Vornado Realty Trust (NYSE: VNO) reported today:
Quarter Ended September 30, 2022
Financial Results
NET INCOME attributable to common shareholders
for the quarter ended September 30, 2022 was $7,769,000, or $0.04
per diluted share, compared to $37,689,000, or $0.20 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 September 30, 2022 was
$37,429,000, or $0.19 per diluted share, and $25,926,000, or $0.14
per diluted share for the quarter ended September 30, 2021.
FUNDS FROM OPERATIONS ("FFO") attributable to
common shareholders plus assumed conversions (non-GAAP) for the
quarter ended September 30, 2022 was $152,461,000, or $0.79 per
diluted share, compared to $158,286,000, or $0.82 per diluted
share, for the prior year's quarter. Adjusting for the items
that impact period-to-period comparability listed in the table on
page 3, FFO attributable to common shareholders plus assumed
conversions, as adjusted (non-GAAP) for the quarter ended September
30, 2022 was $157,350,000, or $0.81 per diluted share, and
$136,213,000, or $0.71 per diluted share for the quarter ended
September 30, 2021.
Nine Months Ended September 30, 2022
Financial Results
NET INCOME attributable to common shareholders
for the nine months ended September 30, 2022 was $84,665,000, or
$0.44 per diluted share, compared to $89,817,000, or $0.47 per
diluted share, for the nine months ended September 30, 2021.
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 nine months
ended September 30, 2022 was $106,652,000, or $0.56 per diluted
share, and $65,176,000, or $0.34 per diluted share, for the nine
months ended September 30, 2021.
FFO attributable to common shareholders plus
assumed conversions (non-GAAP) for the nine months ended September
30, 2022 was $462,463,000, or $2.39 per diluted share, compared to
$430,057,000, or $2.24 per diluted share, for the nine months ended
September 30, 2021. Adjusting for the items that impact
period-to-period comparability listed in the table on page 3, FFO
attributable to common shareholders plus assumed conversions, as
adjusted (non-GAAP) for the nine months ended September 30, 2022
was $469,851,000, or $2.43 per diluted share, and $393,733,000, or
$2.05 per diluted share, for the nine months ended September 30,
2021.
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 EndedSeptember
30, |
|
For the Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net income attributable to common shareholders |
$ |
7,769 |
|
|
$ |
37,689 |
|
|
$ |
84,665 |
|
|
$ |
89,817 |
|
Per diluted share |
$ |
0.04 |
|
|
$ |
0.20 |
|
|
$ |
0.44 |
|
|
$ |
0.47 |
|
|
|
|
|
|
|
|
|
Certain expense (income) items
that impact net income attributable to common shareholders: |
|
|
|
|
|
|
|
Hotel Pennsylvania loss |
$ |
26,613 |
|
|
$ |
6,492 |
|
|
$ |
44,473 |
|
|
$ |
20,474 |
|
Deferred tax liability on our investment in Farley Office and
Retail (held through a taxable REIT subsidiary) |
|
3,776 |
|
|
|
1,688 |
|
|
|
10,183 |
|
|
|
1,688 |
|
Tax benefit recognized by our taxable REIT subsidiaries |
|
— |
|
|
|
(27,910 |
) |
|
|
— |
|
|
|
(27,910 |
) |
After-tax net gain on sale of 220 Central Park South ("220 CPS")
condominium unit(s) and ancillary amenities |
|
— |
|
|
|
(8,815 |
) |
|
|
(6,085 |
) |
|
|
(31,023 |
) |
Net gain on sale of the Center Building (33-00 Northern Boulevard,
Long Island City, NY) |
|
— |
|
|
|
— |
|
|
|
(15,213 |
) |
|
|
— |
|
Refund of New York City transfer taxes related to the April 2019
transfer to Fifth Avenue and Times Square JV |
|
— |
|
|
|
— |
|
|
|
(13,613 |
) |
|
|
— |
|
Other |
|
1,477 |
|
|
|
15,664 |
|
|
|
4,137 |
|
|
|
10,090 |
|
|
|
31,866 |
|
|
|
(12,881 |
) |
|
|
23,882 |
|
|
|
(26,681 |
) |
Noncontrolling interests'
share of above adjustments |
|
(2,206 |
) |
|
|
1,118 |
|
|
|
(1,895 |
) |
|
|
2,040 |
|
Total of certain expense
(income) items that impact net income attributable to common
shareholders |
$ |
29,660 |
|
|
$ |
(11,763 |
) |
|
$ |
21,987 |
|
|
$ |
(24,641 |
) |
Per diluted share (non-GAAP) |
$ |
0.15 |
|
|
$ |
(0.06 |
) |
|
$ |
0.12 |
|
|
$ |
(0.13 |
) |
|
|
|
|
|
|
|
|
Net income attributable to
common shareholders, as adjusted (non-GAAP) |
$ |
37,429 |
|
|
$ |
25,926 |
|
|
$ |
106,652 |
|
|
$ |
65,176 |
|
Per diluted share (non-GAAP) |
$ |
0.19 |
|
|
$ |
0.14 |
|
|
$ |
0.56 |
|
|
$ |
0.34 |
|
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 EndedSeptember
30, |
|
For the Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
FFO attributable to common shareholders plus assumed conversions
(non-GAAP) |
$ |
152,461 |
|
|
$ |
158,286 |
|
|
$ |
462,463 |
|
|
$ |
430,057 |
|
Per diluted share (non-GAAP) |
$ |
0.79 |
|
|
$ |
0.82 |
|
|
$ |
2.39 |
|
|
$ |
2.24 |
|
|
|
|
|
|
|
|
|
Certain expense (income) items
that impact FFO attributable to common shareholders plus assumed
conversions: |
|
|
|
|
|
|
|
Deferred tax liability on our investment in Farley Office and
Retail (held through a taxable REIT subsidiary) |
$ |
3,776 |
|
|
$ |
1,688 |
|
|
$ |
10,183 |
|
|
$ |
1,688 |
|
Tax benefit recognized by our taxable REIT subsidiaries |
|
— |
|
|
|
(27,910 |
) |
|
|
— |
|
|
|
(27,910 |
) |
After-tax net gain on sale of 220 CPS condominium unit(s) and
ancillary amenities |
|
— |
|
|
|
(8,815 |
) |
|
|
(6,085 |
) |
|
|
(31,023 |
) |
Other |
|
1,477 |
|
|
|
11,394 |
|
|
|
3,840 |
|
|
|
18,698 |
|
|
|
5,253 |
|
|
|
(23,643 |
) |
|
|
7,938 |
|
|
|
(38,547 |
) |
Noncontrolling interests' share of above adjustments |
|
(364 |
) |
|
|
1,570 |
|
|
|
(550 |
) |
|
|
2,223 |
|
Total of certain expense
(income) items that impact FFO attributable to common shareholders
plus assumed conversions, net |
$ |
4,889 |
|
|
$ |
(22,073 |
) |
|
$ |
7,388 |
|
|
$ |
(36,324 |
) |
Per diluted share
(non-GAAP) |
$ |
0.02 |
|
|
$ |
(0.11 |
) |
|
$ |
0.04 |
|
|
$ |
(0.19 |
) |
|
|
|
|
|
|
|
|
FFO attributable to common shareholders plus assumed conversions,
as adjusted (non-GAAP) |
$ |
157,350 |
|
|
$ |
136,213 |
|
|
$ |
469,851 |
|
|
$ |
393,733 |
|
Per diluted share
(non-GAAP) |
$ |
0.81 |
|
|
$ |
0.71 |
|
|
$ |
2.43 |
|
|
$ |
2.05 |
|
FFO, as Adjusted Bridge - Q3 2022 vs. Q3
2021
The following table bridges our FFO attributable
to common shareholders plus assumed conversions, as adjusted
(non-GAAP) for the three months ended September 30, 2021 to FFO
attributable to common shareholders plus assumed conversions, as
adjusted (non-GAAP) for the three months ended September 30,
2022:
(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
September 30, 2021 |
$ |
136.2 |
|
|
$ |
0.71 |
|
|
|
|
|
Increase (decrease) in FFO, as
adjusted due to: |
|
|
|
Prior period accrual adjustments recorded in the third quarter of
each year related to changes in the tax-assessed value of
theMART |
|
22.8 |
|
|
|
Increase in interest expense, net of increase in interest
income |
|
(22.5 |
) |
|
|
Rent commencement and other tenant related items |
|
15.6 |
|
|
|
Variable businesses (primarily signage and trade shows) |
|
9.5 |
|
|
|
Straight-line impact of PENN 1 2023 estimated ground rent
reset |
|
(5.8 |
) |
|
|
Other, net |
|
2.6 |
|
|
|
|
|
22.2 |
|
|
|
Noncontrolling interests'
share of above items |
|
(1.0 |
) |
|
|
Net increase |
|
21.2 |
|
|
|
0.10 |
|
|
|
|
|
FFO attributable to
common shareholders plus assumed conversions, as adjusted
(non-GAAP) for the three months ended September 30,
2022 |
$ |
157.4 |
|
|
$ |
0.81 |
|
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
nine months ended September 30, 2022 and 2021. Reconciliations of
FFO attributable to common shareholders plus assumed conversions to
FFO attributable to common shareholders plus assumed conversions,
as adjusted are provided above.
Dispositions:
220 CPS
During the nine months ended September 30, 2022,
we closed on the sale of one condominium unit and ancillary
amenities at 220 CPS for net proceeds of $16,124,000 resulting in a
financial statement net gain of $7,030,000 which is included in
"net gains on disposition of wholly owned and partially owned
assets" on our consolidated statements of income. In connection
with these sales, $945,000 of income tax expense was recognized on
our consolidated statements of income. From inception to September
30, 2022, we have closed on the sale of 107 units and ancillary
amenities for net proceeds of $3,023,020,000 resulting in financial
statement net gains of $1,124,285,000.
SoHo Properties
On January 13, 2022, we sold two Manhattan
retail properties located at 478-482 Broadway and 155 Spring Street
for $84,500,000 and realized net proceeds of $81,399,000. In
connection with the sale, we recognized a net gain of $551,000
which is included in "net gains on disposition of wholly owned and
partially owned assets" on our consolidated statements of
income.
Center Building (33-00 Northern Boulevard)
On June 17, 2022, we sold the Center Building,
an eight-story 498,000 square foot office building located at 33‑00
Northern Boulevard in Long Island City, New York, for $172,750,000.
We realized net proceeds of $58,946,000 after repayment of the
existing $100,000,000 mortgage loan and closing costs. In
connection with the sale, we recognized a net gain of $15,213,000
which is included in "net gains on disposition of wholly owned and
partially owned assets" on our consolidated statements of income.
The gain for tax purposes was approximately $74,000,000.
40 Fulton Street
On August 17, 2022, we entered into an agreement
to sell 40 Fulton Street, a 251,000 square foot Manhattan office
and retail building, for $102,000,000. We expect to close the sale
in the fourth quarter of 2022 and recognize a net gain of
approximately $33,000,000 after closing costs. The sale is subject
to customary closing conditions. As of September 30, 2022, the
$64,177,000 carrying value of the property was classified as
held-for-sale and is included in "other assets" on our consolidated
balance sheets.
Financings:
100 West 33rd Street
On June 15, 2022, we completed a $480,000,000
refinancing of 100 West 33rd Street, a 1.1 million square foot
building comprised of 859,000 square feet of office space and
255,000 square feet of retail space. The interest-only loan bears a
rate of SOFR plus 1.65% (4.64% as of September 30, 2022) through
March 2024, increasing to SOFR plus 1.85% thereafter. The interest
rate on the loan was swapped to a fixed rate of 5.06% through March
2024, and 5.26% through June 2027. The loan matures in June 2027,
with two one-year extension options subject to debt service
coverage ratio and loan-to-value tests. The loan replaces the
previous $580,000,000 loan that bore interest at LIBOR plus 1.55%
and was scheduled to mature in April 2024.
770 Broadway
On June 28, 2022, we completed a $700,000,000
refinancing of 770 Broadway, a 1.2 million square foot Class A
Manhattan office building. The interest-only loan bears a rate of
SOFR plus 2.25% (4.93% as of September 30, 2022) and matures in
July 2024 with three one-year extension options (July 2027 as fully
extended). The interest rate on the loan was swapped to a fixed
rate of 4.98% through July 2027. The loan replaces the previous
$700,000,000 loan that bore interest at SOFR plus 1.86% and was
scheduled to mature in July 2022.
Financings - continued:
Unsecured Revolving Credit Facility
On June 30, 2022, we amended and extended
one of our two revolving credit facilities. The $1.25 billion
amended facility bears interest at a rate of SOFR plus 1.15% (4.18%
as of September 30, 2022). The term of the facility was extended
from March 2024 to December 2027, as fully extended. The facility
fee is 25 basis points. On August 16, 2022, the interest rate on
the $575,000,000 drawn on the facility was swapped to a fixed
interest rate of 3.88% through August 2027. Our other
$1.25 billion revolving credit facility matures in April 2026,
as fully extended, and bears a rate of SOFR plus 1.19% with a
facility fee of 25 basis points.
Unsecured Term Loan
On June 30, 2022, we extended our $800,000,000
unsecured term loan from February 2024 to December 2027. The
extended loan bears interest at a rate of SOFR plus 1.30% (4.33% as
of September 30, 2022) and is currently swapped to a fixed rate of
4.05%.
330 West 34th Street land owner joint venture
On August 18, 2022, the joint venture that owns
the fee interest in the 330 West 34th Street land, in which we have
a 34.8% interest, completed a $100,000,000 refinancing. The
interest-only loan bears interest at a fixed rate of 4.55% and
matures in September 2032. In connection with the refinancing, we
realized net proceeds of $10,500,000. The loan replaces the
previous $50,150,000 loan that bore interest at a fixed rate of
5.71%.
Interest Rate Hedging Activities
During the nine months ended September 30, 2022,
we entered into $2.0 billion of interest rate swap arrangements and
extended a $500,000,000 interest rate swap arrangement, reducing
our variable rate debt at share as a percentage of our total debt
at share to 27% from 47% (excluding our participation in the 150
West 34th Street mortgage loan). The exposure to LIBOR/SOFR index
increases on our $2.8 billion of unswapped variable rate debt is
partially mitigated over the next year by $2.0 billion of interest
rate caps and by an increase in interest income on our cash, cash
equivalents, restricted cash and investments in U.S. Treasury
bills. For further detail on our interest rate swap and cap
arrangements, see page 33 of our Supplemental Operating and
Financial Data package for the quarter ended September 30,
2022.
The table below presents the interest rate swap
arrangements entered into during the nine months ended September
30, 2022.
(Amounts in thousands) |
|
Notional Amount |
|
All-In Swapped Rate |
|
Swap Expiration Date |
|
Variable Rate Spread |
770 Broadway mortgage loan |
|
$ |
700,000 |
|
4.98% |
|
07/27 |
|
S+225 |
Unsecured revolving credit facility |
|
|
575,000 |
|
3.88% |
|
08/27 |
|
S+115 |
Unsecured term loan(1) |
|
|
50,000 |
|
4.04% |
|
08/27 |
|
S+130 |
Unsecured term loan (effective 10/23) |
|
|
500,000 |
|
4.39% |
|
10/26 |
|
S+130 |
100 West 33rd Street mortgage loan |
|
|
480,000 |
|
5.06% |
|
06/27 |
|
S+165 |
888 Seventh Avenue mortgage loan(2) |
|
|
200,000 |
|
4.66% |
|
09/27 |
|
L+170 |
____________________
(1) |
|
Together with the existing $750,000 interest rate swap arrangement
expiring October 2023, the $800,000 unsecured term loan balance
currently bears interest at a fixed rate of 4.05%. |
(2) |
|
The remaining $83,200 amortizing mortgage loan balance bears
interest at a floating rate of LIBOR plus 1.70%. |
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 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 September 30,
2022
-
167,000 square feet of New York Office space (140,000 square feet
at share) at an initial rent of $88.99 per square foot and a
weighted average lease term of 5.8 years. The changes in the GAAP
and cash mark-to-market rent on the 101,000 square feet of second
generation space were positive 7.2% and positive 1.8%,
respectively. Tenant improvements and leasing commissions were
$16.21 per square foot per annum, or 18.2% of initial rent.
-
62,000 square feet of New York Retail space (57,000 square feet at
share) at an initial rent of $242.89 per square foot and a weighted
average lease term of 10.5 years. The changes in the GAAP and cash
mark-to-market rent on the 36,000 square feet of second generation
space were negative 55.8% and negative 49.3%, respectively. Tenant
improvements and leasing commissions were $17.96 per square foot
per annum, or 7.4% of initial rent.
-
67,000 square feet at theMART (all at share) at an initial rent of
$52.20 per square foot and a weighted average lease term of 7.3
years. The changes in the GAAP and cash mark-to-market rent on
the 38,000 square feet of second generation space were negative
3.1% and negative 7.4%, respectively. Tenant improvements and
leasing commissions were $11.64 per square foot per annum, or 22.3%
of initial rent.
-
154,000 square feet at 555 California (108,000 square feet at
share) at an initial rent of $98.20 per square foot and a weighted
average lease term of 5.6 years. The changes in the GAAP and
cash mark-to-market rent on the 101,000 square feet of second
generation space were positive 16.0% and positive 11.9%,
respectively. Tenant improvements and leasing commissions were
$4.73 per square foot per annum, or 4.8% of initial rent.
For the Nine Months Ended September 30, 2022
- 740,000 square feet
of New York Office space (607,000 square feet at share) at an
initial rent of $84.49 per square foot and a weighted average lease
term of 9.2 years. The changes in the GAAP and cash mark-to-market
rent on the 362,000 square feet of second generation space were
positive 6.2% and positive 3.9%, respectively. Tenant improvements
and leasing commissions were $12.09 per square foot per annum, or
14.3% of initial rent.
-
90,000 square feet of New York Retail space (85,000 square feet at
share) at an initial rent of $262.88 per square foot and a weighted
average lease term of 11.6 years. The changes in the GAAP and cash
mark-to-market rent on the 42,000 square feet of second generation
space were negative 38.3% and negative 34.2%, respectively. Tenant
improvements and leasing commissions were $21.82 per square foot
per annum, or 8.3% of initial rent.
-
275,000 square feet at theMART (all at share) at an initial rent of
$51.78 per square foot and a weighted average lease term of 7.2
years. The changes in the GAAP and cash mark-to-market rent on
the 221,000 square feet of second generation space were negative
4.5% and negative 4.6%, respectively. Tenant improvements and
leasing commissions were $10.88 per square foot per annum, or 21.0%
of initial rent.
-
210,000 square feet at 555 California (147,000 square feet at
share) at an initial rent of $96.40 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 135,000 square feet of second
generation space were positive 24.3% and positive 13.6%,
respectively. Tenant improvements and leasing commissions were
$7.15 per square foot per annum, or 7.4% 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, theMART and 555 California Street.
|
Total |
|
New York |
|
theMART(2) |
|
555 California Street |
Same store NOI at share %
increase (decrease)(1): |
|
|
|
|
|
|
|
Three months ended September 30, 2022 compared to September 30,
2021 |
11.7 |
% |
|
(0.8 |
)% |
|
456.2 |
% |
|
1.3 |
% |
Nine months ended September 30, 2022 compared to September 30,
2021 |
7.4 |
% |
|
3.0 |
% |
|
76.1 |
% |
|
3.5 |
% |
Three months ended September 30, 2022 compared to June 30,
2022 |
2.8 |
% |
|
(3.5 |
)% |
|
79.3 |
% |
|
(3.8 |
)% |
|
|
|
|
|
|
|
|
Same store NOI at share - cash
basis % increase (decrease)(1): |
|
|
|
|
|
|
|
Three months ended September 30, 2022 compared to September 30,
2021 |
13.8 |
% |
|
1.1 |
% |
|
325.8 |
% |
|
16.7 |
% |
Nine months ended September 30, 2022 compared to September 30,
2021 |
9.4 |
% |
|
4.6 |
% |
|
71.3 |
% |
|
12.2 |
% |
Three months ended September 30, 2022 compared to June 30,
2022 |
4.0 |
% |
|
(2.1 |
)% |
|
70.7 |
% |
|
0.4 |
% |
____________________
(1) |
|
See pages 13 through 18 for same store NOI at share and same store
NOI at share - cash basis reconciliations. |
(2) |
|
Primarily due to (i) prior period accrual adjustments recorded in
the third quarter of each year related to changes in the
tax-assessed value of theMART and (ii) an increase in tradeshow
activity in the third quarter of 2022. |
NOI At Share:
The elements of our New York and Other NOI at
share for the three and nine months ended September 30, 2022 and
2021 and the three months ended June 30, 2022 are summarized
below.
(Amounts in thousands) |
For the Three Months Ended |
|
For the Nine Months EndedSeptember
30, |
|
September 30, |
|
June 30, 2022 |
|
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
NOI at
share: |
|
|
|
|
|
|
|
|
|
New York: |
|
|
|
|
|
|
|
|
|
Office(1) |
$ |
174,790 |
|
|
$ |
166,553 |
|
|
$ |
182,042 |
|
|
$ |
534,641 |
|
|
$ |
497,238 |
|
Retail |
|
52,127 |
|
|
|
49,083 |
|
|
|
51,438 |
|
|
|
155,670 |
|
|
|
124,998 |
|
Residential |
|
4,598 |
|
|
|
4,194 |
|
|
|
5,250 |
|
|
|
14,622 |
|
|
|
12,889 |
|
Alexander's |
|
9,639 |
|
|
|
9,009 |
|
|
|
9,362 |
|
|
|
27,980 |
|
|
|
28,567 |
|
Hotel Pennsylvania(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,677 |
) |
Total New York |
|
241,154 |
|
|
|
228,839 |
|
|
|
248,092 |
|
|
|
732,913 |
|
|
|
651,015 |
|
Other: |
|
|
|
|
|
|
|
|
|
theMART(3) |
|
35,769 |
|
|
|
6,431 |
|
|
|
19,947 |
|
|
|
75,630 |
|
|
|
42,950 |
|
555 California Street |
|
16,092 |
|
|
|
16,128 |
|
|
|
16,724 |
|
|
|
49,051 |
|
|
|
48,230 |
|
Other investments |
|
4,074 |
|
|
|
3,873 |
|
|
|
4,183 |
|
|
|
12,699 |
|
|
|
12,751 |
|
Total Other |
|
55,935 |
|
|
|
26,432 |
|
|
|
40,854 |
|
|
|
137,380 |
|
|
|
103,931 |
|
|
|
|
|
|
|
|
|
|
|
NOI at share |
$ |
297,089 |
|
|
$ |
255,271 |
|
|
$ |
288,946 |
|
|
$ |
870,293 |
|
|
$ |
754,946 |
|
_______________________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 nine months ended September
30, 2022 and 2021 and the three months ended June 30, 2022 are
summarized below.
(Amounts in thousands) |
For the Three Months Ended |
|
For the Nine Months EndedSeptember
30, |
|
September 30, |
|
June 30, 2022 |
|
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
NOI at share - cash
basis: |
|
|
|
|
|
|
|
|
|
New York: |
|
|
|
|
|
|
|
|
|
Office(1) |
$ |
174,606 |
|
|
$ |
170,521 |
|
|
$ |
180,326 |
|
|
$ |
532,759 |
|
|
$ |
504,939 |
|
Retail |
|
48,096 |
|
|
|
45,175 |
|
|
|
47,189 |
|
|
|
142,678 |
|
|
|
116,265 |
|
Residential |
|
4,556 |
|
|
|
4,136 |
|
|
|
4,309 |
|
|
|
13,554 |
|
|
|
11,898 |
|
Alexander's |
|
10,434 |
|
|
|
9,790 |
|
|
|
10,079 |
|
|
|
30,296 |
|
|
|
30,987 |
|
Hotel Pennsylvania(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,723 |
) |
Total New York |
|
237,692 |
|
|
|
229,622 |
|
|
|
241,903 |
|
|
|
719,287 |
|
|
|
651,366 |
|
Other: |
|
|
|
|
|
|
|
|
|
theMART(3) |
|
36,772 |
|
|
|
8,635 |
|
|
|
21,541 |
|
|
|
78,749 |
|
|
|
45,976 |
|
555 California Street |
|
16,926 |
|
|
|
14,745 |
|
|
|
16,855 |
|
|
|
50,141 |
|
|
|
45,552 |
|
Other investments |
|
4,280 |
|
|
|
4,191 |
|
|
|
4,372 |
|
|
|
13,292 |
|
|
|
13,622 |
|
Total Other |
|
57,978 |
|
|
|
27,571 |
|
|
|
42,768 |
|
|
|
142,182 |
|
|
|
105,150 |
|
|
|
|
|
|
|
|
|
|
|
NOI at share - cash basis |
$ |
295,670 |
|
|
$ |
257,193 |
|
|
$ |
284,671 |
|
|
$ |
861,469 |
|
|
$ |
756,516 |
|
______________________
(1) |
|
Includes Building Maintenance Services NOI of $7,043, $6,879,
$6,468, $19,293 and $19,426, respectively, for the three months
ended September 30, 2022 and 2021 and June 30, 2022 and the nine
months ended September 30, 2022 and 2021. |
(2) |
|
On April 5, 2021, we permanently closed the Hotel Pennsylvania.
Beginning in the third quarter of 2021, we commenced capitalization
of carrying costs in connection with our development of the future
PENN 15 (formerly Hotel Pennsylvania) site. |
(3) |
|
Increase primarily due to (i) prior period accrual adjustments
recorded in the third quarter of each year related to changes in
the tax-assessed value of theMART and (ii) an increase in tradeshow
activity in the third quarter of 2022. |
PENN District - Active
Development/Redevelopment Summary as of September
30, 2022
(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) |
|
|
|
|
Farley (95% interest) |
|
New York |
|
846,000 |
|
1,120,000 |
(2) |
|
1,069,131 |
(2) |
|
50,869 |
|
2022 |
|
6.4% |
|
PENN 2 - as expanded |
|
New York |
|
1,795,000 |
|
750,000 |
|
330,303 |
|
419,697 |
|
2025 |
|
9.0% |
|
PENN 1 (including LIRR
Concourse Retail)(3) |
|
New York |
|
2,546,000 |
|
450,000 |
|
354,828 |
|
95,172 |
|
N/A |
|
12.2% |
(3)(4) |
Districtwide Improvements |
|
New York |
|
N/A |
|
100,000 |
|
40,843 |
|
59,157 |
|
N/A |
|
N/A |
|
Total Active PENN District Projects |
|
|
|
|
|
2,420,000 |
|
1,795,105 |
|
624,895 |
|
|
|
8.0% |
|
________________________________
(1) |
|
Excluding debt and equity carry. |
(2) |
|
Net of 154,000 of historic tax credit investor contributions, of
which 88,000 has been funded to date (at our 95% share). |
(3) |
|
Property is ground leased through 2098, as fully extended. Fair
market value resets occur in 2023, 2048 and 2073. The 12.2%
projected return is before the ground rent reset in 2023, which may
be material. |
(4) |
|
Projected to be achieved as pre-redevelopment leases roll;
approximate average remaining lease term 3.6 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,
November 1, 2022 at 10:00 a.m. Eastern Time (ET). The conference
call can be accessed by dialing 866-374-5140 (domestic) or
404-400-0571 (international) and entering the passcode 86795136. 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; and estimates of future capital expenditures, dividends
to common and preferred shareholders and operating partnership
distributions. 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, 2021. Currently, some of the factors are the ongoing adverse
effect of the COVID-19 pandemic, 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. The extent of the
impact of the COVID-19 pandemic will continue to depend on future
developments, including vaccination rates among the population, the
efficacy and durability of vaccines against emerging variants, and
governmental and tenant responses thereto, which continue to be
uncertain but the impact could be material. Moreover, you are
cautioned that the COVID-19 pandemic will heighten many of the
risks identified in "Item 1A. Risk Factors" in Part I of our Annual
Report on Form 10-K for the year ended December 31, 2021.
VORNADO REALTY
TRUSTCONSOLIDATED BALANCE SHEETS
(Amounts in thousands) |
As of |
|
Increase(Decrease) |
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
ASSETS |
|
|
|
|
|
|
Real estate, at cost: |
|
|
|
|
|
|
Land |
$ |
2,477,956 |
|
|
$ |
2,540,193 |
|
|
$ |
(62,237 |
) |
|
Buildings and improvements |
|
10,015,452 |
|
|
|
9,839,166 |
|
|
|
176,286 |
|
|
Development costs and construction in progress |
|
802,272 |
|
|
|
718,694 |
|
|
|
83,578 |
|
|
Leasehold improvements and equipment |
|
122,948 |
|
|
|
119,792 |
|
|
|
3,156 |
|
|
Total |
|
13,418,628 |
|
|
|
13,217,845 |
|
|
|
200,783 |
|
|
Less accumulated depreciation and amortization |
|
(3,606,986 |
) |
|
|
(3,376,347 |
) |
|
|
(230,639 |
) |
|
Real estate, net |
|
9,811,642 |
|
|
|
9,841,498 |
|
|
|
(29,856 |
) |
|
Right-of-use assets |
|
685,298 |
|
|
|
337,197 |
|
|
|
348,101 |
|
(1) |
Cash, cash equivalents,
restricted cash and investments in U.S. Treasury bills: |
|
|
|
|
|
|
Cash and cash equivalents |
|
845,423 |
|
|
|
1,760,225 |
|
|
|
(914,802 |
) |
|
Restricted cash |
|
131,625 |
|
|
|
170,126 |
|
|
|
(38,501 |
) |
|
Investments in U.S. Treasury bills |
|
445,165 |
|
|
|
— |
|
|
|
445,165 |
|
|
Total |
|
1,422,213 |
|
|
|
1,930,351 |
|
|
|
(508,138 |
) |
|
Tenant and other
receivables |
|
81,004 |
|
|
|
79,661 |
|
|
|
1,343 |
|
|
Investments in partially owned
entities |
|
3,250,197 |
|
|
|
3,297,389 |
|
|
|
(47,192 |
) |
|
Real estate fund
investments |
|
930 |
|
|
|
7,730 |
|
|
|
(6,800 |
) |
|
220 CPS condominium units
ready for sale |
|
78,590 |
|
|
|
57,142 |
|
|
|
21,448 |
|
|
Receivable arising from the
straight-lining of rents |
|
692,733 |
|
|
|
656,318 |
|
|
|
36,415 |
|
|
Deferred leasing costs,
net |
|
380,221 |
|
|
|
391,693 |
|
|
|
(11,472 |
) |
|
Identified intangible assets,
net |
|
142,116 |
|
|
|
154,895 |
|
|
|
(12,779 |
) |
|
Other assets |
|
630,730 |
|
|
|
512,714 |
|
|
|
118,016 |
|
|
Total assets |
$ |
17,175,674 |
|
|
$ |
17,266,588 |
|
|
$ |
(90,914 |
) |
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND
EQUITY |
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
Mortgages payable, net |
$ |
5,831,769 |
|
|
$ |
6,053,343 |
|
|
$ |
(221,574 |
) |
|
Senior unsecured notes, net |
|
1,191,322 |
|
|
|
1,189,792 |
|
|
|
1,530 |
|
|
Unsecured term loan, net |
|
792,847 |
|
|
|
797,812 |
|
|
|
(4,965 |
) |
|
Unsecured revolving credit facilities |
|
575,000 |
|
|
|
575,000 |
|
|
|
— |
|
|
Lease liabilities |
|
731,674 |
|
|
|
370,206 |
|
|
|
361,468 |
|
(1) |
Accounts payable and accrued expenses |
|
475,151 |
|
|
|
613,497 |
|
|
|
(138,346 |
) |
|
Deferred revenue |
|
41,879 |
|
|
|
48,118 |
|
|
|
(6,239 |
) |
|
Deferred compensation plan |
|
95,681 |
|
|
|
110,174 |
|
|
|
(14,493 |
) |
|
Other liabilities |
|
265,775 |
|
|
|
304,725 |
|
|
|
(38,950 |
) |
|
Total liabilities |
|
10,001,098 |
|
|
|
10,062,667 |
|
|
|
(61,569 |
) |
|
Redeemable noncontrolling
interests |
|
483,302 |
|
|
|
688,683 |
|
|
|
(205,381 |
) |
|
Shareholders' equity |
|
6,438,046 |
|
|
|
6,236,346 |
|
|
|
201,700 |
|
|
Noncontrolling interests in
consolidated subsidiaries |
|
253,228 |
|
|
|
278,892 |
|
|
|
(25,664 |
) |
|
Total liabilities, redeemable noncontrolling interests and
equity |
$ |
17,175,674 |
|
|
$ |
17,266,588 |
|
|
$ |
(90,914 |
) |
|
____________________________________________________________
(1) |
|
In January 2022, we exercised a 25-year renewal option on our PENN
1 ground lease extending the term through June 2073. As a result of
the exercise, we remeasured the related ground lease liability to
include the 25-year extension option and recorded an estimated
incremental right-of-use asset and lease liability of approximately
$350,000. |
VORNADO REALTY
TRUSTOPERATING RESULTS
(Amounts in thousands, except per
share amounts) |
For the Three Months EndedSeptember
30, |
|
For the Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenues |
$ |
457,431 |
|
|
$ |
409,212 |
|
|
$ |
1,353,055 |
|
|
$ |
1,168,130 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
20,112 |
|
|
$ |
71,765 |
|
|
$ |
142,390 |
|
|
$ |
175,590 |
|
Less net loss (income)
attributable to noncontrolling interests in: |
|
|
|
|
|
|
|
Consolidated subsidiaries |
|
3,792 |
|
|
|
(5,425 |
) |
|
|
(4,756 |
) |
|
|
(20,323 |
) |
Operating Partnership |
|
(606 |
) |
|
|
(2,818 |
) |
|
|
(6,382 |
) |
|
|
(6,683 |
) |
Net income attributable to
Vornado |
|
23,298 |
|
|
|
63,522 |
|
|
|
131,252 |
|
|
|
148,584 |
|
Preferred share dividends |
|
(15,529 |
) |
|
|
(16,800 |
) |
|
|
(46,587 |
) |
|
|
(49,734 |
) |
Series K preferred share
issuance costs |
|
— |
|
|
|
(9,033 |
) |
|
|
— |
|
|
|
(9,033 |
) |
Net income
attributable to common shareholders |
$ |
7,769 |
|
|
$ |
37,689 |
|
|
$ |
84,665 |
|
|
$ |
89,817 |
|
|
|
|
|
|
|
|
|
Income per common
share - basic: |
|
|
|
|
|
|
|
Net income per common share |
$ |
0.04 |
|
|
$ |
0.20 |
|
|
$ |
0.44 |
|
|
$ |
0.47 |
|
Weighted average shares outstanding |
|
191,793 |
|
|
|
191,577 |
|
|
|
191,756 |
|
|
|
191,508 |
|
|
|
|
|
|
|
|
|
Income per common
share - diluted: |
|
|
|
|
|
|
|
Net income per common share |
$ |
0.04 |
|
|
$ |
0.20 |
|
|
$ |
0.44 |
|
|
$ |
0.47 |
|
Weighted average shares outstanding |
|
192,018 |
|
|
|
192,041 |
|
|
|
192,042 |
|
|
|
192,151 |
|
|
|
|
|
|
|
|
|
FFO attributable to common
shareholders plus assumed conversions (non-GAAP) |
$ |
152,461 |
|
|
$ |
158,286 |
|
|
$ |
462,463 |
|
|
$ |
430,057 |
|
Per diluted share (non-GAAP) |
$ |
0.79 |
|
|
$ |
0.82 |
|
|
$ |
2.39 |
|
|
$ |
2.24 |
|
|
|
|
|
|
|
|
|
FFO attributable to common
shareholders plus assumed conversions, as adjusted (non-GAAP) |
$ |
157,350 |
|
|
$ |
136,213 |
|
|
$ |
469,851 |
|
|
$ |
393,733 |
|
Per diluted share (non-GAAP) |
$ |
0.81 |
|
|
$ |
0.71 |
|
|
$ |
2.43 |
|
|
$ |
2.05 |
|
|
|
|
|
|
|
|
|
Weighted average shares used
in determining FFO attributable to common shareholders plus assumed
conversions per diluted share |
|
193,808 |
|
|
|
192,067 |
|
|
|
193,429 |
|
|
|
192,177 |
|
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 they exclude 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 members of its 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 3 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 EndedSeptember
30, |
|
For the Nine Months EndedSeptember
30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net income attributable to common shareholders |
$ |
7,769 |
|
|
$ |
37,689 |
|
|
$ |
84,665 |
|
|
$ |
89,817 |
|
Per diluted share |
$ |
0.04 |
|
|
$ |
0.20 |
|
|
$ |
0.44 |
|
|
$ |
0.47 |
|
|
|
|
|
|
|
|
|
FFO adjustments: |
|
|
|
|
|
|
|
Depreciation and amortization
of real property |
$ |
122,438 |
|
|
$ |
86,180 |
|
|
$ |
335,020 |
|
|
$ |
256,295 |
|
Real estate impairment
losses |
|
— |
|
|
|
7,880 |
|
|
|
— |
|
|
|
7,880 |
|
Net gain on sale of real
estate |
|
— |
|
|
|
— |
|
|
|
(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 |
|
32,584 |
|
|
|
35,125 |
|
|
|
98,404 |
|
|
|
104,829 |
|
Net loss (gain) on sale of real estate |
|
6 |
|
|
|
— |
|
|
|
(169 |
) |
|
|
(3,052 |
) |
Decrease (increase) in fair value of marketable securities |
|
— |
|
|
|
287 |
|
|
|
— |
|
|
|
(1,118 |
) |
|
|
155,028 |
|
|
|
129,472 |
|
|
|
404,901 |
|
|
|
364,834 |
|
Noncontrolling interests'
share of above adjustments |
|
(10,731 |
) |
|
|
(8,886 |
) |
|
|
(28,018 |
) |
|
|
(24,627 |
) |
FFO adjustments, net |
$ |
144,297 |
|
|
$ |
120,586 |
|
|
$ |
376,883 |
|
|
$ |
340,207 |
|
|
|
|
|
|
|
|
|
FFO attributable to common
shareholders |
$ |
152,066 |
|
|
$ |
158,275 |
|
|
$ |
461,548 |
|
|
$ |
430,024 |
|
Impact of assumed conversion
of dilutive convertible securities |
|
395 |
|
|
|
11 |
|
|
|
915 |
|
|
|
33 |
|
FFO attributable to common
shareholders plus assumed conversions |
$ |
152,461 |
|
|
$ |
158,286 |
|
|
$ |
462,463 |
|
|
$ |
430,057 |
|
Per diluted share |
$ |
0.79 |
|
|
$ |
0.82 |
|
|
$ |
2.39 |
|
|
$ |
2.24 |
|
|
|
|
|
|
|
|
|
Reconciliation of
weighted average shares outstanding: |
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
191,793 |
|
|
|
191,577 |
|
|
|
191,756 |
|
|
|
191,508 |
|
Effect of dilutive
securities: |
|
|
|
|
|
|
|
Convertible securities |
|
1,790 |
|
(1) |
|
26 |
|
|
|
1,407 |
|
(1) |
|
26 |
|
Share-based payment awards |
|
225 |
|
|
|
464 |
|
|
|
266 |
|
|
|
643 |
|
Denominator for FFO per
diluted share |
|
193,808 |
|
|
|
192,067 |
|
|
|
193,429 |
|
|
|
192,177 |
|
______________________
(1) |
|
On January 1, 2022, we adopted Accounting Standards Update 2020-06,
which requires us to include our Series D-13 cumulative redeemable
preferred units and Series G-1 through G-4 convertible preferred
units in our dilutive earnings per share calculations, if the
effect is dilutive. |
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 nine
months ended September 30, 2022 and 2021 and the three months ended
June 30, 2022.
|
For the Three Months Ended |
|
For the Nine Months EndedSeptember
30, |
(Amounts in thousands) |
September 30, |
|
June 30, 2022 |
|
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
Net income |
$ |
20,112 |
|
|
$ |
71,765 |
|
|
$ |
68,903 |
|
|
$ |
142,390 |
|
|
$ |
175,590 |
|
Depreciation and amortization
expense |
|
134,526 |
|
|
|
100,867 |
|
|
|
118,662 |
|
|
|
370,631 |
|
|
|
285,998 |
|
General and administrative
expense |
|
29,174 |
|
|
|
25,553 |
|
|
|
31,902 |
|
|
|
102,292 |
|
|
|
100,341 |
|
Transaction related costs and
other |
|
996 |
|
|
|
9,681 |
|
|
|
2,960 |
|
|
|
4,961 |
|
|
|
10,630 |
|
Income from partially owned
entities |
|
(24,341 |
) |
|
|
(26,269 |
) |
|
|
(25,720 |
) |
|
|
(83,775 |
) |
|
|
(86,768 |
) |
Loss (income) from real estate
fund investments |
|
111 |
|
|
|
66 |
|
|
|
142 |
|
|
|
(5,421 |
) |
|
|
(5,107 |
) |
Interest and other investment
income, net |
|
(5,228 |
) |
|
|
(633 |
) |
|
|
(3,036 |
) |
|
|
(9,282 |
) |
|
|
(3,694 |
) |
Interest and debt expense |
|
76,774 |
|
|
|
50,946 |
|
|
|
62,640 |
|
|
|
191,523 |
|
|
|
152,904 |
|
Net gains on disposition of
wholly owned and partially owned assets |
|
— |
|
|
|
(10,087 |
) |
|
|
(28,832 |
) |
|
|
(35,384 |
) |
|
|
(35,811 |
) |
Income tax expense
(benefit) |
|
3,711 |
|
|
|
(25,376 |
) |
|
|
3,564 |
|
|
|
14,686 |
|
|
|
(20,551 |
) |
NOI from partially owned
entities |
|
76,020 |
|
|
|
75,644 |
|
|
|
74,060 |
|
|
|
228,772 |
|
|
|
231,635 |
|
NOI attributable to
noncontrolling interests in consolidated subsidiaries |
|
(14,766 |
) |
|
|
(16,886 |
) |
|
|
(16,299 |
) |
|
|
(51,100 |
) |
|
|
(50,221 |
) |
NOI at share |
|
297,089 |
|
|
|
255,271 |
|
|
|
288,946 |
|
|
|
870,293 |
|
|
|
754,946 |
|
Non-cash adjustments for
straight-line rents, amortization of acquired below-market leases,
net and other |
|
(1,419 |
) |
|
|
1,922 |
|
|
|
(4,275 |
) |
|
|
(8,824 |
) |
|
|
1,570 |
|
NOI at share - cash basis |
$ |
295,670 |
|
|
$ |
257,193 |
|
|
$ |
284,671 |
|
|
$ |
861,469 |
|
|
$ |
756,516 |
|
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, theMART, 555
California Street and other investments for the three months ended
September 30, 2022 compared to September 30, 2021.
(Amounts in thousands) |
Total |
|
New York |
|
theMART |
|
555 California Street |
|
Other |
NOI at share for the three months ended September 30, 2022 |
$ |
297,089 |
|
|
$ |
241,154 |
|
|
$ |
35,769 |
|
|
$ |
16,092 |
|
|
$ |
4,074 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Change in ownership interest in One Park Avenue |
|
(2,106 |
) |
|
|
(2,106 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Dispositions |
|
(88 |
) |
|
|
(88 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(22,914 |
) |
|
|
(22,914 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(6,149 |
) |
|
|
(2,075 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,074 |
) |
Same store NOI at share for
the three months ended September 30, 2022 |
$ |
265,832 |
|
|
$ |
213,971 |
|
|
$ |
35,769 |
|
|
$ |
16,092 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share for the three
months ended September 30, 2021 |
$ |
255,271 |
|
|
$ |
228,839 |
|
|
$ |
6,431 |
|
|
$ |
16,128 |
|
|
$ |
3,873 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(2,754 |
) |
|
|
(2,754 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(6,302 |
) |
|
|
(6,055 |
) |
|
|
— |
|
|
|
(247 |
) |
|
|
— |
|
Other non-same store income, net |
|
(8,198 |
) |
|
|
(4,325 |
) |
|
|
— |
|
|
|
— |
|
|
|
(3,873 |
) |
Same store NOI at share for
the three months ended September 30, 2021 |
$ |
238,017 |
|
|
$ |
215,705 |
|
|
$ |
6,431 |
|
|
$ |
15,881 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in same
store NOI at share |
$ |
27,815 |
|
|
$ |
(1,734 |
) |
|
$ |
29,338 |
|
|
$ |
211 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase (decrease) in same
store NOI at share |
|
11.7 |
% |
|
(0.8 |
)% |
|
|
456.2 |
% |
|
|
1.3 |
% |
|
|
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, theMART, 555 California Street and other investments for
the three months ended September 30, 2022 compared to September 30,
2021.
(Amounts in thousands) |
Total |
|
New York |
|
theMART |
|
555 California Street |
|
Other |
NOI at share - cash basis for the three months ended September 30,
2022 |
$ |
295,670 |
|
|
$ |
237,692 |
|
|
$ |
36,772 |
|
|
$ |
16,926 |
|
|
$ |
4,280 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Change in ownership interest in One Park Avenue |
|
(1,502 |
) |
|
|
(1,502 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Dispositions |
|
(88 |
) |
|
|
(88 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(15,796 |
) |
|
|
(15,796 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(6,573 |
) |
|
|
(2,293 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,280 |
) |
Same store NOI at share - cash
basis for the three months ended September 30, 2022 |
$ |
271,711 |
|
|
$ |
218,013 |
|
|
$ |
36,772 |
|
|
$ |
16,926 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share - cash basis for
the three months ended September 30, 2021 |
$ |
257,193 |
|
|
$ |
229,622 |
|
|
$ |
8,635 |
|
|
$ |
14,745 |
|
|
$ |
4,191 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(3,436 |
) |
|
|
(3,436 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(6,852 |
) |
|
|
(6,605 |
) |
|
|
— |
|
|
|
(247 |
) |
|
|
— |
|
Other non-same store income, net |
|
(8,064 |
) |
|
|
(3,873 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,191 |
) |
Same store NOI at share - cash
basis for the three months ended September 30, 2021 |
$ |
238,841 |
|
|
$ |
215,708 |
|
|
$ |
8,635 |
|
|
$ |
14,498 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase in same store NOI at
share - cash basis |
$ |
32,870 |
|
|
$ |
2,305 |
|
|
$ |
28,137 |
|
|
$ |
2,428 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase in same store NOI
at share - cash basis |
|
13.8 |
% |
|
|
1.1 |
% |
|
|
325.8 |
% |
|
|
16.7 |
% |
|
|
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, theMART, 555
California Street and other investments for the nine months ended
September 30, 2022 compared to September 30, 2021.
(Amounts in thousands) |
Total |
|
New York |
|
theMART |
|
555 California Street |
|
Other |
NOI at share for the nine months ended September 30, 2022 |
$ |
870,293 |
|
|
$ |
732,913 |
|
|
$ |
75,630 |
|
|
$ |
49,051 |
|
|
$ |
12,699 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Change in ownership interest in One Park Avenue |
|
(13,370 |
) |
|
|
(13,370 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Dispositions |
|
(3,523 |
) |
|
|
(3,523 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(65,440 |
) |
|
|
(65,440 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(17,910 |
) |
|
|
(5,211 |
) |
|
|
— |
|
|
|
— |
|
|
|
(12,699 |
) |
Same store NOI at share for
the nine months ended September 30, 2022 |
$ |
770,050 |
|
|
$ |
645,369 |
|
|
$ |
75,630 |
|
|
$ |
49,051 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share for the nine
months ended September 30, 2021 |
$ |
754,946 |
|
|
$ |
651,015 |
|
|
$ |
42,950 |
|
|
$ |
48,230 |
|
|
$ |
12,751 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(6,667 |
) |
|
|
(6,667 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(23,207 |
) |
|
|
(22,359 |
) |
|
|
— |
|
|
|
(848 |
) |
|
|
— |
|
Hotel Pennsylvania (permanently closed on April 5, 2021) |
|
12,677 |
|
|
|
12,677 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(20,991 |
) |
|
|
(8,240 |
) |
|
|
— |
|
|
|
— |
|
|
|
(12,751 |
) |
Same store NOI at share for
the nine months ended September 30, 2021 |
$ |
716,758 |
|
|
$ |
626,426 |
|
|
$ |
42,950 |
|
|
$ |
47,382 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase in same store NOI at
share |
$ |
53,292 |
|
|
$ |
18,943 |
|
|
$ |
32,680 |
|
|
$ |
1,669 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase in same store NOI
at share |
|
7.4 |
% |
|
|
3.0 |
% |
|
|
76.1 |
% |
|
|
3.5 |
% |
|
|
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, theMART, 555 California Street and other investments for
the nine months ended September 30, 2022 compared to September 30,
2021.
(Amounts in thousands) |
Total |
|
New York |
|
theMART |
|
555 California Street |
|
Other |
NOI at share - cash basis for the nine months ended September 30,
2022 |
$ |
861,469 |
|
|
$ |
719,287 |
|
|
$ |
78,749 |
|
|
$ |
50,141 |
|
|
$ |
13,292 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Change in ownership interest in One Park Avenue |
|
(10,111 |
) |
|
|
(10,111 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Dispositions |
|
(3,732 |
) |
|
|
(3,732 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(44,381 |
) |
|
|
(44,381 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(19,478 |
) |
|
|
(6,186 |
) |
|
|
— |
|
|
|
— |
|
|
|
(13,292 |
) |
Same store NOI at share - cash
basis for the nine months ended September 30, 2022 |
$ |
783,767 |
|
|
$ |
654,877 |
|
|
$ |
78,749 |
|
|
$ |
50,141 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
NOI at share - cash basis for
the nine months ended September 30, 2021 |
$ |
756,516 |
|
|
$ |
651,366 |
|
|
$ |
45,976 |
|
|
$ |
45,552 |
|
|
$ |
13,622 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(6,796 |
) |
|
|
(6,796 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(24,430 |
) |
|
|
(23,582 |
) |
|
|
— |
|
|
|
(848 |
) |
|
|
— |
|
Hotel Pennsylvania (permanently closed on April 5, 2021) |
|
12,723 |
|
|
|
12,723 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(21,310 |
) |
|
|
(7,688 |
) |
|
|
— |
|
|
|
— |
|
|
|
(13,622 |
) |
Same store NOI at share - cash
basis for the nine months ended September 30, 2021 |
$ |
716,703 |
|
|
$ |
626,023 |
|
|
$ |
45,976 |
|
|
$ |
44,704 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase in same store NOI at
share - cash basis |
$ |
67,064 |
|
|
$ |
28,854 |
|
|
$ |
32,773 |
|
|
$ |
5,437 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase in same store NOI
at share - cash basis |
|
9.4 |
% |
|
|
4.6 |
% |
|
|
71.3 |
% |
|
|
12.2 |
% |
|
|
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, theMART, 555
California Street and other investments for the three months ended
September 30, 2022 compared to June 30, 2022.
(Amounts in thousands) |
Total |
|
New York |
|
theMART |
|
555 California Street |
|
Other |
NOI at share for the three months ended September 30, 2022 |
$ |
297,089 |
|
|
$ |
241,154 |
|
|
$ |
35,769 |
|
|
$ |
16,092 |
|
|
$ |
4,074 |
|
Less NOI at share from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(88 |
) |
|
|
(88 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(22,914 |
) |
|
|
(22,914 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(5,250 |
) |
|
|
(1,176 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,074 |
) |
Same store NOI at share for
the three months ended September 30, 2022 |
$ |
268,837 |
|
|
$ |
216,976 |
|
|
$ |
35,769 |
|
|
$ |
16,092 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
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 |
|
(1,628 |
) |
|
|
(1,628 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(21,667 |
) |
|
|
(21,667 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(4,231 |
) |
|
|
(48 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,183 |
) |
Same store NOI at share for
the three months ended June 30, 2022 |
$ |
261,420 |
|
|
$ |
224,749 |
|
|
$ |
19,947 |
|
|
$ |
16,724 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in same
store NOI at share |
$ |
7,417 |
|
|
$ |
(7,773 |
) |
|
$ |
15,822 |
|
|
$ |
(632 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase (decrease) in same
store NOI at share |
|
2.8 |
% |
|
(3.5 |
)% |
|
|
79.3 |
% |
|
(3.8 |
)% |
|
|
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, theMART, 555 California Street and other investments for
the three months ended September 30, 2022 compared to June 30,
2022.
(Amounts in thousands) |
Total |
|
New York |
|
theMART |
|
555 California Street |
|
Other |
NOI at share - cash basis for the three months ended September 30,
2022 |
$ |
295,670 |
|
|
$ |
237,692 |
|
|
$ |
36,772 |
|
|
$ |
16,926 |
|
|
$ |
4,280 |
|
Less NOI at share - cash basis
from: |
|
|
|
|
|
|
|
|
|
Dispositions |
|
(88 |
) |
|
|
(88 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(15,796 |
) |
|
|
(15,796 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(5,665 |
) |
|
|
(1,385 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,280 |
) |
Same store NOI at share - cash
basis for the three months ended September 30, 2022 |
$ |
274,121 |
|
|
$ |
220,423 |
|
|
$ |
36,772 |
|
|
$ |
16,926 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
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 |
|
(1,715 |
) |
|
|
(1,715 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Development properties |
|
(14,657 |
) |
|
|
(14,657 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other non-same store income, net |
|
(4,715 |
) |
|
|
(343 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4,372 |
) |
Same store NOI at share - cash
basis for the three months ended June 30, 2022 |
$ |
263,584 |
|
|
$ |
225,188 |
|
|
$ |
21,541 |
|
|
$ |
16,855 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in same
store NOI at share - cash basis |
$ |
10,537 |
|
|
$ |
(4,765 |
) |
|
$ |
15,231 |
|
|
$ |
71 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
% increase (decrease) in same
store NOI at share - cash basis |
|
4.0 |
% |
|
(2.1 |
)% |
|
|
70.7 |
% |
|
|
0.4 |
% |
|
|
0.0 |
% |
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