The Howard Hughes Corporation
Q4 2019 Earnings Call Transcript

Published: 28 Feb 2020

[Operator:]

Good morning, and welcome to the Howard Hughes Corporation Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Instructions will be given at that time. Please note today's event is being recorded.I would now like to turn the conference over to David Striph, Executive Vice President. Please go ahead sir.

[David Striph:]

Good morning, and welcome to the Howard Hughes Corporation's fourth quarter 2019 earnings call. With me today are Paul Layne, Chief Executive Officer; David O'Reilly, Chief Financial Officer; and Peter Riley, General Counsel.Before we begin, I would like to direct you to our website www.howardhughes.com where you can download both our fourth quarter earnings press release and our supplemental package. The earnings release and supplemental package include reconciliations of non-GAAP financial measures that will be discussed today in relation to their most directly comparable GAAP financial measures.Certain statements made today that are not in the present tense or that discuss the company's expectations are forward-looking statements within the meaning of the federal securities laws. Although, the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that these expectations will be achieved.Please see the forward-looking statement disclaimer in our fourth quarter earnings press release and the risk factors in our SEC filings for factors that could cause material differences between forward-looking statements and actual results. We are not under any duty to update forward-looking statements unless required by law.I will now turn the call over to our CEO, Paul Layne.

[Paul Layne:]

Thank you, Dave, and thank you all for joining us today. Welcome to our fourth quarter 2019 earnings call. I am pleased to report that, we had an exceptional year and that our core businesses have never been stronger than they were in 2019. The solid results we achieved further cement our conviction that the transformation plan announced last October, represents a successful strategy for increasing shareholder value by lowering overhead, selling non-core assets and focusing the company's resources on our core assets.I'd like to divide my prepared remarks by highlighting the results of the year followed by the progress made on our transformation plan and then discuss the strategic benefits of the recent acquisition of the Occidental Towers in The Woodlands. David will then discuss the results of our MPC operating assets Seaport and strategic development segments, along with our financial results. I'll then finish by discussing our outlook for 2020 before opening up for questions.Before we begin, I'd like to mention our February 19th press release announcing that we have partnered with Say the fintech startup reimagining shareholder communications for this call. Ideally, this tool will enhance investor relations by allowing you our investors to ask questions in advance of our earnings calls and have visibility into other investors' questions.At the end of this call, we will answer the top questions from the past week. We are always looking for ways to elevate our capabilities respond to shareholder questions and make our earnings calls more transparent and engaging. I hope that you will find this new technology helpful in that regard.Okay. On to the highlights of the year. We recorded the strongest annual land sales in the company's history selling 571 residential acres or 25% more than we did in 2018. And if you remember 2018 was an excellent year. Our MPC, EBT or earnings before taxes increased by $54.6 million, or 27% to $257.6 million, up from $203 million, we had substantial growth in our operating assets NOI, including our share of NOI from non-consolidated assets of $36.4 million, or approximately 20% driven by increases in our office, hospitality and multifamily portfolios along with our other category which was driven by placing the Las Vegas Ballpark in service in 2019.We continued the conversion of commercial land into vibrant income-producing assets by starting construction on several new properties including 8,770 New Trails Creekside Apartments Phase II Phase III in Millennium multifamily Kō'ula retail and a stand-alone restaurant at the Merriweather District in Colombia. These new assets will contribute approximately $14.3 million of NOI, when stabilized on costs of approximately $154.1 million and an unlevered return on cost of 9.3%. This combined with our acquisition of the Occidental portfolio, which I will talk about in a minute, accounts for an increase in our annual stabilized NOI target, not including the Seaport of $51.4 million to $367.31 million or approximately 16.3%.At Ward Village in Honolulu, we completed and delivered Ke Kilohana our workforce housing project and also began construction on our sixth tower Ka'ula.In January of this year, we launched public presales of our seventh condo project Victoria Place. We have entered into hard contracts with 20% deposits on 185 homes or 53% of the total project as of February 21, an incredible pace. We really could not be more pleased with the reception of this project in this incredible community.In the Seaport District, we increased revenues by $23 million to $55.6 million in 2019 compared to the previous year due to increases at our existing businesses as well as the openings of new businesses such as Jean-Georges' critically claimed The Fulton and Malibu Farm.Given the inherent volatility of opening new businesses, we will be best served by waiting until we have gotten through a few more quarters to further evaluate our estimated stabilized NOI guidance.Now turning to the transformation plan we announced in October. As you hopefully recall, the transformation plan had three key pillars

[David O'Reilly:]

Thank you, Paul. I'm going to start with a quick review of our MPC, operating assets, strategic development and Seaport segments and then turn to our financial results. As Paul mentioned earlier, MPC EBT increased substantially year-over-year, due to both the higher price per acre being achieved and an increase in number of acres sold across the portfolio. EBT increased $54.6 million to $257.6 million.These figures truly hammer home the fact that the more we amenitize our communities, the more people are drawn to them and the more valuable the remaining land becomes. A great example of this is Summerlin. We opened the Ballpark last year and the price per acre increased $82,000 from $566,000 to $648,000. If you extrapolate that increase across the remaining 2,991 residential acres that we own, the uninflated undiscounted value has increased by almost $0.25 billion.Bridgeland had a more modest increase in price per acre, moving from $385,000 to $408,000. But for us, Bridgeland is more about velocity and reaching critical mass, than maximizing price per acre. We sold 773 lots in 2019, up from 620 in 2018; on our way to what we believe is a critical run rate of 1,000 lots per year.This is what we are continuously doing in our MPCs

[Paul Layne:]

Thanks, David. In our MPC segment as previously mentioned we had a record year with MPC EBT of $258 million. Based on both the momentum from 2019 as well as the limited current year-to-date results, we remain optimistic that 2020 will be an excellent year. With that said, we do not expect to repeat the record results of our 2019 MPC EBT in 2020.A number of super pad sales in Summerlin were accelerated into 2019 to meet our home builders and home buyers' demand. And given the magnitude of work it takes to prepare a super pad we do not believe that these same types of results will be repeated in 2020. We expect that we will have an excellent but normalized year for land sales and the resulting MPC EBT will revert to more normal historical levels between $180 million and $200 million for 2020.In our operating asset segment, we see continued stabilization of recently developed or acquired assets. Strong same-store performance and the addition of Occidental Towers all contributing to meaningful growth in our portfolio NOI.But as we've mentioned, we are actively engaged in non-core asset sales and as we execute those sales our NOI will decrease. As such it is our expectation that our first quarter NOI will be strong as we will have contributions from both the non-core assets before they are sold and the benefit of the occupied Occidental buildings.We then expect the NOI will modestly decline throughout the year as the headwinds of the non-core sales will not be entirely offset by the growth of our stabilization of our recently completed or acquired assets.Within our strategic development segment, we have made meaningful progress in the identification and planning of the next several projects across the portfolio. We have a number of projects ready to go in Summerlin, Colombia, The Woodlands and Ward Village and remain committed to delivering on the promises of our transformation plan, which stated our desire to accelerate growth in our core MPCs.But we are also steadfast in our commitment to the same disciplined approach to new development that we've always had at HHC. We will only start a project when we have both the capital to complete the project and we see ample market demand to fill that development at outsized risk-adjusted returns.Obviously, the Occidental acquisition impacted our capital availability to start multiple new projects early in 2020 and we'll need to wait on our future free cash flow and the proceeds of our non-core asset sales to provide the fuel to fund new development projects.We are optimistic that we will be able to talk about a number of new projects this year and we'll provide more detail on these projects as the timing of closing of our noncore asset sales become more clear.For the Seaport District, our goals for 2020 remain unchanged. We are steadfast in our belief that there is a clear near-term road map to unlocking value and intend to continue to execute on the strategy over 2020 and 2021, including opening and stabilizing our restaurant offerings on Pier 17 which has progressed nicely with the continued stabilization of The Fulton, Malibu Farms and the early opening of Bar Wayo.Finally, the restaurant offerings by Andrew Carmellini remain on track with Mister Dips scheduled to open in May and his Italian chophouse to open in July. Completing construction opening and stabilizing the Tin Building Jean-George food hall which we believe will only further increase traffic and solidify the Seaport as a world-class destination which remains on track for summer 2021 opening.Leasing the balance of the office space on Pier 17 and the third floor of the Fulton Market building, we are working with a number of prospects for these spaces and hope that we can share a more detailed update on its progress in the coming quarters. And finally working with the community and elected officials to finalize our plans for 250 Water Street and the remaining air rights.Finally, our disciplined capital allocation approach will not change in 2020. We will continue to allocate the capital generated from operations and non-core asset sales between new developments and share buybacks to where we see the greatest risk-adjusted returns and opportunities to drive the greatest increases to shareholder value.As you can see from our results, since the day we announced the transformation plan the team has been working at a break-neck pace to deliver on results and close the largest transaction in our company's history. As this has been my first full quarter as CEO, I am incredibly proud of the work that the team has done and the improvements that we've already made to the organization both operationally and culturally. These improvements have only started to materialize in our results. Again, thank you all for joining us today and look forward to talking with you as we get out on the road throughout the year.We will now turn to Q&A. Before we open up the lines to those who have called in the first few questions have been generated by our investors over the past week through our newly implemented Say technology application and will be read by Dave Striph. Dave can you please read the first question?

[David Striph:]

Yes, Paul. At what point would you expect to Seaport to be cash flow and neutral

[Paul Layne:]

Thank you, David. We are steadfast on our plan at the Seaport. We are leasing space. We are aggressively going to get our office space leased and get our restaurants open. And we're very excited about the Jean-Georges food hall, which will open in approximately 18 months, which will be a driver of not only foot traffic but also just the excitement at the Seaport District.We're at a point where maybe 12 to 18 months after the food hall stabilizes in 2021, we can look at this. But at this point we're just excited about the opportunities of getting space leased and creating more sustainable NOI.

[David Striph:]

Does the projected stabilized NOI of $367 million include the Chicago office tower?

[Paul Layne:]

As shown on page 16 of our supplemental, we are showing $14.4 million in our stabilized NOI for 110 Wacker.

[David Striph:]

Did the company receive any bids for assets during its period of IB retention? And if so why were they rejected?

[Paul Layne:]

We received a tremendous amount of interest in individual assets and these were the first people we went back to when we decided to sell non-core assets. This is why we've gotten off to such a strong start of our sales $95.5 million with a $22.4 million gain with the sale as mentioned previously of Cottonwood, West Windsor, and Bridges at Mint Hill.

[David Striph:]

Can you quantify the strategy around asset sales versus buybacks? Are there price levels that are especially attractive? And what valuation would that be based on? Any other strategies to close the NAV gap?

[Paul Layne:]

Sure. David, why don't you take that?

[David O'Reilly:]

Sure. I'd say – and I'll reiterate some of what Paul mentioned in his prepared remarks that our disciplined capital allocation approach is not going to change in 2020. We're going to use the free cash flow that we generate from our recurring NOI, our land sales, and our MPCs, and profits from condominiums.And we're going to allocate that capital where we're going to drive the highest risk-adjusted returns be that through share buybacks or new development opportunities, always making sure that we have ample and appropriate liquidity to finish all of our projects and maintain a well-staggered pushed-out maturity schedule of our maturing debt.

[David Striph:]

Do you anticipate any weakening demand in Hawaii condos due to the coronavirus?

[Paul Layne:]

Thank you, Dave. We are -- it's really too early to know. I think the whole world is looking at the coronavirus and trying to understand how the -- it will impact commercial real estate. We have diversified supply chain for construction in Hawaii following the Trump tariffs.Travel and tourism in Hawaii and Vegas certainly may be affected. We are working from -- our company has focused on how we can actually work from home effectively like probably most companies around the world.We have had phenomenal sales at Victoria Place with 20% hard deposits. We're unbelievably excited about that and we'll be talking more about that in the next several quarters. Sales pace could certainly slow but we generally see after it's been record setting.

[David Striph:]

Which pillar of the transformation plan do you think HHC will make the most significant progress on over the next quarter?

[Paul Layne:]

Thank you. I think that's a great question. And our transformation plan we've talked a lot about it in the last four months since it was enacted. I think the ability to invest in our master plan communities will be the major pillar.The perfect example is our investment in the Occidental towers, which we now are calling The Woodlands Waterway towers and the return of a 13-year investment-grade lease for 935,000 feet between the office building and the warehouse. I think that's a perfect example.

[David Striph:]

What does the time line look like for Ka'ula?

[Paul Layne:]

Dave do you want to take that?

[David O'Reilly:]

Sure. As shown on page 23 of our supplemental we remain on-time to deliver that project in 2022 and we commenced construction as you probably remember in the third quarter of 2019.Again, as Paul mentioned, with the pace of sales of Victoria Place, we're really excited the Ka'ula for a tower that's not delivering until 2022 is already over 74% sold.

[David Striph:]

Will you please give us an update as to the process of monetizing your non-core assets including ballpark timelines where possible.

[Paul Layne:]

Sure. We are on track. And we completely believe that the $2 billion of asset sales netting $600 million is in the next 12 to 18 months exactly as we have projected this from the last four months that we've been discussing.

[David Striph:]

As regards to the South Street Seaport what changes if any do you anticipate implementing to the existing strategy? And how long will it take to determine if the strategy is working?

[Paul Layne:]

South -- so thank you for the question Dave. So, the South Street Seaport the Seaport District we are actively working literally every week on improving the plan. As I mentioned before, we're excited about the food hall that is under construction.And if you are going to be in New York, we want you to come and come to one of our concerts, one of the 41 concerts that we have planned this spring and summer. But the strategy has not shifted since our November plan that's been in place.

[David Striph:]

What were the factors in your decision to change leadership in Hawaii?

[Paul Layne:]

The Hawaii leadership really was tied to Simon Treacy deciding that it was his time that he wanted to retire. And he spent two years mentoring the staff as a very strong leader and it worked out extremely well.Simon is a good brand and he did a lot of great things for our company. But it was time for him to go back to retirement, which he had already retired once. And Doug Johnstone is more than ready to run the region. He has a great history in Hawaii and he has a fantastic team behind him and we couldn't be more excited about the future of our region in Hawaii.

[David Striph:]

Thanks Paul. That ends the Say technology questions. So I'm going to turn it over to the operator to open it up for Q&A. Thank you.

[Operator:]

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Today's first question comes from Alexander Goldfarb with Piper Sandler. Please go ahead.

[Alexander Goldfarb:]

Hey, good morning down there. And first, David and Paul really appreciate the improved transparency certainly in the press release and then in your commentary. So, definitely helpful. So, a few questions from us. First, on the land sales, obviously really, really strong year in 2019. Generally you guys tell us to say, don't model quarterly just focus on an annual. But given the outsized pace of 2019, should we be thinking more about a 2018 level? Or how should we be thinking about 2020 land sales? And let's hope that the corona thing settles down, so we'll put that aside?

[David O'Reilly:]

Yeah. It's a great question Alex. And I'm happy to talk through it. And hopefully after the call you have a chance to go back and take a look at the transcript as well. Paul gave a little bit of guidance at the end of his prepared remarks regarding the performance for each of the segments. And in there we talked a little bit about how the 2019 results of MPC EBT hitting the kind of record of $258 million is something that we think we're going to have a hard time recreating.There were a couple of super pads in Summerlin that we were able to accelerate, to meet the home buyer and homebuilder demand. It's going to be very difficult to do that again. So to see on an annual run rate basis to return to a more normalized, but still very healthy and successful results of between $180 million and $200 million per year of MPC EBT is a level that we think very comfortable we should be able to achieve.

[Alexander Goldfarb:]

Okay. Thank you, David. And then the second question is on Hawaii. Obviously, the presales are just phenomenal. Just curious on the pricing. You guys started out originally with some really high-end units and then you quickly switched to more "workforce-affordable" units that flew off the shelves. Victoria Place is more going back towards a higher price point.So how -- is the market broadening, meaning, that there's more appetite for a wider range of price points? Or is it this particular asset where it's situated in the property that makes it applicable for a higher price point whereas a lot of the other projects that you're planning in the future will be more at the more sort of affordable workforce-type price point?

[Paul Layne:]

Very good question. I think the answer is where the property is first row, second row, third row. And then whether it's workforce housing, which is a requirement that we of course will meet. But the pricing on a per square foot basis and we'd be happy offline to talk to you about that specifically. But the first row, Victoria Place, we right-sized the units and it's been extremely popular almost $2,000 a foot. But it's -- they have sold at record pace. So it's really more of where each particular property is located and the pricing related to that.

[Alexander Goldfarb:]

Okay. And then just finally going back to the Seaport, appreciate the investor's question who asked about the cash flow neutrality. And you guys obviously said, look, it's going to take a while. But as we think about sort of the drag on earnings and the operating costs of opening the restaurants, et cetera. David, do you think that this year is sort of the biggest year as far as the sort of cost that you have to put out front, because you're opening restaurants? Or should we think about the next few years are going to have similar outsized costs like this year does, because maybe you're opening Jean-Georges or opening other different projects where you have -- where you guys bear the operating impact of that?

[David O’Reilly:]

It's a great question, Alex. And it's one that is, obviously, challenging to answer and give a lot of certainty around, but what I can tell you is I do think that 2020 will have meaningful headwind as those pre-opening expenses that flow through the P&L and are not capitalized like a traditional real estate development will continue to materialize in our financial statements throughout the year.And specifically, over the next first and second quarter, we'll be opening the second floor of David Chang's restaurant. Just after that as Paul mentioned, Mister Dips in May. And then Andrew Carmellini's Italian Chophouse will be coming on in July. Obviously, those openings will go through the P&L and I think will obfuscate some of the positive results that we'll see from those restaurants that have been opened and stabilized like The Fulton and Malibu Farm.I do think, as Paul mentioned, one of the keys to getting to cash flow neutrality and one of the really important things that we are focused on all the time is leasing the balance of the office space on the fourth floor of the Pier and the third floor of the Fulton Market building. We are casting a very wide net. And I would tell you perhaps previously, we were very focused on more synergistic tenants, and they've been great like Nike and ESPN. But now we are really focused on increasing net cash flow, generating positive NOI and getting tenants in there as soon as we possibly can, that can pay the rent and have the credit to support our growth.

[Alexander Goldfarb:]

Thank you.

[Operator:]

Our next question today comes from Alex Barron with Housing Research Center. Please go ahead.

[Alex Barron:]

Yeah, thanks. Hi, guys. Good job on the quarter.

[Paul Layne:]

Thank you.

[Alex Barron:]

I wanted -- yeah, I wanted to ask about your master plan and the land sales. Right now, it seems like the housing market is pretty strong. And obviously your pricing reflects that. But at the same time, it feels like a lot of the strength is coming from builders making a shift towards more affordable housing. So are you guys shifting the size of your lots? Or how are you shifting your strategy to meet that more -- that demand for more affordable housing just generally in Bridgeland and in Summerlin and so forth?

[Paul Layne:]

Yes. Thank you Alex. And I always love getting your e-mails and your reports. We are closely monitoring the demand cycles that we've seen especially in Bridgeland. And in some cases we have as you probably know minimized our lots size slightly. But there is certainly a trend kind of a barbell if you will to shrink the lots somewhat and bring home prices down, which increases our volume of lot sales. But also we're also seeing a nice push on the upper end with some of the more custom homes both in Summerlin and in Bridgeland.

[Alex Barron:]

Okay. Interesting. And in Summerlin, obviously, you guys had a pretty huge sale this quarter about how many lots that that represents? And what should we expect for 2020, is it going to be pretty lumpy like towards the end of the year or what?

[Paul Layne:]

Well, as I mentioned in my prepared remarks, Summerlin had just a remarkable year last year. And we couldn't be prouder of Kevin and his team and how they performed. In my prepared remarks, I did mention that let's don't count on the same accelerated incredible sales pace, but we're optimistic that it's going to be another great year.Dave do you have any comments?

[David O’Reilly:]

Yeah. Alex I think that you know the difference obviously between Bridgeland and Summerlin where we're selling individual lots in Bridgeland it tends to be a little bit more even quarter-to-quarter in terms of results. Whereas in Summerlin when you're selling super pad, it can and often has as it was in this year be a little bit more lumpy. I would expect that that bit of quarterly volatility will continue to persist throughout 2020. Although as we always said given that volatility you really need to look at our results on an annual basis to best judge how we're performing in that segment of our business.

[Alex Barron:]

But I'm saying -- I understand that it will be lumpy. But I'm saying would you expect the overall year to be similar in dollar values? Or you don't know at this point in time?

[David O’Reilly:]

I – well, as we said earlier we think that the $262 million of revenue and the $257 million of EBT will be tough to replicate this year. And we are expecting something more in the $180 million to $200 million range, more consistent with previous excellent years that we experienced in 2017 and 2018.

[Paul Layne:]

2018 was a fantastic year if you remember that.

[Alex Barron:]

Right. Okay, well good luck for this year. Thank you.

[Paul Layne:]

Thank you, Alex.

[Operator:]

And our next question today comes from Vahid Khorsand of BSW -- BWS Financial. Please go ahead.

[Vahid Khorsand:]

Good morning. Thanks for taking my question. First question in terms of the noncore sales, you were mentioning that NOI was going to go down after the first quarter. Does that mean you have negotiations underway for noncore assets? And do you expect those to happen in the second quarter or third quarter?

[Paul Layne:]

Yeah. I mean we are actively involved as I mentioned before in our noncore asset sales, although we have given our guidance of 12 to 18 months that it would take -- starting four months ago, but we are very positive about the actions that we are taking to get these things closed. We don't ever want to announce things until they actually close. But I think in the next quarter and two quarters you'll be hearing a lot of positive news.

[Vahid Khorsand:]

When -- and then when you had mentioned stabilized NOI was about 60 something million dollars without the noncore assets. Are you projecting all of them to be disposed of this year?

[David O’Reilly:]

We're still sticking to that 12 to 18-month time frame in terms of when we're going to be able to execute on the sales just from a full stabilized NOI perspective. Obviously there's going to be the headwinds of those sales that will bring it down to a run rate level just over $300 million as Paul mentioned in his remarks earlier.

[Vahid Khorsand:]

Okay. And then my last question is on Ward Village. I know we -- before you mentioned, how you can't record the full sale until you deliver it, you're not anticipating moving up development from 2021 to 2020 completion and booking those sales?

[David O’Reilly:]

I would love to think that, we could accelerate and shave a year off of our construction time frame. We just haven't figured out, how to do it just yet. Look, we are kind of trying to deliver these towers, on time and on budget.And meet the expectations of not just our investors, but those buyers of the units, as well, in Ward Village. And I think the timing that we've laid out in the supplemental that speaks to it on page 23, is one that we feel very good about being able to deliver on.

[Vahid Khorsand:]

So comparatively speaking 2020 condo sales are going to be, noticeably lower than 2019?

[David O'Reilly:]

Correct. We -- we don't have a tower closing this year. So from an earnings perspective, we wouldn't see anything, in the 12 months now. We'll see ' 'A'ali'i close, in 2021 Ka'ula in 2022.And if things continue to progress, as they have with Victoria Place, we're hopeful that we'll be adding that on to a project under construction during 2020, that would be a 2023 delivery.

[Vahid Khorsand:]

Perfect, thank you very much.

[David O'Reilly:]

Thank you.

[Paul Layne:]

Thank you.

[Operator:]

And our next question comes from Peter Abramowitz of Jefferies. Please go ahead.

[Peter Abramowitz:]

Hi guys. I just had a quick question. I wanted to dig into that office space of the Seaport a little bit more. So obviously, you guys, kind of have -- it's very premium office space it's highly amenities.But as far as New York City goes, it's not quite as close to public transportation kind of over there on the East Side. It's a little more central in West Side, in Lower Manhattan.So just curious, have you seen that affect, how kind of some of the tenants here or potential tenants you're speaking to? Does that affect, how they kind of evaluate that space relative to other options they might have, in Lower Manhattan?

[Paul Layne:]

It's a very good question. This is a very special office space. We have 88,000 feet. And in the Pier building Pier 17, that has the most dramatic views. We certainly believe, in all of Lower Manhattan. We have strong interest from a number of tenants.And as David mentioned earlier, we have opened our ideas of who we would accept as a tenant, and looking more directly oriented to NOI achievement, in a rapid fashion. David?

[David O'Reilly:]

I don't say -- Peter, I don't think, the distance to Fulton Street which is just a few blocks away west, has had an impact. And I would say our proximity to the incredible ferry system that has become a mainstay of public transportation in Manhattan, has actually been a pretty big benefit.And a great tool that, we've used to attract incremental office users to the space. So as Paul said, we think, we have great amenities. We don't view the distance in public transportation, as a hindrance at all.And we've gotten a number of folks. As we've talked about in the past, we're very close and within the couple of yards at the goal line. And just haven't been able to get them to sign that lease.So we're working with a number of tenants, as Paul said. And we're hopeful that, we'll be able to talk about that, in the coming quarters with some positive progress.

[Peter Abramowitz:]

Got it, thank you, and then, just as a reminder, I know -- I think the majority of the space you're still trying to lease there is at Pier 17. How much is that pace? And then, how much from a square footage perspective do you have of office that, you're still trying to lease elsewhere, at the Seaport?

[Paul Layne:]

So, at Pier 17, we have on the main floor 88,000 feet. And then there's approximately 46000 feet in the Fulton building on the uplands which we are actively working on as well.And then, there are some partial space partial floor spaces on the Pier as well, which is a smaller amount of the square footage.

[Peter Abramowitz:]

Okay. So overall, you're looking at like 135. Okay. That's it for me. Thanks.

[Paul Layne:]

Great.

[Operator:]

And ladies and gentlemen, this concludes the question-and-answer session. I'd like to turn the conference back over to, Paul Layne for any closing remarks.

[Paul Layne:]

Thank you very much for joining us today. We look forward to speaking with all of you in the future. And that concludes our remarks for today. Thank you very much.

[Operator:]

And thank you, sir. Today's conference has now concluded. We thank you all for attending today's presentation. You may now disconnect your lines. And have a wonderful day.