Core Viewpoint - Vornado's recent earnings report shows mixed results, with FFO and revenues beating estimates but a decline in same-store NOI, raising questions about future performance leading up to the next earnings release [2][3][4]. Financial Performance - Vornado's Q3 2024 FFO was 52 cents per share, exceeding the Zacks Consensus Estimate of 51 cents, but down 21.2% year over year [2]. - Total revenues for the quarter were $443.3 million, surpassing the Zacks Consensus Estimate of $440.7 million, yet reflecting a year-over-year decline of nearly 1.7% [3]. - Same-store NOI was reported at $247.8 million, an 8.4% decrease from the prior year, with specific portfolio declines of 9% in New York, 2.8% at THE MART, and 4.7% at 555 California Street [4]. Leasing Activity - In the New York office portfolio, 454,000 square feet were leased at an initial rent of $92.32 per square foot, with a weighted average lease term of 9.7 years [5]. - The New York retail portfolio saw 97,000 square feet leased at an initial rent of $66.26 per square foot, with a lease term of 10.8 years [6]. - At THE MART, 239,000 square feet were leased at an initial rent of $50.18 per square foot, with a lease term of 8.4 years [7]. - In 555 California Street, 46,000 square feet were leased at an initial rent of $98.75 per square foot, with a lease term of 11.6 years [8]. Occupancy Rates - The occupancy rate in the New York portfolio decreased to 86.7%, down 320 basis points year over year, while THE MART's occupancy increased to 79.7%, up 290 basis points [9]. Balance Sheet - Vornado ended Q3 2024 with cash and cash equivalents of $783.6 million, a decrease of 10.2% from $872.6 million as of June 30, 2024 [10]. Industry Comparison - Vornado is part of the Zacks REIT and Equity Trust - Other industry, where Digital Realty Trust has gained 5.6% over the past month, reporting revenues of $1.43 billion, a year-over-year increase of 2.1% [14].

Core Viewpoint - Vornado Realty Trust is positioned to benefit from the increasing demand for high-quality office spaces with premium amenities, although challenges in the office real estate market and geographic concentration raise concerns [1][9]. Group 1: Financial Performance - In Q3 2024, Vornado reported adjusted funds from operations (FFO) of 52 cents per share, surpassing the Zacks Consensus Estimate of 51 cents, but reflecting a 21.2% decline year-over-year [2]. - The company had $2.6 billion in liquidity as of September 30, 2024, including $1 billion in cash and cash equivalents, and $1.6 billion available under its revolving credit facilities [7]. - A projected year-over-year decrease of 2.5% in total revenues is expected for 2024, alongside a 17.9% decline in adjusted FFO [9][12]. Group 2: Market Position and Strategy - Vornado Realty owns a portfolio of high-quality office properties in high-rent markets such as New York, Chicago, and San Francisco, focusing on expanding its market share in New York City [3][4]. - The company is enhancing its core business through opportunistic developments, divestitures, and strategic sell-outs, which provide capital for reinvestment [6]. - Vornado's focus on premier office spaces in transit-centric locations is expected to capitalize on the trend of office-using job growth [5]. Group 3: Risks and Challenges - The company faces ongoing uncertainty in the macroeconomic environment and a hybrid working model, which may lead to fluctuating demand for office spaces [9]. - Vornado's significant exposure to the New York City office market, which accounts for 86.5% of its net operating income, makes its cash flows vulnerable to regional economic conditions [10]. - Competition from other developers and the availability of sublease space may hinder Vornado's ability to attract and retain tenants at competitive rents [11].

Core Viewpoint - Vornado Realty Trust (VNO) has experienced an 81% increase in stock price over the past six months, significantly outperforming its industry's growth of 17.3% [1] Group 1: Financial Performance - In Q3 2024, Vornado reported funds from operations (FFO) of 52 cents per share, surpassing the Zacks Consensus Estimate of 51 cents, although this represents a 21.2% decline year-over-year [2] - The company achieved better-than-expected top-line growth during the same quarter [2] Group 2: Market Position and Strategy - Vornado focuses on high-rent, high-barrier-to-entry markets, which, along with a diversified tenant base, is expected to drive steady cash flows and long-term growth [3] - The demand for office spaces in New York remains strong, with Vornado leasing 454,000 square feet across 18 transactions at an initial rent of $92 per square foot in Q3 2024 [4] - The company is well-positioned to benefit from rising rents in newly constructed or redeveloped assets that offer ample amenities [5] Group 3: Development and Financial Strength - Vornado is engaging in opportunistic developments and divestitures, with strategic sellouts providing capital for reinvestment in developments and redevelopments [6] - The company sold a 49.9% interest in a property for net proceeds of $2 million and two condominium units for approximately $31.6 million in the first nine months of 2024 [6] - As of September 30, 2024, Vornado had $2.6 billion in liquidity, including $1 billion in cash and cash equivalents, and $1.6 billion available under its revolving credit facilities [7]

Group 1 - Manhattan's office vacancy rate decreased by 90 basis points year-over-year to 16.8% in October 2024 [1] - The asking rents in Manhattan reached the highest in the US at $67.93 per square foot [1] - There has been a slowdown in new office construction in Manhattan [1] Group 2 - Pacifica Yield focuses on long-term wealth creation through investments in undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Core Viewpoint - Vornado Realty Trust (NYSE: VNO) was downgraded at the beginning of the year after a strong rally at the end of the previous year, indicating a cautious outlook on the stock's future performance [1]. Group 1 - The stock had previously rallied back significantly, prompting the downgrade [1].

Financial Data and Key Metrics Changes - Third quarter comparable FFO as adjusted was $0.52 per share, down from $0.66 per share in the same quarter last year, primarily due to lower NOI from known move-outs and higher net interest expense [24] - Liquidity stands at $2.6 billion, including $1 billion in cash, with additional cash expected from the Uniqlo sale and NYU prepaid rent [12][43] Business Line Data and Key Metrics Changes - Year-to-date leasing activity reached 2.5 million square feet company-wide, with 2.1 million square feet in Manhattan [9] - In the third quarter, approximately 740,000 square feet of office space was leased across three markets, with an average starting rent of $92 per square foot in New York [28][29] - The New York office cash mark-to-market for the quarter was reported at a negative 7%, but if certain leases were included, it would be a positive 17.9% [33] Market Data and Key Metrics Changes - Manhattan's leasing volume for the first three quarters of 2024 totaled 23.1 million square feet, with full-year activity expected to surpass 30 million square feet for the first time in five years [25] - Midtown vacancy for Class A buildings is around 10%, with Park Avenue at 7% and Sixth Avenue at 9% [26] - The occupancy rate for the company's office portfolio is currently at 87.5%, down from 89.3% last quarter [36] Company Strategy and Development Direction - The company is focused on leasing up PENN 1 and PENN 2, with significant growth expected from these properties [88] - There is a strong emphasis on cash management and maintaining a disciplined approach to capital allocation, with plans to pay approximately the same dividend as last year [21] - The company is open to acquisitions but remains selective, focusing on good assets at distressed prices [20] Management's Comments on Operating Environment and Future Outlook - The office leasing market in Manhattan is showing signs of recovery, with strong demand for Class A space and declining vacancies [7] - Management expressed optimism about the future, noting that the lack of new office supply is conducive to a landlord's market [8] - The company anticipates completing 2024 with almost 3.8 million square feet leased across its portfolio, which would be the highest volume since 2014 [35] Other Important Information - A master lease agreement with NYU for 770 Broadway is expected to close in January, providing significant upfront payment and annual net rent [10][11] - The company has successfully extended the Bloomberg lease to 2040 and financed the maturing loan on the Bloomberg H2 building [18] Q&A Session Summary Question: Does the anticipated leasing activity include the NYU lease? - Yes, it does [46] Question: When does the occupancy at 770 Broadway start contributing to FFO? - The closing and rent commencement are expected in January [50] Question: Is the strategy for theMART to build occupancy with reduced rents? - The strategy is to rent opportunistically as attractive deals arise, given the current soft market in Chicago [51] Question: What is the current pipeline and activity at PENN 2? - There are 600,000 to 700,000 square feet of leases in negotiation, with expectations to close several during Q4 [53] Question: What is the demand for retail and plans for the Macy's store? - Demand for retail is up significantly, with ongoing discussions for new retailers, including Primark [59][61] Question: How does the company view raising equity given the current cap rate? - The company is well-capitalized and does not currently plan to issue equity, focusing instead on internal opportunities [66][68]

Core Viewpoint - Vornado Realty Trust reported a decline in funds from operations (FFO) for Q3 2024, despite beating consensus estimates, indicating challenges in the current market environment [1][2]. Financial Performance - Adjusted FFO was 52 cents per share, surpassing the Zacks Consensus Estimate of 51 cents, but down 21.2% year-over-year [1] - Total revenues for the quarter were $443.3 million, exceeding the Zacks Consensus Estimate of $440.7 million, but reflecting a year-over-year decline of nearly 1.7% [2] Same-Store Net Operating Income (NOI) - Total same-store NOI was $247.8 million, down from $270.6 million in the prior-year quarter, with declines in key portfolios: New York (-9%), THE MART (-2.8%), and 555 California Street (-4.7%) [3] Leasing Activity - In the New York office portfolio, 454,000 square feet were leased at an initial rent of $92.32 per square foot, with a weighted average lease term of 9.7 years [4] - The New York retail portfolio saw 97,000 square feet leased at an initial rent of $66.26 per square foot, with a weighted average lease term of 10.8 years [5] - At THE MART, 239,000 square feet were leased at an initial rent of $50.18 per square foot, with a weighted average lease term of 8.4 years [6] - 46,000 square feet were leased at 555 California Street for an initial rent of $98.75 per square foot, with a weighted average lease term of 11.6 years [7] Occupancy Rates - Occupancy in the New York portfolio decreased to 86.7%, down 320 basis points year-over-year; THE MART's occupancy increased to 79.7%, up 290 basis points; 555 California Street remained stable at 94.5% [8] Balance Sheet - Vornado ended Q3 2024 with cash and cash equivalents of $783.6 million, a decrease of 10.2% from $872.6 million as of June 30, 2024 [9]

Core Insights - Vornado reported $443.26 million in revenue for Q3 2024, a year-over-year decline of 1.7%, with an EPS of $0.52 compared to $0.28 a year ago, indicating a positive EPS surprise of +1.96% over the consensus estimate [1] Financial Performance - Revenue of $443.26 million exceeded the Zacks Consensus Estimate of $440.72 million by +0.58% [1] - Occupancy in New York was reported at 86.7%, slightly below the average estimate of 87.2% [3] - New York Retail occupancy was 79%, surpassing the two-analyst average estimate of 77.2% [3] - Total revenues from New York were $362.48 million, a decrease of -0.6% year-over-year, compared to the average estimate of $357.27 million [3] - Total rental revenues were $387.47 million, slightly below the average estimate of $389.40 million, reflecting a -3.2% year-over-year change [3] - Fee and other income revenue was $55.79 million, exceeding the average estimate of $51.76 million, with a year-over-year increase of +10.2% [3] - Total revenues from management and leasing fees were $2.84 million, significantly lower than the average estimate of $4.37 million, representing a -12.9% year-over-year change [3] - Total revenues from property rentals were $342.71 million, above the average estimate of $336.25 million, with a year-over-year change of +0.3% [3] Stock Performance - Vornado shares have returned +4.8% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

分组1 - Vornado reported quarterly funds from operations (FFO) of $0.52 per share, exceeding the Zacks Consensus Estimate of $0.51 per share, but down from $0.66 per share a year ago, representing an FFO surprise of 1.96% [1] - The company posted revenues of $443.26 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.58%, although this is a decrease from year-ago revenues of $451 million [2] - Vornado shares have increased approximately 46% since the beginning of the year, outperforming the S&P 500's gain of 20.1% [3] 分组2 - The current consensus FFO estimate for the coming quarter is $0.51 on revenues of $439.97 million, and for the current fiscal year, it is $2.16 on revenues of $1.77 billion [7] - The Zacks Industry Rank for REIT and Equity Trust - Other is in the top 27% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financing and Debt Management - The company extended the $1,075,000,000 mortgage loan on 280 Park Avenue to September 2026, with options to extend to September 2028, maintaining an interest rate of SOFR plus 1.78%[4] - A refinancing of 435 Seventh Avenue was completed for $75,000,000, with a fixed interest rate of 6.96% through April 2026, replacing a previous loan of $95,696,000[4] - The company extended its unsecured revolving credit facility to April 2029, with a new facility of $915,000,000 bearing interest at SOFR plus 1.20%[4] - A $400,000,000 refinancing of the office condominium portion of 731 Lexington Avenue was completed, carrying a fixed rate of 5.04% and maturing in October 2028[4] - A joint venture modified the terms of the $625,000,000 mortgage loan on 85 Tenth Avenue, deferring interest payments until December 2026[4] - The company has a total of $5,466,550 in debt subject to interest rate swaps and a 1.00% SOFR interest rate cap[51] - The total variable rate debt subject to interest rate caps amounts to $844,700[51] - Fixed rate debt per loan agreements is reported at $3,349,954[51] - The company has a total of $10,066,342 in variable rate debt not subject to interest rate swaps or caps[51] - The 555 California Street mortgage loan has a notional amount of $840,000 with an all-in swapped rate of 6.03%[51] - The unsecured revolving credit facility has a balance of $575,000 with an interest rate of 3.88%[51] - The unsecured term loan has a total of $800,000 with varying interest rates across different maturities[51] - The 1290 Avenue of the Americas mortgage loan has a balance of $665,000 and an effective interest rate of 5.94%[51] - The company has a total of $500,000 in the PENN 11 mortgage loan with an interest rate of 6.28%[51] - The 100 West 33rd Street mortgage loan has a balance of $480,000 with an interest rate of 5.26%[51] - Total secured debt amounts to $5,708.919 million, with a weighted average interest rate of 4.56%[53] - The company has a total unsecured debt of $2,575 million, with a weighted average interest rate of 3.40%[53] - The company has a total debt of $8,283.919 million, with fixed rate debt amounting to $7,066.850 million[53] - The company has a $1.25 billion unsecured revolving credit facility due in December 2027, with an interest rate of 3.88%[53] - The company’s largest secured debt is $1,200 million for 555 California Street, with an interest rate of 6.36%[53] Financial Performance - Total revenues for Q3 2024 were $443,255,000, a decrease of 1.6% from $450,995,000 in Q3 2023[8] - Net loss attributable to common shareholders for Q3 2024 was $(19,154,000), compared to a net income of $52,846,000 in Q3 2023[8] - FFO attributable to common shareholders plus assumed conversions, as adjusted, for Q3 2024 was $102,755,000, down from $127,241,000 in Q3 2023, representing a decrease of 19.2%[9] - Per diluted share FFO for Q3 2024 was $0.52, compared to $0.66 in Q3 2023, reflecting a decline of 21.2%[9] - Total revenues for the nine months ended September 30, 2024, were $1,329,896, a decrease of $39,381 compared to $1,369,277 in 2023[15] - Net income attributable to common shareholders for the nine months ended September 30, 2024, was $7,072, down from $104,391 in 2023, representing a decline of 93.2%[17] - Operating expenses increased to $691,753 for the nine months ended September 30, 2024, compared to $685,233 in 2023, reflecting a rise of $6,520[15] - Total rental revenues for the nine months ended September 30, 2024, were $1,170,343, down from $1,215,994 in 2023, a decrease of $45,651[15] - The company reported a net loss of $(19,468) for the three months ended September 30, 2023, compared to a net income of $59,570 in the same period last year[11] - The company reported a net gain on the sale of real estate of $(53.045) million for the three months ended September 30, 2023[79] - The company reported a total of $2,682,672,000 in investments in partially owned entities, with a share of debt amounting to $1,993,607,000[39] Asset Management and Property Performance - The company has a carrying value of $54,196,000 for the 606 Broadway property after an impairment charge recorded in Q4 2023[4] - The company has extended leases covering approximately 947,000 square feet at 731 Lexington Avenue for an additional eleven years to February 2040[7] - The company reported a cash basis NOI at share of $852,619,000 for the nine months ended September 30, 2023, compared to $723,440,000 in the prior year, indicating a 17.9% increase[25] - The NOI at share for the New York segment for the three months ended September 30, 2024, was $265,491,000, down from $280,995,000 in the same period of 2023, a decrease of 5.5%[24] - The company’s share of NOI from partially owned entities increased to $210,942,000 for the nine months ended September 30, 2023, compared to $202,043,000 in the previous year, marking a growth of 4.4%[22] - The company has active development projects in the PENN District with a total rentable square footage of 1,795,000 and a projected incremental cash yield of 9.5%[27] - The total future opportunities for development amount to 4,306,000 square feet, including various properties in New York and Chicago[27] - The average initial rent per square foot for New York office leases signed in the three months ended September 30, 2024, was $92.32, with a weighted average lease term of 9.7 years[29] - Tenant improvements and leasing commissions for New York office leases were $96.29 per square foot, representing 10.8% of the initial rent[29] - The total square footage as of September 30, 2024, is 34,800 thousand square feet, a slight decrease from 34,808 thousand square feet on June 30, 2024[57] - The occupancy rate in New York as of September 30, 2024, is 86.7%, down from 88.3% on June 30, 2024[59] - The total number of residential units under Vornado's ownership interest is 769, with an occupancy rate of 96.5% as of September 30, 2024[60] - The total annualized escalated rent for the PENN District is $8,841,000, with 7,074,000 in properties currently in service[64] - The total annualized escalated rent for Midtown East is $1,932,000, with an occupancy rate of 100.0% for retail spaces[64] - The total annualized escalated rent for Midtown West is $1,163,000, with an occupancy rate of 100.0% for retail spaces[66] - The total annualized escalated rent for Times Square properties is $61,200,000 with an occupancy rate of 99.3%[69] - The total annualized escalated rent for New York segment is $2,107,800, with an occupancy rate of 87.2%[71] Operational Metrics - The FFO payout ratio based on FFO attributable to common shareholders plus assumed conversions was 18.9% for Q3 2024[8] - The company reported a decrease in lease expirations and net rent commencements contributing to a $16.7 million decrease in FFO[9] - The company aims to utilize non-GAAP measures like NOI at share and FFO to assess unlevered performance and make investment decisions[78] - FAD (non-GAAP) for the three months ended September 30, 2024, was $79,547, compared to $91,821 for the same period in 2023, reflecting a decrease of 13.8%[82] - The FAD payout ratio for the nine months ended September 30, 2024, was 25.2%[82] - General and administrative expenses for the three months ended September 30, 2024, were $35,511, slightly down from $35,838 in the same period of 2023[83] - Depreciation and amortization expense for the nine months ended September 30, 2024, was $334,439, compared to $324,076 for the same period in 2023, an increase of 3.9%[83] - Consolidated total NOI for the three months ended September 30, 2024, was $220,886, down from $217,258 in the same period of 2023[84] - Vornado's share of NOI at cash basis for the three months ended September 30, 2024, was $272,298, compared to $278,015 in the same period of 2023, a decrease of 2.5%[84] Market and Tenant Information - The largest tenant, Meta Platforms, Inc., occupies 1,176,828 square feet, contributing $139,999 thousand or 7.9% of total annualized escalated rents[55] - The second-largest tenant, IPG and affiliates, occupies 1,029,557 square feet, contributing $69,304 thousand or 4.0% of total annualized escalated rents[55] - The company has a total of 30 tenants, with the top 10 accounting for a significant portion of the rental income[55] - Major tenants in the PENN District include Cisco, Bank of America, and Starbucks, contributing to a diverse tenant mix[63] - Major tenants in Times Square include U.S. Polo, Forever 21, and Disney[69] - The average monthly rent per unit in New York increased to $4,689 as of September 30, 2024, from $4,624 on June 30, 2024[60] - The average escalated annual rent PSF for Midtown East is $67.46 for office and $200.79 for retail[64] - The average escalated annual rent PSF for Midtown West is $100.62 for office and $253.55 for retail[66] - The company reported a weighted average escalated annual rent PSF of $102.22 across its properties[66]