VORNADO REALTY TRUST
For the period ended Sep 30, 2024. Filed Nov 4, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 4, 2024
VNO$35.82-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-05.
0000899689-24-000033
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0000899689-24-000039
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 201 previous paragraphs and 202 current paragraphs.
128 unchanged; 41 reworded; 33 added; 23 removed; 9 previous and 0 current paragraphs rearranged.
Tables are not compared: 36 previous and 39 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
606 Broadway
Current report
On September 5, 2024, the $74,119,000 non-recourse mortgage loan on 606 Broadway, in which we hold a 50% interest, matured and was not repaid, at which time the lender declared an event of default. As of September 30, 2024, the property has a carrying value of $54,196,000, which is after an impairment charge recorded in the fourth quarter of 2023. We consolidate the joint venture. The loan currently bears interest at a floating rate of SOFR plus 1.91% (7.02% as of September 30, 2024) and provides for additional default interest of 3.00%.
Current report
85 Tenth Avenue
Current report
On September 24, 2024, a joint venture, in which we have a 49.9% interest, modified the terms of the $625,000,000 mortgage loan on 85 Tenth Avenue. Per the original loan agreement, the mortgage loan is comprised of a (i) $396,000,000 3.82% senior note, (ii) $129,000,000 5.20% mezzanine A note and (iii) $100,000,000 6.60% mezzanine B note. The modification provides for the interest payments due under the mezzanine notes to be deferred until the December 2026 loan maturity. The deferred amounts will not accrue additional interest. The cash available from the deferred interest payments will be used to fund leasing costs at the property. At loan maturity, if there is no event of default, repayment of 50% of the accrued mezzanine interest will be waived.
Current report
On September 30, 2024, Alexander’s, in which we own a 32.4% common equity interest, completed a $400,000,000 refinancing of the office condominium portion of 731 Lexington Avenue, the Bloomberg LP headquarters building. The interest-only loan carries a fixed rate of 5.04% and matures in October 2028. The loan is prepayable, at Alexander’s option, with no penalty, beginning in October 2026. The loan replaces the previous $490,000,000 loan on the office condominium, that bore interest at the Prime Rate and was scheduled to mature in October 2024.
Current report
Acquisitions
Current report
On August 6, 2024, we purchased a $50,000,000 B-Note secured by a Midtown Manhattan property at par. The B-Note, together with the $35,000,000 A-Note, is in default. The B-Note accrues interest at 5.25% plus 4.00% default interest. The $50,000,000 B-Note investment was recorded to “other assets” on our consolidated balance sheets.
Current report
Alexander’s
Current report
(1)Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Most leases include free rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis straight-line rent per square foot.
Current report
(2)Excludes 64 square feet of leases at PENN 1 which had been vacant for more than nine months and, therefore, are not considered second generation relet space used to calculate our mark-to-market statistics. Additionally, includes 148 square feet (at share) with no tenant improvement allowance at a reduced rent.
Current report
The statistics presented below are adjusted to reflect (i) the inclusion of the 64 square feet of PENN 1 leases and (ii) the 148 square feet at share of second generation relet space based on what would have been the higher rent and tenant improvement allowance.
Current report
(3)Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases and includes the effect of free rent and periodic step-ups in rent.
Current report
Leasing Activity - continued
Current report
(1)Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Most leases include free rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis straight-line rent per square foot.
Current report
(2)Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases and includes the effect of free rent and periodic step-ups in rent.
Current report
Below is a reconciliation of net (loss) income to NOI at share and NOI at share - cash basis for the three months ended September 30, 2024 and 2023.
Current report
Our expenses were $392,724,000 for the three months ended September 30, 2024, compared to $382,368,000 for the prior year’s quarter, an increase of $10,356,000. Below are the details of the increase by segment:
Current report
(1)Includes interests in 280 Park Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
Current report
Income tax expense for the three months ended September 30, 2024 was $4,883,000, compared to $11,684,000 for the prior year’s quarter, a decrease of $6,801,000. This was primarily due to lower income tax expense incurred by our taxable REIT subsidiaries.
Current report
Net loss attributable to noncontrolling interests in consolidated subsidiaries was $14,152,000 for the three months ended September 30, 2024, compared to $13,541,000 for the prior year’s quarter, an increase of $611,000.
Current report
NOI At Share by Segment for the Nine Months Ended September 30, 2024 and 2023
Current report
NOI At Share by Segment for the Nine Months Ended September 30, 2024 and 2023 - continued
Current report
The elements of our New York and Other NOI at share for the nine months ended September 30, 2024 and 2023 are summarized below.
Current report
The elements of our New York and Other NOI at share - cash basis for the nine months ended September 30, 2024 and 2023 are summarized below.
Current report
Reconciliation of Net Income to NOI At Share and NOI at Share - Cash Basis for the Nine Months Ended September 30, 2024 and 2023
Current report
Below is a reconciliation of net income to NOI at share and NOI at share - cash basis for the nine months ended September 30, 2024 and 2023.
Current report
Results of Operations – Nine Months Ended September 30, 2024 Compared to September 30, 2023
Current report
(1)2023 includes the receipt of a $21,350 tenant settlement, of which $6,405 is attributable to noncontrolling interests.
Current report
Results of Operations – Nine Months Ended September 30, 2024 Compared to September 30, 2023 - continued
Current report
(3)Includes interests in 280 Park Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others.
Current report
Income tax expense for the nine months ended September 30, 2024 was $16,907,000, compared to $20,848,000 for the prior year’s nine months, a decrease of $3,941,000. This was primarily due to lower income tax expense incurred by our taxable REIT subsidiaries.
Current report
Results of Operations – Nine Months Ended September 30, 2024 Compared to September 30, 2023 - continued
Current report
(5)Excludes additional 3.00% default interest on the 606 Broadway mortgage loan.
Removed paragraphs (23)
Previous report
•1,322,000 square feet of New York Office space (598,000 square feet at share) at an initial rent of $131.37 per square foot and a weighted average lease term of 9.7 years. The changes in the GAAP and cash mark-to-market rent on the 518,000 square feet of second generation space were positive 8.2% and positive 3.4%, respectively. Tenant improvements and leasing commissions were $6.54 per square foot per annum, or 5.0% of initial rent.
Previous report
•4,000 square feet of New York Retail space (all at share) at an initial rent of $301.14 per square foot and a weighted average lease term of 5.0 years. The changes in the GAAP and cash mark-to-market rent on the 4,000 square feet of second generation space were positive 26.9% and positive 14.8%, respectively. Tenant improvements and leasing commissions were $10.99 per square foot per annum, or 3.6% of initial rent.
Previous report
•32,000 square feet at THE MART (all at share) at an initial rent of $56.39 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 19,000 square feet of second generation space were negative 3.5% and negative 4.3%, respectively. Tenant improvements and leasing commissions were $7.86 per square foot per annum, or 13.9% of initial rent.
Previous report
•66,000 square feet at 555 California Street (47,000 square feet at share) at an initial rent of $99.14 per square foot and a weighted average lease term of 9.8 years. The changes in the GAAP and cash mark-to-market rent on the 47,000 square feet of second generation space were positive 32.4% and positive 13.3%, respectively. Tenant improvements and leasing commissions were $12.56 per square foot per annum, or 12.7% of initial rent.
Previous report
For the Six Months Ended June 30, 2024:
Previous report
•1,613,000 square feet of New York Office space (848,000 square feet at share) at an initial rent of $118.96 per square foot and a weighted average lease term of 10.1 years. The changes in the GAAP and cash mark-to-market rent on the 613,000 square feet of second generation space were positive 7.6% and positive 3.3%, respectively. Tenant improvements and leasing commissions were $8.64 per square foot per annum, or 7.3% of initial rent.
Previous report
•40,000 square feet of New York Retail space (37,000 square feet at share) at an initial rent of $258.76 per square foot and a weighted average lease term of 3.9 years. The changes in the GAAP and cash mark-to-market rent on the 31,000 square feet of second generation space were positive 7.2% and negative 14.5%, respectively. Tenant improvements and leasing commissions were $26.92 per square foot per annum, or 10.4% of initial rent.
Previous report
•83,000 square feet at THE MART (all at share) at an initial rent of $61.09 per square foot and a weighted average lease term of 5.5 years. The changes in the GAAP and cash mark-to-market rent on the 62,000 square feet of second generation space were positive 3.5% and negative 1.4%, respectively. Tenant improvements and leasing commissions were $8.17 per square foot per annum, or 13.4% of initial rent.
Previous report
•107,000 square feet at 555 California Street (76,000 square feet at share) at an initial rent of $87.03 per square foot and a weighted average lease term of 8.1 years. The changes in the GAAP and cash mark-to-market rent on the 76,000 square feet of second generation space were positive 10.9% and negative 4.4%, respectively. Tenant improvements and leasing commissions were $10.40 per square foot per annum, or 11.9% of initial rent.
Previous report
Our expenses were $382,388,000 for the three months ended June 30, 2024, compared to $371,507,000 for the prior year’s quarter, an increase of $10,881,000. Below are the details of the increase (decrease) by segment:
Previous report
Net gains on disposition of wholly owned and partially owned assets for the three months ended June 30, 2024 were $16,048,000 compared to $936,000, for the prior year’s quarter, an increase of $15,112,000. This was primarily due to the sale of two condominium units at 220 CPS in 2024.
Previous report
Income tax expense for the three months ended June 30, 2024 was $5,284,000 compared to $4,497,000 for the prior year’s quarter, an increase of $787,000. This was primarily due to income tax expense recognized upon the sale of two 220 CPS condominium units in 2024.
Previous report
NOI At Share by Segment for the Six Months Ended June 30, 2024 and 2023
Previous report
NOI At Share by Segment for the Six Months Ended June 30, 2024 and 2023 - continued
Previous report
The elements of our New York and Other NOI at share for the six months ended June 30, 2024 and 2023 are summarized below.
Previous report
See note below.
Previous report
The elements of our New York and Other NOI at share - cash basis for the six months ended June 30, 2024 and 2023 are summarized below.
Previous report
Reconciliation of Net Income to NOI At Share and NOI at Share - Cash Basis for the Six Months Ended June 30, 2024 and 2023
Previous report
Below is a reconciliation of net income to NOI at share and NOI at share - cash basis for the six months ended June 30, 2024 and 2023.
Previous report
Results of Operations – Six Months Ended June 30, 2024 Compared to June 30, 2023
Previous report
Results of Operations – Six Months Ended June 30, 2024 Compared to June 30, 2023 - continued
Previous report
Income tax expense for the six months ended June 30, 2024 was $12,024,000 compared to $9,164,000 for the prior year’s six months, an increase of $2,860,000. This was primarily due to income tax expense recognized upon the sale of two 220 CPS condominium units in 2024.
Previous report
Results of Operations – Six Months Ended June 30, 2024 Compared to June 30, 2023 - continued
Reworded paragraphs (41)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a discussion of our consolidated financial statements for the three and six months ended June 30, 2024. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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, 2024 are not necessarily indicative of the operating results for the full year. Certain prior year balances have been reclassified in order to conform to the current year presentation.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a discussion of our consolidated financial statements for the three and nine months ended September 30, 2024. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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, 2024 are not necessarily indicative of the operating results for the full year. Certain prior year balances have been reclassified in order to conform to the current year presentation.
Previous wording
Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P. (the “Operating Partnership”), a Delaware limited partnership. Vornado is the sole general partner of and owned approximately 90.9% of the common limited partnership interest in the Operating Partnership as of June 30, 2024. All references to the “Company,” “we,” “us” and “our” mean, collectively, Vornado, the Operating Partnership and those subsidiaries consolidated by Vornado.
Current wording
Vornado Realty Trust (“Vornado”) is a fully-integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P. (the “Operating Partnership”), a Delaware limited partnership. Vornado is the sole general partner of and owned approximately 91.3% of the common limited partnership interest in the Operating Partnership as of September 30, 2024. All references to the “Company,” “we,” “us” and “our” mean, collectively, Vornado, the Operating Partnership and those subsidiaries consolidated by Vornado.
Previous wording
Net income attributable to common shareholders for the quarter ended June 30, 2024 was $35,260,000, or $0.18 per diluted share, compared to $46,377,000, or $0.24 per diluted share, for the prior year’s quarter.
Current wording
Net loss attributable to common shareholders for the quarter ended September 30, 2024 was $19,154,000, or $0.10 per diluted share, compared to net income attributable to common shareholders of $52,846,000, or $0.28 per diluted share, for the prior year’s quarter.
Previous wording
Funds from operations (“FFO”) attributable to common shareholders plus assumed conversions for the quarter ended June 30, 2024 was $148,944,000, or $0.76 per diluted share, compared to $144,059,000, or $0.74 per diluted share, for the prior year’s quarter. FFO attributable to common shareholders plus assumed conversions for the quarters ended June 30, 2024 and 2023 include certain items that impact the comparability of period-to-period FFO, which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common shareholders plus assumed conversions for the quarter ended June 30, 2024 by $36,178,000, or $0.19 per diluted share, and by $3,322,000, or $0.02 per diluted share, for the quarter ended June 30, 2023.
Current wording
Funds from operations (“FFO”) attributable to common shareholders plus assumed conversions for the quarter ended September 30, 2024 was $99,256,000, or $0.50 per diluted share, compared to $119,487,000, or $0.62 per diluted share, for the prior year’s quarter. FFO attributable to common shareholders plus assumed conversions for the quarters ended September 30, 2024 and 2023 include certain items that impact the comparability of period-to-period FFO, which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common shareholders plus assumed conversions for the quarter ended September 30, 2024 by $3,499,000, or $0.02 per diluted share, and by $7,754,000, or $0.04 per diluted share, for the quarter ended September 30, 2023.
Previous wording
Six Months Ended June 30, 2024 Financial Results Summary
Current wording
Nine Months Ended September 30, 2024 Financial Results Summary
Previous wording
Net income attributable to common shareholders for the six months ended June 30, 2024 was $26,226,000, or $0.13 per diluted share, compared to $51,545,000, or $0.27 per diluted share, for the six months ended June 30, 2023.
Current wording
Net income attributable to common shareholders for the nine months ended September 30, 2024 was $7,072,000, or $0.04 per diluted share, compared to $104,391,000, or $0.54 per diluted share, for the nine months ended September 30, 2023.
Previous wording
FFO attributable to common shareholders plus assumed conversions for the six months ended June 30, 2024 was $253,068,000, or $1.29 per diluted share, compared to $263,149,000, or $1.35 per diluted share, for the six months ended June 30, 2023. FFO attributable to common shareholders plus assumed conversions for the six months ended June 30, 2024 and 2023 include certain items that impact the comparability of period-to-period FFO, which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common shareholders plus assumed conversions for the six months ended June 30, 2024 by $31,460,000, or $0.16 per diluted share, and by $6,117,000, or $0.03 per diluted share for the six months ended June 30, 2023.
Current wording
FFO attributable to common shareholders plus assumed conversions for the nine months ended September 30, 2024 was $352,914,000, or $1.79 per diluted share, compared to $382,658,000, or $1.97 per diluted share, for the nine months ended September 30, 2023. FFO attributable to common shareholders plus assumed conversions for the nine months ended September 30, 2024 and 2023 include certain items that impact the comparability of period-to-period FFO, which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common shareholders plus assumed conversions for the nine months ended September 30, 2024 by $28,054,000, or $0.14 per diluted share, and decreased FFO attributable to common shareholders plus assumed conversions by $1,713,000, or $0.01 per diluted share for the nine months ended September 30, 2023.
Previous wording
The percentage decrease in same store NOI at share and same store NOI at share - cash basis of our New York segment, THE MART and 555 California Street are below.
Current wording
The percentage (decrease) increase in same store NOI at share and same store NOI at share - cash basis of our New York segment, THE MART and 555 California Street are below.
Previous wording
(1)2023 includes our $14,103,000 share of the receipt of a tenant settlement, net of legal expenses.
Current wording
(1)The nine months ended September 30, 2023 includes our $14,103,000 share of the receipt of a tenant settlement, net of legal expenses.
Previous wording
We entered into the following interest rate swap and cap arrangements during the six months ended June 30, 2024. See Note 14 -Fair Value Measurements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our consolidated hedging instruments:
Current wording
We entered into the following interest rate swap and cap arrangements during the nine months ended September 30, 2024. See Note 15 -Fair Value Measurements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our consolidated hedging instruments:
Previous wording
During the three and six months ended June 30, 2024, we closed on the sale of two condominium units at 220 CPS for net proceeds of $31,605,000, resulting in a financial statement net gain of $15,175,000 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, $2,106,000 of income tax expense was recognized on our consolidated statements of income. Four units remain unsold, with a carrying value of $20,227,000 which is included in "other assets” on our consolidated balance sheets.
Current wording
During the nine months ended September 30, 2024, we closed on the sale of two condominium units at 220 CPS for net proceeds of $31,605,000, resulting in a financial statement net gain of $15,175,000 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, $2,106,000 of income tax expense was recognized on our consolidated statements of income. Four units remain unsold, with a carrying value of $21,030,000 which is included in "other assets” on our consolidated balance sheets.
Previous wording
On May 3, 2024, Alexander’s Inc. (“Alexander’s”), in which we own a 32.4% common equity interest, and Bloomberg L.P. reached an agreement to extend the leases covering approximately 947,000 square feet at 731 Lexington Avenue that were scheduled to expire in February 2029 for a term of eleven years to February 2040.
Current wording
On May 3, 2024, Alexander’s, in which we own a 32.4% common equity interest, and Bloomberg L.P. reached an agreement to extend the leases covering approximately 947,000 square feet at 731 Lexington Avenue that were scheduled to expire in February 2029 for a term of eleven years to February 2040.
Previous wording
The leasing activity and related statistics below are based on leases signed during the period and are not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Second generation relet space represents square footage that has not been vacant for more than nine months and tenant improvements and leasing commissions are based on our share of square feet leased during the period.
Current wording
The leasing activity and related statistics below and on the following page are based on leases signed during the period and are not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Second generation relet space represents square footage that has not been vacant for more than nine months and tenant improvements and leasing commissions are based on our share of square feet leased during the period.
Previous wording
A summary of our critical accounting policies and estimates used in the preparation of our consolidated financial statements is included in Part II, 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, 2023. For the six months ended June 30, 2024, there were no material changes to these policies.
Current wording
A summary of our critical accounting policies and estimates used in the preparation of our consolidated financial statements is included in Part II, 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, 2023. For the nine months ended September 30, 2024, there were no material changes to these policies.
Previous wording
Reconciliation of Net Income to NOI At Share and NOI At Share - Cash Basis for the Three Months Ended June 30, 2024 and 2023
Current wording
Reconciliation of Net (Loss) Income to NOI At Share and NOI At Share - Cash Basis for the Three Months Ended September 30, 2024 and 2023
Previous wording
Our revenues were $450,266,000 for the three months ended June 30, 2024 compared to $472,359,000 for the prior year’s quarter, a decrease of $22,093,000. Below are the details of the (decrease) increase by segment:
Current wording
Our revenues were $443,255,000 for the three months ended September 30, 2024 compared to $450,995,000 for the prior year’s quarter, a decrease of $7,740,000. Below are the details of the decrease by segment:
Previous wording
(5)Includes interests in Independence Plaza, Rosslyn Plaza and others.
Current wording
(2)Includes interests in Independence Plaza, Rosslyn Plaza and others.
Previous wording
Interest and debt expense for the three months ended June 30, 2024 was $98,401,000 compared to $87,165,000 for the prior year’s quarter, an increase of $11,236,000. This was primarily due to higher average interest rates, inclusive of the impact of our interest rate hedging instruments, partially offset by higher capitalized interest and debt expense.
Current wording
Interest and debt expense for the three months ended September 30, 2024 was $100,907,000, compared to $88,126,000 for the prior year’s quarter, an increase of $12,781,000. This was primarily due to higher average interest rates, inclusive of the impact of our interest rate hedging instruments, partially offset by higher capitalized interest.
Previous wording
Below is a summary of NOI at share and NOI at share - cash basis by segment for the six months ended June 30, 2024 and 2023.
Current wording
Below is a summary of NOI at share and NOI at share - cash basis by segment for the nine months ended September 30, 2024 and 2023.
Previous wording
Our revenues were $886,641,000 for the six months ended June 30, 2024, compared to $918,282,000 for the prior year’s six months, a decrease of $31,641,000. Below are the details of the decrease by segment:
Current wording
Our revenues were $1,329,896,000 for the nine months ended September 30, 2024, compared to $1,369,277,000 for the prior year’s nine months, a decrease of $39,381,000. Below are the details of the decrease by segment:
Previous wording
Our expenses were $760,341,000 for the six months ended June 30, 2024, compared to $752,826,000 for the prior year’s six months, an increase of $7,515,000. Below are the details of the increase (decrease) by segment:
Current wording
Our expenses were $1,153,065,000 for the nine months ended September 30, 2024, compared to $1,135,194,000 for the prior year’s nine months, an increase of $17,871,000. Below are the details of the increase (decrease) by segment:
Previous wording
(4)2023 includes our $16,396 share of the net gain from the sale of Alexander’s Rego III land parcel.
Current wording
(2)2023 includes our $16,396 share of the net gain from the sale of Alexander’s Rego III land parcel.
Previous wording
(3)2024 includes our $31,215 share of the debt extinguishment gain from the repayment of the 280 Park Avenue mezzanine loan. See Note 5 -Investments in Partially Owned Entities in Part I, Item 1 of this Quarterly Report on Form 10-Q for details.
Current wording
(4)2024 includes our $31,215 share of the debt extinguishment gain from the repayment of the 280 Park Avenue mezzanine loan. See Note 5 -Investments in Partially Owned Entities in Part I, Item 1 of this Quarterly Report on Form 10-Q for details.
Previous wording
Interest and debt expense was $188,879,000 for the six months ended June 30, 2024, compared to $173,402,000 for the prior year’s six months, an increase of $15,477,000. This was primarily due to higher average interest rates, inclusive of the impact of our interest rate hedging instruments, partially offset by higher capitalized interest and debt expense.
Current wording
Interest and debt expense was $289,786,000 for the nine months ended September 30, 2024, compared to $261,528,000 for the prior year’s nine months, an increase of $28,258,000. This was primarily due to higher average interest rates, inclusive of the impact of our interest rate hedging instruments, partially offset by higher capitalized interest.
Previous wording
Net gains on disposition of wholly owned and partially owned assets were $16,048,000 for the six months ended June 30, 2024, primarily resulting from the sale of two condominium units at 220 CPS. Net gains on disposition of wholly owned and partially owned assets were $8,456,000 for the six months ended June 30, 2023, primarily resulting from the sale of a condominium unit at 220 CPS.
Current wording
Net gains on disposition of wholly owned and partially owned assets were $16,048,000 for the nine months ended September 30, 2024, primarily resulting from the sale of two condominium units at 220 CPS. Net gains on disposition of wholly owned and partially owned assets were $64,592,000 for the nine months ended September 30, 2023, primarily consisting of (i) $35,968,000 upon contribution of our Pier 94 leasehold to Sunset Pier 94 Studios (“Pier 94 JV”) primarily due to the step-up of our retained investment in the leasehold interest to fair value, (ii) $20,181,000 from the sale of The Armory Show, and (iii) $7,520,000 from the sale of a condominium unit at 220 CPS.
Previous wording
Net loss attributable to noncontrolling interests in consolidated subsidiaries was $25,872,000 for the six months ended June 30, 2024, compared to $12,709,000 for the prior year’s six months, an increase of $13,163,000. This resulted primarily from higher average interest rates on mortgage loans of our non-wholly owned consolidated subsidiaries.
Current wording
Net loss attributable to noncontrolling interests in consolidated subsidiaries was $40,024,000 for the nine months ended September 30, 2024, compared to $26,250,000 for the prior year’s nine months, an increase of $13,774,000. This resulted primarily from higher average interest rates on mortgage loans of our non-wholly owned consolidated subsidiaries.
Previous wording
Below are reconciliations of NOI at share to same store NOI at share and NOI at share - cash basis to same store NOI at share - cash basis for our New York segment, THE MART, 555 California Street and other investments for the six months ended June 30, 2024 compared to June 30, 2023.
Current wording
Below are reconciliations of NOI at share to same store NOI at share and NOI at share - cash basis to same store NOI at share - cash basis for our New York segment, THE MART, 555 California Street and other investments for the nine months ended September 30, 2024 compared to September 30, 2023.
Previous wording
As of June 30, 2024, we had $2.7 billion of liquidity comprised of $1.1 billion of cash and cash equivalents and restricted cash and $1.6 billion available on our $2.2 billion revolving credit facilities. The ongoing challenges posed by the increase in interest rates and inflation could adversely impact our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months together with cash balances on hand will be adequate to fund our business operations, cash distributions to unitholders of the Operating Partnership, cash dividends to our shareholders, debt amortization and recurring capital expenditures. We anticipate that we will pay a common share dividend for 2024 in the fourth quarter, subject to approval by our Board of Trustees. Capital requirements for development and redevelopment expenditures and acquisitions may require funding from borrowings, equity offerings and/or asset sales.
Current wording
As of September 30, 2024, we had $2.6 billion of liquidity comprised of $1.0 billion of cash and cash equivalents and restricted cash and $1.6 billion available on our $2.2 billion revolving credit facilities. The ongoing challenges posed by the increase in interest rates and inflation could adversely impact our cash flow from continuing operations but we anticipate that cash flow from continuing operations over the next twelve months together with cash balances on hand will be adequate to fund our business operations, cash distributions to unitholders of the Operating Partnership, cash dividends to our shareholders, debt amortization and recurring capital expenditures. We anticipate that we will pay a common share dividend for 2024 in the fourth quarter, subject to approval by our Board of Trustees. Capital requirements for development and redevelopment expenditures and acquisitions may require funding from borrowings, equity offerings and/or asset sales.
Previous wording
Cash and cash equivalents and restricted cash was $1,116,854,000 as of June 30, 2024, a $144,730,000 decrease from the balance as of December 31, 2023.
Current wording
Cash and cash equivalents and restricted cash was $1,029,075,000 as of September 30, 2024, a $232,509,000 decrease from the balance as of December 31, 2023.
Previous wording
Net cash provided by operating activities primarily consists of cash inflows from rental revenues and operating distributions from our unconsolidated partially owned entities less cash outflows for property expenses, general and administrative expenses and interest expense. For the six months ended June 30, 2024, net cash provided by operating activities of $226,164,000 was comprised of $282,855,000 of cash from operations, including distributions of income from partially owned entities of $54,618,000, and a net decrease of $56,691,000 in cash due to the timing of cash receipts and payments related to changes in operating assets and liabilities.
Current wording
Net cash provided by operating activities primarily consists of cash inflows from rental revenues and operating distributions from our unconsolidated partially owned entities less cash outflows for property expenses, general and administrative expenses and interest expense. For the nine months ended September 30, 2024, net cash provided by operating activities of $331,543,000 was comprised of $445,765,000 of cash from operations, including distributions of income from partially owned entities of $101,826,000, and a net decrease of $114,222,000 in cash due to the timing of cash receipts and payments related to changes in operating assets and liabilities.
Previous wording
We are redeveloping PENN 2, a 1,795,000 square foot (as expanded) office building located on the west side of Seventh Avenue between 31st and 33rd Street. The development cost of this project is estimated to be $750,000,000, of which $675,504,000 of cash has been expended as of June 30, 2024.
Current wording
We are redeveloping PENN 2, a 1,795,000 square foot (as expanded) office building located on the west side of Seventh Avenue between 31st and 33rd Street. The development cost of this project is estimated to be $750,000,000, of which $685,275,000 of cash has been expended as of September 30, 2024.
Previous wording
We are also making districtwide improvements within the PENN District. The development cost of these improvements is estimated to be $100,000,000, of which $60,493,000 of cash has been expended as of June 30, 2024.
Current wording
We are also making districtwide improvements within the PENN District. The development cost of these improvements is estimated to be $100,000,000, of which $66,164,000 of cash has been expended as of September 30, 2024.
Previous wording
On August 28, 2023, we, together with Hudson Pacific Properties and Blackstone Inc., formed a joint venture to develop Sunset Pier 94 Studios (“Pier 94 JV”), a 266,000 square foot purpose-built studio campus in Manhattan. We own a 49.9% equity interest in the joint venture. The development cost of the project is estimated to be $350,000,000, which will be funded with $183,200,000 of construction financing and $166,800,000 of equity contributions. Our share of equity contributions will be funded by (i) our $40,000,000 Pier 94 leasehold interest contribution and (ii) $34,000,000 of cash contributions, which are net of an estimated $9,000,000 for our share of development fees and reimbursement for overhead costs incurred by us. We have funded $19,494,000 of cash contributions as of June 30, 2024.
Current wording
On August 28, 2023, we, together with Hudson Pacific Properties and Blackstone Inc., formed a joint venture to develop Pier 94 JV, a 266,000 square foot purpose-built studio campus in Manhattan. We own a 49.9% equity interest in the joint venture. The development cost of the project is estimated to be $350,000,000, which will be funded with $183,200,000 of construction financing and $166,800,000 of equity contributions. Our share of equity contributions will be funded by (i) our $40,000,000 Pier 94 leasehold interest contribution and (ii) $34,000,000 of cash contributions, which are net of an estimated $9,000,000 for our share of development fees and reimbursement for overhead costs incurred by us. As of September 30, 2024, we have fully funded our share of equity and cash contributions.
Previous wording
We may, from time to time, enter into guarantees including, but not limited to, payment guarantees to lenders of unconsolidated joint ventures for tax purposes, completion guarantees for development and redevelopment projects, and guarantees to fund leasing costs. These agreements terminate either upon the satisfaction of specified obligations or repayment of the underlying loans. As of June 30, 2024, the aggregate dollar amount of these guarantees was approximately $574,500,000, primarily comprised of payment guarantees for the mortgage loans secured by 7 West 34th Street and 435 Seventh Avenue, and the completion guarantee provided to the lender of the Pier 94 JV. Other than these loans, our mortgage loans are non-recourse to us.
Current wording
We may, from time to time, enter into guarantees including, but not limited to, payment guarantees to lenders of unconsolidated joint ventures for tax purposes, completion guarantees for development and redevelopment projects, and guarantees to fund leasing costs. These agreements terminate either upon the satisfaction of specified obligations or repayment of the underlying loans. As of September 30, 2024, the aggregate dollar amount of these guarantees was approximately $535,935,000, primarily comprised of payment guarantees for the mortgage loans secured by 7 West 34th Street and 435 Seventh Avenue. Other than these loans, our mortgage loans are non-recourse to us.
Previous wording
Our 95% consolidated joint venture (5% is owned by Related Companies ("Related")) developed and owns the Farley Building. In connection with the development of the property, the joint venture admitted a historic tax credit investor partner (the "Tax Credit Investor"). Under the terms of the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and contractual provisions. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, may require a refund or reduction of the Tax Credit Investor’s capital contributions. As of June 30, 2024, the Tax Credit Investor has made $205,068,000 in capital contributions. Vornado and Related have guaranteed certain of the joint venture’s obligations to the Tax Credit Investor.
Current wording
Our 95% consolidated joint venture (5% is owned by Related Companies ("Related")) developed and owns the Farley Building. In connection with the development of the property, the joint venture admitted a historic tax credit investor partner (the "Tax Credit Investor"). Under the terms of the historic tax credit arrangement, the joint venture is required to comply with various laws, regulations, and contractual provisions. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, may require a refund or reduction of the Tax Credit Investor’s capital contributions. As of September 30, 2024, the Tax Credit Investor has made $208,407,000 in capital contributions. Vornado and Related have guaranteed certain of the joint venture’s obligations to the Tax Credit Investor.
Previous wording
As of June 30, 2024, we had construction commitments aggregating approximately $45,819,000.
Current wording
As of September 30, 2024, we had construction commitments aggregating approximately $67,959,000.
Previous wording
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, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP financial measures used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. 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. The calculations of both the numerator and denominator used in the computation of income per share are disclosed in Note 12 –Income Per Share/Income Per Class A Unitin Part I, Item 1 of this Quarterly Report on Form 10-Q. Details of certain adjustments to FFO are discussed in the financial results summary of our “Overview”.
Current wording
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, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, depreciation and amortization expense from real estate assets and other specified items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP financial measures used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. 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. The calculations of both the numerator and denominator used in the computation of income per share are disclosed in Note 13 –(Loss) Income Per Share and Per Class A Unitin Part I, Item 1 of this Quarterly Report on Form 10-Q. Details of certain adjustments to FFO are discussed in the financial results summary of our “Overview”.
Previous wording
Below is a reconciliation of net income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions for the three and six months ended June 30, 2024 and 2023.
Current wording
Below is a reconciliation of net (loss) income attributable to common shareholders to FFO attributable to common shareholders plus assumed conversions for the three and nine months ended September 30, 2024 and 2023.
Previous wording
(4)Includes variable rate debt subject to interest rate cap arrangements with a total notional amount of $1,034,119, of which $397,059 is attributable to noncontrolling interests. The interest rate cap arrangements have a weighted average SOFR strike rate of 4.74% and a weighted average remaining term of ten months.
Current wording
(4)Includes variable rate debt subject to interest rate cap arrangements with a total notional amount of $960,000, of which $360,000 is attributable to noncontrolling interests. The interest rate cap arrangements have a weighted average SOFR strike rate of 4.79% and a weighted average remaining term of seven months.
Previous wording
(5)Includes variable rate debt subject to interest rate cap arrangements with a total notional amount of $244,883 at our pro rata share. The interest rate cap arrangements have a weighted average SOFR strike rate of 4.16% and a weighted average remaining term of one year.
Current wording
(6)Includes variable rate debt subject to interest rate cap arrangements with a total notional amount of $244,700 at our pro rata share. The interest rate cap arrangements have a weighted average SOFR strike rate of 4.16% and a weighted average remaining term of nine months.
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Rearranged previous paragraphs (9)
Previous report — wording carried elsewhere
For the Three Months Ended June 30, 2024:
Previous report — wording carried elsewhere
Below is a reconciliation of net income to NOI at share and NOI at share - cash basis for the three months ended June 30, 2024 and 2023.
Previous report — wording carried elsewhere
Net loss attributable to noncontrolling interests in consolidated subsidiaries was $13,890,000 for the three months ended June 30, 2024, compared to $2,781,000 for the prior year’s quarter, an increase of $11,109,000. This resulted primarily from higher average interest rates on mortgage loans of our non-wholly owned consolidated subsidiaries.
Previous report — wording carried elsewhere
(1)2023 includes our $14,103 share of the receipt of a tenant settlement, net of legal expenses.
Previous report — wording carried elsewhere
(1)2023 excludes our $14,103,000 share of the receipt of a tenant settlement, net of legal expenses.
Previous report — wording carried elsewhere
(1)2023 includes a $5,120 accrual of default interest which was forgiven by the lender as part of the restructuring of the 697-703 Fifth Avenue loan which is being amortized over the remaining term of the restructured loan, reducing future interest expense.
Previous report — wording carried elsewhere
(3)2024 includes our $31,215 share of the debt extinguishment gain from the repayment of the 280 Park Avenue mezzanine loan. See Note 5 -Investments in Partially Owned Entities in Part I, Item 1 of this Quarterly Report on Form 10-Q for details.
Previous report — wording carried elsewhere
(4)2023 includes our $16,396 share of the net gain from the sale of Alexander’s Rego III land parcel.
Previous report — wording carried elsewhere
Net Gains on Disposition of Wholly Owned and Partially Owned Assets