ALEXANDERS INC

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations include a discussion of our consolidated financial statements for the three and six months ended June 30, 2025. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the operating results for the full year.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations include a discussion of our consolidated financial statements for the three and nine months ended September 30, 2025. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full year.

Previous wording

A summary of the critical accounting policies and estimates used in the preparation of our consolidated financial statements is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. For the six months ended June 30, 2025, there were no material changes to these estimates or policies.

Current wording

A summary of the critical accounting policies and estimates used in the preparation of our consolidated financial statements is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. For the nine months ended September 30, 2025, there were no material changes to these estimates or policies.

Previous wording

Net income for the three months ended June 30, 2025 was $6,120,000, or $1.19 per diluted share, compared to $8,380,000 or $1.63 per diluted share in the prior year’s three months.

Current wording

Net income for the three months ended September 30, 2025 was $5,968,000, or $1.16 per diluted share, compared to $6,678,000 or $1.30 per diluted share in the prior year’s three months.

Previous wording

Funds from operations (“FFO”) (non-GAAP) for the three months ended June 30, 2025 was $14,762,000, or $2.88 per diluted share, compared to $17,009,000, or $3.31 per diluted share in the prior year’s three months.

Current wording

Funds from operations (“FFO”) (non-GAAP) for the three months ended September 30, 2025 was $14,920,000, or $2.91 per diluted share, compared to $14,582,000, or $2.84 per diluted share in the prior year’s three months.

Previous wording

Six Months Ended June 30, 2025 Financial Results Summary

Current wording

Nine Months Ended September 30, 2025 Financial Results Summary

Previous wording

Net income for the six months ended June 30, 2025 was $18,432,000, or $3.59 per diluted share, compared to $24,489,000 or $4.77 per diluted share in the prior year’s six months.

Current wording

Net income for the nine months ended September 30, 2025 was $24,400,000, or $4.75 per diluted share, compared to $31,167,000 or $6.07 per diluted share in the prior year’s nine months.

Previous wording

The $300,000,000 mortgage loan on the retail condominium of our 731 Lexington Avenue property was scheduled to mature on August 5, 2025. On August 1, 2025, we entered into a 60-day extension with the lenders. The interest-only, non-recourse loan continues to bear interest at SOFR plus 1.51% (5.83% as of June 30, 2025) through the extended maturity date of October 3, 2025.

Current wording

The $300,000,000 non-recourse mortgage loan on the retail condominium of our 731 Lexington Avenue property was scheduled to mature on August 5, 2025. On August 1, 2025, we entered into a 60-day extension with the lenders. The Company did not repay the loan on the extended maturity date of October 3, 2025. The Company is in discussions with the lenders regarding a potential loan restructuring.

Previous wording

Our portfolio is comprised of five properties aggregating 2,455,000 square feet. As of June 30, 2025, the commercial occupancy rate was 94.8% and the residential occupancy rate was 98.7%.

Current wording

Our portfolio is comprised of five properties aggregating 2,455,000 square feet. As of September 30, 2025, the commercial occupancy rate was 94.9% and the residential occupancy rate was 97.1%.

Previous wording

In the fourth quarter of 2024, we entered into ten-year leases with Burlington and Marshalls to relocate them to our Rego Park II property in 2025 from our Rego Park I property. Rego Park I will then be vacant and we are currently exploring sale and development opportunities for the property.

Current wording

In the fourth quarter of 2024, we entered into ten-year leases with Burlington and Marshalls to relocate them to our Rego Park II property in 2025 from our Rego Park I property which is now vacant. We are currently exploring sale opportunities for our Rego Park I property and are in advanced negotiations with a potential buyer.

Previous wording

Bloomberg L.P. (“Bloomberg”) accounted for revenue of $64,446,000 and $60,946,000 for the six months ended June 30, 2025 and 2024, respectively, representing approximately 61% and 53% of our rental revenues in each period, 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 L.P. (“Bloomberg”) accounted for revenue of $96,655,000 and $93,179,000 for the nine months ended September 30, 2025 and 2024, respectively, representing approximately 60% and 55% of our rental revenues in each period, 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

Rental revenues were $51,589,000 for the three months ended June 30, 2025, compared to $53,392,000 for the prior year’s three months, a decrease of $1,803,000. This was primarily due to (i) $3,781,000 of lower rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue, partially offset by (ii) $1,213,000 of higher recoveries of operating expenses and capital expenditures, (iii) $696,000 of higher straight-line rental revenue from new tenants at Rego Park II and (iv) $581,000 of higher straight-line rental revenue from Bloomberg’s lease extension at 731 Lexington Avenue.

Current wording

Rental revenues were $53,424,000 for the three months ended September 30, 2025, compared to $55,675,000 for the prior year’s three months, a decrease of $2,251,000. This was primarily due to $3,774,000 of lower rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue, partially offset by $1,417,000 of higher rental revenue from new leases at Rego Park II.

Previous wording

Operating expenses were $51,498,000 for the six months ended June 30, 2025, compared to $50,254,000 for the prior year’s six months, an increase of $1,244,000. This was primarily due to (i) $1,983,000 of higher operating expenses subject to recovery, including real estate taxes and common area maintenance, (ii) $388,000 of higher operating expenses not subject to recovery, partially offset by (iii) higher capitalized expenses of $1,127,000.

Current wording

Operating expenses were $26,693,000 for the three months ended September 30, 2025, compared to $26,446,000 for the prior year’s three months, an increase of $247,000. This was primarily due to higher operating expenses not subject to recovery.

Previous wording

Depreciation and amortization was $8,707,000 for the three months ended June 30, 2025, compared to $8,697,000 for the prior year’s three months, an increase of $10,000.

Current wording

Depreciation and amortization was $9,018,000 for the three months ended September 30, 2025, compared to $7,972,000 for the prior year’s three months, an increase of $1,046,000. This was primarily due to higher depreciation and amortization expense on capital costs for new leases at Rego Park II.

Previous wording

Interest and other income was $3,928,000 for thethree months ended June 30, 2025, compared to $7,054,000 for the prior year’s three months, a decrease of $3,126,000. This was primarily due to a decrease in average interest rates and investment balances.

Current wording

Interest and other income was $3,682,000 for thethree months ended September 30, 2025, compared to $6,105,000 for the prior year’s three months, a decrease of $2,423,000. This was primarily due to a decrease in average interest rates and investment balances.

Previous wording

Interest and debt expense was $12,801,000 for thethree months ended June 30, 2025, compared to $16,219,000 for the prior year’s three months, a decrease of $3,418,000. This was primarily due to (i) $2,361,000 of lower interest rate cap premium amortization, (ii) $1,590,000 from the downsize of the 731 Lexington Office loan in September 2024 and (iii) $1,654,000 from lower rates, partially offset by (iv) $1,937,000 from the expiration of the 731 Lexington Retail swap in May 2025 and (v) $250,000 of higher deferred debt issuance cost amortization.

Current wording

Interest and debt expense was $14,078,000 for thethree months ended September 30, 2025, compared to $19,261,000 for the prior year’s three months, a decrease of $5,183,000. This was due to (i) $4,637,000 from lower rates, (ii) $3,681,000 from the refinancing and downsize of the 731 Lexington Office loan in September 2024, (iii) $578,000 of lower deferred debt issuance cost amortization and (iv) $157,000 of lower interest rate cap premium amortization, partially offset by (v) $3,870,000 from the expiration of the 731 Lexington Retail swap in May 2025.

Previous wording

Rental revenues were $106,504,000 for the six months ended June 30, 2025, compared to $114,789,000 for the prior year’s six months, a decrease of $8,285,000. This was primarily due to (i) $9,001,000 of lower straight-line rental revenue from IKEA’s lease expiration at Rego Park I and (ii) $6,285,000 of lower rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue, partially offset by (iii) $2,583,000 of higher recoveries of operating expenses and capital expenditures, (iv) $2,321,000 of higher straight-line rental revenue from Bloomberg’s lease extension at 731 Lexington Avenue, (v) $1,705,000 of payments received for tenant receivables that were previously written off and (vi) $1,305,000 of higher straight-line rental revenue from new tenants at Rego Park II.

Current wording

Rental revenues were $159,928,000 for the nine months ended September 30, 2025, compared to $170,464,000 for the prior year’s nine months, a decrease of $10,536,000. This was primarily due to (i) $10,059,000 of lower rental revenue from Home Depot’s lease expiration at 731 Lexington Avenue, (ii) $9,001,000 of lower rental revenue from IKEA’s lease expiration at Rego Park I and (iii) $1,054,000 of lower lease termination fee income, partially offset by (iv) $3,073,000 of higher recoveries of operating expenses and capital expenditures, (v) $2,722,000 of higher rental revenue from new leases at Rego Park II, (vi) $2,321,000 of higher rental revenue from Bloomberg’s lease extension at 731 Lexington Avenue and (vii) $2,201,000 of payments received for tenant receivables that were previously written off.

Previous wording

Operating expenses were $25,934,000 for the three months ended June 30, 2025, compared to $24,991,000 for the prior year’s three months, an increase of $943,000. This was primarily due to (i) $983,000 of higher operating expenses subject to recovery, including real estate taxes and common area maintenance and (ii) $454,000 of higher operating expenses not subject to recovery, partially offset by (iii) higher capitalized expenses of $494,000.

Current wording

Operating expenses were $78,191,000 for the nine months ended September 30, 2025, compared to $76,700,000 for the prior year’s nine months, an increase of $1,491,000. This was due to (i) $2,003,000 of higher operating expenses subject to recovery, including real estate taxes and common area maintenance, and (ii) $682,000 of higher operating expenses not subject to recovery, partially offset by (iii) higher capitalized expenses of $1,194,000.

Previous wording

Depreciation and amortization was $17,306,000 for the six months ended June 30, 2025, compared to $18,174,000 for the prior year’s six months, a decrease of $868,000. This was primarily due to the accelerated depreciation and amortization related to IKEA’s lease expiration at Rego Park I in the prior year’s six months.

Current wording

Depreciation and amortization was $26,324,000 for the nine months ended September 30, 2025, compared to $26,146,000 for the prior year’s nine months, an increase of $178,000. This was primarily due to higher depreciation and amortization expense on capital costs for new leases at Rego Park II, partially offset by the accelerated depreciation and amortization related to IKEA’s lease expiration at Rego Park I in the prior year’s nine months.

Previous wording

General and administrative expenses were $1,955,000 for the three months ended June 30, 2025, compared to $2,159,000 for the prior year’s three months, a decrease of $204,000. This was primarily due to lower professional fees.

Current wording

General and administrative expenses were $4,895,000 for the nine months ended September 30, 2025, compared to $5,058,000 for the prior year’s nine months, a decrease of $163,000. This was primarily due to lower professional fees.

Previous wording

Interest and other income was $7,873,000 for thesix months ended June 30, 2025, compared to $14,216,000 for the prior year’s six months, a decrease of $6,343,000. This was primarily due to a decrease in average interest rates and investment balances.

Current wording

Interest and other income was $11,555,000 for thenine months ended September 30, 2025, compared to $20,321,000 for the prior year’snine months, a decrease of $8,766,000. This was primarily due to a decrease in average interest rates and investment balances.

Previous wording

Interest and debt expense was $23,595,000 for thesix months ended June 30, 2025, compared to $32,453,000 for the prior year’s six months, a decrease of $8,858,000. This was primarily due to (i) $5,586,000 of lower interest rate cap premium amortization, (ii) $3,090,000 from the downsize of the 731 Lexington Office loan in September 2024 and (iii) $2,759,000 from lower rates, partially offset by (iv) $1,937,000 from the expiration of the 731 Lexington Retail swap in May 2025 and (v) $640,000 of higher deferred debt issuance cost amortization.

Current wording

Interest and debt expense was $37,673,000 for thenine months ended September 30, 2025, compared to $51,714,000 for the prior year’snine months, a decrease of $14,041,000. This was primarily due to (i) $7,396,000 from lower rates, (ii) $6,771,000 from the refinancing and downsize of the 731 Lexington Office loan in September 2024 and (iii) $5,743,000 of lower interest rate cap premium amortization, partially offset by (iv) $5,807,000 from the expiration of the 731 Lexington Retail swap in May 2025.

Previous wording

As of June 30, 2025, we had $390,305,000 of liquidity comprised of cash and cash equivalents and restricted cash. The ongoing challenges posed by fluctuations in interest rates and the effects of 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 September 30, 2025, we had $352,258,000 of liquidity comprised of cash and cash equivalents and restricted cash. The ongoing challenges posed by fluctuations in interest rates and the effects of 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 $390,305,000 as of June 30, 2025, compared to $393,836,000 as of December 31, 2024, a decr ease of $3,531,000. This decrease resulted from (i) $48,185,000 of net cash used in financing activities and (ii) $14,633,000 of net cash used in investing activities, partially offset by (iii) $59,287,000 of net cash provided by operating activities.

Current wording

Cash and cash equivalents and restricted cash were $352,258,000 as of September 30, 2025, compared to $393,836,000 as of December 31, 2024, a decr ease of $41,578,000. This decrease resulted from (i) $72,612,000 of net cash used in financing activities and (ii) $18,986,000 of net cash used in investing activities, partially offset by (iii) $50,020,000 of net cash provided by operating activities.

Previous wording

Net cash used in financing activities of $57,308,000 was comprised of (i) $46,176,000 of dividends paid, (ii) $10,000,000 of debt repayments and (iii) $1,132,000 of debt issuance costs.

Current wording

Net cash used in financing activities of $72,612,000 was comprised of (i) $69,314,000 of dividends paid, (ii) $3,189,000 of debt repayments and (iii) $109,000 of debt issuance costs.

Previous wording

Net cash used in investing activities of $14,633,000 was comprised of construction in progress and real estate additions.

Current wording

Net cash used in investing activities of $18,986,000 was comprised of construction in progress and real estate additions.

Previous wording

Net cash provided by operating activities of $59,287,000 was comprised of (i) net income of $18,432,000, (ii) adjustments for non-cash items of $25,958,000 and (iii) the net change in operating assets and liabilities of $14,897,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $18,888,000, (ii) other non-cash adjustments of $4,336,000, (iii) straight-lining of rents of $2,018,000, (iv) stock-based compensation expense of $394,000 and (v) interest rate cap premium amortization of $322,000.

Current wording

Net cash provided by operating activities of $50,020,000 was comprised of (i) net income of $24,400,000 and (ii) adjustments for non-cash items of $38,207,000, partially offset by (iii) the net change in operating assets and liabilities of $12,587,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $28,709,000, (ii) other non-cash adjustments of $6,529,000, (iii) straight-lining of rents of $2,105,000, (iv) interest rate cap premium amortization of $470,000 and (v) stock-based compensation expense of $394,000.

Previous wording

Cash and cash equivalents and restricted cash were $524,377,000 as of June 30, 2024, compared to $552,977,000 as of December 31, 2023, a decr ease of $28,600,000. This decrease resulted from (i) $57,308,000 of net cash used in financing activities, partially offset by (ii) $28,327,000 of net cash provided by operating activities and (iii) $381,000 of net cash provided by investing activities.

Current wording

Cash and cash equivalents and restricted cash were $397,176,000 as of September 30, 2024, compared to $552,977,000 as of December 31, 2023, a decr ease of $155,801,000. This decrease resulted from (i) $175,824,000 of net cash used in financing activities and (ii) $3,273,000 of net cash used in investing activities, partially offset by (iii) $23,296,000 of net cash provided by operating activities.

Previous wording

Net cash used in financing activities of $48,185,000 was comprised of (i) $46,202,000 of dividends paid and (ii) $1,983,000 of debt repayments.

Current wording

Net cash used in financing activities of $175,824,000 was comprised of (i) $500,000,000 of debt repayments, (ii) $69,277,000 of dividends paid and (iii) $6,547,000 of debt issuance costs, partially offset by (iv) proceeds from borrowing of $400,000,000.

Previous wording

Net cash provided by investing activities of $381,000 was comprised of $6,563,000 of proceeds from an interest rate cap, partially offset by construction in progress and real estate additions of $6,182,000.

Current wording

Net cash used in investing activities of $3,273,000 was comprised of $9,836,000 of construction in progress and real estate additions, partially offset by proceeds from an interest rate cap of $6,563,000.

Previous wording

Net cash provided by operating activities of $28,327,000 was comprised of (i) net income of $24,489,000 and (ii) adjustments for non-cash items of $32,748,000, partially offset by (iii) the net change in operating assets and liabilities of $28,910,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $19,118,000, (ii) straight-lining of rents of $11,076,000, (iii) interest rate cap premium amortization of $5,908,000 and (iv) stock-based compensation expense of $450,000, partially offset by (v) other non-cash adjustments of $3,804,000.

Current wording

Net cash provided by operating activities of $23,296,000 was comprised of (i) net income of $31,167,000 and (ii) adjustments for non-cash items of $45,349,000, partially offset by (iii) the net change in operating assets and liabilities of $53,220,000. The adjustments for non-cash items were comprised of (i) depreciation and amortization (including amortization of debt issuance costs) of $28,470,000, (ii) straight-lining of rents of $11,880,000, (iii) interest rate cap premium amortization of $6,213,000 and (iv) stock-based compensation expense of $450,000, partially offset by (v) other non-cash adjustments of $1,664,000.

Previous wording

We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, of which the first $30,000,000 includes communicable disease coverage, and all-risk property and rental value insurance coverage with limits of $1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.

Current wording

We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, which includes communicable disease coverage, and all-risk property and rental value insurance coverage with limits of $1.7 billion per occurrence, including coverage for acts of terrorism, with sub-limits for certain perils such as floods and earthquakes on each of our properties and excluding communicable disease coverage.

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 $338,000 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 $348,000 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.

Previous wording

FFO (non-GAAP) for the three and six months ended June 30, 2025 and 2024

Current wording

FFO (non-GAAP) for the three and nine months ended September 30, 2025 and 2024