Vornado Realty Trust (NYSE: VNO) reported today:
Quarter Ended June 30, 2023 Financial
Results
NET INCOME attributable to common shareholders
for the quarter ended June 30, 2023 was $46,377,000, or $0.24 per
diluted share, compared to $50,418,000, or $0.26 per diluted share,
for the prior year's quarter. Adjusting for the items that impact
period-to-period comparability listed in the table on the following
page, net income attributable to common shareholders, as adjusted
(non-GAAP) for the quarter ended June 30, 2023 was $27,454,000, or
$0.14 per diluted share, and $37,403,000, or $0.19 per diluted
share for the quarter ended June 30, 2022.
FUNDS FROM OPERATIONS ("FFO") attributable to
common shareholders plus assumed conversions (non-GAAP) for the
quarter ended June 30, 2023 was $144,059,000, or $0.74 per diluted
share, compared to $154,965,000, or $0.80 per diluted share, for
the prior year's quarter. Adjusting for the items that impact
period-to-period comparability listed in the table the following
page, FFO attributable to common shareholders plus assumed
conversions, as adjusted (non-GAAP) for the quarter ended June 30,
2023 was $140,737,000, or $0.72 per diluted share, and
$160,059,000, or $0.83 per diluted share for the quarter ended June
30, 2022.
Six Months Ended June 30, 2023 Financial
Results
NET INCOME attributable to common shareholders
for the six months ended June 30, 2023 was $51,545,000, or $0.27
per diluted share, compared to $76,896,000, or $0.40 per diluted
share, for the six months ended June 30, 2022. Adjusting for the
items that impact period-to-period comparability listed in the
table on the following page, net income attributable to common
shareholders, as adjusted (non-GAAP) for the six months ended June
30, 2023 was $29,827,000, or $0.15 per diluted share, and
$69,209,000, or $0.36 per diluted share, for the six months ended
June 30, 2022.
FFO attributable to common shareholders plus
assumed conversions (non-GAAP) for the six months ended June 30,
2023 was $263,149,000, or $1.35 per diluted share, compared to
$309,997,000, or $1.60 per diluted share, for the six months ended
June 30, 2022. Adjusting for the items that impact period-to-period
comparability listed in the table on the following page, FFO
attributable to common shareholders plus assumed conversions, as
adjusted (non-GAAP) for the six months ended June 30, 2023 was
$257,032,000, or $1.32 per diluted share, and $312,496,000, or
$1.62 per diluted share, for the six months ended June 30,
2022.
The following table reconciles net income
attributable to common shareholders to net income attributable to
common shareholders, as adjusted (non-GAAP):
(Amounts in thousands, except per
share amounts) |
For the Three Months EndedJune
30, |
|
For the Six Months EndedJune
30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income attributable to common shareholders |
$ |
46,377 |
|
|
$ |
50,418 |
|
|
$ |
51,545 |
|
|
$ |
76,896 |
|
Per diluted share |
$ |
0.24 |
|
|
$ |
0.26 |
|
|
$ |
0.27 |
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
Certain (income) expense items that impact net income attributable
to common shareholders: |
|
|
|
|
|
|
|
Our share of Alexander's, Inc. ("Alexander's") gain on sale of Rego
Park III land parcel |
$ |
(16,396 |
) |
|
$ |
— |
|
|
$ |
(16,396 |
) |
|
$ |
— |
|
Deferred tax liability on our investment in The Farley Building
(held through a taxable REIT subsidiary) |
|
2,206 |
|
|
|
3,234 |
|
|
|
5,081 |
|
|
|
6,407 |
|
Net gain on sale of the Center Building (33-00 Northern Boulevard,
Long Island City, NY) |
|
— |
|
|
|
(15,213 |
) |
|
|
— |
|
|
|
(15,213 |
) |
Refund of New York City transfer taxes related to the April 2019
transfer to Fifth Avenue and Times Square JV |
|
— |
|
|
|
(13,613 |
) |
|
|
— |
|
|
|
(13,613 |
) |
After-tax net gain on sale of 220 Central Park South ("220 CPS")
condominium units and ancillary amenities |
|
— |
|
|
|
(673 |
) |
|
|
(6,173 |
) |
|
|
(6,085 |
) |
Other |
|
(6,194 |
) |
|
|
12,691 |
|
|
|
(5,906 |
) |
|
|
20,520 |
|
|
|
(20,384 |
) |
|
|
(13,574 |
) |
|
|
(23,394 |
) |
|
|
(7,984 |
) |
Noncontrolling interests' share of above adjustments |
|
1,461 |
|
|
|
559 |
|
|
|
1,676 |
|
|
|
297 |
|
Total of certain (income) expense items that impact net income
attributable to common shareholders |
$ |
(18,923 |
) |
|
$ |
(13,015 |
) |
|
$ |
(21,718 |
) |
|
$ |
(7,687 |
) |
Per diluted share (non-GAAP) |
$ |
(0.10 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
Net income attributable to common shareholders, as adjusted
(non-GAAP) |
$ |
27,454 |
|
|
$ |
37,403 |
|
|
$ |
29,827 |
|
|
$ |
69,209 |
|
Per diluted share (non-GAAP) |
$ |
0.14 |
|
|
$ |
0.19 |
|
|
$ |
0.15 |
|
|
$ |
0.36 |
|
The following table reconciles FFO attributable
to common shareholders plus assumed conversions (non-GAAP) to FFO
attributable to common shareholders plus assumed conversions, as
adjusted (non-GAAP):
(Amounts in thousands, except per
share amounts) |
For the Three Months EndedJune
30, |
|
For the Six Months EndedJune
30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
FFO attributable to common shareholders plus assumed conversions
(non-GAAP)(1) |
$ |
144,059 |
|
|
$ |
154,965 |
|
|
$ |
263,149 |
|
|
$ |
309,997 |
|
Per diluted share (non-GAAP) |
$ |
0.74 |
|
|
$ |
0.80 |
|
|
$ |
1.35 |
|
|
$ |
1.60 |
|
|
|
|
|
|
|
|
|
Certain expense (income) items that impact FFO attributable to
common shareholders plus assumed conversions: |
|
|
|
|
|
|
|
Deferred tax liability on our investment in The Farley Building
(held through a taxable REIT subsidiary) |
$ |
2,206 |
|
|
$ |
3,234 |
|
|
$ |
5,081 |
|
|
$ |
6,407 |
|
After-tax net gain on sale of 220 CPS condominium units and
ancillary amenities |
|
— |
|
|
|
(673 |
) |
|
|
(6,173 |
) |
|
|
(6,085 |
) |
Other |
|
(5,785 |
) |
|
|
2,912 |
|
|
|
(5,497 |
) |
|
|
2,363 |
|
|
|
(3,579 |
) |
|
|
5,473 |
|
|
|
(6,589 |
) |
|
|
2,685 |
|
Noncontrolling interests' share of above adjustments |
|
257 |
|
|
|
(379 |
) |
|
|
472 |
|
|
|
(186 |
) |
Total of certain expense (income) items that impact FFO
attributable to common shareholders plus assumed conversions,
net |
$ |
(3,322 |
) |
|
$ |
5,094 |
|
|
$ |
(6,117 |
) |
|
$ |
2,499 |
|
Per diluted share (non-GAAP) |
$ |
(0.02 |
) |
|
$ |
0.03 |
|
|
$ |
(0.03 |
) |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
FFO attributable to common shareholders plus assumed conversions,
as adjusted (non-GAAP) |
$ |
140,737 |
|
|
$ |
160,059 |
|
|
$ |
257,032 |
|
|
$ |
312,496 |
|
Per diluted share (non-GAAP) |
$ |
0.72 |
|
|
$ |
0.83 |
|
|
$ |
1.32 |
|
|
$ |
1.62 |
|
________________________________
(1) See page
11 for a reconciliation of net income attributable to common
shareholders to FFO attributable to common shareholders plus
assumed conversions (non-GAAP) for the three and six months ended
June 30, 2023 and 2022.
FFO, as Adjusted Bridge - Q2 2023 vs. Q2
2022
The following table bridges our FFO attributable
to common shareholders plus assumed conversions, as adjusted
(non-GAAP) for the three months ended June 30, 2022 to FFO
attributable to common shareholders plus assumed conversions, as
adjusted (non-GAAP) for the three months ended June 30, 2023:
(Amounts in millions, except
per share amounts) |
FFO, as Adjusted |
|
Amount |
|
Per Share |
FFO attributable to common shareholders plus assumed
conversions, as adjusted (non-GAAP) for the three months ended June
30, 2022 |
$ |
160.1 |
|
|
$ |
0.83 |
|
|
|
|
|
Increase (decrease) in FFO, as
adjusted due to: |
|
|
|
Non-recurring items impacting current quarter earnings: |
|
|
|
345 Montgomery Street tenant settlement proceeds, net of legal
expenses |
|
14.1 |
|
|
|
Accelerated stock compensation expense on the June 2023 grant due
to accelerated vesting conditions for retirement-eligible
employees |
|
(7.5 |
) |
|
|
697-703 Fifth Avenue loan default interest in excess of rate under
restructured loan(1) |
|
(4.7 |
) |
|
|
Total non-recurring items impacting current quarter earnings |
|
1.9 |
|
|
|
Increase in interest expense, net of increase in interest
income |
|
(21.8 |
) |
|
|
Sale of 33‐00 Northern Boulevard, 40 Fulton Street and street
retail properties |
|
(2.6 |
) |
|
|
Tenant related items |
|
2.2 |
|
|
|
Other, net |
|
(0.4 |
) |
|
|
|
|
(20.7 |
) |
|
|
Noncontrolling interests'
share of above items and impact of assumed conversions of
convertible securities |
|
1.3 |
|
|
|
Net decrease |
|
(19.4 |
) |
|
|
(0.11 |
) |
|
|
|
|
FFO attributable to common shareholders plus assumed
conversions, as adjusted (non-GAAP) for the three months ended June
30, 2023 |
$ |
140.7 |
|
|
$ |
0.72 |
|
________________________________
(1) The
accrued default interest was forgiven by the lender as part of the
June 2023 restructuring of the loan. In accordance with GAAP, the
accrued amount will be amortized over the remaining term of the
restructured loan, reducing future interest expense.
See page 11 for a reconciliation of net income
attributable to common shareholders to FFO attributable to common
shareholders plus assumed conversions (non-GAAP) for the three and
six months ended June 30, 2023 and 2022. Reconciliations of FFO
attributable to common shareholders plus assumed conversions to FFO
attributable to common shareholders plus assumed conversions, as
adjusted are provided on the previous page.
Dividends/Share Repurchase Program:
On April 26, 2023, Vornado announced the
postponement of dividends on its common shares until the end of
2023, at which time, upon finalization of its 2023 taxable income,
including the impact of asset sales, it will pay the 2023 dividend
in either (i) cash, or (ii) a combination of cash and securities,
as determined by its Board of Trustees. Cash retained from
dividends or from asset sales will be used to reduce debt and/or to
fund the share repurchase program discussed below.
Vornado also announced that its Board of
Trustees has authorized the repurchase of up to $200,000,000 of its
outstanding common shares under a newly established share
repurchase program.
During the three and six months ended June 30,
2023, we repurchased 1,722,295 common shares for $23,216,000 at an
average price per share of $13.48.
350 Park Avenue:
On January 24, 2023, we and the Rudin family
(“Rudin”) completed agreements with Citadel Enterprise Americas LLC
(“Citadel”) and with an affiliate of Kenneth C. Griffin, Citadel’s
Founder and CEO (“KG”), for a series of transactions relating to
350 Park Avenue and 40 East 52nd Street.
Pursuant to the agreements, Citadel master
leases 350 Park Avenue, a 585,000 square foot Manhattan office
building, on an “as is” basis for ten years, with an initial annual
net rent of $36,000,000. Per the terms of the lease, no tenant
allowance or free rent was provided. Citadel has also master leased
Rudin’s adjacent property at 40 East 52nd Street (390,000 square
feet).
In addition, we entered into a joint venture
with Rudin (the “Vornado/Rudin JV”) which was formed to purchase 39
East 51st Street. Upon formation of the KG joint venture described
below, 39 East 51st Street will be combined with 350 Park Avenue
and 40 East 52nd Street to create a premier development site
(collectively, the “Site”). On June 20, 2023, the Vornado/Rudin JV
completed the purchase of 39 East 51st Street for $40,000,000,
which was funded on a 50/50 basis by Vornado and Rudin.
From October 2024 to June 2030, KG will have the
option to either:
- acquire a 60%
interest in a joint venture with the Vornado/Rudin JV that would
value the Site at $1.2 billion ($900,000,000 to Vornado and
$300,000,000 to Rudin) and build a new 1,700,000 square foot office
tower (the “Project”) pursuant to East Midtown Subdistrict zoning
with the Vornado/Rudin JV as developer. KG would own 60% of the
joint venture and the Vornado/Rudin JV would own 40% (with Vornado
owning 36% and Rudin owning 4% of the joint venture along with a
$250,000,000 preferred equity interest in the Vornado/Rudin JV).
- at the joint
venture formation, Citadel or its affiliates will execute a
pre-negotiated 15-year anchor lease with renewal options for
approximately 850,000 square feet (with expansion and contraction
rights) at the Project for its primary office in New York
City;
- the rent for
Citadel’s space will be determined by a formula based on a
percentage return (that adjusts based on the actual cost of
capital) on the total Project cost;
- the master leases
will terminate at the scheduled commencement of demolition;
- or, exercise an
option to purchase the Site for $1.4 billion
($1.085 billion to Vornado and $315,000,000 to Rudin), in
which case the Vornado/Rudin JV would not participate in the new
development.
Further, the Vornado/Rudin JV will have the
option from October 2024 to September 2030 to put the Site to KG
for $1.2 billion ($900,000,000 to Vornado and $300,000,000 to
Rudin). For ten years following any put option closing, unless the
put option is exercised in response to KG’s request to form the
joint venture or KG makes a $200,000,000 termination payment, the
Vornado/Rudin JV will have the right to invest in a joint venture
with KG on the terms described above if KG proceeds with
development of the Site.
Dispositions:
Alexander's
On May 19, 2023, Alexander's completed the sale
of the Rego Park III land parcel, located in Queens, New York, for
$71,060,000, inclusive of consideration for Brownfield tax benefits
and reimbursement of costs for plans, specifications and
improvements to date. As a result of the sale, we recognized our
$16,396,000 share of the net gain and received a $711,000 sales
commission from Alexander’s, of which $250,000 was paid to a
third-party broker.
The Armory Show
On July 3, 2023, we completed the sale of The
Armory Show, located in New York, for $24,400,000, subject to
certain post-closing adjustments. The financial statement gain,
which will be recognized in the third quarter of 2023, will be
approximately $20,000,000.
Manhattan Retail Properties Sale
On July 27, 2023, we entered into an agreement
to sell four Manhattan retail properties located at 510 Fifth
Avenue, 148–150 Spring Street, 443 Broadway and 692 Broadway for
$100,000,000. We expect to close the sale in the third quarter of
2023 and recognize a financial statement loss of approximately
$500,000. The sale is subject to customary closing conditions.
Financings:
150 West 34th Street Loan Participation
On January 9, 2023, our $105,000,000
participation in the $205,000,000 mortgage loan on 150 West 34th
Street was repaid, which reduced “other assets” and “mortgages
payable, net” on our consolidated balance sheets by $105,000,000.
The remaining $100,000,000 mortgage loan balance bears interest at
SOFR plus 1.86%, subject to an interest rate cap arrangement with a
SOFR strike rate of 4.10%, and matures in May 2024.
697-703 Fifth Avenue (Fifth Avenue and Times
Square JV)
On June 14, 2023, the Fifth Avenue and Times
Square JV completed a restructuring of the 697-703 Fifth Avenue
$421,000,000 non-recourse mortgage loan, which matured in December
2022. The restructured $355,000,000 loan, which had its principal
reduced through an application of property-level reserves and funds
from the partners, was split into (i) a $325,000,000 senior note,
which bears interest at SOFR plus 2.00%, and (ii) a $30,000,000
junior note, which accrues interest at a fixed rate of 4.00%. The
restructured loan matures in March 2028, as fully extended. Any
amounts funded for future re-leasing of the property will be senior
to the $30,000,000 junior note.
512 West 22nd Street
On June 28, 2023, a joint venture, in which we
have a 55% interest, completed a $129,250,000 refinancing of 512
West 22nd Street, a 173,000 square foot Manhattan office building.
The interest-only loan bears a rate of SOFR plus 2.00% in year one
and SOFR plus 2.35% thereafter. The loan matures in June 2025 with
a one-year extension option subject to debt service coverage ratio,
loan-to-value and debt yield requirements. The loan replaces the
previous $137,124,000 loan that bore interest at LIBOR plus 1.85%
and had an initial maturity of June 2023. In addition, the joint
venture entered into the interest rate cap arrangement detailed in
the table below.
825 Seventh Avenue
On July 24, 2023, a joint venture, in which we
have a 50% interest, completed a $54,000,000 refinancing of the
office condominium of 825 Seventh Avenue, a 173,000 square foot
Manhattan office and retail building. The interest-only loan bears
a rate of SOFR plus 2.75%, with a 30 basis point reduction
available upon satisfaction of certain leasing conditions, and
matures in January 2026. The loan replaces the previous $60,000,000
loan that bore interest at LIBOR plus 2.35% and was scheduled to
mature in July 2023.
Interest Rate Swap and Cap Arrangements
We entered into the following interest rate swap
and cap arrangements during the six months ended June 30, 2023:
(Amounts in thousands) |
|
Notional Amount(at share) |
|
All-In Swapped Rate |
|
Expiration Date |
|
Variable Rate Spread |
Interest rate
swaps: |
|
|
|
|
|
|
|
|
555 California Street (effective 05/24) |
|
$ |
840,000 |
|
6.03 |
% |
|
05/26 |
|
S+205 |
Unsecured term loan(1) (effective 10/23) |
|
|
150,000 |
|
5.12 |
% |
|
07/25 |
|
S+129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Index Strike Rate |
|
|
|
|
Interest rate
caps: |
|
|
|
|
|
|
|
|
1290 Avenue of the Americas (70.0% interest) (effective
11/23)(2) |
|
$ |
665,000 |
|
1.00 |
% |
|
11/25 |
|
S+162 |
One Park Avenue (effective 3/24) |
|
|
525,000 |
|
3.89 |
% |
|
03/25 |
|
S+122 |
731 Lexington Avenue office condominium (32.4% interest) (effective
7/23) |
|
|
162,000 |
|
6.00 |
% |
|
06/24 |
|
Prime + 0 |
640 Fifth Avenue (52.0% interest) |
|
|
259,925 |
|
4.00 |
% |
|
05/24 |
|
S+111 |
512 West 22nd Street (55.0% interest) |
|
|
71,088 |
|
4.50 |
% |
|
06/25 |
|
S+200 |
________________________________
(1) In
addition to the swap disclosed above, the unsecured term loan,
which matures in December 2027, is subject to various interest rate
swap arrangements that were entered into in prior periods. The
table below summarizes the impact of the swap arrangements on the
unsecured term loan.
|
|
Swapped Balance |
|
All-In Swapped Rate |
|
Unswapped Balance(bears interest at
S+129) |
Through 10/23 |
|
$ |
800,000 |
|
4.04 |
% |
|
$ |
— |
10/23 through 07/25 |
|
|
700,000 |
|
4.52 |
% |
|
|
100,000 |
07/25 through 10/26 |
|
|
550,000 |
|
4.35 |
% |
|
|
250,000 |
10/26 through 08/27 |
|
|
50,000 |
|
4.03 |
% |
|
|
750,000 |
(2) In
connection with the arrangement, we made a $63,100 up-front
payment, of which $18,930 is attributable to noncontrolling
interests.
Leasing Activity
The leasing activity and related statistics
below are based on leases signed during the period and are not
intended to coincide with the commencement of rental revenue in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”). Second generation relet space
represents square footage that has not been vacant for more than
nine months and tenant improvements and leasing commissions are
based on our share of square feet leased during the period.
For the Three Months Ended June 30, 2023:
- 279,000 square feet
of New York Office space (224,000 square feet at share) at an
initial rent of $91.57 per square foot and a weighted average lease
term of 10.7 years. The changes in the GAAP and cash mark-to-market
rent on the 174,000 square feet of second generation space were
positive 9.9% and positive 5.7%, respectively. Tenant improvements
and leasing commissions were $10.94 per square foot per annum, or
11.9% of initial rent.
- 205,000 square feet
of New York Retail space (159,000 square feet at share) at an
initial rent of $50.29 per square foot and a weighted average lease
term of 5.1 years. The changes in the GAAP and cash mark-to-market
rent on the 97,000 square feet of second generation space were
positive 20.6% and positive 15.6%, respectively. Tenant
improvements and leasing commissions were $16.17 per square foot
per annum, or 32.2% of initial rent.
- 29,000 square feet
at THE MART (all at share) at an initial rent of $56.85 per square
foot and a weighted average lease term of 3.7 years. The
changes in the GAAP and cash mark-to-market rent on the 21,000
square feet of second generation space were negative 11.2% and
negative 13.4%, respectively. Tenant improvements and leasing
commissions were $4.86 per square foot per annum, or 8.5% of
initial rent.
- 6,000 square feet
at 555 California Street (4,000 square feet at share) at an initial
rent of $120.56 per square foot and a weighted average lease term
of 5.2 years. The changes in the GAAP and cash mark-to-market rent
on the 4,000 square feet of second generation space were positive
12.8% and positive 2.4%, respectively. Tenant improvements and
leasing commissions were $9.12 per square foot per annum, or 7.6%
of initial rent.
For the Six Months Ended June 30, 2023:
- 1,056,000 square
feet of New York Office space (996,000 square feet at share) at an
initial rent of $98.89 per square foot and a weighted average lease
term of 9.8 years. The changes in the GAAP and cash mark-to-market
rent on the 851,000 square feet of second generation space were
positive 8.7% and positive 2.4%, respectively. Tenant improvements
and leasing commissions were $4.55 per square foot per annum, or
4.6% of initial rent.
- 230,000 square feet
of New York Retail space (179,000 square feet at share) at an
initial rent of $85.76 per square foot and a weighted average lease
term of 5.3 years. The changes in the GAAP and cash mark-to-market
rent on the 104,000 square feet of second generation space were
positive 11.3% and positive 8.6%, respectively. Tenant improvements
and leasing commissions were $17.59 per square foot per annum, or
20.5% of initial rent.
- 108,000 square feet
at THE MART (all at share) at an initial rent of $56.55 per square
foot and a weighted average lease term of 6.0 years. The
changes in the GAAP and cash mark-to-market rent on the 72,000
square feet of second generation space were negative 4.3% and
negative 9.4%, respectively. Tenant improvements and leasing
commissions were $7.48 per square foot per annum, or 13.2% of
initial rent.
- 10,000 square feet
at 555 California Street (7,000 square feet at share) at an initial
rent of $134.70 per square foot and a weighted average lease term
of 5.9 years. The changes in the GAAP and cash mark-to-market
rent on the 4,000 square feet of second generation space were
positive 12.8% and positive 2.4%, respectively. Tenant improvements
and leasing commissions were $22.92 per square foot per annum, or
17.0% of initial rent.
Same Store Net Operating Income ("NOI")
At Share:
Below is the percentage increase (decrease) in
same store NOI at share and same store NOI at share - cash basis of
our New York segment, THE MART and 555 California Street.
|
Total |
|
New York |
|
THE MART |
|
555 California Street(2) |
Same store NOI at share %
increase (decrease)(1): |
|
|
|
|
|
|
|
Three months ended June 30, 2023 compared to June 30, 2022 |
6.7 |
% |
|
2.9 |
% |
|
(17.5 |
)% |
|
87.4 |
% |
Six months ended June 30, 2023 compared to June 30, 2022 |
3.3 |
% |
|
2.3 |
% |
|
(20.0 |
)% |
|
46.5 |
% |
Three months ended June 30, 2023 compared to March 31, 2023 |
8.5 |
% |
|
3.0 |
% |
|
6.8 |
% |
|
85.2 |
% |
|
|
|
|
|
|
|
|
Same store NOI at share - cash
basis % increase (decrease)(1): |
|
|
|
|
|
|
|
Three months ended June 30, 2023 compared to June 30, 2022 |
6.2 |
% |
|
2.7 |
% |
|
(23.0 |
)% |
|
91.5 |
% |
Six months ended June 30, 2023 compared to June 30, 2022 |
3.9 |
% |
|
3.2 |
% |
|
(25.5 |
)% |
|
50.5 |
% |
Three months ended June 30, 2023 compared to March 31, 2023 |
6.1 |
% |
|
(0.1 |
)% |
|
13.1 |
% |
|
82.2 |
% |
____________________
(1) See pages
13 through 18 for same store NOI at share and same store NOI at
share - cash basis
reconciliations.(2) 2023 includes
our $14,103,000 share of the receipt of a tenant settlement, net of
legal expenses.NOI At Share:
The elements of our New York and Other NOI at
share for the three and six months ended June 30, 2023 and 2022 and
the three months ended March 31, 2023 are summarized below.
(Amounts in thousands) |
For the Three Months Ended |
|
For the Six Months Ended June
30, |
|
June 30, |
|
March 31, 2023 |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
NOI at
share: |
|
|
|
|
|
|
|
|
|
New York: |
|
|
|
|
|
|
|
|
|
Office(1) |
$ |
186,042 |
|
$ |
182,042 |
|
$ |
174,270 |
|
$ |
360,312 |
|
$ |
359,851 |
Retail |
|
47,428 |
|
|
51,438 |
|
|
47,196 |
|
|
94,624 |
|
|
103,543 |
Residential |
|
5,467 |
|
|
5,250 |
|
|
5,458 |
|
|
10,925 |
|
|
10,024 |
Alexander's |
|
9,429 |
|
|
9,362 |
|
|
9,070 |
|
|
18,499 |
|
|
18,341 |
Total New York |
|
248,366 |
|
|
248,092 |
|
|
235,994 |
|
|
484,360 |
|
|
491,759 |
Other: |
|
|
|
|
|
|
|
|
|
THE MART |
|
16,462 |
|
|
19,947 |
|
|
15,409 |
|
|
31,871 |
|
|
39,861 |
555 California Street(2) |
|
31,347 |
|
|
16,724 |
|
|
16,929 |
|
|
48,276 |
|
|
32,959 |
Other investments |
|
5,464 |
|
|
4,183 |
|
|
5,151 |
|
|
10,615 |
|
|
8,625 |
Total Other |
|
53,273 |
|
|
40,854 |
|
|
37,489 |
|
|
90,762 |
|
|
81,445 |
|
|
|
|
|
|
|
|
|
|
NOI at share |
$ |
301,639 |
|
$ |
288,946 |
|
$ |
273,483 |
|
$ |
575,122 |
|
$ |
573,204 |
________________________________See notes
below.
NOI At Share - Cash Basis:
The elements of our New York and Other NOI at
share - cash basis for the three and six months ended June 30, 2023
and 2022 and the three months ended March 31, 2023 are summarized
below.
(Amounts in thousands) |
For the Three Months Ended |
|
For the Six Months EndedJune
30, |
|
June 30, |
|
March 31, 2023 |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
NOI at share - cash
basis: |
|
|
|
|
|
|
|
|
|
New York: |
|
|
|
|
|
|
|
|
|
Office(1) |
$ |
181,253 |
|
$ |
180,326 |
|
$ |
182,081 |
|
$ |
363,334 |
|
$ |
358,153 |
Retail |
|
44,956 |
|
|
47,189 |
|
|
44,034 |
|
|
88,990 |
|
|
94,582 |
Residential |
|
5,129 |
|
|
4,309 |
|
|
5,051 |
|
|
10,180 |
|
|
8,998 |
Alexander's |
|
10,231 |
|
|
10,079 |
|
|
9,861 |
|
|
20,092 |
|
|
19,862 |
Total New York |
|
241,569 |
|
|
241,903 |
|
|
241,027 |
|
|
482,596 |
|
|
481,595 |
Other: |
|
|
|
|
|
|
|
|
|
THE MART |
|
16,592 |
|
|
21,541 |
|
|
14,675 |
|
|
31,267 |
|
|
41,977 |
555 California Street(2) |
|
32,284 |
|
|
16,855 |
|
|
17,718 |
|
|
50,002 |
|
|
33,215 |
Other investments |
|
5,624 |
|
|
4,372 |
|
|
5,115 |
|
|
10,739 |
|
|
9,012 |
Total Other |
|
54,500 |
|
|
42,768 |
|
|
37,508 |
|
|
92,008 |
|
|
84,204 |
|
|
|
|
|
|
|
|
|
|
NOI at share - cash basis |
$ |
296,069 |
|
$ |
284,671 |
|
$ |
278,535 |
|
$ |
574,604 |
|
$ |
565,799 |
________________________________
(1) Includes
Building Maintenance Services NOI of $6,797, $6,468, $6,289,
$13,086 and $12,250, respectively, for the three months ended June
30, 2023 and 2022 and March 31, 2023 and the six months ended June
30, 2023 and 2022.(2) 2023
includes our $14,103 share of the receipt of a tenant settlement,
net of legal expenses.
PENN District - Active
Development/Redevelopment Summary as of June 30,
2023
(Amounts in
thousands of dollars, except square feet) |
|
|
|
|
|
|
|
|
PropertyRentableSq.
Ft. |
|
|
|
Cash AmountExpended |
|
Remaining Expenditures |
|
Stabilization Year |
|
Projected IncrementalCash
Yield |
Active PENN District Projects |
|
Segment |
|
|
Budget(1) |
|
|
|
|
PENN 2 - as expanded |
|
New York |
|
1,795,000 |
|
750,000 |
|
515,417 |
|
234,583 |
|
2025 |
|
|
9.5 |
% |
|
PENN 1 (including LIRR Concourse Retail)(2) |
|
New York |
|
2,559,000 |
|
450,000 |
|
401,262 |
|
48,738 |
|
N/A |
|
|
13.2 |
% |
(2)(3) |
Districtwide Improvements |
|
New York |
|
N/A |
|
100,000 |
|
43,713 |
|
56,287 |
|
N/A |
|
|
N/A |
|
|
Total Active PENN District Projects |
|
|
|
|
|
1,300,000 |
|
960,392 |
|
339,608 |
|
|
|
|
10.1 |
% |
|
________________________________
(1) Excluding debt
and equity carry. (2) Property is
ground leased through 2098, as fully extended. Fair market value
resets occur in 2023, 2048 and 2073. The 13.2% projected return is
before the ground rent reset in June 2023, which has yet to be
determined and may be
material.(3) Projected to be
achieved as pre-redevelopment leases roll, which have an
approximate average remaining term of 3.2 years.
There can be no assurance that the above
projects will be completed, completed on schedule or within budget.
In addition, there can be no assurance that the Company will be
successful in leasing the properties on the expected schedule or at
the assumed rental rates.
Conference Call and Audio
Webcast
As previously announced, the Company will host a
quarterly earnings conference call and an audio webcast on Tuesday,
August 1, 2023 at 10:00 a.m. Eastern Time (ET). The conference call
can be accessed by dialing 888-317-6003 (domestic) or 412-317-6061
(international) and entering the passcode 2738876. A live webcast
of the conference call will be available on Vornado’s website at
www.vno.com in the Investor Relations section and an online
playback of the webcast will be available on the website following
the conference call.
Contact
Thomas J. Sanelli
(212) 894-7000
Supplemental Data
Further details regarding results of operations,
properties and tenants can be accessed at the Company’s website
www.vno.com. Vornado Realty Trust is a fully - integrated equity
real estate investment trust.
Certain statements contained herein may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are not guarantees of performance. They represent
our intentions, plans, expectations and beliefs and are subject to
numerous assumptions, risks and uncertainties. Our future
results, financial condition and business may differ materially
from those expressed in these forward-looking statements. You can
find many of these statements by looking for words such as
"approximates," "believes," "expects," "anticipates," "estimates,"
"intends," "plans," "would," "may" or other similar expressions in
this press release. We also note the following forward-looking
statements: in the case of our development and redevelopment
projects, the estimated completion date, estimated project cost,
projected incremental cash yield, stabilization date and cost to
complete; estimates of future capital expenditures, dividends to
common and preferred shareholders and operating partnership
distributions, including the form of any 2023 dividend payments,
and the amount and form of potential share repurchases and/or asset
sales. For a discussion of factors that could materially affect the
outcome of our forward-looking statements and our future results
and financial condition, see “Risk Factors” in Part I, Item 1A, of
our Annual Report on Form 10-K for the year ended December 31,
2022. Currently, some of the factors are the impacts of the
increase in interest rates and inflation on our business, financial
condition, results of operations, cash flows, operating performance
and the effect that these factors have had and may continue to have
on our tenants, the global, national, regional and local economies
and financial markets and the real estate market in general.
VORNADO REALTY
TRUSTCONSOLIDATED BALANCE SHEETS
(Amounts in thousands) |
As of |
|
Increase(Decrease) |
|
June 30, 2023 |
|
December 31, 2022 |
|
ASSETS |
|
|
|
|
|
Real estate, at cost: |
|
|
|
|
|
Land |
$ |
2,457,589 |
|
|
$ |
2,451,828 |
|
|
$ |
5,761 |
|
Buildings and improvements |
|
9,839,556 |
|
|
|
9,804,204 |
|
|
|
35,352 |
|
Development costs and construction in progress |
|
1,177,290 |
|
|
|
933,334 |
|
|
|
243,956 |
|
Leasehold improvements and equipment |
|
127,319 |
|
|
|
125,389 |
|
|
|
1,930 |
|
Total |
|
13,601,754 |
|
|
|
13,314,755 |
|
|
|
286,999 |
|
Less accumulated depreciation and amortization |
|
(3,625,270 |
) |
|
|
(3,470,991 |
) |
|
|
(154,279 |
) |
Real estate, net |
|
9,976,484 |
|
|
|
9,843,764 |
|
|
|
132,720 |
|
Right-of-use assets |
|
685,536 |
|
|
|
684,380 |
|
|
|
1,156 |
|
Cash, cash equivalents,
restricted cash and investments in U.S. Treasury bills: |
|
|
|
|
|
Cash and cash equivalents |
|
1,133,693 |
|
|
|
889,689 |
|
|
|
244,004 |
|
Restricted cash |
|
178,440 |
|
|
|
131,468 |
|
|
|
46,972 |
|
Investments in U.S. Treasury bills |
|
— |
|
|
|
471,962 |
|
|
|
(471,962 |
) |
Total |
|
1,312,133 |
|
|
|
1,493,119 |
|
|
|
(180,986 |
) |
Tenant and other
receivables |
|
87,551 |
|
|
|
81,170 |
|
|
|
6,381 |
|
Investments in partially owned
entities |
|
2,641,297 |
|
|
|
2,665,073 |
|
|
|
(23,776 |
) |
220 CPS condominium units
ready for sale |
|
39,098 |
|
|
|
43,599 |
|
|
|
(4,501 |
) |
Receivable arising from the
straight-lining of rents |
|
693,220 |
|
|
|
694,972 |
|
|
|
(1,752 |
) |
Deferred leasing costs,
net |
|
359,752 |
|
|
|
373,555 |
|
|
|
(13,803 |
) |
Identified intangible assets,
net |
|
134,683 |
|
|
|
139,638 |
|
|
|
(4,955 |
) |
Other assets |
|
508,085 |
|
|
|
474,105 |
|
|
|
33,980 |
|
Total assets |
$ |
16,437,839 |
|
|
$ |
16,493,375 |
|
|
$ |
(55,536 |
) |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND
EQUITY |
|
|
|
|
|
Liabilities: |
|
|
|
|
|
Mortgages payable, net |
$ |
5,715,138 |
|
|
$ |
5,829,018 |
|
|
$ |
(113,880 |
) |
Senior unsecured notes, net |
|
1,192,853 |
|
|
|
1,191,832 |
|
|
|
1,021 |
|
Unsecured term loan, net |
|
793,864 |
|
|
|
793,193 |
|
|
|
671 |
|
Unsecured revolving credit facilities |
|
575,000 |
|
|
|
575,000 |
|
|
|
— |
|
Lease liabilities |
|
744,696 |
|
|
|
735,969 |
|
|
|
8,727 |
|
Accounts payable and accrued expenses |
|
504,295 |
|
|
|
450,881 |
|
|
|
53,414 |
|
Deferred revenue |
|
35,884 |
|
|
|
39,882 |
|
|
|
(3,998 |
) |
Deferred compensation plan |
|
99,050 |
|
|
|
96,322 |
|
|
|
2,728 |
|
Other liabilities |
|
302,233 |
|
|
|
268,166 |
|
|
|
34,067 |
|
Total liabilities |
|
9,963,013 |
|
|
|
9,980,263 |
|
|
|
(17,250 |
) |
Redeemable noncontrolling
interests |
|
480,296 |
|
|
|
436,732 |
|
|
|
43,564 |
|
Shareholders' equity |
|
5,734,857 |
|
|
|
5,839,728 |
|
|
|
(104,871 |
) |
Noncontrolling interests in
consolidated subsidiaries |
|
259,673 |
|
|
|
236,652 |
|
|
|
23,021 |
|
Total liabilities, redeemable noncontrolling interests and
equity |
$ |
16,437,839 |
|
|
$ |
16,493,375 |
|
|
$ |
(55,536 |
) |
VORNADO REALTY
TRUSTOPERATING RESULTS
(Amounts in thousands, except per
share amounts) |
For the Three Months EndedJune
30, |
|
For the Six Months EndedJune
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenues |
$ |
472,359 |
|
|
$ |
453,494 |
|
|
$ |
918,282 |
|
|
$ |
895,624 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
62,733 |
|
|
$ |
68,903 |
|
|
$ |
73,931 |
|
|
$ |
122,278 |
|
Less net loss (income)
attributable to noncontrolling interests in: |
|
|
|
|
|
|
|
Consolidated subsidiaries |
|
2,781 |
|
|
|
826 |
|
|
|
12,709 |
|
|
|
(8,548 |
) |
Operating Partnership |
|
(3,608 |
) |
|
|
(3,782 |
) |
|
|
(4,037 |
) |
|
|
(5,776 |
) |
Net income attributable to
Vornado |
|
61,906 |
|
|
|
65,947 |
|
|
|
82,603 |
|
|
|
107,954 |
|
Preferred share dividends |
|
(15,529 |
) |
|
|
(15,529 |
) |
|
|
(31,058 |
) |
|
|
(31,058 |
) |
Net income
attributable to common shareholders |
$ |
46,377 |
|
|
$ |
50,418 |
|
|
$ |
51,545 |
|
|
$ |
76,896 |
|
|
|
|
|
|
|
|
|
Income per common
share - basic: |
|
|
|
|
|
|
|
Net income per common share |
$ |
0.24 |
|
|
$ |
0.26 |
|
|
$ |
0.27 |
|
|
$ |
0.40 |
|
Weighted average shares outstanding |
|
191,468 |
|
|
|
191,750 |
|
|
|
191,668 |
|
|
|
191,737 |
|
|
|
|
|
|
|
|
|
Income per common
share - diluted: |
|
|
|
|
|
|
|
Net income per common share |
$ |
0.24 |
|
|
$ |
0.26 |
|
|
$ |
0.27 |
|
|
$ |
0.40 |
|
Weighted average shares outstanding |
|
194,804 |
|
|
|
192,039 |
|
|
|
194,364 |
|
|
|
192,047 |
|
|
|
|
|
|
|
|
|
FFO attributable to common shareholders plus assumed conversions
(non-GAAP) |
$ |
144,059 |
|
|
$ |
154,965 |
|
|
$ |
263,149 |
|
|
$ |
309,997 |
|
Per diluted share (non-GAAP) |
$ |
0.74 |
|
|
$ |
0.80 |
|
|
$ |
1.35 |
|
|
$ |
1.60 |
|
|
|
|
|
|
|
|
|
FFO attributable to common shareholders plus assumed conversions,
as adjusted (non-GAAP) |
$ |
140,737 |
|
|
$ |
160,059 |
|
|
$ |
257,032 |
|
|
$ |
312,496 |
|
Per diluted share (non-GAAP) |
$ |
0.72 |
|
|
$ |
0.83 |
|
|
$ |
1.32 |
|
|
$ |
1.62 |
|
|
|
|
|
|
|
|
|
Weighted average shares used in determining FFO attributable to
common shareholders plus assumed conversions per diluted share |
|
194,878 |
|
|
|
193,423 |
|
|
|
194,543 |
|
|
|
193,297 |
|
FFO is computed in accordance with the
definition adopted by the Board of Governors of the National
Association of Real Estate Investment Trusts (“NAREIT”). NAREIT
defines FFO as GAAP net income or loss adjusted to exclude net
gains from sales of certain real estate assets, real estate
impairment losses, depreciation and amortization expense from real
estate assets and other specified items, including the pro rata
share of such adjustments of unconsolidated subsidiaries. FFO and
FFO per diluted share are non-GAAP financial measures used by
management, investors and analysts to facilitate meaningful
comparisons of operating performance between periods and among our
peers because it excludes the effect of real estate depreciation
and amortization and net gains on sales, which are based on
historical costs and implicitly assume that the value of real
estate diminishes predictably over time, rather than fluctuating
based on existing market conditions. The Company also uses FFO
attributable to common shareholders plus assumed conversions, as
adjusted for certain items that impact the comparability of period
to period FFO, as one of several criteria to determine
performance-based compensation for senior management. FFO does not
represent cash generated from operating activities and is not
necessarily indicative of cash available to fund cash requirements
and should not be considered as an alternative to net income as a
performance measure or cash flow as a liquidity measure. FFO may
not be comparable to similarly titled measures employed by other
companies. In addition to FFO attributable to common shareholders
plus assumed conversions, we also disclose FFO attributable to
common shareholders plus assumed conversions, as adjusted. Although
this non-GAAP measure clearly differs from NAREIT’s definition of
FFO, we believe it provides a meaningful presentation of operating
performance. Reconciliations of net income attributable to common
shareholders to FFO attributable to common shareholders plus
assumed conversions are provided on the following page.
Reconciliations of FFO attributable to common shareholders plus
assumed conversions to FFO attributable to common shareholders plus
assumed conversions, as adjusted are provided on page 2 of this
press release.
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS
The following table reconciles net income
attributable to common shareholders to FFO attributable to common
shareholders plus assumed conversions:
(Amounts in thousands, except per
share amounts) |
For the Three Months EndedJune
30, |
|
For the Six Months EndedJune
30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income attributable to common shareholders |
$ |
46,377 |
|
|
$ |
50,418 |
|
|
$ |
51,545 |
|
|
$ |
76,896 |
|
Per diluted share |
$ |
0.24 |
|
|
$ |
0.26 |
|
|
$ |
0.27 |
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
FFO adjustments: |
|
|
|
|
|
|
|
Depreciation and amortization of real property |
$ |
94,922 |
|
|
$ |
106,620 |
|
|
$ |
189,714 |
|
|
$ |
212,582 |
|
Net gain on sale of real estate |
|
(260 |
) |
|
|
(27,803 |
) |
|
|
(260 |
) |
|
|
(28,354 |
) |
Proportionate share of adjustments to equity in net income of
partially owned entities to arrive at FFO: |
|
|
|
|
|
|
|
Depreciation and amortization of real property |
|
26,666 |
|
|
|
33,681 |
|
|
|
54,135 |
|
|
|
65,820 |
|
Net gain on sale of real estate |
|
(16,545 |
) |
|
|
(175 |
) |
|
|
(16,545 |
) |
|
|
(175 |
) |
|
|
104,783 |
|
|
|
112,323 |
|
|
|
227,044 |
|
|
|
249,873 |
|
Noncontrolling interests' share of above adjustments |
|
(7,510 |
) |
|
|
(7,781 |
) |
|
|
(16,256 |
) |
|
|
(17,287 |
) |
FFO adjustments, net |
$ |
97,273 |
|
|
$ |
104,542 |
|
|
$ |
210,788 |
|
|
$ |
232,586 |
|
|
|
|
|
|
|
|
|
FFO attributable to common shareholders |
$ |
143,650 |
|
|
$ |
154,960 |
|
|
$ |
262,333 |
|
|
$ |
309,482 |
|
Impact of assumed conversion of dilutive convertible
securities |
|
409 |
|
|
|
5 |
|
|
|
816 |
|
|
|
515 |
|
FFO attributable to common shareholders plus assumed
conversions |
$ |
144,059 |
|
|
$ |
154,965 |
|
|
$ |
263,149 |
|
|
$ |
309,997 |
|
Per diluted share |
$ |
0.74 |
|
|
$ |
0.80 |
|
|
$ |
1.35 |
|
|
$ |
1.60 |
|
|
|
|
|
|
|
|
|
Reconciliation of
weighted average shares outstanding: |
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
191,468 |
|
|
|
191,750 |
|
|
|
191,668 |
|
|
|
191,737 |
|
Effect of dilutive
securities: |
|
|
|
|
|
|
|
Convertible securities |
|
3,378 |
|
|
|
1,412 |
|
|
|
2,852 |
|
|
|
1,271 |
|
Share-based payment awards |
|
32 |
|
|
|
261 |
|
|
|
23 |
|
|
|
289 |
|
Denominator for FFO per
diluted share |
|
194,878 |
|
|
|
193,423 |
|
|
|
194,543 |
|
|
|
193,297 |
|
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below is a reconciliation of net income to NOI
at share and NOI at share - cash basis for the three and six months
ended June 30, 2023 and 2022 and the three months ended March 31,
2023.
(Amounts in thousands) |
For the Three Months Ended |
|
For the Six Months EndedJune
30, |
|
June 30, |
|
March 31, 2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
$ |
62,733 |
|
|
$ |
68,903 |
|
|
$ |
11,198 |
|
|
$ |
73,931 |
|
|
$ |
122,278 |
|
Depreciation and amortization expense |
|
107,162 |
|
|
|
118,662 |
|
|
|
106,565 |
|
|
|
213,727 |
|
|
|
236,105 |
|
General and administrative expense |
|
39,410 |
|
|
|
31,902 |
|
|
|
41,595 |
|
|
|
81,005 |
|
|
|
73,118 |
|
Transaction related costs and other |
|
30 |
|
|
|
2,960 |
|
|
|
658 |
|
|
|
688 |
|
|
|
3,965 |
|
Income from partially owned entities |
|
(37,272 |
) |
|
|
(25,720 |
) |
|
|
(16,666 |
) |
|
|
(53,938 |
) |
|
|
(59,434 |
) |
Loss (income) from real estate fund investments |
|
102 |
|
|
|
142 |
|
|
|
19 |
|
|
|
121 |
|
|
|
(5,532 |
) |
Interest and other investment income, net |
|
(13,255 |
) |
|
|
(3,036 |
) |
|
|
(9,603 |
) |
|
|
(22,858 |
) |
|
|
(4,054 |
) |
Interest and debt expense |
|
87,165 |
|
|
|
62,640 |
|
|
|
86,237 |
|
|
|
173,402 |
|
|
|
114,749 |
|
Net gains on disposition of wholly owned and partially owned
assets |
|
(936 |
) |
|
|
(28,832 |
) |
|
|
(7,520 |
) |
|
|
(8,456 |
) |
|
|
(35,384 |
) |
Income tax expense |
|
4,497 |
|
|
|
3,564 |
|
|
|
4,667 |
|
|
|
9,164 |
|
|
|
10,975 |
|
NOI from partially owned entities |
|
70,745 |
|
|
|
74,060 |
|
|
|
68,097 |
|
|
|
138,842 |
|
|
|
152,752 |
|
NOI attributable to noncontrolling interests in consolidated
subsidiaries |
|
(18,742 |
) |
|
|
(16,299 |
) |
|
|
(11,764 |
) |
|
|
(30,506 |
) |
|
|
(36,334 |
) |
NOI at share |
|
301,639 |
|
|
|
288,946 |
|
|
|
273,483 |
|
|
|
575,122 |
|
|
|
573,204 |
|
Non-cash adjustments for straight-line rents, amortization of
acquired below-market leases, net and other |
|
(5,570 |
) |
|
|
(4,275 |
) |
|
|
5,052 |
|
|
|
(518 |
) |
|
|
(7,405 |
) |
NOI at share - cash basis |
$ |
296,069 |
|
|
$ |
284,671 |
|
|
$ |
278,535 |
|
|
$ |
574,604 |
|
|
$ |
565,799 |
|
NOI at share represents total revenues less
operating expenses including our share of partially owned entities.
NOI at share - cash basis represents NOI at share adjusted to
exclude straight-line rental income and expense, amortization of
acquired below and above market leases, net and other non-cash
adjustments. We consider NOI at share - cash basis to be the
primary non-GAAP financial measure for making decisions and
assessing the unlevered performance of our segments as it relates
to the total return on assets as opposed to the levered return on
equity. As properties are bought and sold based on NOI at share -
cash basis, we utilize this measure to make investment decisions as
well as to compare the performance of our assets to that of our
peers. NOI at share and NOI at share - cash basis should not be
considered alternatives to net income or cash flow from operations
and may not be comparable to similarly titled measures employed by
other companies.
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Same store NOI at share represents NOI at share
from operations which are in service in both the current and prior
year reporting periods. Same store NOI at share - cash basis is
same store NOI at share adjusted to exclude straight-line rental
income and expense, amortization of acquired below and above market
leases, net and other non-cash adjustments. We present these
non-GAAP measures to (i) facilitate meaningful comparisons of the
operational performance of our properties and segments, (ii) make
decisions on whether to buy, sell or refinance properties, and
(iii) compare the performance of our properties and segments to
those of our peers. Same store NOI at share and same store NOI
at share - cash basis should not be considered alternatives to net
income or cash flow from operations and may not be comparable to
similarly titled measures employed by other companies.
Below are reconciliations of NOI at share to
same store NOI at share for our New York segment, THE MART, 555
California Street and other investments for the three months ended
June 30, 2023 compared to June 30, 2022.
(Amounts in thousands) |
Total |
|
New York |
|
THE MART |
|
555 California Street |
|
Other |
NOI at share for the three months ended June 30, 2023 |
$ |
301,639 |
|
|
$ |
248,366 |
|
|
$ |
16,462 |
|
|
$ |
31,347 |
|
|
$ |
5,464 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
111 |
|
|
|
111 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(7,594 |
) |
|
|
(7,594 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(6,658 |
) |
|
|
(1,194 |
) |
|
|
— |
|
|
|
— |
|
|
|
(5,464 |
) |
Same store NOI at share for
the three months ended June 30, 2023 |
$ |
287,498 |
|
|
$ |
239,689 |
|
|
$ |
16,462 |
|
|
$ |
31,347 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share for the three
months ended June 30, 2022 |
$ |
288,946 |
|
|
$ |
248,092 |
|
|
$ |
19,947 |
|
|
$ |
16,724 |
|
|
$ |
4,183 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(3,321 |
) |
|
|
(3,321 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(8,263 |
) |
|
|
(8,263 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(7,803 |
) |
|
|
(3,620 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,183 |
) |
Same store NOI at share for
the three months ended June 30, 2022 |
$ |
269,559 |
|
|
$ |
232,888 |
|
|
$ |
19,947 |
|
|
$ |
16,724 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in same
store NOI at share |
$ |
17,939 |
|
|
$ |
6,801 |
|
|
$ |
(3,485 |
) |
|
$ |
14,623 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase (decrease) in same
store NOI at share |
|
6.7 |
% |
|
|
2.9 |
% |
|
|
(17.5 |
)% |
|
|
87.4 |
% |
|
|
0.0 |
% |
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below are reconciliations of NOI at share - cash
basis to same store NOI at share - cash basis for our New York
segment, THE MART, 555 California Street and other investments for
the three months ended June 30, 2023 compared to June 30, 2022.
(Amounts in thousands) |
Total |
|
New York |
|
THE MART |
|
555 California Street |
|
Other |
NOI at share - cash basis for the three months ended June 30,
2023 |
$ |
296,069 |
|
|
$ |
241,569 |
|
|
$ |
16,592 |
|
|
$ |
32,284 |
|
|
$ |
5,624 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
111 |
|
|
|
111 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(6,687 |
) |
|
|
(6,687 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(7,061 |
) |
|
|
(1,437 |
) |
|
|
— |
|
|
|
— |
|
|
|
(5,624 |
) |
Same store NOI at share - cash
basis for the three months ended June 30, 2023 |
$ |
282,432 |
|
|
$ |
233,556 |
|
|
$ |
16,592 |
|
|
$ |
32,284 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share - cash basis for
the three months ended June 30, 2022 |
$ |
284,671 |
|
|
$ |
241,903 |
|
|
$ |
21,541 |
|
|
$ |
16,855 |
|
|
$ |
4,372 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(3,149 |
) |
|
|
(3,149 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(7,620 |
) |
|
|
(7,620 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(8,007 |
) |
|
|
(3,635 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,372 |
) |
Same store NOI at share - cash
basis for the three months ended June 30, 2022 |
$ |
265,895 |
|
|
$ |
227,499 |
|
|
$ |
21,541 |
|
|
$ |
16,855 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in same
store NOI at share - cash basis |
$ |
16,537 |
|
|
$ |
6,057 |
|
|
$ |
(4,949 |
) |
|
$ |
15,429 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase (decrease) in same
store NOI at share - cash basis |
|
6.2 |
% |
|
|
2.7 |
% |
|
|
(23.0 |
)% |
|
|
91.5 |
% |
|
|
0.0 |
% |
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below are reconciliations of NOI at share to
same store NOI at share for our New York segment, THE MART, 555
California Street and other investments for the six months ended
June 30, 2023 compared to June 30, 2022.
(Amounts in thousands) |
Total |
|
New York |
|
THE MART |
|
555 California Street |
|
Other |
NOI at share for the six months ended June 30, 2023 |
$ |
575,122 |
|
|
$ |
484,360 |
|
|
$ |
31,871 |
|
|
$ |
48,276 |
|
|
$ |
10,615 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
307 |
|
|
|
307 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(15,140 |
) |
|
|
(15,140 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store (income) expense, net |
|
(8,145 |
) |
|
|
2,470 |
|
|
|
— |
|
|
|
— |
|
|
|
(10,615 |
) |
Same store NOI at share for
the six months ended June 30, 2023 |
$ |
552,144 |
|
|
$ |
471,997 |
|
|
$ |
31,871 |
|
|
$ |
48,276 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share for the six
months ended June 30, 2022 |
$ |
573,204 |
|
|
$ |
491,759 |
|
|
$ |
39,861 |
|
|
$ |
32,959 |
|
|
$ |
8,625 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(6,356 |
) |
|
|
(6,356 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(15,702 |
) |
|
|
(15,702 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(16,722 |
) |
|
|
(8,097 |
) |
|
|
— |
|
|
|
— |
|
|
|
(8,625 |
) |
Same store NOI at share for
the six months ended June 30, 2022 |
$ |
534,424 |
|
|
$ |
461,604 |
|
|
$ |
39,861 |
|
|
$ |
32,959 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in same
store NOI at share |
$ |
17,720 |
|
|
$ |
10,393 |
|
|
$ |
(7,990 |
) |
|
$ |
15,317 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase (decrease) in same
store NOI at share |
|
3.3 |
% |
|
|
2.3 |
% |
|
|
(20.0 |
)% |
|
|
46.5 |
% |
|
|
0.0 |
% |
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below are reconciliations of NOI at share - cash
basis to same store NOI at share - cash basis for our New York
segment, THE MART, 555 California Street and other investments for
the six months ended June 30, 2023 compared to June 30, 2022.
(Amounts in thousands) |
Total |
|
New York |
|
THE MART |
|
555 California Street |
|
Other |
NOI at share - cash basis for the six months ended June 30,
2023 |
$ |
574,604 |
|
|
$ |
482,596 |
|
|
$ |
31,267 |
|
|
$ |
50,002 |
|
|
$ |
10,739 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
307 |
|
|
|
307 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(13,457 |
) |
|
|
(13,457 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(13,131 |
) |
|
|
(2,392 |
) |
|
|
— |
|
|
|
— |
|
|
|
(10,739 |
) |
Same store NOI at share - cash
basis for the six months ended June 30, 2023 |
$ |
548,323 |
|
|
$ |
467,054 |
|
|
$ |
31,267 |
|
|
$ |
50,002 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share - cash basis for
the six months ended June 30, 2022 |
$ |
565,799 |
|
|
$ |
481,595 |
|
|
$ |
41,977 |
|
|
$ |
33,215 |
|
|
$ |
9,012 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(6,205 |
) |
|
|
(6,205 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(14,375 |
) |
|
|
(14,375 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(17,339 |
) |
|
|
(8,327 |
) |
|
|
— |
|
|
|
— |
|
|
|
(9,012 |
) |
Same store NOI at share - cash
basis for the six months ended June 30, 2022 |
$ |
527,880 |
|
|
$ |
452,688 |
|
|
$ |
41,977 |
|
|
$ |
33,215 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in same
store NOI at share - cash basis |
$ |
20,443 |
|
|
$ |
14,366 |
|
|
$ |
(10,710 |
) |
|
$ |
16,787 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase (decrease) in same
store NOI at share - cash basis |
|
3.9 |
% |
|
|
3.2 |
% |
|
|
(25.5 |
)% |
|
|
50.5 |
% |
|
|
0.0 |
% |
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below are reconciliations of NOI at share to
same store NOI at share for our New York segment, THE MART, 555
California Street and other investments for the three months ended
June 30, 2023 compared to March 31, 2023.
(Amounts in thousands) |
Total |
|
New York |
|
THE MART |
|
555 California Street |
|
Other |
NOI at share for the three months ended June 30, 2023 |
$ |
301,639 |
|
|
$ |
248,366 |
|
|
$ |
16,462 |
|
|
$ |
31,347 |
|
|
$ |
5,464 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
111 |
|
|
|
111 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(7,594 |
) |
|
|
(7,594 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(6,298 |
) |
|
|
(834 |
) |
|
|
— |
|
|
|
— |
|
|
|
(5,464 |
) |
Same store NOI at share for
the three months ended June 30, 2023 |
$ |
287,858 |
|
|
$ |
240,049 |
|
|
$ |
16,462 |
|
|
$ |
31,347 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share for the three
months ended March 31, 2023 |
$ |
273,483 |
|
|
$ |
235,994 |
|
|
$ |
15,409 |
|
|
$ |
16,929 |
|
|
$ |
5,151 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
195 |
|
|
|
195 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(7,230 |
) |
|
|
(7,230 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store (income) expense, net |
|
(1,126 |
) |
|
|
4,025 |
|
|
|
— |
|
|
|
— |
|
|
|
(5,151 |
) |
Same store NOI at share for
the three months ended March 31, 2023 |
$ |
265,322 |
|
|
$ |
232,984 |
|
|
$ |
15,409 |
|
|
$ |
16,929 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase in same store NOI at
share |
$ |
22,536 |
|
|
$ |
7,065 |
|
|
$ |
1,053 |
|
|
$ |
14,418 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase in same store NOI
at share |
|
8.5 |
% |
|
|
3.0 |
% |
|
|
6.8 |
% |
|
|
85.2 |
% |
|
|
0.0 |
% |
VORNADO REALTY
TRUSTNON-GAAP RECONCILIATIONS -
CONTINUED
Below are reconciliations of NOI at share - cash
basis to same store NOI at share - cash basis for our New York
segment, THE MART, 555 California Street and other investments for
the three months ended June 30, 2023 compared to March 31,
2023.
(Amounts in thousands) |
Total |
|
New York |
|
THE MART |
|
555 California Street |
|
Other |
NOI at share - cash basis for the three months ended June 30,
2023 |
$ |
296,069 |
|
|
$ |
241,569 |
|
|
$ |
16,592 |
|
|
$ |
32,284 |
|
|
$ |
5,624 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
111 |
|
|
|
111 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(6,687 |
) |
|
|
(6,687 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(6,701 |
) |
|
|
(1,077 |
) |
|
|
— |
|
|
|
— |
|
|
|
(5,624 |
) |
Same store NOI at share - cash
basis for the three months ended June 30, 2023 |
$ |
282,792 |
|
|
$ |
233,916 |
|
|
$ |
16,592 |
|
|
$ |
32,284 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share - cash basis for
the three months ended March 31, 2023 |
$ |
278,535 |
|
|
$ |
241,027 |
|
|
$ |
14,675 |
|
|
$ |
17,718 |
|
|
$ |
5,115 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
195 |
|
|
|
195 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(6,475 |
) |
|
|
(6,475 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(5,708 |
) |
|
|
(593 |
) |
|
|
— |
|
|
|
— |
|
|
|
(5,115 |
) |
Same store NOI at share - cash
basis for the three months ended March 31, 2023 |
$ |
266,547 |
|
|
$ |
234,154 |
|
|
$ |
14,675 |
|
|
$ |
17,718 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in same
store NOI at share - cash basis |
$ |
16,245 |
|
|
$ |
(238 |
) |
|
$ |
1,917 |
|
|
$ |
14,566 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase (decrease) in same
store NOI at share - cash basis |
|
6.1 |
% |
|
|
(0.1 |
)% |
|
|
13.1 |
% |
|
|
82.2 |
% |
|
|
0.0 |
% |
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