NEW YORK, Nov. 03, 2025 (GLOBE NEWSWIRE) -- Vornado Realty Trust (NYSE: VNO) reported today: Quarter Ended September 30, 2025 Financial Results NET INCOME attributable to common shareholders for the quarter ended September 30, 2025 was $11,589,000, or $0.06 per diluted share, compared to net loss attributable to common shareholders of $19,154,000, or $0.10 per diluted share, for the prior year's quarter. FUNDS FROM OPERATIONS ("FFO") attributable to common shareholders plus assumed conversions (non-GAAP) fo ...

Financial Data and Key Metrics Changes - Funds from operations (FFO) per share for Q3 2025 was $2.27, representing a 6.6% increase compared to the same quarter last year [7][13] - Quarter-end leasing was at 96.7% with occupancy at 95.9%, while average quarterly occupancy was 95.7%, down 100 basis points from Q3 2024 [7][8] - Cash same store revenue rose by 6.9% for the quarter and 6.2% year to date [8] - The company has a diversified rent roll, with the top 10 tenants accounting for only 6.9% of rents, down 60 basis points from the previous year [8] Business Line Data and Key Metrics Changes - Quarterly releasing spreads were 36% GAAP and 22% cash for leases signed during the quarter, with year-to-date results slightly higher at 42.7% GAAP and cash respectively [7][8] - The retention rate for tenants rose to almost 80%, indicating a cautious nature among tenants [10] Market Data and Key Metrics Changes - The market remains somewhat bifurcated, with improved activity in smaller spaces (50,000 square feet and below) but larger spaces experiencing delays in leasing [9][10] - The company is reforecasting 2025 starts to 200,000,000 due to current demand levels and a decline in the supply pipeline [11] Company Strategy and Development Direction - The company aims to capitalize on development opportunities earlier than private peers, leveraging its balance sheet strength and existing tenant expansion needs [12] - The focus is on geographic and tenant diversity as strategic paths to stabilize earnings regardless of economic conditions [8] - The company is excited about acquiring properties in Raleigh, North Carolina, and new development land in Orlando [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about macroeconomic conditions improving, which could strengthen consumer and corporate confidence [16] - The company is positioned to benefit from long-term trends such as population migration and evolving logistics chains [18] - Management noted that while construction costs have come down, demand remains a critical factor for development starts [33] Other Important Information - The company has a strong balance sheet with a debt to total market capitalization of 14.1% and an unadjusted debt to EBITDA ratio of 2.9 times [14] - Tenant collections remain healthy, with uncollectible rents estimated to be in the 35 to 40 basis point range as a percentage of revenues [15] Q&A Session Summary Question: Can you expand on leasing and the development pipeline? - Management noted that conversations regarding leasing have improved since May, with a high retention rate benefiting the portfolio [22][24] Question: How have construction costs trended recently? - Construction pricing has come down by about 10% to 12%, but demand remains the primary constraint on starting new projects [31][33] Question: What is the outlook for releasing spreads? - Management believes they can maintain releasing spreads in the mid-30s, with low supply and high demand expected to drive future rent increases [48][50] Question: How are different regional markets performing? - The Eastern Region, particularly Florida and Raleigh, has shown strength, while California and Denver have been slower markets [58][60] Question: What is the current status of bad debt and tenant watch lists? - Bad debt remains low at around 30 to 35 basis points relative to total revenue, with no significant changes in the tenant watch list [84] Question: What interest rate would prompt a change in leverage levels? - Management indicated that they are monitoring interest rates and equity opportunities, with plans to potentially issue $200,000,000 to $250,000,000 in unsecured term loans [85][86]

Financial Data and Key Metrics Changes - The second quarter and first half of the year results exceeded initial guidance, with revenue growth driven by higher occupancy and rental revenue [5][6] - Core FFO growth was reported at 3.3% year to date, positioning the company toward the top of the sector [9] - Operating expenses growth is now forecasted at 3.1%, 100 basis points better than original guidance, leading to higher NOI growth projected at 2.7% for 2025 [6][12] Business Line Data and Key Metrics Changes - Same store NOI growth is projected at 2.7%, which is 30 basis points above initial expectations, driven by a reduction in expense growth [12][13] - New development projects started in the first half of the year totaled $610 million, with a revised target of $1.7 billion for the full year [9][13] Market Data and Key Metrics Changes - Total market occupancy in established regions stands at 94.8%, while the Sunbelt region is at 89.5% due to elevated standing inventory [10] - Economic occupancy in New York, New Jersey averaged 96.3% during Q2, while Seattle achieved 96.6% [19][21] Company Strategy and Development Direction - The company is focused on acquiring $900 million of assets this year, primarily funded by capital from dispositions [8] - Development projects are expected to generate differentiated external growth, with ongoing projects trending above pro forma stabilized yields [7][9] Management's Comments on Operating Environment and Future Outlook - Management noted that job growth expectations for the second half of the year are more muted, but demand remains healthy across most of the portfolio [6] - The company anticipates that new supply in established regions will continue to decline, supporting healthy operating fundamentals [6][10] Other Important Information - The company raised $1.3 billion of capital year to date at an initial cost of 5%, which is attractive relative to yields on new development projects [9] - The CEO acknowledged the retirement of the Head of Investor Relations, Jason Reilly, after 21 years with the company [10][11] Q&A Session Summary Question: What is impacting the pace of leasing in Denver communities? - The leasing pace is averaging about 30 homes per month, which is in line with expectations, but some delays are due to elevated concessions in competitive submarkets [30][32] Question: What gives confidence in achieving the same number of occupied units by year-end? - The company has seen good velocity in leasing, averaging 30 homes per month, and expects to push harder on concessions to maintain occupancy [34][36] Question: What caused the leveling off in asking rent trends? - Demand has softened due to weaker job growth, with about 100,000 fewer jobs than originally projected impacting rent growth [41][42] Question: Why is bad debt running higher compared to peers? - The company charges for all amounts due under lease terms, including late fees and utilities, which may contribute to higher bad debt figures [44][45] Question: How is the Dallas acquisition performing? - The acquisition is trending as expected, with increased resources being allocated to asset management [52][54] Question: What regions are expected to underperform in rent change? - The Mid Atlantic and Southern California are projected to underperform due to weaker job environments and pricing power [58][60] Question: What is the outlook for the DC asset sales? - The DC market is challenging due to unique laws, but the company is comfortable with current pricing and values for the assets [91][94]