Alexander’s(US:ALX)2026-02-09 13:30Financial Performance - Net income for the year ended December 31, 2025, was $28,224,000, or $5.50 per diluted share, down from $43,444,000, or $8.46 per diluted share in 2024[137]. - Funds from operations (FFO) for the year ended December 31, 2025, was $62,995,000, or $12.27 per diluted share, compared to $77,968,000, or $15.19 per diluted share in 2024[137]. - Rental revenues decreased to $213,183,000 for the year ended December 31, 2025, down from $226,374,000 in 2024, a decline of approximately 5.8%[149]. - Operating expenses increased to $106,376,000 in 2025, compared to $103,240,000 in 2024, an increase of about 3.0%[150]. - Interest and debt expense decreased to $51,624,000 in 2025, down from $62,818,000 in 2024, a reduction of approximately 18.0%[154]. - Cash and cash equivalents and restricted cash were $192,225,000 as of December 31, 2025, a decrease of $201,611,000 from $393,836,000 in 2024[159]. - Net cash provided by operating activities was $73,444,000 in 2025, compared to $54,106,000 in 2024, an increase of approximately 35.9%[161]. - The company declared a quarterly dividend of $4.50 per share, indicating an annual rate of $18.00 per share, requiring approximately $92,450,000 in 2026[165]. - The company reported a comprehensive income of $24,328 million for 2025, down from $31,130 million in 2024 and $93,028 million in 2023[201]. Property and Rental Information - Bloomberg accounted for $129.3 million, $125.3 million, and $120.4 million in rental revenues for the years ended December 31, 2025, 2024, and 2023, respectively, representing approximately 61%, 55%, and 54% of total rental revenues[22]. - The 731 Lexington Avenue property has 1,080,000 square feet of space, with 952,000 square feet designated for office use, fully occupied by Bloomberg[21]. - The Rego Park II shopping center, which spans 606,000 square feet, is anchored by a 145,000 square foot Costco and a 133,000 square foot Kohl's[21]. - The company is exploring sale opportunities for the vacant Rego Park I property, which has 338,000 square feet of space[21]. - The total portfolio comprises five properties aggregating 2,446,000 square feet[138]. - The office portion of 731 Lexington Avenue is encumbered by a mortgage loan of $400,000,000, maturing in October 2028[115]. - The retail portion of 731 Lexington Avenue has a mortgage loan of $300,000,000, maturing in December 2035, with a fixed interest rate of 7.00%[116]. - Annual rental revenues from Home Depot were approximately $15,000,000 before its lease expired on January 31, 2025[138]. - The Home Depot was the principal retail tenant at 731 Lexington Avenue until its lease expired on January 31, 2025[215]. - Kohl's store at Rego Park II is currently closed but remains obligated under its lease, which expires in January 2031[215]. Debt and Financing - As of December 31, 2025, total mortgages payable amounted to $836,691,000, with a total debt to total enterprise value ratio of 46%[65]. - The company is subject to risks associated with debt financing, including insufficient cash flow from operations to meet required debt service[65]. - Existing mortgage indebtedness of $836,691,000 is secured by three properties, which may restrict operational and financial flexibility[68]. - The company faces risks related to interest rate volatility, which could increase the cost of refinancing existing debt and reduce operating cash flows[67]. - The company has a variable rate balance of $175,000,000 with a weighted average interest rate of 5.72% as of December 31, 2025[180]. - The company has an interest rate cap on a mortgage loan with a notional amount of $175,000,000, capping SOFR at 4.50% through December 2026[180]. Risks and Challenges - The company faces risks from trends in office real estate, with 61% of rental revenues dependent on Bloomberg, amid increasing work-from-home policies[36]. - The competitive environment in New York City affects rental rates and occupancy levels, with various factors influencing the real estate market[29]. - The company is exposed to risks from tenant bankruptcies, which could lead to decreased revenues and operational difficulties, impacting net income and cash available for distributions[49]. - The company faces potential increased costs due to climate change regulations, including compliance costs and penalties related to carbon emissions under New York City's Local Law 97[58]. - Significant inflation could adversely affect the company's ability to raise rental rates, impacting profit margins and increasing operational costs[60]. - The company may encounter challenges in acquiring, developing, or redeveloping properties, which could lead to increased costs and operational risks[61]. - The company is subject to transitional risks related to climate-related policy changes, which could result in substantial costs and affect financial performance[57]. - The company relies on anchor tenants to attract shoppers, and any adverse developments with these tenants could materially impact financial results[48]. - The company may face difficulties in selling real estate promptly, limiting flexibility in response to economic changes[63]. Corporate Governance and Compliance - The company’s operational and financial policies are determined by the Board of Directors, limiting stockholder control over these decisions[76]. - The company may change its policies without stockholder approval, which could affect strategic decisions and operations[76]. - The company is subject to various federal, state, and local regulatory requirements, and noncompliance could result in fines or damage awards[99]. - Changes in federal and state tax laws could adversely affect the company's tax liability and financial condition[94][97]. - The company may be required to pay federal income taxes if it fails to maintain its qualification as a REIT, adversely affecting cash available for distributions[93]. Cybersecurity - Cybersecurity risks could disrupt operations and compromise confidential information, potentially leading to significant financial and reputational damage[84]. - A security breach could result in unauthorized access to sensitive information, leading to legal claims and damage to relationships with tenants and investors[86]. - The company has a comprehensive cybersecurity risk management program integrated into its overall enterprise risk management, with no known material threats as of the report date[104]. - The company has a cybersecurity incident response plan that includes procedures for responding to incidents and assessing risks[109].