ALEXANDERS INC

Previous wording

Our business has been, and may continue to be, affected by the increase in inflation and interest rates, and other uncertainties including the potential for an economic downturn. These factors could have a material impact on our business, financial condition, results of operations and cash flows.

Current wording

Our business has been, and may continue to be, affected by interest rate fluctuations, the effects of inflation and other uncertainties including the potential for an economic downturn. These factors could have a material impact on our business, financial condition, results of operations and cash flows.

Previous wording

Net income for the year ended December 31, 2023 was $102,413,000 or $19.97 per diluted share, compared to $57,632,000 or $11.24 per diluted share for the year ended December 31, 2022. Net income for the year ended December 31, 2023 included $53,952,000, or $10.52 per diluted share, of income as a result of a net gain on the sale of real estate.

Current wording

Net income for the year ended December 31, 2024 was$43,444,000 or$8.46 per diluted share, compared to$102,413,000 or$19.97 per diluted share for the year ended December 31, 2023. Net income for the year ended December 31, 2023 included$53,952,000, or $10.52 per diluted share, of income as a result of a net gain on the sale of real estate.

Previous wording

Funds from operations (“FFO”) (non-GAAP) for the year ended December 31, 2023 was $81,067,000, or $15.80 per diluted share, compared to $87,090,000, or $16.99 per diluted share for the year ended December 31, 2022.

Current wording

Funds from operations (“FFO”) (non-GAAP) for the year ended December 31, 2024 was $77,968,000, or $15.19 per diluted share, compared to $81,067,000, or $15.80 per diluted share for the year ended December 31, 2023.

Previous wording

As of December 31, 2023, our portfolio was comprised of five properties aggregating 2,455,000 square feet. The commercial occupancy rate was 92.6% and the residential occupancy rate was 95.2%.

Current wording

As of December 31, 2024, our portfolio was comprised of five properties aggregating 2,455,000 square feet. The commercial occupancy rate was 99.1% and the residential occupancy rate was 94.2%.

Previous wording

Bloomberg accounted for revenue of $120,351,000, $115,129,000, and $113,140,000 in the years ended December 31, 2023, 2022 and 2021, respectively, representing approximately 54%, 56%and 55% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.

Current wording

Bloomberg accounted for revenue of $125,349,000, $120,351,000, and $115,129,000 in the years ended December 31, 2024, 2023 and 2022, respectively, representing approximately 55%, 54% and 56% of our rental revenues in each year, respectively. No other tenant accounted for more than 10% of our rental revenues. If we were to lose Bloomberg as a tenant, or if Bloomberg were to be unable to fulfill its obligations under its lease, it would adversely affect our results of operations and financial condition. In order to assist us in our continuing assessment of Bloomberg’s creditworthiness, we receive certain confidential financial information and metrics from Bloomberg. In addition, we access and evaluate financial information regarding Bloomberg from other private sources, as well as publicly available data.

Previous wording

Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment analyses are based on current plans, intended holding periods, ability to hold, and available information at the time the analyses are prepared. Assessing impairment can be complex and involves a high degree of subjectivity in determining if impairment indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset. In particular, these estimates are sensitive to significant assumptions, including the estimation of future rental revenues, operating expenses, discount and capitalization rates and our intent and ability to hold the related asset, all of which could be affected by our expectations about future market or economic conditions. These estimates can have a significant impact on the undiscounted cash flows or estimated fair value of an asset and could thereby affect the value of our real estate on our consolidated balance sheets as well as any potential impairment losses recognized on our consolidated statements of income.

Current wording

Our properties are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment analyses are based on current plans, intended holding periods, ability to hold, and available information at the time the analyses are prepared. Assessing impairment can be complex and involves a high degree of subjectivity in determining if impairment indicators are present and in estimating the future undiscounted cash flows or the fair value of an asset. In particular, these estimates are sensitive to significant assumptions, including the estimation of future rental revenues, operating expenses, capital expenditures, discount and capitalization rates and our intent and ability to hold the related asset, all of which could be affected by our expectations about future market or economic conditions. These estimates can have a significant impact on the undiscounted cash flows or estimated fair value of an asset and could thereby affect the value of our real estate on our consolidated balance sheets as well as any potential impairment losses recognized on our consolidated statements of income.

Previous wording

Rental revenues were $224,962,000 in the year ended December 31, 2023, compared to $205,814,000 in the prior year, an increase of $19,148,000. This was primarily due to (i) $8,065,000 of higher straight-line rental revenue from IKEA’s lease modification, (ii) $4,184,000 of higher reimbursable operating expenses and capital expenditures, (iii) $3,750,000 of higher real estate tax reimbursements due to higher real estate tax expense, and (iv) $3,359,000 of higher revenue due to leasing activity, partially offset by (v) $1,467,000 of lower lease termination fee income.

Current wording

Rental revenues were$226,374,000 in the year ended December 31, 2024, compared to$224,962,000 in the prior year, an increase of $1,412,000. This was primarily due to (i) $4,583,000 of higher rental revenue from Bloomberg’s lease extension, and (ii) $2,322,000 of higher real estate tax reimbursements due to higher real estate tax expense, partially offset by (iii) $3,785,000 of lower rental revenue from IKEA’s lease expiration at Rego Park I, (iv) $875,000 of lower rental revenue from Bed Bath & Beyond’s lease rejection at Rego Park I, and (v) $781,000 of lower rental revenue from Old Navy’s lease termination at Rego Park I.

Previous wording

Operating expenses were $101,210,000 in the year ended December 31, 2023, compared to $90,446,000 in the prior year, an increase of $10,764,000. This was primarily due to higher real estate tax expense and operating expenses, including the impact of lower capitalized expenses during the current year.

Current wording

Operating expenses were$103,240,000 in the year ended December 31, 2024, compared to$101,210,000 in the prior year, an increase of $2,030,000. This was primarily due to higher real estate tax expense and non reimbursable operating expenses, partially offset by higher capitalized expenses during the current year.

Previous wording

Depreciation and amortization was $32,898,000 in the year ended December 31, 2023, compared to $29,797,000 in the prior year, an increase of $3,101,000. This was primarily due to higher depreciation expense on capital projects placed into service during the current year.

Current wording

Depreciation and amortization was$34,782,000 in the year ended December 31, 2024, compared to$32,898,000 in the prior year, an increase of $1,884,000. This was primarily due to higher depreciation expense on capital projects placed into service.

Previous wording

General and administrative expenses were $6,341,000 in the year ended December 31, 2023, compared to $6,106,000 in the prior year, an increase of $235,000. This was primarily due to higher professional fees.

Current wording

General and administrative expenses were$6,519,000 in the year ended December 31, 2024, compared to$6,341,000 in the prior year, an increase of $178,000. This was primarily due to higher professional fees.

Previous wording

Interest and other income was $22,245,000 in the year ended December 31, 2023, compared to $6,769,000 in the prior year, an increase of $15,476,000. This was primarily due to an increase in average interest rates.

Current wording

Interest and other income was$24,429,000 in the year ended December 31, 2024, compared to$22,245,000 in the prior year, an increase of $2,184,000. This was primarily due to an increase in average interest rates.

Previous wording

Net gains on the sale of real estate were $53,952,000 in the year ended December 31, 2023, resulting from the sale of the Rego Park III land parcel in Queens, New York in May 2023.

Current wording

Net gain on the sale of real estate was$53,952,000 in the year ended December 31, 2023, resulting from the sale of the Rego Park III land parcel in Queens, New York in May 2023.

Previous wording

As of December 31, 2023, we had $552,977,000 of liquidity comprised of cash and cash equivalents and restricted cash. Recent increases in interest rates and inflation could adversely affect our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months, together with existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt service and capital expenditures. We may refinance our maturing debt as it comes due or choose to pay it down. However, there can be no assurance that additional financing or capital will be available to refinance our debt, or that the terms will be acceptable or advantageous to us.

Current wording

As of December 31, 2024, we had $393,836,000 of liquidity comprised of cash and cash equivalents and restricted cash. Recent increases in interest rates and inflation could adversely affect our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months, together with existing cash balances, will be adequate to fund our business operations, cash dividends to stockholders, debt service and capital expenditures. We may refinance our maturing debt as it comes due or choose to pay it down. However, there can be no assurance that additional financing or capital will be available to refinance our debt, or that the terms will be acceptable or advantageous to us.

Previous wording

Cash and cash equivalents and restricted cash were $214,478,000 at December 31, 2022, compared to $483,505,000 at December 31, 2021, a decrease of $269,027,000. This resulted from (i) $279,266,000 of net cash used in investing activities and (ii) $92,310,000 of net cash used in financing activities, partially offset by (iii) $102,549,000 of net cash provided by operating activities.

Current wording

Cash and cash equivalents and restricted cash were $393,836,000 at December 31, 2024, compared to $552,977,000 at December 31, 2023, a decrease of $159,141,000. This resulted from (i) $200,025,000 of net cash used in financing activities and (ii) $13,222,000 of net cash used in investing activities, partially offset by (iii) $54,106,000 of net cash provided by operating activities.

Previous wording

Net cash used in investing activities of $279,266,000 was comprised of (i) the purchase of U.S. Treasury bills of $364,238,000 and (ii) $14,386,000 of construction in progress and real estate additions, partially offset by (iii) $99,358,000 of proceeds from maturities of U.S. Treasury bills.

Current wording

Net cash used in investing activities of $13,222,000 was comprised of construction in progress and real estate additions of $19,785,000, partially offset by proceeds from an interest rate cap of $6,563,000.

Previous wording

Net cash provided by operating activities of $102,549,000 was comprised of (i) net income of $57,632,000, (ii) adjustments for non-cash items of $36,936,000 and (iii) the net change in operating assets and liabilities of $7,981,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $31,454,000, (ii) straight-lining of rental income of $7,960,000 and (iii) stock-based compensation expense of $450,000, partially offset by (iv) other non-cash adjustments of $2,928,000.

Current wording

Net cash provided by operating activities of $54,106,000 was comprised of (i) net income of $43,444,000 and (ii) adjustments for non-cash items of $58,440,000, partially offset by (iii) the net change in operating assets and liabilities of $47,778,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $37,897,000, (ii) straight-lining of rents of $13,116,000, (iii) interest rate cap premium amortization of $6,483,000, (iv) other non-cash adjustments of $494,000 and (v) stock-based compensation expense of $450,000.

Previous wording

Net cash provided by investing activities of $321,812,000 was comprised of (i) proceeds from maturities of U.S. Treasury bills of $264,881,000, (ii) proceeds from sale of real estate of $67,821,000 and (iii) proceeds from interest rate cap of $5,049,000, partially offset by (iv) the purchase of interest rate cap of $11,258,000 and (v) construction in progress and real estate additions of $4,681,000.

Current wording

Net cash provided by investing activities of $321,812,000 was comprised of (i) proceeds from maturities of U.S. Treasury bills of $264,881,000, (ii) proceeds from sale of real estate of $67,821,000 and (iii) proceeds from an interest rate cap of $5,049,000, partially offset by (iv) the purchase of an interest rate cap of $11,258,000 and (v) construction in progress and real estate additions of $4,681,000.

Previous wording

On February 7, 2024, our Board of Directors declared a regular quarterly dividend of $4.50 per share (an indicated annual rate of $18.00 per share). The dividend, if declared by the Board of Directors at the same rate for all of 2024, would require us to pay out approximately $92,350,000 in 2024.

Current wording

On February 5, 2025, our Board of Directors declared a regular quarterly dividend of $4.50 per share (an indicated annual rate of $18.00 per share). The dividend, if declared by the Board of Directors at the same rate for all of 2025, would require us to pay out approximately $92,400,000 in 2025.

Previous wording

Capital expenditures consist of expenditures to maintain and improve assets, tenant improvement allowances and leasing commissions. During 2024, we expect to incur approximately $29,000,000 of capital expenditures at our properties. We plan to fund these capital expenditures from operating cash flow, existing liquidity, and/or borrowings.

Current wording

Capital expenditures consist of expenditures to maintain and improve assets, tenant improvement allowances, lease incentives and leasing commissions. During 2025, we expect to spend approximately $125,000,000 of capital expenditures at our properties. We plan to fund these capital expenditures from operating cash flow, existing liquidity, and/or borrowings.

Previous wording

Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027. Coverage for acts of terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a $316,000 deductible and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.

Current wording

Fifty Ninth Street Insurance Company, LLC (“FNSIC”), our wholly owned consolidated subsidiary, acts as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Act of 2002, as amended to date and which has been extended through December 2027. Coverage for acts of terrorism (including NBCR acts) is up to $1.7 billion per occurrence and in the aggregate. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to FNSIC. For NBCR acts, FNSIC is responsible for a deductible of $338,000 and 20% of the balance of a covered loss, and the Federal government is responsible for the remaining 80% of a covered loss. We are ultimately responsible for any loss incurred by FNSIC.

Previous wording

FFO (non-GAAP) for the year ended December 31, 2023 was $81,067,000, or $15.80 per diluted share, compared to $87,090,000, or $16.99 per diluted share for the year ended December 31, 2022.

Current wording

FFO (non-GAAP) for the year ended December 31, 2024 was $77,968,000, or $15.19 per diluted share, compared to $81,067,000, or $15.80 per diluted share for the year ended December 31, 2023.