Vornado Realty to Report Q3 Earnings: What's in Store for the Stock?

Core Insights - Vornado Realty Trust (VNO) is expected to report third-quarter 2025 results on November 3, with anticipated year-over-year increases in revenues and funds from operations (FFO) per share [1][10] Company Performance - In the last reported quarter, Vornado's FFO per share was 56 cents, exceeding the Zacks Consensus Estimate of 53 cents, with growth in same-store net operating income (NOI) and strong leasing activity [2][3] - Over the past four quarters, Vornado's FFO per share has consistently beaten estimates, with an average surprise of 12.1% [3] Market Environment - The U.S. office market is experiencing solid demand for high-quality spaces, with companies expanding their footprints after previous cutbacks [3] - Despite negative net absorption in the broader office market, gross leasing activity is on the rise, with 46 out of 92 tracked U.S. markets showing positive absorption [4] - Demand for Class A assets remains high, driven by companies focusing on employee retention through enhanced experiences [4] Supply Dynamics - The supply pressures are easing due to reduced new construction activity, with the under-construction pipeline at 22.5 million square feet, the lowest in the 21st century, representing 0.4% of total office inventory [6] - New deliveries in the third quarter were 7.1 million square feet, 30% lower than the average since 2020 [6] Future Projections - Vornado's New York portfolio occupancy is projected to rise to 85.7%, up from 85.2% a year earlier, with revenues expected to reach $362.9 million, indicating flat growth year-over-year [10][11] - The Zacks Consensus Estimate for quarterly revenues is pegged at $443.3 million, also implying flat growth year-over-year [11] - The consensus for FFO per share remains at 55 cents, reflecting a 5.8% increase from the prior-year period [12] Strategic Considerations - Vornado's premium portfolio is likely to have benefited from healthy demand, supporting leasing activity [7] - The company’s focus on opportunistic developments and divestitures, along with a well-diversified tenant base, has contributed to stable revenue generation [8][7]