Michael Franco: Yes, yes. Look, I think we’ve done a pretty good job of hedging over the last couple of years. We weren’t perfect, but I think we’ve done a good job. If you look at the fair value of our hedges right now, I think it’s roughly $300 million. So that tells you we’re quite a bit in the money. I guess, unfortunately. But that means we’ve done a good job of hedging. That being said, you can’t hedge away maturity risk, right? And so the loans roll until we figure out what the plan for those assets are difficult to hedge, right? So if something is floating and we convert it to fix and therefore, we don’t need to have roll that hedge, but you’re exposed on what the interest rate is when you actually do roll it. So the answer is we have some exposure on some expiring or maturing loans where the caps or swaps are at lower rates than the in-place SOFR rate.
And then we’ve got a couple of loans where the swaps 555, for example, we put in place another swap on that asset. That is at a higher level than the existing one. So we have some leakage, we think, in 2024 from those loans that are rolling over and a couple of those swaps that are all expiring, but we will replace this. We will continue to hedge our portfolio, but given rates have moved up when you move from one hedge to the next, there’ll be some leakage on 3 or 4 assets.
Camille Bonnel: Okay. And for my last question, switching gears a bit. Can you talk to the sublease activity you’re seeing across the portfolio? How has it changed since a year ago? And how does it compare by region?
Glen Weiss: Hi, Camille, it’s Glen. From New York portfolio, I’d say the color hasn’t changed much since last year in terms of the spaces that are on the market in our portfolio from a sublease basis. As a matter of fact, some of it has been fully leased or taken off the market. For example, PwC at 90 Park that space is now called for. So I would say nothing really new to highlight over the 12-month period. In Chicago, I think there’s more sublease space in the market in the market generally and if more specifically and in San Francisco, the only tenant to note is Microsoft has announced the sublease of their space 555 that has a very long-term nature left to it. So that’s a general color. But I think if you look at the statistics in New York specifically, I think the numbers are generally on par with a year ago.
Operator: And our next question today comes from Michael Griffin with Citi.
Michael Griffin: Maybe just another question on leasing for Glen. Are you noticing office users taking longer in making decisions about whether or not the lease space and then if you could update us on kind of where TIs and free rents have been trending in the market. That would be great.
Glen Weiss: I think those concession TIs and free rents, that’s all stabilized. And as Michael said in his remarks, we’re even seeing rents go up in certain buildings like a 280 Park, 1290, or PENN 1. So the things stabilizes the answer around the concessions. So what was the other part of it [Indiscernible] longer I think generally the processes are longer in terms of deal making from first toward assigning a lease definitely longer than historic for sure, yes.
Michael Griffin: That’s helpful. And then just on the dividend policy going forward in 2022, just given how it was handled in 2023. I’m curious if you can kind of update us on kind of any expectations for the go-forward year as it relates to the dividend.
Michael Franco: Your question, Griffin, is about 2024, I think you said ’22, but I think you meant 2024?
Michael Griffin: Yes.
Michael Franco: At this point, we don’t really have a comment. I gave you a pretty good outline of where we are in 2023. The environment is fluid, as we said earlier this year, we don’t know how asset sales could impact what we have to do. I think the same goes for next year. So we’ll deal with the 2024 dividend and try to give a little bit more color as we get into 2024.
Michael Griffin: I think it was more — sorry about this, but I think it was more just the expectation to pay it quarterly or wait until the end of the year, if you can comment at all.
Steven Roth: It’s not impossible that we will wait until the end of the year next year as we did this year.
Operator: And our next question today comes from Alex Goldfarb with Piper Sandler. Please go ahead.
Alex Goldfarb: Good morning, Steve, and thanks for your comments at the start of the call. I appreciate it. So 2 questions here. The first is politics obviously has gotten, it’s pretty animated these days, especially around real estate. One of your peers just made a government hire but when you think back to like the Robert Moses era and like Jackie Kennedy saving Grand Central, it seems like politics has always been pretty big in New York. So Steve, given some of the headlines recently, especially on the Penn District, would you say in your career, the current era of political involvement with regards to development, commercial development change of zoning. Would you say it’s different now? Or this is really what New York has always been and it’s just that we happen to be living in today versus had we been around in the 70s, 60s and before.
Steven Roth: That’s a hard to answer question. I think the times today are not very different at all from what the times have been over the last decade. The politics in the United States have always been interesting. The growth of the cities in the United States have always been fairly aggressive. And most cities want to grow. New York is in that category, by the way.
Alex Goldfarb: And then the second question is, a few years ago — well, quite a few years ago, you guys announced an effort to trim G&A given the reduction in the size of the company with the different platform spin-offs, et cetera. As we look at FFO, it’s about half the level that it was 8 or so years ago, but G&A is only down maybe 15%. So is there — as you think about, to the prior question on the dividend for next year, as you think about increasing shareholder returns, what’s your perspective on corporate overhead reduction as part of boosting earnings and growing the dividend.
Michael Franco: Alex, it’s Michael. I think we were maybe the only company in our sector and certainly in the industry, I guess it’s almost 3 years ago now that a major reduction in the height of the pandemic. And that was a difficult reduction, but we did it. I think it was a responsible decision, and I think the company has performed fine and frankly, we elevated some young leaders that I think have done extraordinarily well, hungrier and quite capable. So I think we’re pleased with what we did in retrospect. Look, we are constantly evaluating business both from a personnel standpoint, from a system standpoint, how do we do things more efficiently, et cetera. And we’ll do that as we enter year-end here. But I don’t see — we made some major cuts personnel wise.
