Vornado Realty Trust (VNO) September 15, 2026 Conference Transcript

Thank you, everyone, for joining our first roundtable presentation. Welcome to Bank of America's 2026 Global Real Estate Conference. I'm Yana Gallen, B of A's Office Read Analyst, and we're thrilled to have with us today Vernado presenting. We have President and CFO Michael Franco, Co-Head of Real Estate Glenn Weiss, EVP Finance Thomas Sinelli, and SVP Investor Relations Gary Hansen. Michael will start with a few opening remarks and then we'll jump into Q&A. With that I'll turn it over to Michael.

Can anybody hear me? Is it, there are people on the?

On the webcast.

Okay, if you webcast, I don't know if you did or not.

You did? Okay, sorry, yes. Yes.

I'm just going to give a brief comment or two and then let's jump right in the Q&A. Everybody generally knows born NATO you know what I would just say is I think if you look at where we as a company are now after the last few years you know we're as optimistic and well positioned as we've ever been we own about 28 million square feet we have reshaped the portfolio to continue to add you know upgrade the portfolio and quality standpoint adding assets like Park Avenue Plaza 623 fifth we're about to do a 350 park um so we think we have the premier portfolio in new york city both office and street retail we'll talk about market fundamentals uh they're arguably as good as they've ever been in my 37 year career certainly there's they're better than they've been in 20 plus years and why it's going to stay that way um we have uh delivered our balance sheet our last several years continue to make progress there we bought stock back we'll talk about that as well if you want uh so i think we've done a number of positive steps the stock has you know performed a little bit retrenched here recently um and uh you know i think that it's it's sort of shocking given the fundamental backdrop you know where uh certainly new york city office stocks are trading so uh let me jump into q a the only other thing i'd say is hopefully all of you have been over the Penn District scene we've done there the last six seven years transforming that area of the city I think it's remarkable the results I think speak to the transformation and you know we're still in the early innings there so there's a lot more to come in terms of what those assets are going to produce and future opportunities coming out of Penn and we couldn't be any more excited about owning that entire campus which gives us the ability unique things that you don't get by owning one or two buildings in a sub-market. So, Yana, with that, turn it over to you.

That's great. And we'd love to kind of dive into, you know, the best operating environment in 37 years. If you could help us kind of, you know, understand that a little bit more, you know, characterize the state of the New York City economy, the job market, and then office market.

Let me start and then, you know, Glenn should jump in here. You know, I think it all starts with where does talent want to be, right? And talent, particularly young talent, wants to be in New York City at a disproportionate level relative to every other city. And that gap is widened post-COVID. So I don't know how many of you have college-age kids or no people have college-age kids. I happen to have two that have graduated. I've had 80% of their friends that weren't from New York now work in New York City. And that's generally the case with almost everybody you know. Now, that doesn't mean they stay their entire lives, but they build their careers here and many times do stay. So talent wants to be here. Companies recognize that. And you're seeing as a result of that, you know, strong broad-based demand. And I would say, You know, as we sit here today, financial services, legal, accounting, tech, media, every sector is active and is growing. Right. So driven by talent here and therefore the companies need to be here. You overlay that with for that, for those companies to attract talent, they have to be in higher quality space in the right locations. That's generally around the two main transit hubs in New York, Grand Central and Penn Station. and they want to be in amenitized buildings and so you know out of that you know I think we've said a couple times 180 million square feet you know you're looking at a vacancy right now that's tightened the point particularly in the plaza district you know mid single digits so you have tight vacancy you have strong demand rents are rising there's limited new supply and it's extremely hard to build in this city both from a cost standpoint from a time standpoint so you know This is not Atlanta. This is not Charlotte where you can slab up a building in two years, right? We know with certainty what's coming over the next seven years, and it's not much, right? And so if the demand stays reasonably strong, by definition, you have to see meaningful rental rate growth, right? So that's why we're so bullish. Why don't you tack on in terms of what else you're seeing?

I think Michael hit it all. I mean, I've also never experienced this, Morgan, in my career, and I've been at this for three decades also. Just on the street, tenants are growing exponentially, and there's no space. So, we're seeing huge growth within our buildings. We're seeing tenants in our buildings growing into other buildings we own because they can't grow where they are. CEOs want to be in New York, period. As Michael said, the talent's here. And we tracked the better building segment, which is about 180 million feet, which is Class A, trophy Class A, and new trophy. And that vacancy rate is only 6%. And if you think about that vacancy rate in the upper half of the buildings, the towers, it's even less. I don't know the exact number, but it's probably 3 or 4%. So there's really no space. So we're all of a sudden seeing tenants battling for space in all of our buildings. And, you know, one thing we love about our portfolio specifically is our mix, where we have really done a great job expanding the Park Avenue sub-district with a real stranglehold now with 623 Park Avenue Plaza and 350 coming. The dominant Penn District portfolio, we're renterizing daily. The renter is just out of control up there now in a great way for us. 1290 has been an excellent performer, best building on 6th Avenue. So we feel great about where we're sitting. We are working nonstop. It was the busiest August of my life. So we'll go to the next one. Yeah, exactly. Exactly. Exactly.

Great. I guess, you know, about a year ago at this time, people were very concerned about the change in administration in the city with the new mayor.

Just curious if there has been any notable changes on kind of the day-to-day operations or business and any kind of new policies that you're watching that could potentially be positive or, you know, a little bit more challenging for the office market. we've seen no change in behavior at all we haven't lost any leases based on you know what john is saying um so nothing so far i mean it's out there in the ether so to speak everyone thinks about it but so far nothing at all that we're seeing on the ground i mean uh i i love ken griffin's quote right that um uh when all this was happening um my business is going to be here a lot

long in any administration, right? And I think that's how companies think, right? They're here long-term. Again, the talent wants to be here, regardless of who the mayor is, good, bad, whatever. And so companies are growing here. You know, big tech is growing more here than on the West Coast. Obviously, financial services is the center of the world. Legal is the center of the world. Healthcare, you know, if you want the best of the best, you come to New York City, And so we're not seeing any change in tenant behavior. I mean, if anything, as Glenn's talked about, we've seen companies growth accelerate over the last year. And that's happening whether person X is mayor, person Y is the mayor. Their businesses are driven by what's going on in the marketplace. So, nothing that, you know, has impacted tenant demand, and I don't know that we're going to see it. Look, the Pieta tear tax got a lot of noise. I don't think that's changed any tenant's behavior, and, you know, okay, you complain, and then you move on.

Great.

And Citadel moved forward with their commitment.

Well, I think, you know, the interesting thing about Citadel was, you know, if you look back to when we first announced the arrangement, which was in January of 2023, and at the time, the way we structured it, you know, remember this deal was negotiated in 22, the world was in a different place, right? Right. They thought that they wanted to proceed on a new building, but they weren't sure about, you know, 100 percent sure and growth plans, et cetera. We hadn't designed the building yet. Right. So we said, like, let's let's let's not forth. Let's come up with a structure where both sides have effectively eight years to decide to move forward. And if we want to get out at any time, we can put, you know, if you want to never build, you can call and pay a premium, et cetera, et cetera. So it was pretty clear in the ensuing few months that they wanted to proceed. They were refining their plans. And so, you know, we first signed up the deal in January 2023 was if the development went forward, they were committing to 850,000 square feet. Right now we just, you know, the official exercise by Ken occurred, you know, last year and then we had until August to make our decision. Right. And so we exercised to participate in the venture. So at the time that we we committed, Citadel had increased their least square footage to a million fifty. Right. So they've grown 200,000 square feet additionally in that three year period. Right. And we'll see. I'm not saying it's going to grow anymore or not, but it's a juggernaut of a business. Right. And these businesses, you know, they don't sit around static every day. They're trying to conquer the world. And so, you know, there's a chance that they grow larger. But I just think in that time frame, not only just they commit, but they upsize their commitment over that time frame, notwithstanding all the noise, right?

Maybe since we started with 350 Park, just, you know, kind of any updates on demolition progress and possible 25% sale of the JV?

And on the demolition, it has commenced. It will complete in April. So we're coming down floor by floor. We're on, I think, the 30th floor now. So by April, the building will be down, and then we'll start construction of the new tower. So all on schedule.

And what are you hearing from tenants, brokers, and marketplace?

I mean, you know, everyone wants to see what we're doing. We're presenting actually tomorrow again. So we're definitely exposing the project, but we feel great about it. So he's taking the 105 out on the bottom half, other than two floors at the top for the executive center. So we have our speculative office block is perfect. It's floors 28 to 56, which includes some early option space where they could grow more so over the next couple of years. But, you know, we're in the tower with views of heaven and the world in the park. Perfect floor plate to 26,000 feet with 16-foot ceilings, no columns, perfection. So we're absolutely in no rush to lease that. It's only going to get better and better. But certainly we're exposing it. We're presenting it and we're talking to everyone who's out there, you know, but really that space, my guess is we'll wind up leasing, you know, to one, two, three floor tenants. It won't be a big block user, but we'll see. So we're out there and the response has been five star, unbelievable response to what we're doing.

And tenants are looking that far out already because they're out of space, right? So it's a balance of, you know, rent and, you know, committing. You know, I would say in terms of 25%, I'm not going to comment much on that. You know, we'll get into when we close the transaction, we'll publish the economics. Confident you guys will be impressed. And, you know, I think as Steve talked about on the call, you know, we're going to try to lay off a little bit, take a little bit of profit risk off the table and, but still on a meaningful piece of the investment. That's the game plan.

I think on the call, Steve said $350 per square foot rent.

$350 at $350. That's our marketing slogan, yes.

Maybe if you can kind of talk about your various sub-markets, what are you seeing with rent growth, which are stronger than others?

Just on Citadel, what rights have they got in terms of rights of veto, design issues? What do you control? The heads-up partnership between us and Ken Griffin.

I agree on everything.

Ken Griffin personally is our partner. Citadel is the tenant. That's how the arrangement works.

And how to veto that?

Mutual, right? It's a heads-up deal. There's things that relate just to Citadel we control, and if it's things just relate to Vornado, they control, as you would expect, right?

So finishes, I mean, is this a...

Buildings design.

There's nothing to argue about at this point. Okay, so it's not a vanity project where he's going to overspend.

No, no, no. Ken owns 60% of the bill. He wants to make money, trust me.

He cares a lot about the spec space and the rents and, yes.

I think actually one of the, you know, more, not just interesting, but positive things is he has thought like a landlord the entire time, right? He constantly says, Glenn, what should we do here? How do we maximize the value of this space, right? It's not thinking about that. Obviously, he wants the building to be great for Citadel, but he's thinking about how do I maximize my 60% ownership stake? And, Glenn, if you tell me we need to put in this amenity, let's do it. If you tell me that this is not good, let's not do it. So he's listened to the real estate professionals, and he's very focused on that 60% being very valuable.

Is he on the Miami building?

Maybe chatting about the submarkets.

I mean, rents are rising. everywhere, particularly for us in Penn. Rents are going up, up, up. At Penn 1, particularly right now, we've leased more than $200,000 most recently with rents running into the $120,000. Similarly, at Penn 2, we have another, you know, 60,000, 70,000 feet of leases out in that same zip code of rents. So, we're really churning very, you know, we're in fifth gear and pen um park avenue any space we could get back right now with 280 park we're getting back and those rents keep rolling up up and up you know as you know park avenue is just tight as a drum um 1290 similarly um you know we're seeing rents there in the bottom of the building now in the 90s which you know is unheard of based on historical you know rents that we and others have gotten, but it's going to be $97 a foot on the sixth floor at $1,290, which is a huge rent. So it speaks, I think, to the market, but it also speaks to what we've done with these properties. The redevelopment of $1,290 has been off the charts for us. Some of you have seen it recently. The town hall, the rooftop park, it's really, you know, we've leased over 600,000 feet off that project now. And, of course, you've all been at Penn now, and it's really, at this point in Penn, it's a very natural state of affairs. People are coming, we're walking, we're touring, and they just feel and experience the environment we created, and everyone's loving it. So, you know, those submarkets are humming, six, park, Penn, but really the market overall is hitting on all cylinders. So rents are rising, free rents coming down, and even TIs are starting to tighten. So it's certainly a landlord's market, period. I mean, it's just clear at this point.

Just pause on that for a second. Jeff, you know, you were there early days, you know, you came up. I mean, you know, we used to get rents at Penn of $60, $65 a foot, right? We're basically double that now. And, you know, we first published our yields, you know, we thought we'd get, give or take, $90 a foot, right? So, you know, I think you're seeing a combination of, obviously, strong market and market acceptance of the sub-market and product of what we've done, and notwithstanding that success, we're still at a discount to Hudson Yards, Manhattan West, so forth. Now, we're not new, right, but our amenities are better and we're better located, and so that gap should narrow, we think, pretty dramatically over time, and so, you know, this is round one of sort of the redevelopment benefit, but we think there's a lot of room to run on the pent assets as we roll those leases over time.

And you touched on, you know, gaining a little bit more leverage in negotiations with lower TIs. Can you maybe just comment on kind of where those are, how it's free rent? You know, what are tenants looking for? What's going on with term?

Yeah, I mean, term is no issue. You know, we're still in the 10 to 15 year range, no change at all on that. If anything, people want flexibility for expansion more than I've ever seen because people are growing a lot. Net effective rents are up, certainly in the high single digits amount of 10 percent at this point but net effective rents are up and keep and keep going up every month um so you know everything is is looking up you know the arrows are up on everything um especially as supply keeps coming down and then the quality of that supply is really really coming down quickly um the market's running very fast right now um so we're trying to look ahead every day and we've been increasing rents over the past three months basically once every week or two in our always we keep sitting down looking at our rent charts and increasing rents as we see things and just trying to stay ahead of the market as we're supposed to do how much interest in how much of your activities on the early renewal side is that our markets continue more and more now more and more we're in a couple of those discussions with large tenants right now which is, you know, gives us very good leverage on those negotiations. So that's a good point. Yes, very much so.

Historically, has there been a spread to where if New York got pricing so far above some other market that people would start to shift to that other, you know, almost like a substitution effect? Has there been a spread? Does it get wide enough? No. There's never been that point historically where they've moved for price.

Never for price. I mean, you see some companies taking space in Florida, Texas. That's different, and those aren't big spaces, as you see from the reports. But it's never been about price. It used to be, oh, we're going to move to Long Island City or Brooklyn. That never happened either. That was more the price talk and that theory, but that never took off at all.

Maybe downtown?

Does downtown sometimes compete on price? We never – the tenants we talked to are never looking at downtown. It's a totally separate market in every respect. And, by the way, downtown's performing better also now. We don't see RSOs interacting with downtown activity at all. If anything, the downtown tenants, we've landed a bunch of them in Penn. They've come up to Penn, many of them. You know, some of the healthcare companies, insurance companies, that's been good for us in town but generally we don't you know interact with that.

Most big downtown companies were already downtown right they've maybe moved to higher quality buildings some move uptown I can't think of a major town that's moved from midtown to downtown that's not where they want to be.

Can you take us through what do you think the profile of Park Avenue of other acquisition. I think it's got 11 years, nine or 11 years term. So is it a future land bank? How do you unlock value with that term or is it something you're just happy to sit on base?

Look, we love the acquisition. If there were five more of them, we'd buy five more. When you have an opportunity to buy a high quality asset in that kind of location, at that kind of price in our view no brainer right and uh uh you know we basically bought it for if you think if you think about the value we're contributing the land at 350 we basically bought park avenue plaza for the land okay now there's a building on top of it with good income so we didn't buy it as a tear down play is that a play sure we looked at it when we evaluate that's like in the drawer for 15 years from now right but not a not a that's likely not the path that's going on And, you know, you have you have a attractive yield with rents that are, you know, 40, 50 percent below market, at least maybe more than that. Right. Certainly when the lease is roll. And it's kind of a one way option. Right. We have 11 year walt with built in bumps, good income, very strong cash on cash yields given the debt. And if any tenants want to do anything before that, they're going to have to come to us and say, you know, we want to do something. Right. And that's already happening. So that creates opportunity. So we have a baseline of, okay, we know we're getting this for the next, you know, number of years. And, you know, assets are not static, right? Companies grow, they get bought, they free, whatever the case may be, results in opportunities to restack that space. And I mean, I don't even think we closed and we already had a phone call on this one, right? We didn't underwrite that, just literally out of the blue. We're involved and, you know, we have an interest in doing something. So stuff's going to happen there, right? If it doesn't, we're fine with that too, but stuff's going to happen there and that's going to be positive in our view but would you join venture I mean given the markets getting better would you sell down an interest no no we know we bought we bought a 49% interest right and I think that's part of a create the opportunity is it was not a wholly owned opportunity was an opportunity to buy a joint venture interest we happen to know the other 51% owner well or 50% on a well. And maybe some institutions, you know, didn't and said, you know, it's not for us, right? So, you know, we're happy at our 50% and, you know, very, very bullish on it.

And the credit roster is excellent, top tier, financial service building, and we're already working on recapture opportunities in the tower, which we sort of knew about before we went after this building so as michael said there's huge opportunity in this thing with the rents being so below market and don't forget it's right next door to 350 park which we love one follow-up on the early renewals um like what what i guess year are some of these leases expiring that you're working on these uh 29 30 31 mainly yeah so three to five years ahead of time already and big tenants and that like yesterday we did a new york city tour we had a lot of folks who was

there we did a double-decker open-air bus uh for a lot of people it was the first time doing something like that but you know one of the big takeaways was some of the that some of the development how does it all work i guess is there an easy way to explain to folks like over the coming years how did the confusion is the dynamics right like you're starting to see these early renewals there's not much space you were saying supply for the next couple years limited I guess how does it all like high level how does it all work over the coming years because I think there was some confusion on does the new supply take away from some of this demand

or not and that it sounds like it's kickstarting some renewals here's the beauty of it the new supply needs rents of call it 250 a foot or more All of it, right, whether it's 625 Madison, 343 Madison, 175 Park, whatever it is. So that's great for us on the renewal theme because our rents aren't $250 a foot. So you have tenants who are in a tweener situation where their leases are coming up three, four, five, six years from now. They don't want to move to new supply because it's too expensive. They generally like our building otherwise, and they want to renew because either they want to redo their space or expand or something's happening. So they come to us early in a market that's robust for us, and we're trying to take advantage of that. At the same time, we want to service our customers and keep our tenants, right? But at the end of the day, that's the umbrella, what's going on. They don't want to move to these new buildings because the rents are too high, and also these projects take a long time to deliver. So that's the general overview of what's happening.

I mean, Jeff, if you look at the supply and, you know, there's probably, including 350, maybe five buildings that are, you know, let's call it started or about start, right? You know, you'll probably have one of those deliver a year starting in 29, right? Maybe it jumps one year and you miss one, right? But that's not a lot of supply, right?

And by the way, every single one of those buildings is at least 50% pre-leased, you know, and most of that constitutes expansion space, you know, for those tenants that are pre-leasing that.

So, you know, I think it's actually, so A, that's not much supply to add over the next, you know, that's probably from 29 to 32, 33, right? So you're talking about seven years. um and uh you know as glenn said in terms of the rent dynamic that's a big umbrella for all the other class a buildings to operate under you know i think for for i think we've gotten to the point now as good as all this is the city needs some new supply right now if you can't service these tenants they will look at other places right maybe they'll move a little back off but eventually to attract that talent you have to be in high quality space so we need some new supply, right? We don't want oversupply, but we need some amount of new supply. And so that's what you're saying. And that generally is catered toward the financial service tenants, because when you're talking about $250, $350 for rents, those are financial service tenants, right? I mean, shocking, I guess there's actually a couple of law firms that are now leasing space, which tells you how much money the lawyers are making these days, right? They're making more than you guys now, Sterling, right? They're making more than bankers. I know it's so I'm sure Horowitz is bothered by that right so you know you have you have to service those those companies and those companies every you think about the investment managers I mean their businesses continue to grow right so they're going to grow in terms of space needs you have to service that with some amount of new supply so for New York to be successful we have to have some new supply we don't want you know a massive bulge and you're not going to see that it's just too the the quantum of capital that you're having to move on these deals now and we and we've got all the data going back to when hudson yards deals right it's it's like 2x what it used to be right so damn expensive the amount of you know not just debt but equity there's just not many people that can pull it off and then i think the other takeaway was the sticker shock on what we were hearing, you know, rents.

You mentioned the $250 for new. I think we heard over $400 and maybe some top floors, at least over $350, I guess. Again, I think I see some, you know, faces in the room that were on the tour. I think there was some surprise there. You know, what are your thoughts around that?

People are paying it who could afford it, and it's the financial companies. They want the best of the best, so they've increased their budget on rent, right? It used be run with x percent of our overall operating expense and that's no longer because people realize just how important it is to be in the best buildings more than ever recruiting the brand the company the culture um so i will spend more of my real estate to get the talent and then part of that is a lot of all the industries are competing for the same people so the financial companies are competing with the technology and the ai companies and it's all very mixed and that's part of it also but but it's changed the game has changed that and that's why the you know the rents have been able to increase and become much more elastic upwards in these new properties.

I think Jeff the the key thing is that it's happening already right like we have a chart we put together that we sort of look at you know Glenn talks about where our spec space is on 350 and so there's a number of comps we sort of you know we're in building is that comp you know what are they paying is that right you know there are several deals that have been done in the 300s in some cases upper 300s for space right so that's today right now when these buildings you know get finished and the market you know is further ahead we think that number is going to be higher but you know we're not prognosticating something that's not happening it's happening today right it's going to keep happening so when a nine west says We're going to try to get $400. God bless. We're rooting for you. We hope you do it because, you know, if we tell you $350, $350, that may look like a bargain, right? That's today's number. It may go up, right? So, we're not guessing until it may get there. There are actual comps that they are there today.

Maybe just in the interest of time, I want to quickly jump into capital allocation and balance sheet.

Maybe retail?

It doesn't get much of a mention. what's going on in the retail yeah yeah look retails come back strong um you know new york is you know the premier market you know for retailers right if you want to have uh this is where the tourism is this is where you maximize sales when you have a location so i would say that leasing velocity has picked up significantly the last two three years um we've seen a number of I would say particular international retailers that, you know, want to come to New York first time locations, right? We're in active discussion with today. You know, rents and, you know, retail, it's not office. It's a little more bespoke. You can be two blocks different on Fifth Avenue, one versus another, and the rents are totally different given the quality of the space and who you're next to and so on. But I would say for, you know, the best assets, you're pretty close back to peak rents, both Times Square and Fifth Avenue. If you look at what we've done in Times Square, you know, we've executed several leases and have a couple others in the works that are basically back at peak levels. I think we'll announce a deal in the third quarter that's quite strong.

Market rents would be – What's that? Market rents in retail, what would that be?

You know, I'd say Times Square. And, again, this is – you know, Times Square, the bullseye is the bow tie. We own both sides of that. When you get one block on either side, you know, it falls off a little bit. But I would say rents in the bullseye are $1,500 to maybe $2,000 for a corner. And what sort of growth rate is that? On an annual basis or 2 and a half, 3% a year?

Yeah, 3% a year.

You know, on Fifth Avenue, you know, let's call it rents generally back to, depending on what could be anywhere from $2,500 to $3,500 is a sweet spot. and some spaces command a lot higher, right? And we've achieved that, you know, recent space. So a lot of it is the quality asset, right? And there's a stretch of fifth, it's probably four blocks. It really is, you know, with the luxury, it's a lot higher. So, you know, the beauty of both those is that's beachfront real estate. I'm not making any more of it. You know exactly how much there is and, you know, with users buying some of that space over the last few years, right? There's just less and less of that available. So, I mean, we got, in fact, two calls in the last week on Fifth Avenue, you know, out of the blue. So, you know, it's not an office where there's a rhythm because, you know, those are big commitments. There's another deal that will get announced shortly, not ours. But, you know, these things take a little time. But, you know, market's healthy.

Could you touch on the investment sales market just given the upward pressure on rates? I know you're looking to sell a couple of sizable assets. You've got the 350 park interest you're looking to sell as well. Just kind of what you're seeing, any kind of, you know, what's going on there.

Yeah, I think if you trace the, you know, what's happened in the market, you know, at first, I'll call it some B assets traded, right? And that tended to be, you know, private capital. you know then some higher quality assets came to the market and you start to see more institutional capital the REITs like us and missile green got more active you know we clearly see this is the most interesting investment environment probably in 15 years you know we're pretty you look at our track record yeah I don't think we made a other than filling in assemblages I don't think we made a single investment on a new buy for a decade right so it's not the right thing we're happy just to keep sitting out in our view the last 18 months has been prime time and you know you've seen we've announced we missed out on a couple other things we were pretty close on so we've been pretty bullish and remain so but it's a you know it's a tight window we're willing to buy but i would say in terms of what the capital is out there today it's private capital is active uh high net worth capital very active uh and i'd say that's globally south america asia Europe I'm so sorry I don't want to cut you off but unfortunately we're out of time I have three rapid-fire questions if I could sneak in number one if long term rates stay higher for longer which has the biggest impact on earnings for your sector higher refinancing costs lower transaction activity or less new supply probably higher refinancing activity then over the next three years

will third-party capital become a more important source of growth for public REITs than balance sheet capital? Yes or no?

I only care about us. Probably not.

And then for your sector, will 2027 same-story NOI growth be higher, the same, or lower than 2026?

I think higher time, right?

Yep. Thank you very much.

After the sector, I only care about us.

Thank you very much. Thank you. Thanks, guys.

Appreciate the time.