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Alexander’s(ALX) - 2025 Q2 - Quarterly Report
Alexander’sAlexander’s(US:ALX)2025-08-04 12:51

markdown PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Alexander's, Inc.'s unaudited consolidated financial statements, including balance sheets, income, comprehensive income, equity, and cash flow statements, with detailed explanatory notes for the specified periods [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) Total assets and equity slightly decreased from December 31, 2024, to June 30, 2025, while total liabilities increased, driven by changes in cash and real estate assets Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | % Change | | :---------------------------------- | :------------ | :---------------- | :----- | :------- | | Total Assets | $1,320,816 | $1,341,295 | $(20,479) | -1.53% | | Real estate, net | $639,480 | $641,570 | $(2,090) | -0.33% | | Cash and cash equivalents | $313,036 | $338,532 | $(25,496) | -7.53% | | Total Liabilities | $1,175,369 | $1,164,436 | $10,933 | 0.94% | | Mortgages payable, net | $987,619 | $988,019 | $(400) | -0.04% | | Total Equity | $145,447 | $176,859 | $(31,412) | -17.76% | | Retained earnings | $105,632 | $133,402 | $(27,770) | -20.82% | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income%20(Unaudited)%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Rental revenues and net income decreased for both the three and six months ended June 30, 2025, primarily due to lower rental and interest income Consolidated Statements of Income Highlights (Amounts in thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :------------------------ | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Rental revenues | **$51,589** | **$53,392** | **$(1,803)** | **$106,504** | **$114,789** | **$(8,285)** | | Total expenses | **$(36,596)** | **$(35,847)** | **$(749)** | **$(72,350)** | **$(72,063)** | **$(287)** | | Interest and other income | **$3,928** | **$7,054** | **$(3,126)** | **$7,873** | **$14,216** | **$(6,343)** | | Interest and debt expense | **$(12,801)** | **$(16,219)** | **$3,418** | **$(23,595)** | **$(32,453)** | **$8,858** | | Net income | **$6,120** | **$8,380** | **$(2,260)** | **$18,432** | **$24,489** | **$(6,057)** | | Net income per share | **$1.19** | **$1.63** | **$(0.44)** | **$3.59** | **$4.77** | **$(1.18)** | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Comprehensive income decreased for both periods ended June 30, 2025, mainly due to a larger change in the fair value of interest rate derivatives Consolidated Statements of Comprehensive Income Highlights (Amounts in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------------- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Net income | **$6,120** | **$8,380** | **$(2,260)** | **$18,432** | **$24,489** | **$(6,057)** | | Change in fair value of interest rate derivatives | **$(1,055)** | **$(3,360)** | **$2,305** | **$(4,036)** | **$(3,900)** | **$(136)** | | Comprehensive income | **$5,065** | **$5,020** | **$45** | **$14,396** | **$20,589** | **$(6,193)** | [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Unaudited)%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Total equity significantly decreased from December 31, 2024, to June 30, 2025, primarily due to dividends and negative changes in comprehensive income Consolidated Statements of Changes in Equity Highlights (Amounts in thousands) | Metric | Balance, Dec 31, 2024 | Net Income | Dividends Paid | Change in Fair Value of Derivatives | Deferred Stock Unit Grants | Balance, June 30, 2025 | | :-------------------------------------- | :-------------------- | :--------- | :------------- | :---------------------------------- | :------------------------- | :--------------------- | | Total Equity | **$176,859** | **$18,432** | **$(46,202)** | **$(4,036)** | **$394** | **$145,447** | | Retained Earnings | **$133,402** | **$18,432** | **$(46,202)** | — | — | **$105,632** | | Accumulated Other Comprehensive (Loss) Income | **$3,887** | — | — | **$(4,036)** | — | **$(149)** | - Dividends paid for the six months ended June 30, 2025, were **$9.00** per common share, totaling **$46,202,000**[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Operating cash flow significantly increased in H1 2025, while investing and financing activities continued to use substantial cash for construction and dividends Consolidated Statements of Cash Flows Highlights (Amounts in thousands) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :---------------------------------- | :--------------------------- | :--------------------------- | :----------- | | Net cash provided by operating activities | **$59,287** | **$28,327** | **$30,960** | | Net cash (used in) provided by investing activities | **$(14,633)** | **$381** | **$(15,014)** | | Net cash used in financing activities | **$(48,185)** | **$(57,308)** | **$9,123** | | Net decrease in cash and cash equivalents and restricted cash | **$(3,531)** | **$(28,600)** | **$25,069** | | Cash and cash equivalents and restricted cash at end of period | **$390,305** | **$524,377** | **$(134,072)** | - Operating cash flow for **6** months ended June 30, 2025, was positively impacted by net income (**$18.4M**), non-cash adjustments (**$26.0M**), and changes in operating assets/liabilities (**$14.9M**)[109](index=109&type=chunk) - Investing activities for **6** months ended June 30, 2025, primarily consisted of **$14.6 million** in construction in progress and real estate additions[108](index=108&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide essential context for the financial statements, detailing company structure, accounting policies, revenue, related parties, debt, and segment information [1. Organization](index=9&type=section&id=1.%20Organization) Alexander's, Inc. is a Delaware-incorporated REIT managing five New York City properties, with Vornado Realty Trust as its manager - Alexander's, Inc. (NYSE: ALX) is a real estate investment trust (REIT) with five properties in New York City[23](index=23&type=chunk) - The company is managed by Vornado Realty Trust (NYSE: VNO)[23](index=23&type=chunk) [2. Basis of Presentation](index=9&type=section&id=2.%20Basis%20of%20Presentation) Unaudited financial statements are prepared under GAAP and SEC Form 10-Q, based on estimates, with current results not indicative of the full year - Consolidated financial statements are unaudited and prepared in accordance with GAAP and SEC Form 10-Q instructions[24](index=24&type=chunk) - Estimates and assumptions were made, and current period results are not necessarily indicative of the full year[25](index=25&type=chunk) [3. Recently Issued Accounting Literature](index=9&type=section&id=3.%20Recently%20Issued%20Accounting%20Literature) The company is evaluating the impact of new FASB ASUs on income taxes and expense disaggregation disclosures, effective in future fiscal years - ASU 2023-09 (Income Taxes) requires additional disclosures for effective tax rate reconciliation and disaggregation of income tax expense/paid, effective for fiscal years beginning after December 15, 2024[26](index=26&type=chunk) - ASU 2024-03 (Expense Disaggregation Disclosures) requires additional disclosure of the nature and specific types of expenses, effective for fiscal years beginning after December 15, 2026[27](index=27&type=chunk) - The company is currently evaluating the impact of these ASUs on its consolidated financial statements[26](index=26&type=chunk)[27](index=27&type=chunk) [4. Revenue Recognition](index=10&type=section&id=4.%20Revenue%20Recognition) Rental revenues decreased due to Home Depot and IKEA lease expirations, partially offset by new tenants and Bloomberg's continued significant contribution Rental Revenues (Amounts in thousands) | Revenue Source | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Lease revenues | **$49,502** | **$51,288** | **$102,228** | **$110,634** | | Parking revenue| **$1,218** | **$1,185** | **$2,414** | **$2,315** | | Tenant services| **$869** | **$919** | **$1,862** | **$1,840** | | **Total Rental Revenues** | **$51,589** | **$53,392** | **$106,504** | **$114,789** | - Bloomberg L.P. accounted for approximately **61%** (**$64.4M**) of rental revenues for the six months ended June 30, 2025, up from **53%** (**$60.9M**) in the prior year[30](index=30&type=chunk) - Home Depot's lease at 731 Lexington Avenue expired on January 31, 2025, resulting in approximately **$15,000,000** in lost annual rental revenues[31](index=31&type=chunk) - IKEA's lease at Rego Park I terminated early on April 1, 2024, with remaining rent and a **$10,000,000** termination payment received in late 2023 and early 2024[33](index=33&type=chunk) [5. Related Party Transactions](index=11&type=section&id=5.%20Related%20Party%20Transactions) Fees paid to Vornado, a **32.4%** owner and service provider, significantly decreased due to lower leasing fees following May 2024 agreement amendments - Vornado Realty Trust owns **32.4%** of Alexander's outstanding common stock and manages/develops its properties[35](index=35&type=chunk) Fees Earned by Vornado (Amounts in thousands) | Fee Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Company management fees | **$700** | **$700** | **$1,400** | **$1,400** | | Development fees | **$207** | **$111** | **$626** | **$126** | | Leasing fees | **$229** | **$5,517** | **$242** | **$5,555** | | Property management, cleaning, engineering, parking and security fees | **$1,464** | **$1,213** | **$2,923** | **$2,849** | | **Total Fees** | **$2,600** | **$7,541** | **$5,191** | **$9,930** | - Amendments to leasing agreements in May 2024 made the Company responsible for third-party lease commissions, with Vornado's fee becoming one-third of the applicable third-party commission[37](index=37&type=chunk) [6. Mortgages Payable](index=12&type=section&id=6.%20Mortgages%20Payable) Mortgages payable remained stable at **$987.6 million**, with the **$300 million** 731 Lexington Avenue retail mortgage extended to October 3, 2025 Outstanding Mortgages Payable (Amounts in thousands) | Property | Maturity | Interest Rate (June 30, 2025) | Balance at June 30, 2025 | Balance at Dec 31, 2024 | | :-------------------------------------- | :----------- | :---------------------------- | :----------------------- | :---------------------- | | 731 Lexington Avenue, office condominium | Oct. 09, 2028 | **5.04%** | **$400,000** | **$400,000** | | 731 Lexington Avenue, retail condominium | Oct. 03, 2025 | **5.83%** | **$300,000** | **$300,000** | | Rego Park II shopping center | Dec. 12, 2025 | **5.60%** | **$200,561** | **$202,544** | | The Alexander apartment tower | Nov. 01, 2027 | **2.63%** | **$94,000** | **$94,000** | | **Total** | | | **$994,561** | **$996,544** | | Deferred debt issuance costs, net | | | **$(6,942)** | **$(8,525)** | | **Mortgages payable, net** | | | **$987,619** | **$988,019** | - The **$300 million** mortgage loan on the 731 Lexington Avenue retail condominium was extended from August 5, 2025, to October 3, 2025, bearing interest at **SOFR** plus **1.51%** (**5.83%** as of June 30, 2025)[46](index=46&type=chunk) [7. Stock-Based Compensation](index=12&type=section&id=7.%20Stock-Based%20Compensation) In May 2025, the company granted **$394,000** in DSUs to Board members, with **28,666** DSUs outstanding and **477,121** shares available for future grants - In May 2025, **346** DSUs were granted to each Board member, with an aggregate grant date fair value of **$394,000**, expensed immediately upon vesting[48](index=48&type=chunk) - As of June 30, 2025, there were **28,666** DSUs outstanding and **477,121** shares available for future grants under the 2016 Omnibus Stock Plan[48](index=48&type=chunk) [8. Fair Value Measurements](index=12&type=section&id=8.%20Fair%20Value%20Measurements) The company applies ASC 820 fair value hierarchy, with an interest rate cap measured at Level 2 and mortgages payable at Level 2 fair value - Financial assets measured at fair value as of June 30, 2025, include an interest rate cap of **$129,000** (Level 2)[52](index=52&type=chunk) - Cash equivalents are carried at cost, approximating fair value (Level 1)[56](index=56&type=chunk) Fair Value of Financial Instruments Not Measured at Fair Value (Amounts in thousands) | Instrument | Carrying Amount (June 30, 2025) | Fair Value (June 30, 2025) | Carrying Amount (Dec 31, 2024) | Fair Value (Dec 31, 2024) | | :--------- | :------------------------------ | :------------------------- | :----------------------------- | :------------------------ | | Cash equivalents | **$63,906** | **$63,906** | **$61,889** | **$61,889** | | Mortgages payable | **$994,561** | **$981,633** | **$996,544** | **$967,941** | [9. Commitments and Contingencies](index=15&type=section&id=9.%20Commitments%20and%20Contingencies) The company maintains extensive insurance, including terrorism coverage via FNSIC, and expects no material financial impact from ongoing legal actions - Maintains general liability insurance (**$300M** per occurrence) and all-risk property/rental value insurance (**$1.7B** per occurrence), including terrorism coverage[59](index=59&type=chunk) - Fifty Ninth Street Insurance Company, LLC (FNSIC), a wholly-owned subsidiary, directly insures NBCR acts of terrorism, with a **$338,000** deductible and **20%** responsibility for covered losses[60](index=60&type=chunk) - Legal actions in the ordinary course of business are not expected to have a material effect on financial position, results of operations, or cash flows[63](index=63&type=chunk) [10. Earnings Per Share](index=15&type=section&id=10.%20Earnings%20Per%20Share) Basic and diluted net income per common share decreased for both the three and six months ended June 30, 2025, with no dilutive securities Net Income Per Common Share (Basic and Diluted) | Period | Net Income (thousands) | Weighted Average Shares Outstanding | Net Income Per Common Share | | :----- | :--------------------- | :---------------------------------- | :-------------------------- | | 3 Months Ended June 30, 2025 | **$6,120** | **5,134,599** | **$1.19** | | 3 Months Ended June 30, 2024 | **$8,380** | **5,131,902** | **$1.63** | | 6 Months Ended June 30, 2025 | **$18,432** | **5,134,069** | **$3.59** | | 6 Months Ended June 30, 2024 | **$24,489** | **5,131,290** | **$4.77** | - Basic and diluted EPS are the same as there were no potentially dilutive securities outstanding[64](index=64&type=chunk) [11. Segment Information](index=16&type=section&id=11.%20Segment%20Information) All properties are aggregated into one New York City segment, with Net Operating Income (NOI) decreasing for both periods due to lower rental revenues - All properties are aggregated into one reportable segment: leasing, management, development, and redevelopment of properties in New York City[67](index=67&type=chunk) - Net Operating Income (NOI) is the primary financial measure used by the CEO to assess segment performance[67](index=67&type=chunk) Net Operating Income (NOI) (Amounts in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | | :----- | :--------------------------- | :--------------------------- | :----------- | :--------------------------- | :--------------------------- | :----------- | | Rental revenues | **$51,589** | **$53,392** | **$(1,803)** | **$106,504** | **$114,789** | **$(8,285)** | | Total operating expenses | **$(25,934)** | **$(24,991)** | **$(943)** | **$(51,498)** | **$(50,254)** | **$(1,244)** | | **NOI** | **$25,655** | **$28,401** | **$(2,746)** | **$55,006** | **$64,535** | **$(9,529)** | [Report of Independent Registered Public Accounting Firm](index=17&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP reviewed interim financial information, finding no material GAAP modifications and confirming the fair statement of the December 31, 2024 balance sheet - Deloitte & Touche LLP reviewed the interim financial information and found no material modifications needed for conformity with GAAP[73](index=73&type=chunk) - The firm expressed an unqualified opinion on the consolidated financial statements for the year ended December 31, 2024, and confirmed the fair statement of the December 31, 2024, balance sheet information[74](index=74&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting decreased net income and FFO for both periods, detailing factors influencing revenues, expenses, and liquidity, including tenant changes and debt refinancing [Forward-Looking Statements](index=18&type=section&id=Forward-Looking%20Statements) Forward-looking statements are subject to risks and uncertainties, and future results may differ materially, with no undertaking to update them - Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, and future results may differ materially[78](index=78&type=chunk) - The company claims protection under the Private Securities Litigation Reform Act of 1995 and does not undertake to publicly release revisions to forward-looking statements[79](index=79&type=chunk) [Critical Accounting Estimates and Significant Accounting Policies](index=18&type=section&id=Critical%20Accounting%20Estimates%20and%20Significant%20Accounting%20Policies) No material changes occurred in critical accounting estimates or significant accounting policies for the six months ended June 30, 2025 - No material changes to critical accounting estimates or significant accounting policies for the six months ended June 30, 2025[81](index=81&type=chunk) [Overview](index=19&type=section&id=Overview) Alexander's, Inc., a NYC REIT, reported decreased net income and FFO, with key updates including a mortgage extension, high occupancy, and significant tenant changes - Alexander's, Inc. is a REIT with five properties in New York City, managed by Vornado Realty Trust[82](index=82&type=chunk) - The company's success is influenced by global/local economies, tenant financial condition, capital availability, and its ability to lease/sell properties and refinance debt[83](index=83&type=chunk) Financial Results Summary (Amounts in thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | **$6,120** | **$8,380** | **$18,432** | **$24,489** | | Net income per diluted share | **$1.19** | **$1.63** | **$3.59** | **$4.77** | | FFO (non-GAAP) | **$14,762** | **$17,009** | **$35,604** | **$42,541** | | FFO per diluted share (non-GAAP) | **$2.88** | **$3.31** | **$6.93** | **$8.29** | - The **$300 million** mortgage loan on the 731 Lexington Avenue retail condominium was extended for **60** days to October 3, 2025[87](index=87&type=chunk) - As of June 30, 2025, commercial occupancy was **94.8%** and residential occupancy was **98.7%**. Home Depot's lease expired, and new leases were signed with Burlington and Marshalls at Rego Park II[88](index=88&type=chunk)[89](index=89&type=chunk) - Bloomberg L.P. is a significant tenant, contributing approximately **61%** of rental revenues for the six months ended June 30, 2025[90](index=90&type=chunk) [Results of Operations – Three Months Ended June 30, 2025, compared to June 30, 2024](index=21&type=section&id=Results%20of%20Operations%20%E2%80%93%20Three%20Months%20Ended%20June%2030%2C%202025%2C%20compared%20to%20June%2030%2C%202024) Rental revenues, interest income, and interest expense decreased for the three months ended June 30, 2025, while operating expenses increased, driven by lease expirations and debt management - Rental revenues decreased by **$1,803,000**, primarily due to **$3,781,000** lower revenue from Home Depot's lease expiration, partially offset by higher recoveries and straight-line rents from new tenants and Bloomberg's extension[92](index=92&type=chunk) - Operating expenses increased by **$943,000**, mainly due to higher recoverable and non-recoverable operating expenses, partially offset by higher capitalized expenses[93](index=93&type=chunk) - Interest and other income decreased by **$3,126,000**, attributed to lower average interest rates and investment balances[96](index=96&type=chunk) - Interest and debt expense decreased by **$3,418,000**, driven by lower interest rate cap premium amortization, loan downsizing, and lower rates, partially offset by the expiration of the 731 Lexington Retail swap[97](index=97&type=chunk) [Results of Operations – Six Months Ended June 30, 2025, compared to June 30, 2024](index=22&type=section&id=Results%20of%20Operations%20%E2%80%93%20Six%20Months%20Ended%20June%2030%2C%202025%2C%20compared%20to%20June%2030%2C%202024) Rental revenues, interest income, and interest expense decreased for the six months ended June 30, 2025, primarily due to lease expirations and debt management, while operating expenses increased - Rental revenues decreased by **$8,285,000**, primarily due to **$9,001,000** lower straight-line revenue from IKEA's lease expiration and **$6,285,000** lower revenue from Home Depot's lease expiration, partially offset by higher recoveries, Bloomberg's lease extension, and new tenants at Rego Park II[98](index=98&type=chunk) - Operating expenses increased by **$1,244,000**, mainly due to higher recoverable and non-recoverable operating expenses, partially offset by higher capitalized expenses[99](index=99&type=chunk) - Depreciation and amortization decreased by **$868,000**, primarily due to accelerated depreciation related to IKEA's lease expiration in the prior year[100](index=100&type=chunk) - Interest and other income decreased by **$6,343,000**, due to a decrease in average interest rates and investment balances[102](index=102&type=chunk) - Interest and debt expense decreased by **$8,858,000**, primarily due to lower interest rate cap premium amortization, the downsize of the 731 Lexington Office loan, and lower rates, partially offset by the expiration of the 731 Lexington Retail swap[103](index=103&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity was **$390.3 million** as of June 30, 2025, with increased operating cash flow, while investing and financing activities used cash for capital expenditures and dividends - As of June 30, 2025, liquidity (cash and cash equivalents and restricted cash) was **$390,305,000**[106](index=106&type=chunk) - Net cash provided by operating activities for the six months ended June 30, 2025, was **$59,287,000**, a significant increase from **$28,327,000** in the prior year[107](index=107&type=chunk)[110](index=110&type=chunk) - Net cash used in investing activities for the six months ended June 30, 2025, was **$14,633,000**, primarily for construction and real estate additions[107](index=107&type=chunk)[108](index=108&type=chunk) - Net cash used in financing activities for the six months ended June 30, 2025, was **$48,185,000**, mainly due to **$46,202,000** in dividends paid and **$1,983,000** in debt repayments[107](index=107&type=chunk)[108](index=108&type=chunk) - The company expects cash flow from operations and existing balances to be adequate for funding business operations, dividends, and capital expenditures over the next twelve months, but notes refinancing risks[106](index=106&type=chunk) [Funds from Operations ("FFO") (non-GAAP)](index=25&type=section&id=Funds%20from%20Operations%20(%22FFO%22)%20(non-GAAP)) FFO, a non-GAAP measure, decreased for both periods ended June 30, 2025, and is used to assess operating performance by excluding certain real estate items - FFO is a non-GAAP financial measure used to compare operating performance, excluding real estate depreciation/amortization and net gains from sales[119](index=119&type=chunk) FFO (non-GAAP) Reconciliation (Amounts in thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | **$6,120** | **$8,380** | **$18,432** | **$24,489** | | Depreciation and amortization of real property | **$8,642** | **$8,629** | **$17,172** | **$18,052** | | **FFO (non-GAAP)** | **$14,762** | **$17,009** | **$35,604** | **$42,541** | | FFO per diluted share (non-GAAP) | **$2.88** | **$3.31** | **$6.93** | **$8.29** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on variable-rate debt, with a **1%** rate change impacting EPS by **$0.97**, and utilizes an interest rate cap for the Rego Park II mortgage Interest Rate Exposure (Amounts in thousands, except per share) | Debt Type | June 30, 2025 Balance | Weighted Average Interest Rate (June 30, 2025) | Effect of 1% Change in Base Rates | | :---------- | :-------------------- | :--------------------------------------------- | :-------------------------------- | | Variable Rate | **$500,561** | **5.74%** | **$5,006** | | Fixed Rate | **$494,000** | **4.59%** | — | | **Total** | **$994,561** | **5.17%** | **$5,006** | | Total effect on diluted earnings per share | | | **$0.97** | - An interest rate cap on the Rego Park II mortgage loan (notional **$200,561,000**) caps **SOFR** at **4.15%** through December 2025[123](index=123&type=chunk) - The estimated fair value of consolidated debt was **$981,633,000** as of June 30, 2025, compared to **$967,941,000** as of December 31, 2024[124](index=124&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[125](index=125&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter[126](index=126&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal actions in the ordinary course of business are not expected to materially affect the company's financial condition or results - Legal actions in the ordinary course of business are not expected to have a material effect on financial condition, results of operations, or cash flows[128](index=128&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the Annual Report on Form 10-K for December 31, 2024 - No material changes to risk factors since the Annual Report on Form 10-K for December 31, 2024[129](index=129&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - No unregistered sales of equity securities or use of proceeds[130](index=130&type=chunk) [Item 3. Defaults Upon Senior Securities](index=27&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities[131](index=131&type=chunk) [Item 4. Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[132](index=132&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) The **$300 million** mortgage loan on the 731 Lexington Avenue retail condominium was extended to October 3, 2025 - The **$300,000,000** mortgage loan on the 731 Lexington Avenue retail condominium was extended to October 3, 2025[133](index=133&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, as required by Item 601 of Regulation S-K - Exhibits required by Item 601 of Regulation S-K are filed herewith[134](index=134&type=chunk) [Exhibit Index](index=28&type=section&id=Exhibit%20Index) The Exhibit Index details all exhibits accompanying the Form 10-Q, including certifications and financial information in iXBRL format - The Exhibit Index includes certifications (Rule 13a-14(a), Section 1350) from the CEO and CFO, and financial information formatted in Inline Extensible Business Reporting Language (iXBRL)[136](index=136&type=chunk) [SIGNATURES](index=29&type=section&id=SIGNATURES) The report is duly signed on behalf of Alexander's, Inc. by Gary Hansen, Chief Financial Officer, on August 4, 2025 - The report was signed by Gary Hansen, Chief Financial Officer, on August 4, 2025[139](index=139&type=chunk)