage you to visit this phenomenal asset. Back in New York, we continue with our redevelopment project at 1633 Broadway. If any of you have been to the property recently, you have seen the progress we are making on the public plaza redevelopment.

We also continue to progress on the subterranean space and we are very excited by the project and continue to see the space as bringing an iconic retail presence to the Westside market.

We continue to take a measured view and plan to uphold the same disciplined acquisition strategy that has guided our decisions through various cycles for the past 20 plus years. From our perspective, this market provides very little room for error and we remain conservative in our underwriting assumptions and in the deployment of capital.

During the quarter we closed on the previously announced acquisition of 670 Broadway and with that our real estate equity fund Fund VII is fully invested. As we look at transactions, anything we do has to make sense versus internal alternatives such as 31 West 52nd Street and has to measure up in terms of total shareholder returns.

Overall we made terrific strides in the third quarter. We are very encouraged by the steady progress to build upon a solid base and we will continue to work to produce same-store NOI growth for the long term. With that overview, I will now turn the call over to Vito to discuss the leasing activity during the quarter. .

Thank you, Albert. In the third quarter we leased 390,142 square feet at a weighted average initial rent of $80.97 per square foot and an average term of 9.4 years. Tenant improvements and leasing commissions were $7.66 per square foot per annum or 9.5% of initial rents, in line with leasing activities in the prior two quarters of this year.

Overall our portfolio wide leased occupancy was 92.9% as of September 30 as compared to 94.8% at June 30. The change was driven primarily by BNY and Bank of America lease expirations at 1633 Broadway. As Albert mentioned those spaces have already been leased as of today.

Taking into account leases signed subsequent to the quarter end, portfolio wide leased occupancy grows from 92.9% to an excess of 94% and most notably the lease percentage at the end of the third quarter at 1633 Broadway climbs from 87.4% to approaching 93%.

Of the 390,142 square feet leased during the quarter, 325,217 square feet represents leases on second-generation space for which we achieved a positive mark to market of 13.4% on a cash basis and 8.8% on a GAAP basis.

During the quarter the cash mark to market in our New York portfolio was affected by a renewal on the 25,000 square foot leased at 1325 Avenue of the Americas where the prior per square foot rent was in excess of $100. Excluding the impact of this lease, the cash mark to market on the portfolio for the third quarter would've been approximately 18%.

The majority of our third quarter leasing activity or 306,824 square feet was in New York at a weighted average initial rents of $78.73 per square foot at an average term of 10 years. Tenant improvements and leasing commissions were $7.58 per square foot per annum or 9.6% of initial rent.

Of the 306,824 square feet leased in New York, 281,525 square feet represented the leases on second-generation space for which we achieved a positive mark to market of 8.5% on a cash basis and 4% on a GAAP basis.

Excluding the impact of the previously mentioned lease renewal at 1325 Avenue of the Americas, the cash mark market in the New York portfolio for the quarter would've been 13.1%. Turning to Washington DC. The portfolio is 90.3% leased as of September 30, 2015 essentially unchanged from last quarter, go up 970 basis points over the last year.

During the third quarter we leased 16,453 square feet in DC all of which was second-generation space at Liberty Place for which we achieved a positive mark to market of 25.8% on a cash basis and 26.8% on a GAAP basis. In San Francisco, our property was 98.4% leased as of September 30, 2015, up 60 basis points from last quarter.

During the third quarter we leased 66,865 square feet at a weighted average rate of $100.68 per square foot, of which 27,239 square feet represented our share of the second generation leases for which we achieved a positive mark to market of 66.2% on a cash basis and 59.2% on a GAAP basis.

Tenant improvements and leasing commissions remained low in this strong market at $6.69 per square foot per annum or 6.6% of initial rents. From our perspective, leasing trends in San Francisco remain very strong.

Heading into 2016 we have approximately 200,000 square feet of leases or 14% of the asset on our tower floors set to expire primarily at the end of 2016 at below market rental rates. We remain confident in our ability to further capitalize on the value inherent in this asset.

With that, I will turn the call over to Ted who will provide an update on what we are seeing in each of our markets..

to significantly improve our rental rates and also to retain our best tenants. Broadly speaking we’ve seen a consistent level of traffic and remain confident that we will be able to lease our available space at rates reflective of the market position.

Further the recent positive trends suggest that the market has strengthened overall and with virtually no further expirations in the DC portfolio until 2019 we look forward to this continued strengthening. Finally in San Francisco, from our perspective availability remains very low and in turn the market remains very healthy.

With not much space to lease, we still had a productive quarter and we were able to complete eight leases five of which had an initial starting rents of $100 per square foot.

The pending 200,000 square feet of lease expirations in 2016 are being marketed currently in this strong market where we will be able to capture significantly higher rents on this space. With the completion of the Lobby and retail redevelopment, we have one of the best assets in a very strong market.

And with that, I'll turn the call over to Mike who will discuss the third-quarter financial results in more detail. .

Thanks, Ted. Turning to the financials. Our core FFO was $0.25 per share for the third quarter. FFO for the quarter was $0.24 per share and includes $12.3 million for our share of unrealized gains on interest rate swaps.

Our portfolio ended the quarter at 91.1% occupied, 180 basis points lower than the prior quarter mostly due to no-moves at 1633 Broadway. As discussed earlier, occupancy improved over time as signed leases commenced. We had $17.8 million of straight-line rent and $1.5 million of net above and below market lease revenues on a consolidated basis.

$11.3 million of this quarter’s straight-line rent was attributable to free rents. Looking at the balance sheet, at quarter end we had $418.1 million of cash, of which $230 million was deployed on October 1 to acquire the joint venture partnership interest in 31 West 52nd Street.

In addition, we have $800 million of availability under our revolving credit facility. Outstanding consolidated debt of $2.9 billion is unchanged from last quarter with an average interest rate of 5.5%.

In anticipation of our planned refinancing of the $926 million mortgage loan on 1633 Broadway maturing in December 2016, we have entered into forward starting swaps on a notional $1 billion locking in our base rate at 1.79%.

We expect to complete the refinancing by year-end producing meaningful future interest savings when compared to a current rate of 5.35%. Our leverage metrics are conservative with an overall net debt to total enterprise value of 31.8% and net debt to adjusted EBITDA of 6.0 times.

Moving to our earnings guidance, we are raising out full year 2015 core FFO guidance to be between $0.80 and $0.82 per share, up a penny on both sides from our prior guidance of $0.79 and $0.81 per share.

The increase is primarily due to the purchase of our partner’s share of 31 West 52nd Street which as a consolidated asset will be shown as a decrease in the non-controlling interest line in the fourth quarter 2015 and fully [ph]. Our pro-rata share of cash NOI for the third quarter was $77.2 million bringing our cash NOI year-to-date to $233 million.

Including the acquisition of our partner’s interest at 31 West 52nd Street we project our fourth quarter share of cash NOI to be $3 million to $6 million lower than the third quarter due to lease expirations during the second half of 2015.

Through three quarters, we have leased almost 750,000 square feet with an average free rent period of 9.3 months. This combined with the leases signed since the end of the quarter will temporarily cause an above normal rent abatement period which will reverse and become cash paying as we move into late 2016 and 2017.

We will provide our initial 2016 earnings guidance on our year-end earnings call. With that, operator, please open the lines for questions. .

[Operator Instructions] Our first question is coming from the line of Vance Edelson with Morgan Stanley..

So if we think about 1633 Broadway and 1301 Sixth, most of what's been available to lease or will be available is in the top half of the towers as you point out, which is a pretty favorable situation.

Can you talk about the upside in-place rents a little bit more as you sign these leases, on average for each building is it – 60s going to 70s or 70s going to 80s, or is that suddenly sounding too conservative based on the momentum you are seeing?.

Good morning Vance. I think that might be a little bit conservative because we are seeing -- just with each deal that we’re doing, we just continue to see the numbers move higher.

So I feel like we’re in a position where certainly as we get to like 95% leased in the building and higher with less than 5% vacancy, we’re also in a strong position to push the rents even more. .

And then moving to the West Coast, if you could provide more of an update on the retail refresh at one market.

I was there earlier this week and it looks like the heavy lifting is done but still a bunch of workers putting the finishing touches on, and so you don't see many stores that are open facing into the lobby or the atrium, do you think we will see more retail taking occupancy soon?.

Vance, this retail and lobby renovation took quite a lot of effort here and we have spent by now $16 million, the total project is about $25 million and we wanted to finish the construction first and that’s pretty typical and Ted can talk a little bit more about the finishing of the leasing of the retail space.

We have transactions in progress but we are really not rushing it. We are looking for the best use for these locations and if you have a chance to look at that renovation, it really came out very very nicely. The food court will also be added with a new touch-up and additional renovation done there. So it will be a terrific addition to that asset.

Ted?.

We have three leases that we’ve signed on the retail spaces and we’ve delivered those spaces in the last few weeks to the tenants. So next time you go out there I imagine you'll have seen not only construction starting in some of the retail space but some of those retailers are occupying the spaces already. .

That’s a great progress and then last one for me, now that you bought in 31 West 51st and given the obvious advantages and more strategic control and better refinancing flexibility, how are you to accomplish the same with 712 Fifth and One Market in 60 Wall?.

Well, Vance, as you know we have been working on 31 West for quite some time. We currently have no other joint venture buyout activities to report on..

Thank you. Our next question is coming from the line of Jamie Feldman with Bank of America Merrill Lynch..

So lot of progress at 1633, congratulations on that.

Can you walk us through now -- I know you touched on the expirations coming but just to be very clear in terms of how many square feet are expiring at 1633, 1301 and 1325, and then what your expectations are and the pipeline of leasing for that space?.

Sure, Jamie at 1633, the 2016 expirations are about 220,000 square feet, virtually all of that as we discussed in the past is the Deloitte & Touche space. At 1301 Avenue of the Americas about 213,000 square feet and again those are the Commerzbank floors top of the building just like Deloitte & Touche at 1633 top of the building.

And then I think – at 1325, there's really not much expiration in 1633 but the lower floor is the ING space is actually – I think it’s 1-1-17..

I was thinking about the ING space. .

Yes..

So it sounds like Deloitte – do you think Deloitte is moving out completely at this point?.

Yes, we do..

And Commerzbank is moving out – and then ING, do you have an update there?.

ING’s renewal rate has come and gone, so we expect that they are moving out as well..

You might recall Jamie, Commerzbank has been out of that space for quite some time. This was space that Commerzbank took over Dresdner Bank a couple of years ago, and this has been sub-leased space at 1301 for quite some time.

The Deloitte & Touche space is also known to us, they were moved out, both is terrific space and the best part of the tower and we are very excited about these opportunities..

So maybe, I think in the past you guys have been very good about providing just the leasing pipeline, maybe in terms of square feet or number of people you are talking to.

Can you just give us an update of how things feel, I know you’ve accomplished a lot in the last quarter, but just as we are heading into next year, what is the conversations look like for the available space?.

Well, at 1633 we are already speaking to some tenants about the Deloitte space, we have some preliminary conversations that have gone on there. There’s some detailed negotiations there but nothing really to report yet.

And then over at 1301, on the existing space we are multiple – in discussion with multiple tenants across multiple floors right now in actual lease negotiations with multiple tenants across multiple floors. And in terms of the 2016 space right now it’s more inquiries than anything else at 1301..

And then can you give an update on the retail space at 1633, maybe the progress on the development and then what kind of discussions you are having there?.

Yes, the redevelopment, you can really see there is a lot of progress made in the construction, actually you can see now the cubicle, the steel part has been erected over the last week and we have been spending about $3.8 million so far and it’s on schedule to be finished in the fourth quarter of 2016.

We are marketing the retail location and with rental rates going up in New York in this part of the market, we are very confident that we’d find the best tenant for the location. As you had mentioned over the last couple of calls we are very selective in getting the right tenant mix into this asset.

It’s our headquarter building with a lot of very high profile tenants, office tenants in this building. So we are very selective when we are going through the possible retail tenancy here. .

And then finally, you had some activity in your funds this quarter both on the debt side and the equity side.

Can you remind us how much capacity you have left in Fund VII and Fund VIII and what the pipeline looks like there?.

As we reported last time, we did our last investment with 670 Broadways, for Fund VII, that’s our equity fund. So the Fund VII is fully invested.

Fund VIII, our mezzanine fund, we have reached currently close to $6 million and we're still – the activity is quite active there for additional money to be assembled, so it might go to $700 million because our performance of the mezzanine fund has been quite good and we have invested so far around $200 million of that fund. .

And then what does the investment pipeline look like there, like how long it can take to get to your 700?.

We have a lot of activity, we are evaluating every year around 300 plus opportunities transactions, equity and debt in our team.

And we see a lot of deal flow and as we had mentioned in the past, the mezzanine fund enables us to see a lot of transactions across our three markets here, New York and Washington and San Francisco and we are evaluating this very very carefully.

The mezz business is quite active and we have a lot of deal flow, we want to be selective and on the equity side as well, we will be, as I mentioned in my remarks, we will be very careful with spending shareholders’ equity at this point..

Thank you. Our next question is coming from the line of Vin Chao of Deutsche Bank..

I just want to go back to the expirations here the near-term in the fourth quarter,130,000, does that still include some of the stuff that you’ve already released that you’ve talked about earlier or is that already out of those numbers?.

In the third quarter, 120 that we have left in the fourth quarter rather is space that has already been re-leased..

Do you have a sense – based on signings already what amount of square footage is going to commence, maybe not the cash paying immediately but just what amount will commence in the fourth quarter?.

It’s Mike. We don’t have that right now, we’re going phases as we deliver this space. Where we stand on this, we talked about the renewal fee, so just kicked right in with the new deal, and as we deliver floors it will take place over time..

Maybe can you just give us an update on 2099, obviously the lease rate stayed the same there but just curious how activity is at that building and when you expect that to sort of pick up a little bit?.

Sure, I mean we have the bottom five floors available there, it’s about 50,000 square feet and – I can tell you we are talking to multiple tenants, a number of them are 50,000 foot tenants, so if we have one of those guys, all the space is gone but we’ve got a couple of single floor ones too.

The DC market is still moving at a slower space to get deals done but we feel kind of where our assets are positioned, that we are in a good spot. And we expect it to be leased probably in the next few quarters. .

And in terms of the tours and activity level from that perspective, has that changed much or is just steady?.

It’s pretty steady, I mean we want to be – we want to be – we’re in a good position in DC, we have less than 7000 square feet expiring until 2019 at this point. So we want to be mindful of where our assets sit, the quality of our assets and then the deals that we’re getting done. .

And just maybe a question on the refi at 1633 Broadway, just from an order of magnitude perspective, what does the prepayment penalty look like?.

The prepayment penalty is moving especially as rates have moved but it’s probably in the mid $30 million range as of right now. .

Our next question is coming from the line of Nick Yulico with UBS..

Mike, you gave the numbers on what the cash pro forma starts looking like, cash NOI perform in the fourth quarter, is there anyway your sense for how much cash NOI still in the back side of lease but it’s not going to commence yet in the fourth quarter on an annual basis, if we want to sort of add to that number?.

I mean the free rents we gave is $11 million and we’ve leased a lot of space. So that number will go up a bit over time and so the rent kicks in on those spaces. I think taking the comments as to where our occupancy will be and grossing up for that, we will give you an idea of, where the cash will be based on signed deals.

So we gave our forward lease occupancy. .

And then just going back to that 1633 is now – it’s about I guess 93% leased in the fourth quarter. If we were to think about – forget about the roll over in a building but at what point that 93% leased turns into a 93% occupied? Is it second quarter next year or –.

So the spaces that we have leased will be delivered some time in the first half of next year. Just keep in mind the rollover that Vito talked about with the Deloitte & Touche..

So you basically get a lot of space and then there is the Deloitte rollover. And then just one last one, Albert, I am wondering as you look at the district DC portfolio you have, it sounds like you’re getting closer to just leasing that up over the next couple quarters.

Do you think about perhaps JV-ing some of that, since you’ve now been pretty stable and pricing has been pretty still pretty good for DC office sales?.

As we had mentioned on the last calls, we are evaluating from time to time what assets could be ripe to be harvested and you’re right on the money DC could be the one or the other, asset could be ripe to be sold partly over the next 24 months or so, and we will be looking at this from time to time..

Thank you. Our next question is coming from the line of Brendan Maiorana with Wells Fargo..

So Mike, maybe just start with you. So I think it’s 31 West 52nd probably adds about $1 million to NOI in the fourth quarter and I think you said guidance would be, cash NOI would be down 3 to 6.

Is the change in the cash NOI really just going from all leasing that you did and a lot of space converting from what was cash in the third quarter to free rent in the fourth quarter?.

There were couple of things. One, on page 14 we actually provide what the contribution is from 31 West, so the FFO contribution to that or interest expense is almost $2 million in the third quarter and excluding the leasing changes that we’ve made, you’d expect that to be the same.

The other is, yes, I think you're right that the rollover that we have and the free rents that we are providing on some of these transactions are going to combined cause that degradation over a short period of time. Last quarter we provided a range, the range is basically the same with the exception of the addition of 31 West this quarter. .

And then how should we think about maybe timing of what to expect for re-leasing on the Deloitte & Touche space and the commerce space, is that something that – as you guys think about the business plan for ’16, that is – not from a commence basis but something that can get leased during ‘16 that we could see backfill those spaces?.

As you see and Ted will add to this, as you can see from our today’s report we have been filling spaces pretty fast and rapidly. We have been in the market as Ted was mentioning before on both spaces, in both locations and we think that the market is strong and we are quite confident that we can get them re-leased in 2016 yes..

I mean we mentioned in previous quarters that the market is healthy. We mentioned that our assets are well-positioned that we’ve got good activity and I think what we’ve reported so far and closed deals reflects, all that has been true and we don’t see – we haven’t seen that changing.

So we expect activity to be good in the space that we are rolling in ‘16 as well..

And then I apologize if I missed.

The timing of the tenant converting from 31 West 52nd over to 1633, when is that?.

We are delivering the space to them in September of next year is when they get – they receive the space, and they are leaving in August of next year, the 31 West 52nd. It’s a terrific opportunity here and we are very very happy that we were able to unlock this mark to market opportunity.

As you may recall that tenant had space leased up to 2026 on these five floors and we wouldn’t have been able to do this without buying out our joint venture partner and that will be a part of the certain control and to be very certainly – I mean October 1, we took 100% control and we signed up this tenant for 1633 and could move them, I think that's – the leasing team has done a terrific job here and the whole team in getting this done..

And then just last one, so kind of looking at rent terms in New York, so you guys have -- have a cash rent that is higher than a GAAP rent which looks like you're giving about a month of free rent near-term but sort of back of the envelope looks like maybe a $5 bump kind of midway through the terms.

Do you guys think about given strength of the market, think about pushing a little bit more in terms of not the initial rent but maybe the concessions that are there to try to either increase the bump or make the free rent a little bit lower?.

Well overall just in terms of what we’ve given on concessions we feel that we’re at where the market is and really the way this market has moved in Midtown it’s been a slow – slowing growing rent market with concessions kind of remaining where they are.

I think that’s probably the next phase for us and really for the market it’s to really start pushing down concessions. As I said as we get closer to that 10% availability and starting to get into single-digits of availability the rent growth is going to take care of itself and I think the concessions is where we start looking next..

The only thing I would add to that to your comment about the cash rent and the GAAP rent, remember, at IPO 11 of our 12 assets in the portfolio were marked to market, so it is our expectation that our cash mark to market will be greater than our GAAP mark to market, because of the FAS 141 step up that we’ve got..

So you include it in your expiring – is that 141 mark-up. .

And just one other clarification, you mentioned $5 rent – we are seeing rent of $6 and $7, we’ve been pushing on that. .

Thank you. Our next question is coming from the line of Jed Reagan with Green Street Advisors..

On the lease you signed at 1633 Broadway and elsewhere in the portfolio, can you talk about whether any of those were short-term extensions because it looked like your ’16 expirations went up a little bit versus last quarter?.

At 1301 that was one short-term extension for 40,000 square feet on one floor and that was, I believe, it was either a six or nine month extension through the end of the year. And Jed, the other thing to keep in mind is going to be with the 31 West, the FSA expiration that got moved into 2016 at 31 West, 110,000 square feet.

So the net of that is going to be a net increase of about 70,000 square feet in ‘16 as compared to what you’d previously seen..

And can you just talk about also the process a little bit that led to the JV buyout at 52nd Street? I know your partner had a for sale provisions, did that come into play here explicitly and I guess how do you get comfortable with the transaction pricing at north of $1300 a foot?.

Jed, this is -- it was a negotiated transaction, it made a lot of sense to us to do it this way. Now I think as you can see how quickly we were able to unlock value here and we had a very very good relationships since 2007 since we bought the asset, and it was just a different philosophy over how to manage and run this asset.

We are much more entrepreneurial as you know and more proactive and the building had been 100% leased from the get-go, actually we could have leased at 110%, 120% what the demand was in that terrific asset here. And we had numerous discussions over the last nine months and finally ended up with the solution. .

I will just mention one thing just on the leasing side because it is rare that you see 100,000 foot tenant move from one building to another within someone’s portfolio and I think that that really speaks to our strategy and the relationship that we have with the tenants that we’re able to do things like that to unlock value in a 100% leased building..

And that could not have been done with the current joint venture or the previous joint venture partner and that finally ended to the result that we bought them out..

Was that a specific sort of sticking point and issue of contention in that specific kind of lease opportunity or that was one of kind of broader series of issues?.

No, it was a general discussion, it was not stuck with just leasing situation. I mean we wanted to do something more proactive and that’s what we wanted to pursue and it was a very amicable relationship at the end..

And then just last one from me, it looks like your signed rents last quarter in San Francisco were around $100 a foot.

Is that where market is in that building at this point or should we think of that as more of a anomaly for last quarter?.

We have signed five leases over – at $100 plus and if you recall this asset because of its location and its quality, has been always substantially receiving higher rents – substantially higher than the rest of the market, and we think that it's not the end of it and Ted can add to this..

Yes, I certainly wouldn't call these deals as outliers, I call them a norm for what rents we get at One Market Plaza. .

Our next question is coming from the line of Rich Anderson with Mizuho Securities..

Regarding the great results that you reported on, on 1633, would you say the pivot to like more of a cash flow story and by extension a dividend growth story has become a close rent – it was going to happen sooner rather than later or do you think the certainty that you’ve sort of gotten on the downside being ING, Deloitte and Commerzbank, maybe keeps you in the same ballpark in terms of all this leasing activity actually turning into cash flow?.

I think this is pretty much in line with what we had, also when we went on our IPO road show what we had forecasted over the next couple of years and I think we have been quite successful here and -- but the timing is -- everything is on track pretty much. .

And I will just say – just on the leasing side, I mean these are – again we have said this before, these are large blocks of space, so it’s big tenant type of space that takes time to get done.

So really to say, to predict an increase on timing, leasing of large blocks is always a little bit more difficult but certainly we would love to have the cash flow will be higher in terms of rents and we’re always going to be pushing on that. .

And it will be converting into additional cash flow over the next couple of years of course..

And can you speak a little bit about bifurcating the demand that you’re seeing by industry and you guys are unique in the sense that you have a diverse portfolio, not terribly influenced or subject to the technology sectors? Just wondering if you could talk about if tech demand is increasing, decreasing and what sectors you’re really seeing the majority of the growth coming out of in New York in particular?.

Yes, I think -- I wanted to say it’s different from market to market between New York, Washington and San Francisco, we have seen a lot more activity lately in the financial services segment, that has been pretty quiet for the last couple of years and now you see quite a lot of activity.

And as you can see from our leasing success here at 1633, in our last quarter that a lot of these tenants were financial services tenants. And we think that it’s prevalent in especially the markets where we are in New York. .

So we are getting share of tech, which the type of tech that’s sort of a more mature tech that goes to a more established type company and some great examples are the lease that we did with Visa at One Market. I mean it’s their tech group but it’s Visa.

So it seems it’s a tech company because that’s a tech type deal and we are seeing those types of deals in our portfolio..

And I should know this but I don’t recall if you have any business with WeWork, but do you have an opinion about that business model and your willingness to doing future business with them?.

No, we don’t like to comment about our tenants and potential tenants. But we don't have any lease with WeWork at this point. .

Thank you. Our next question is coming from the line of Gabriel Hilmoe with Evercore ISI..

Ted, I apologize if I missed this but I know it’d be completely different space but did you give the rent differential on the tenant that’s moving out of 31 West 52nd and going to 1633?.

We didn’t give an exact number but we think it’s probably close to a 50% mark to market. .

So what they are paying at 1633 is an uplift from what they are paying at 31 West 52nd?.

1633, it’s a different rent, it’s a normal market rent that they are paying at 1633, and the upside here is definitely at 31 West 52nd where we are expecting a plus minus 50% mark to market opportunity. .

And then Mike, any update just on refinancing timing around 31 West 52nd, I think that expires in ’17?.

So I mean right now we’re focused on taking care of 1633 Broadway which we announced and right on the heels of that or during that we are going to explore refinancing 31 West 52nd and taking advantage of the current interest rate environment even considering this movement. End of Q&A.

Thank you. It appears we have no additional questions at this time. So I’d like to turn the floor back over to Mr Behler for any additional concluding comments. .

Well thank you all for joining us this morning. We look forward to updating everyone on our progress when we report our fourth quarter and year-end results in February of 2016. Thank you. .

Ladies and gentlemen this does conclude today’s teleconference. We thank you for your participation and you may disconnect your lines at this time..