Core Insights - The article focuses on Vornado Realty Trust (VNO), one of the oldest and largest REIT companies that owns commercial and office properties in New York [1] Company Overview - Vornado Realty Trust is highlighted as a significant player in the commercial real estate sector, particularly in New York [1] Investment Strategy - The article mentions Denislav Iliev, an experienced day trader with over 15 years in the field, who leads a team of 40 analysts at Trade With Beta [1] - The team specializes in identifying mispriced investments in fixed-income and closed-end funds using straightforward financial logic [1] - Features of the Trade With Beta service include frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, hedging strategies, and an actively managed portfolio [1]

Group 1 - Vornado Realty Trust (VNO) is experiencing an increase in its Manhattan office occupancy rate due to a positive absorption rate in New York City, leading to a favorable leasing environment [1] - VNO has leased 594,000 square feet of office space in Manhattan, indicating strong demand in the market [1] Group 2 - The equity market is highlighted as a significant mechanism for wealth creation or destruction over the long term, emphasizing the importance of market fluctuations [1] - Pacifica Yield focuses on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Core Insights - Vornado Realty Trust (VNO) is expected to experience an increase in its Manhattan office occupancy rate due to a positive absorption rate in New York City, contributing to a favorable leasing environment [1] - VNO has successfully leased 594,000 square feet of office space in Manhattan, indicating strong demand in the market [1] Company Overview - Vornado Realty Trust is focusing on the Manhattan office market, which is currently benefiting from a robust leasing environment driven by positive absorption rates [1] Market Context - The equity market serves as a significant mechanism for wealth creation or destruction over the long term, highlighting the importance of strategic investment in undervalued yet high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Financial Data and Key Metrics Changes - The third-quarter comparable FFO was $0.57 per share, up from $0.52 per share in the same quarter last year, beating analyst consensus by $0.02 [24] - Same-store GAAP NOI for the New York business increased by 9.1% for the quarter, while same-store cash NOI decreased by 7.4% [24][25] - The net debt-to-EBITDA ratio improved to 7.3x from 8.6x at the start of the year, with immediate liquidity of $2.6 billion [28] Business Line Data and Key Metrics Changes - Vornado leased 3.7 million sq ft overall in the first nine months of 2025, with 2.8 million sq ft in Manhattan office [10] - Average starting rents for Manhattan office leasing were $99 per sq ft, with mark-to-markets of +11.9% GAAP and +8.3% cash [10] - During the third quarter, 21 New York office deals were executed totaling 594,000 sq ft at starting rents of $103 per sq ft, with mark-to-markets of +15.7% GAAP and +10.4% cash [11] Market Data and Key Metrics Changes - Midtown core better building vacancy is now down to 6.2%, indicating a shift to a landlord's market [8][9] - Manhattan office leasing activity is on pace to exceed 40 million sq ft for the year, the highest since 2019 [9] - The retail market in Manhattan is showing strength, with tenants approaching landlords for early renewals [19] Company Strategy and Development Direction - The company is focused on the Penn District as a growth engine, with plans for a 475-unit rental residential building and retail redevelopment [14][15] - Vornado aims to transform outdated retail spaces into modern offerings, enhancing the Penn District's appeal [15] - The company is actively involved in the Penn Station transformation project, supporting improvements that benefit its holdings [54][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for office space, noting robust tenant demand across industries [6][9] - The company anticipates significant earnings growth in 2027 as the full impact of Penn 1 and Penn 2 leases takes effect [25] - Management expects occupancy rates to increase into the low 90s over the next year [26] Other Important Information - The company acquired 623 Fifth Avenue for $218 million, with plans to redevelop it into a high-end boutique office building [16][18] - The signage business is projected to have its highest revenue year in 2025, benefiting from the company's unique control over signage in key locations [19][20] Q&A Session Summary Question: How is the leasing strategy changing at Penn 2? - Rents have increased, with average rent at $112 per sq ft, and the company is confident in securing tenants for the remaining space [32] Question: How will leasing for 623 Fifth Avenue be approached? - The company plans to market the building with high-end designs, similar to its approach with 220 Central Park South [34] Question: What is the current signed-not-open pipeline? - The company expects over $200 million in revenue from signed leases over the next couple of years, with the bulk coming in 2027 [40] Question: What is the expected trajectory of occupancy next year? - The company anticipates reaching 90% occupancy in the next quarter or two, with further increases expected [53] Question: What are the plans for proceeds from non-core asset sales? - Proceeds may be used for strengthening the balance sheet or for compelling external acquisitions, depending on opportunities [67] Question: What is the outlook for rent growth in the coming years? - The company expects rent increases to exceed 20%-25% over the next four to five years due to strong demand and limited supply [61]

Financial Data and Key Metrics Changes - Third-quarter comparable FFO was $0.57 per share, compared to $0.52 per share for the same quarter last year, beating analyst consensus by $0.02 [24] - Same-store GAAP NOI for the New York business overall was up 9.1% for the quarter, while same-store cash NOI was down 7.4% [24] - Net debt-to-EBITDA ratio improved to 7.3 times from 8.6 times at the start of the year, with immediate liquidity of $2.6 billion [28] Business Line Data and Key Metrics Changes - During the first nine months of 2025, Vornado leased 3.7 million sq ft overall, with 2.8 million sq ft in Manhattan office [10] - Average starting rents for Manhattan office leasing were $99 per sq ft, with mark-to-markets of plus 11.9% GAAP and plus 8.3% cash [10] - In the third quarter, 21 New York office deals totaled 594,000 sq ft at starting rents of $103 per sq ft, with mark-to-markets of plus 15.7% GAAP and 10.4% cash [11] Market Data and Key Metrics Changes - Midtown core better building vacancy is now down to 6.2%, indicating a shift to a landlord's market [9] - Manhattan office leasing activity is on pace to exceed 40 million sq ft for the year, the highest since 2019 [9] - New York office occupancy increased to 88.4% from 86.7% last quarter, primarily due to leasing activity at Penn 2 [26] Company Strategy and Development Direction - The company is focused on the Penn District as a growth engine, with plans for a 475-unit rental residential building and retail redevelopment [14][15] - The acquisition of 623 Fifth Avenue is aimed at transforming it into a high-end boutique office building [16][17] - The Manhattan retail market is showing strength, with tenants approaching landlords for early renewals [19] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the demand for office space, noting that tenant demand is robust across all industries [6][9] - The company expects 2025 leasing volume for Manhattan office to be the highest in over a decade [10] - Management anticipates significant earnings growth in 2027 as the full impact of Penn 1 and Penn 2 leases takes effect [25] Other Important Information - The company has generated $1.5 billion in net proceeds from sales and financings, paying down $900 million in debt [28] - Signage revenue for 2025 is projected to be the highest year ever, with the company owning the largest signage portfolio in New York City [19][20] - The company is involved in the Penn Station transformation project, supporting improvements that benefit its holdings [54][56] Q&A Session Summary Question: How is the leasing strategy changing at Penn 2? - Rents have increased, with average rent at $112 per sq ft, and the company is confident in its leasing strategy for the remaining space [32] Question: How will leasing for 623 Fifth Avenue be approached? - The company plans to market the building with complete designs to attract high-end tenants [34] Question: What is the current signed-not-open pipeline? - The company expects over $200 million in revenue from signed leases over the next couple of years, with the bulk coming in 2027 [40] Question: What is the expected trajectory of occupancy next year? - The company anticipates reaching 90% occupancy in the next quarter or two, with continued growth thereafter [53] Question: What are the plans for proceeds from non-core asset sales? - Proceeds will be used to strengthen the balance sheet and potentially for compelling external acquisitions [66] Question: What is the status of the Penn Station transformation project? - The company supports improvements to Penn Station and is involved in the process, focusing on retail opportunities [54][56] Question: What are the expectations for rent growth in the coming years? - The company expects rent growth to exceed 20%-25% over the next four to five years due to strong demand and limited supply [61]

Financial Data and Key Metrics Changes - Third-quarter comparable FFO was $0.57 per share, compared to $0.52 per share for the same quarter last year, beating analyst consensus by $0.02 [19] - Same-store GAAP NOI for the New York business overall was up 9.1% for the quarter, while same-store cash NOI was down 7.4% [20] - The net debt-to-EBITDA ratio improved to 7.3 times from 8.6 times at the start of the year, with immediate liquidity of $2.6 billion [23] Business Line Data and Key Metrics Changes - During the first nine months of 2025, Vornado leased 3.7 million sq ft overall, with 2.8 million sq ft in Manhattan office [8] - Average starting rents for Manhattan office leasing during the first nine months were $99 per sq ft, with mark-to-markets of plus 11.9% GAAP and plus 8.3% cash [8] - In the third quarter, 21 New York office deals totaled 594,000 sq ft at starting rents of $103 per sq ft, with mark-to-markets of plus 15.7% GAAP and 10.4% cash [9] Market Data and Key Metrics Changes - Midtown core better building vacancy is now down to 6.2%, indicating a shift to a landlord's market [6] - Manhattan office leasing activity is on pace to exceed 40 million sq ft for the year, the highest since 2019 [7] - New York office occupancy increased to 88.4% from 86.7% last quarter, primarily due to leasing activity at Penn 2 [21] Company Strategy and Development Direction - The company is focused on the Penn District as a growth engine, with plans for a 475-unit rental residential building and retail transformation [11][12] - The acquisition of 623 Fifth Avenue is aimed at redeveloping it into a high-end boutique office building, with a projected yield of 9% [14][15] - The Manhattan retail market is showing strength, with tenants approaching landlords for early renewals as rents rise [16] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the demand for office space, noting that tenant demand is robust and broad-based across industries [6][7] - The company expects 2025 comparable FFO to be slightly higher than 2024, with significant earnings growth anticipated in 2027 as the full impact of Penn 1 and Penn 2 leases takes effect [20] - Management highlighted the strong financing market for New York City assets, with ample liquidity facilitating deals [22] Other Important Information - The company has generated $1.5 billion in net proceeds from sales and financings, paying down $900 million in debt and increasing cash by $500 million [23] - The signage revenue for 2025 is projected to be the highest year ever, benefiting from the unique control over signage in key locations [16][32] - The company is actively involved in the Penn Station transformation project, which is expected to enhance commercial development opportunities [37] Q&A Session Summary Question: How is the leasing strategy changing at Penn 2? - Rents have increased, with average rent at $112 per sq ft, and the company is confident in its approach to leasing the remaining space [25] Question: How will the leasing of 623 Fifth Avenue be approached? - The company plans to market the building with complete designs to attract high-end tenants, similar to the strategy used for 220 Central Park South [27] Question: What is the current signed-not-open pipeline in terms of dollar value? - The company indicated a projection of around $200 million in revenue over the next couple of years, with the bulk coming in 2027 [28] Question: What are the expectations for rent growth in the coming years? - Management expressed confidence that rent growth could exceed 20%-25% over the next four to five years due to strong demand and limited supply [38][39] Question: What are the plans for proceeds from non-core asset sales? - Proceeds could be used for various purposes, including strengthening the balance sheet or potential acquisitions, depending on market opportunities [42]

Financial Data and Key Metrics Changes - The third-quarter comparable FFO was $0.57 per share, up from $0.52 per share in the same quarter last year, beating analyst consensus by $0.02 [20] - Same-store GAAP NOI for the New York business overall increased by 9.1% for the quarter, while same-store cash NOI decreased by 7.4% [21] - The net debt-to-EBITDA ratio improved to 7.3 times from 8.6 times at the start of the year, with immediate liquidity at $2.6 billion [24] Business Line Data and Key Metrics Changes - Vornado leased 3.7 million sq ft overall in the first nine months of 2025, with 2.8 million sq ft in Manhattan office space [9] - Average starting rents for Manhattan office leasing during the first nine months were $99 per sq ft, with mark-to-markets of +11.9% GAAP and +8.3% cash [10] - In the third quarter, 21 New York office deals were executed totaling 594,000 sq ft at starting rents of $103 per sq ft, with mark-to-markets of +15.7% GAAP and +10.4% cash [11] Market Data and Key Metrics Changes - Manhattan office leasing activity is on pace to exceed 40 million sq ft for the year, the highest since 2019 [8] - The vacancy rate for Midtown core better buildings is now down to 6.2% [7] - New York office occupancy increased to 88.4% from 86.7% last quarter, primarily due to leasing activity at Penn 2 [22] Company Strategy and Development Direction - The company is focused on the Penn District as a growth engine, with plans for a 475-unit rental residential building and retail redevelopment [12][14] - The acquisition of 623 Fifth Avenue is aimed at transforming it into a high-end boutique office building, with redevelopment expected to deliver space by year-end 2027 [15][16] - The Manhattan retail market is showing strength, with tenants approaching landlords for early renewals to lock in spaces [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for office space in New York City, noting that tenant demand is robust and broad-based across industries [6] - The company expects 2025 comparable FFO to be slightly higher than 2024, with significant earnings growth anticipated in 2027 as the full impact of Penn 1 and Penn 2 leases takes effect [21] - Management highlighted the strong leasing fundamentals and liquidity in the capital markets for New York City assets [23][24] Other Important Information - The company is the largest owner of signage in New York City, with signage revenue for 2025 projected to be the highest year ever [17][18] - A recent court ruling vacated the arbitration panel's Penn 1 ground lease rent reset, but management remains optimistic about a reversal on appeal [19] Q&A Session Summary Question: How is the leasing strategy changing at Penn 2 with only 20% of the building left? - Rents have increased, with average rent at $112/sq ft at Penn 2, and the company is confident in their approach with many deals in the works [26] Question: How will the leasing of 623 Fifth Avenue be approached? - The company plans to market the building similarly to 220 Central Park South, with high aspirations once designs are completed [28] Question: What is the current signed-not-open pipeline in terms of dollar value? - The company indicated a projection of over $200 million in revenue from signed leases over the next two years, with the bulk coming in 2027 [29][30] Question: What is the expected trajectory of occupancy next year? - Management anticipates occupancy could reach the low 90s over the next year, with a reasonable probability of reaching 90% in the next quarter or two [34][36] Question: What are the plans for proceeds from non-core asset sales? - Proceeds could be used for strengthening the balance sheet or for compelling external opportunities, with a focus on internal development projects [41] Question: How does the company view the signage business in the Penn District? - The company owns 100% of the signs in the Penn District, allowing for optimized income and steady growth in signage revenue [33][32]

Core Insights - Vornado Realty Trust's (VNO) third-quarter 2025 adjusted funds from operations (FFO) were 57 cents per share, exceeding the Zacks Consensus Estimate of 55 cents and reflecting a year-over-year increase of 9.6% [1][11] - Total revenues for the quarter reached $453.7 million, surpassing the Zacks Consensus Estimate of $443.3 million, with a year-over-year growth of 2.4% [2][11] Financial Performance - Total same-store net operating income (NOI) was $266.7 million, up from $265.5 million in the prior year, with notable increases of 9.1% in the New York portfolio and 3.8% in the 555 California Street portfolio, while THE MART saw a decrease of 10.4% [3][11] - The occupancy rate in the total New York portfolio improved to 87.5%, an increase of 80 basis points year over year, with THE MART at 80.7% (up 100 bps) and 555 California Street at 96.3% (up 180 bps) [7][11] Leasing Activity - In the New York office portfolio, 594,000 square feet were leased at an initial rent of $102.60 per square foot, with a weighted average lease term of 12.5 years [4] - The New York retail portfolio saw 27,000 square feet leased at an initial rent of $292.79 per square foot, with a weighted average lease term of 9 years [5] - At THE MART, 158,000 square feet were leased at an initial rent of $48.84 per square foot, with a weighted average lease term of 10.5 years [6] Portfolio Activity - Vornado acquired the 623 Fifth Avenue office condominium for $218 million, which includes 382,500 rentable square feet and is currently 75% vacant, with plans for redevelopment by 2027 [8][11] - A joint venture, in which Vornado holds a 55% interest, sold the 512 West 22nd Street office building for $205 million [9][11] Balance Sheet - Vornado ended the quarter with cash and cash equivalents of $1.01 billion, a decrease from $1.2 billion as of June 30, 2025 [10]

Acquisitions and Sales - The company acquired the 623 Fifth Avenue office condominium for $218 million, financing $145.42 million through a revolving credit facility, with redevelopment expected to complete in 2027[5]. - A joint venture sold 512 West 22nd Street for $205 million, resulting in net proceeds of $37.9 million and a financial statement net gain of $11.002 million[7]. - The company recognized a financial statement net gain of $13.702 million from the sale of two condominium units at 220 Central Park South, with net proceeds of $24.839 million[9]. - The company recognized a financial statement net gain of $10.337 million from the sale of six residential condominium units at Canal Street, with net proceeds of $21.633 million[10]. Financing and Debt - The company completed a $450 million refinancing of PENN 11, a 1.2 million square foot office building, with a fixed interest rate of 6.35%[15]. - The company completed a $675 million refinancing of Independence Plaza, a residential complex, with a fixed interest rate of 5.84%[16]. - As of September 30, 2025, the company's total consolidated debt amounts to $7,216,912, with a weighted average interest rate of 4.41%[83]. - The company's pro rata share of total debt is $9,054,083, with 25% classified as unsecured debt[87]. - The total outstanding debt to total assets ratio is 34%, well below the required limit of 60%[87]. - The fixed charge coverage ratio stands at 2.01, exceeding the required minimum of 1.40[87]. - The company has $1,009,876 in cash and cash equivalents, which reduces the net debt significantly[83]. - The company has a total of $5,807,323,000 in unconsolidated debt, with a debt balance at share of $2,519,230,000[103]. Income and Revenue - Net income attributable to common shareholders for Q3 2025 was $11,589,000, a significant increase from a loss of $19,154,000 in Q3 2024[26]. - Total revenues for Q3 2025 reached $453,700,000, compared to $443,255,000 in Q3 2024, indicating a growth of 2.9%[30]. - Funds From Operations (FFO) attributable to common shareholders plus assumed conversions, as adjusted, for Q3 2025 was $114,535,000, up from $102,755,000 in Q3 2024, representing an 11.5% increase[28]. - The company reported a net income of $932,290,000 for the nine months ended September 30, 2025, a significant increase of $917,932,000 compared to $14,358,000 in the same period of 2024[36]. Operating Performance - For the three months ended September 30, 2025, total rental revenues increased to $389,097,000, up from $387,470,000 in the same period of 2024, reflecting a variance of $1,627,000[34]. - Operating expenses for the three months ended September 30, 2025, were $241,769,000, compared to $236,149,000 in the same period of 2024, resulting in an increase of $5,620,000[34]. - The company achieved a gain on sales-type lease of $803,248,000 for the nine months ended September 30, 2025, compared to no gain in the same period of 2024[36]. - The total NOI at share for the three months ended September 30, 2025, was $266,676,000, a slight increase from $265,491,000 in the same period of 2024, representing a 0.4% growth[40]. Occupancy and Leasing - The occupancy rate in New York improved to 87.5% as of September 30, 2025, up from 85.2% at June 30, 2025[114]. - Residential units in New York have an occupancy rate of 93.7% as of September 30, 2025, with an average monthly rent of $4,992[115]. - The total square feet leased in New York for the three months ended September 30, 2025, was 594,000, with an initial rent of $102.60 per square foot[49]. - The weighted average lease term for office leases signed in New York was 12.5 years for the three months ended September 30, 2025[49]. Future Developments and Capital Expenditures - The company plans to invest $57,663,000 in the PENN 2 development project[68]. - Total active development projects in the New York segment amount to $975 million, with $898.794 million already expended and $76.206 million remaining[70]. - Capital expenditures for the nine months ended September 30, 2025, totaled $279,769,000, with $136,054,000 allocated for tenant improvements[68]. Joint Ventures and Partnerships - The Fifth Avenue and Times Square joint venture reported a net income of $11.772 million for the nine months ended September 30, 2025, compared to $28.971 million in 2024[79]. - The company's share of net income from the 280 Park Avenue joint venture was a loss of $11.969 million for the nine months ended September 30, 2025, compared to a profit of $9.398 million in 2024[79]. - The total share of net income across all unconsolidated joint ventures for the nine months ended September 30, 2025, was $135.588 million, down from $82.457 million in 2024[79]. Market Capitalization and Liquidity - The company's market capitalization as of September 30, 2025, was $18.8 billion, an increase from $19.5 billion at the end of Q3 2024[26]. - The company reported a total liquidity of $2,571,000,000 as of September 30, 2025, down from $2,589,000,000 in Q3 2024[26]. - Cash and cash equivalents increased to $1,010,000,000 as of September 30, 2025, up from $784,000,000 in Q3 2024, reflecting a growth of 28.9%[33]. Dividend Policy - The company anticipates continuing its common share dividend policy with a payment in December 2025, subject to Board approval[26]. - The FFO payout ratio for Q4 2024 was 32.7%, indicating a sustainable dividend policy[26]. - The FAD payout ratio for Q3 2025 was 180.5%, indicating a high distribution relative to available funds[159].

Financial Performance - Net income attributable to common shareholders for Q3 2025 was $11,589,000, or $0.06 per diluted share, compared to a net loss of $19,154,000, or $0.10 per diluted share in Q3 2024 [1] - For the nine months ended September 30, 2025, net income was $842,250,000, or $4.19 per diluted share, significantly up from $7,072,000, or $0.04 per diluted share in the same period of 2024, primarily due to a gain of $803,248,000 related to the NYU master lease [3] Funds from Operations (FFO) - FFO attributable to common shareholders plus assumed conversions for Q3 2025 was $117,372,000, or $0.58 per diluted share, compared to $99,256,000, or $0.50 per diluted share in Q3 2024 [2] - For the nine months ended September 30, 2025, FFO was $373,482,000, or $1.86 per diluted share, compared to $352,914,000, or $1.79 per diluted share in the same period of 2024 [4] Acquisitions and Dispositions - On September 4, 2025, the company purchased the 623 Fifth Avenue office condominium for $218,000,000, intending to redevelop it into a boutique office building by 2027 [10] - A joint venture sold 512 West 22nd Street for $205,000,000 on August 14, 2025, resulting in net proceeds of $37,900,000 and a financial statement net gain of $11,002,000 [12] Leasing Activity - Total square feet leased in Q3 2025 was 594,000, with an initial rent of $102.60 per square foot, reflecting a 15.7% increase compared to the prior year [34] - For the nine months ended September 30, 2025, total square feet leased was 2,782,000, with an initial rent of $99.26 per square foot, showing an 11.9% increase compared to the same period in 2024 [36] Occupancy Rates - As of September 30, 2025, occupancy rates were 87.5% overall, with office occupancy at 88.4% and retail occupancy at 79.2% [38] Same Store Net Operating Income (NOI) - Same store NOI at share increased by 7.5% for Q3 2025 compared to Q3 2024, and by 5.4% for the nine months ended September 30, 2025 compared to the same period in 2024 [41]